Investment Moving Overseas

Below is an excerpt from an outstanding Kevin Madigan essay summarizing the problems plaguing development investment in what was once our gold-standard US patent system. Madigan explains why development investment needed to commercialize US inventions and life science discoveries is now heading overseas. Madigan’s description of the situation is spot-on. His description of this alarming situation is spot-on, and his links are reliable and helpful. Lincoln’s famed reference to the investor’s “fuel of interest” supporting the inventor’s “fire of genius” poetically describes the commercialization process. More prosaically, after Congress appropriates its R&D funding, commercialization is where that federal funding rubber meets the road. This essay is about real statistics, sound reasoning and reliable links to opinions of patent policy experts. It demonstrates the economic importance of the Oil States case pending at SCOTUS and passage of the Coons/Cotton STRONGER Patents Act.

Kevin begins:

“Venture capital investment in the United States has declined steadily for years, as investors abandon an uncertain domestic climate for more reliable opportunities in foreign countries. In a report on the current state of the entrepreneurial ecosystem, the National Venture Capital Association emphasizes the extreme decline in the US share of global venture capital in the last twenty years, highlighting a drop from 83% of global share in 1996 to just 54% in 2015. At a time of decreasing investment, the US should be working to improve its innovation ecosystem, providing stable and effective property rights to inventors so that VCs can once again feel confident that investments in startups’ R&D—secured by patent rights—won’t just be stolen by established and better-financed infringers. Unfortunately, its doing just the opposite. Over the past decade, the US has continued to gut its patent system of the protections and incentives that attracted investment and made it the world leader in cutting-edge innovation in the first place.” 

The rest of the essay needs no further comment from us ….it is a gem…..please read it here, send it to your congressional delegations and save it as a resource in the struggle that lies ahead. 

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