Patent Matters: A VC’s Perspective –

Patrick Ennis, managing partner of Arch Venture Partners in Seattle, knows a thing or two about research. Long before he joined Arch in 1998 to invest in life sciences, Ennis was conducting research, beginning in the late 1980s, on solid state and nuclear physics at several national laboratories in North America. He wrote numerous articles on his findings. But, he says that he never thought of patenting his discoveries back then.

Q What’s the best thing that could happen to patents?

A It would be great if not so many were granted. Cutting down on their numbers would increase their quality.

Q What’s the worst thing that could happen to patents?

A That we forget the goal of patents, which is to foster innovation and benefit people. It’s not doing any good to focus on the litigation, rather than conducting research.

Q Why didn’t you focus on creating patents when you were a researcher?

A Back then, if you worked in a lab, you never thought of creating a patent for the company you worked for. Not until the 1990s did marketing a patent and offering incentives to employees for creating them became a huge deal for companies.

Q And now patents are on the rise. And so is patent litigation. Why is that?

A It’s not because there’s a rise in good patents. A rise in patents, in general, has helped fuel all the lawsuits.

Q How does the emphasis on patents and avoiding patent litigation affect you as a VC?

A We spend more time now than ever before on patent due diligence, researching the patent database to see what else is filed. And we have to read all the scientific journals to gauge where the next patents will come from. It’s very time consuming, and VC firms obviously need to be properly staffed to deal with patents.

Q Are you worried about getting sued?

A No, if you do the due diligence and check with other companies that have similar technology or patents, you can avoid lawsuits. Most litigation comes from bad communication.

Q What do you mean when you say bad communication?

A It’s about due diligence. When you’re filing a patent, you see who the competing researchers are. Then, you talk to them, or their backers, and you see if you can’t bring all the research together and create a bigger portfolio. Everyone benefits from communication like that, and no one gets sued.

Q What about Prop 71 in California; is that a good way to foster research?

A It will fund plenty of research, that’s a good thing. But the best research happens opportunistically. Someone thinks of an idea and goes out and researches it and gets funding and develops a product that benefits people.