Pharma, Biotech See Value In Patents, But Software? Not So Much

Summary:  A recent survey asked corporations "Overall, has your company made money from the patent system?"  Pharma and biotech companies responded with a resounding "Yes."

 

In a survey conducted August 7, 2007, University of Missouri School of Law Associate Professor and Patently-O blawger Dennis Crouch asked companies whether they had made money from the patent system.  His published results showed that:

"On average, pharmaceutical companies see patents as a profit center while software companies see patents as an overall loser. (At 95%CI, Software & EE results each differ significantly from Pharm results)."

The survey results are based on responses from 131 corporate employees who claim to be "highly involved with their company patents."  See the Overall, has your company made money from the patent system? survey for details and graphical results. 

Comments:

  • Although the survey was admittedly non-scientific, the responses and trends are consistent with anecdotal evidence that I am familiar with:  in general, chemical, pharmaceutical and biotechnology companies see value in their patent portfolios more so than, say, software companies (especially those with financial services software patents).

  • The explanation for the survey results?  It largely depends on whom you ask.  Bio and pharma companies invest significant sums of money to develop a single drug or biologic candidate that may or may not receive market approval.  They want to recoup that investment, and the exclusivity of a patent grant represents a means to achieve that goal. 

  • This survey should come as no surprise (okay, maybe a little surprise) to a majority of the estimated 300 Maryland companies operating in the biotechnology and pharmaceutical sectors of the economy. 

  • FYI:  Maryland, has the fourth largest cluster of biotechnology companies among states in the U.S. (Source: Ernst & Young, Beyond Borders, Global Biotechnology Report 2006).  Many of them consistently rank among the top entities in Maryland receiving patents from the PTO each year (see Patenting By Geographic Region: Maryland, 2005).
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