Spotting Software Innovation in a Patent Assertion Entity World

This paper looks at the relationship between venture capital (VC) funds and patent assertion entities (PAEs). These two types of entities rely heavily on patents most particularly in the software industry. The paper analyzes this relationship and argues that VC funds have fed into the PAE phenomenon. This paper also argues that PAEs have impacted how VCs behave.

It offers an empirical analysis and finds that as PAEs became more active, VCs provided more funds to the companies they backed. This paper closes by discussing what VCs have done and could do to address PAEs and their activities.