We offer description and analysis of the 2008 Berkeley Patent Surveythe first comprehensive survey of patenting and entrepreneurship in the United States-summarizing the responses of 1,332 early-stage technology companies founded since 1998. Our results show that entrepreneurs have varied and subtle reasons for using the patent system, many of which diverge from the traditional theory that patents provide an "incentive to invent." Somewhat surprisingly, startup executives report that patents generally provide relatively weak incentives to conduct innovative activities. But while a substantial share of early-stage companies hold no patents, we also find that holding patents is more widespread than previously reported, with patenting patterns and motives being highly industry, technology, and context specific. When early-stage companies patent, they are often seeking competitive advantage, and the associated goals of preventing technology copying, securing financing, and enhancing reputation. We find substantial differences between the health-related sectors (biotechnology and medical devices), in which patents are more commonly used and considered important, and the software and Internet fields, in which patents are reported to be less useful. Startups with venture funding hold more patents regardless of industry, although unlike software companies, venture-backed IT hardware firms show a patenting pattern more similar to that of health-related firms. When choosing not to patent major innovations, early-stage companies often cite to cost considerations, and report substantially higher patenting costs than the

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Many scholars have employed the term “entropy” in the context of law and legal systems to roughly refer to the amount of “uncertainty” present in a given law, doctrine, or legal system. Just a few of these scholars have attempted to formulate a quantitative definition of legal entropy, and none have provided a precise formula usable across a variety of legal contexts. Here, relying upon Claude Shannon's definition of entropy in the context of information theory, I provide a quantitative formalization of entropy in delineating, interpreting, and applying the law. In addition to offering a precise quantification of uncertainty and the information content of the law, the approach offered here provides other benefits. For example, it offers a more comprehensive account of the uses and limits of “modularity” in the law—namely, using the terminology of Henry Smith, the use of legal “boundaries” (be they spatial or intangible) that “economize on information costs” by “hiding” classes of information “behind” those boundaries. In general, much of the “work” performed by the legal system is to reduce legal entropy by delineating, interpreting, and applying the law, a process that can in principle be quantified.

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It is now widely asserted that legal regimes that enforce contractual and other limitations on labor mobility deter technological innovation. First, recent empirical studies purport to show relationships between bans on enforcing noncompete agreements, increased employee movement, and increased innovation. We find that these studies misconstrue legal differences across states and otherwise are flawed, incomplete, or limited in applicability. Second, scholars have largely adopted the view that California's policy against noncompetes promoted Silicon Valley as the world's leading technology center. By contrast, Massachusetts' enforcement of noncompetes purportedly stunted innovation in the Route 128 region near Boston. We show that this account is incomplete. During the rise of Silicon Valley, California noncompete law did not as vigorously preclude noncompetes as today and firms could substantially mimic noncompetes through contractual and other instruments. Rather, fundamental technological and economic factors more persuasively account for the rise of Silicon Valley and the Boston area has remained a significant innovation center. There is little compelling ground for the view that barring noncompetes and other limitations on employee mobility promotes innovation.