Patent Thickets are a MYTH- no investors are concerned about infringement

The idea of a “thicket” or “anticommons” in the software industry is difficult to credit.  When raised in my interviews, that thesis universally was rejected. The basic premise of the model is that assets will go unused because of the costs of obtaining the permissions necessary to use them.263 As discussed above, there is nothing theoretically impossible about that outcome. The important question, however, is whether this is in fact what has happened in the software industry. In this case, a few objective indicators suggest reasons why the thesis of the patent thicket has so little power to say anything usefully descriptive about the industry. For one thing, none of the startup firms to which I spoke suggested a practice of doing prior-art searches before beginning development of their products. As far as I can tell, the only occasion in the software industry in which a startup is likely to experience such costs is when the startup is founded on a specific piece of existing technology spun off from an existing company or from a university laboratory. For another thing, no investor suggested any concern about the possibility that their portfolio firms might be infringing the IP of others in the industry. That is not because they were sure that the startups were not infringing; it was because they thought it would be unlikely to pose a significant difficulty if they were. As discussed above, industry executives do accept one premise of the patent-thicket thesis: that software patents are multiplying so rapidly that it is likely that many products startups are developing ultimately will infringe patents held by large existing companies. The textbook example is IBM, which apparently holds far more software patents than any other company in the industry. Indeed, as I explained above several of my interview subjects joked that they thought it likely – without any investigation or particular knowledge – that there would be something in IBM’s portfolio that their product infringed.