A Software Entrepreneur On The Madness Of Software Patents and Trolls

http://www.feld.com/wp/archives/2012/08/a-software-entrepreneur-on-the-madness-of-software-patents-and-trolls.html

by azakai • 14 years ago

65 32 14 years ago

equity2• 14 years ago

Couldn't you just ignore the lawsuit? Presumably they are after big bucks, and it is a pain and huge cost to continue with legal proceedings. And you are probably one of a thousand threats they send out. They are in-business too and don't want to waste their time on cases that don't pan out. Do you really think they will actually take you to court? I suspect they may just drop it if you ignore it, unless you are a big name startup with deep pockets. For the patent trolls, this is just a numbers game. If you send out a lot, a certain percentage will settle... Note: I am not a lawyer and this does not constitute legal advice.

brazzy5• 14 years ago

For the troll, legal is their business, and the costs much lower because the ARE the lawyers. And they will not easily back off because that news would spread and suddenly everyone would ignore them, which would make their business much harder. It's not the same as frauds that send out tens of thousands of fake invoices for $50 in the hope that many will pay out of laziness and without spending time on research. Patent troll "license fees" are too high for that.

equity2• 14 years ago

Although trolls are lawyers, there is still a "cost", and in this cost is time and the opportunity cost of spending time elsewhere. Going to court, getting a judgement and collecting fees is a huge time sink. Patent trolls are not dumb. They will litigate when you are a big fish.

lusr• 14 years ago

Could one then attack their standing as a lawyer, i.e. pursue seeing them disbarred?

kenster07• 14 years ago

Imagine if Pythagoras, Leibniz, and Newton were able to receive patents for their formulas. What if the quadratic formula was patented? In fact, why not?

Actually, I retract that argument. The average software patent nowadays does not even begin to approach the caliber of the aforementioned discoveries.

anamax2• 14 years ago

> What if the quadratic formula was patented? In fact, why not?

Because it's math, and math isn't patentable.

And no, software patents aren't patenting math. They're patenting specific mechanisms used to perform specific tasks.

Here's another way to think of it. You can't patent physical phenomena. However, you can patent a process that uses heat to cure rubber.

darkestkhan3• 14 years ago

And that is why there are no software patents in Poland - software is math. In fact every software ever created could be written as math formula in lambda calculus.

cm127• 14 years ago

It's a shame the courts can't revoke some of these patents that are completely full of shit. You'd think if a troll would just lose once, it'd be over.

brazzy5• 14 years ago

The problem is that it takes someone fighting a lawsuit for hundreds of thoudsands of dollars to get a patent declared invalid (and it's never a sure thing) , but only a few hundred or thousand dollars to get a new patent.

pervycreeper• 14 years ago

Here's the thing: this guy probably didn't care all that much about software patents before his company was sued and it became a personal issue for him. The public at large is unlikely to be moved by something as abstract and (ostensibly) abstruse as software patents unless a clear case can be made about what's really at stake. This difficulty is compounded by the fact that the big companies can afford to license and defend if need be, so the stifling effects of software patents are even harder to see. How can we measure what might have been?

brazzy5• 14 years ago

Ultimately, what makes patent trolls so dangerous is that they're an asymmetric threat: one troll needs only the resources to fight one lawsuit to be able to make thousands of companies pay the extortion fee, and while only one of them would have to fight and win, it isn't rational for any one of them to do so Could that be sthe solution? Victims setting up shared defense funds to get the patents overturned, where each victim only has to pay a few thousand dollars?

smutticus• 14 years ago

It's even worse. The way things currently are incentivizes patent trolls to NOT create anything. Because then the companies they're suing might have a defensive patent they could use against the troll to exact a settlement. Patent trolls are incentivized to not create any value lest that value be used against them.

honzzz3• 14 years ago

It seems to me that the US patent law is a system for transferring money from those who actually do stuff to those who don't.

This is huge burden on business. Fear of getting sued to death is not the best motivation for creating new and exciting things - are you not afraid that start-ups will start to move out of US jurisdiction?

I know that Silicon Valley is the best place for start-ups and whatnot... but is it still worth it? Seeing lawsuit after lawsuit... I would never incorporate in the US - would you?

patrikmcguire• 14 years ago

Intellectual Ventures, at least, is structured as tens of thousands of theoretically independent corporations each owning one or a small number of patents. The idea is to have as few assets as possible in the suing agent so that there's no point in countersuing for any misconduct in the proceedings like barratry: http://en.wikipedia.org/wiki/Barratry_%28common_law%29 Misconduct may not be the best phrase, since there are a million ways to be liable that don't involve wrongdoing, but the idea is the same - you want to construct an artificial you that's as poor as possible so you have that much less to lose.

It's why the RIAA does the suing rather than the record companies themselves - you've got a long lawsuit to prove that anyone pierced the corporate veil before you can get anywhere near touching the entity with the actual monetary stake.

IANAL, so don't go too crazy with this.

the-expert• 14 years ago

He says his company has zero revenue but is being sued by a patent troll.

That doesn't make much sense without some more details.

What does the troll want?

Maybe it's not cash upfront?

noonespecial• 14 years ago

One lawyer I consulted told me not to read the patents- they were irrelevant. And the troll agrees. He said he didn’t really understand my business and didn’t care. We just looked like other companies he has sued.

This is kind of important. We spend a lot of time worrying about the patent. Its the least important part of the equation. The important thing to understand is that you're being mugged, and the police aren't coming. They know its bad, but there are much bigger things on their plate than petty crime. The actual patent is just the gun/knife used in the mugging, a completely common and non-unique weapon.

What the entrepreneurial community needs is a common sense guide to surviving a legal mugging just like the ones that address realworld muggings. There are simple things that a person can do as the victim of street crime that can greatly improve their chances of survival while minimizing loss. What might these best practices look like for startups facing trolls?

batgaijin• 14 years ago

Eh, all it takes is one random country with low taxes saying they don't respect IP laws. Cue US having a hissy fit, which in turn simply notifies other countries that it's a tactic that actually works. I look forward to that hydra rising.

honzzz3• 14 years ago

Many countries do respect IP laws... they just do not have software patents. For example EU countries - huge, developed market, technologically advanced with well educated people. Their start-ups used to go to the Valley because that was the best place to be for start-ups... but now when Americans managed to create such toxic anti-innovative legal environment maybe this will change.

ahi• 14 years ago

Unfortunately, the best response to realworld muggings is the same -- hand over your wallet.

A Software Entrepreneur On The Madness Of Software Patents and Trolls

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