Patent Reform Would Likely Deter Investor Interest

Med-tech companies, particularly startups, rely heavily on investors for support. To attract and retain investors, however, companies must provide assurance that inventions will be protected from competitors.

With sweeping patent reform legislation pending, companies focused on development of new technology have cause for concern.

Under the current system, patent litigation costs have escalated sharply—and reform is necessary to balance protection for innovation, competition and the public interest. Proposed changes would enable patents to be issued in a more cost-effective manner and with greater assurance of validity. In addition, pending legislation would bring the U.S. patent system more in line with other countries and eliminate expensive interference proceedings.

But the Patent Reform Act would also limit exclusivity and curb large damages awards—rendering patent portfolios more vulnerable to attack. Companies that rely heavily on patent rights may be hard pressed to draw investors under these conditions.

This article analyzes key components of proposed patent reform—and the impact such legislation would have on companies that invent.  Read more...