The importance of patent term restoration to small, high technology companies.

Abstract

T he importance of patents and of a strengthened patent incentive to the small, high technology company is difficult to overstate. When under the umbrella of patent protection, a small company can compete on the strength of its innovative capability with larger, older, and more entrenched concerns, the patent system operates to best purpose as an essentially procompetitive mechanism. Nothing in my experience has been more instructive with regard to the vital role patents play in our free enterprise system than the opportunity I have had to look at the world from the vantage point of the small start-up company. Although surrounded by trees that cast great shade, we at Genentech are seeking our own place in the sun, and we expect that the availability of meaningful patent protection will help us do it. Thus, we strongly support patent term restoration legislation as should every small company whose competitive edge lies in its innovative capabilities and whose activities must undergo regulatory review before the onset of commercialization. My thesis is straightforward. Innovation is important. It arises most frequently in the small, entrepreneurial company context.. Patent term restoration will make patent protection more meaningful. More meaningful patent protection will permit small companies to flourish and grow, where otherwise they might not. Conditions that encourage the growth of start-up companies also encourage investment in them, and therefore investment in innovation. The formation of small, innovative companies that can grow up under the shelter of patent protection only enhances competition, by increasing the number of market entrants and by the downward pressure the new products of innovation exert on the prices of older products. The genius of the patent term restoration legislation