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Venture Capital Investment in Patent-Intensive Industries Falling

Are We Really Encouraging Innovation?

The race to develop a COVID-19 vaccine illustrates how vital scientific innovation is to our entire society – and also how arduous and uncertain scientific research can be. Scientific ventures are massive undertakings. For organizations to undertake such pursuits, there needs to be a reasonable expectation of a return on investment. This stance is not money-grubbing. A return on investment is necessary to enable the massive expenditures that go into developing lifechanging innovations.

In many cases, patents are necessary in order to protect this return on investment. Yet as a new report from the Alliance of U.S. Startups and Inventors for Jobs describes, U.S. legal and judicial systems have made changes to the patent system – and venture capital investment in patent-intensive industries has fallen.

Perhaps now is the time to examine this legal and judicial environment. Does our system really encourage the innovation that can change so many lives? The coronavirus is massive enough that governments have undertaken action to incent work to combat this virus, and rightfully so. But what about other needs and medical issues that do not receive as much urgent attention? Is our system set up to encourage innovation to combat other problems? What needs to change in the U.S. patent system so that more investors will turn to patent-intensive industries?

 

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Principal & Chief Innovation Officer

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