Financial Times Says Strong Patent Protections Promote Strong Economic Growth

Financial Times global business columnist Rana Foroohar published an insightful and well-researched column in October that highlighted the importance of strong patent protections to the U.S. economy. She wrote:

“There is little doubt that strong IP protection is linked to stronger economic growth. A recent paper from the National Bureau of Economic Research found that holding a patent (and being able to defend it) increases the probability of securing venture capital funding by 53 per cent, start-up job growth by 36 per cent and start-up sales by 51 per cent. Another paper, “Patents and the Wealth of Nations” by Stanford academic Stephen Haber, found that countries that protect patents enjoy stronger economic growth.”

Foroohar described how a large coalition of inventors, life sciences and tech companies, universities, venture capitalists and others believe patent rights have been dangerously weakened in recent years and a rebalancing of the system in favor of inventors is needed. She wrote:

“Indeed, the only ones that seem not to be complaining about the current system are a handful of the biggest Silicon Valley companies – including Google, Apple, Intel and Cisco…""But small and mid-sized software and hardware suppliers as well as life sciences companies have very different business models... For many of these companies, the shifts in the system that began a decade ago have gone too far.”

Foroohar also explained that the “patent troll” narrative that has driven the push for further patent-weakening legislation has no basis in reality, writing:

“In 2013, then president Barack Obama issued a report saying that patent lawsuits were rising, and two-thirds of all patent suits were brought by trolls. But that report was itself influenced by the Big Tech narrative on patent trolls…

“The White House report didn’t account for the fact that the America Invents Act itself artificially jacked up the number of cases by changing rules to disallow plaintiffs from suing multiple defendants in a single suit, thus necessitating that the number of suits equal the number of defendants…"

“The conclusion? Trolls have been overblown as a patent issue.”

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