What do venture capitalists really think about patents?

Eriq Gardner of IP Law & Business suggests that VCs insist on patents, but the VCs I talked to on March 1 don't care about patents, especially in the IT area. Further, according to Paul Grant and Bob Park, venture capitalists don't even care if the underlying science works, as manifested by the recent willingness of folks to invest in BlackLight's hydrino. From the Princeton Packet, 20 Jan 1999, on funding for BlackLight: "This kind of thing happens all the time," Dr. Park said. "These companies do not have people on staff who can evaluate the science," he said of venture capitalists. "They are gambling. If he's wrong, they lose a few million. If he's right, they gain billions." "I could go out to Sand Hill with some wild idea this afternoon and raise $10 million," Dr. Grant said, referring to a pocket of venture capital money in Silicon Valley, Calif., and the ease with which its denizens can be induced to part with their money.

I note I'm the only one in this group who actually talked to venture capitalists and quoted a venture capitalist. [See also later discussion in Intellectual Property Today, "Edison's Light Bulb and Stem Cells."] Will the real VC position on patents please stand up?

UPDATE on 30 March from from bizzbandbuzz.

From IPLB:

Venture capitalists won't "even fund new businesses without an assurance they can keep competitors out of the marketplace," Sarnoff says.

Mark Lemley: "If they aren't in the market and have no realistic prospect of
entering, an injunction does the world no good."

BUT

If Woolston says his purpose is to commercialize his patents, should
judges play psychologist, measuring the man's sincerity? If Microsoft held the
same patent, but hadn't commercialized it yet, should courts weigh its
efforts to exclude competitors differently?

Some believe these questions are irrelevant. MercExchange may be a
patent troll who blocks the bridge to progress, but "someone who owns the
bridge has the property right to choose who crosses it," says Ted Frank, resident
fellow at the American Enterprise Institute for Public Policy, which is not
involved in the litigation.


[egardner@alm.com; IPLB, Pg. 17 Vol. 04 No. 3, March 2006]