Software patents

My friends at USV and Brad Feld are pushing for patent reform or doing away with software patents wholesale. I encourage you to read Brad Burnhams post and Brad Felds follow up here. Brad Feld has been passionate about this topic for some time and sent me the book “Math You Can’t Use” last year.

There is a compelling argument for this push. The trolls are busier than ever and we are also seeing our portfolio companies spend precious capital defending themselves against these legal attacks without merit.

Trolls are just one end the spectrum. On the other end, patents also favor big companies. In 2007 IBM proudly announced they received 3000 patents for the year.

In my experience, filing a patent costs about $10k and that’s just for the US. In order to receive 3k patents a year, consider how much they spend since some percentage of their applications are either rejected or require modifications. Those 3k patents alone required well over $30M. How many do you think they file per year?

This isn’t a sport for startups or young companies.

The patent system seems to be geared towards trolls or mega corporations. Is that best for the innovation economy ?

But here’s the thing. For all of this mess, every now and then you see the patent system working.

A recent example is the TiVo and Echostar lawsuit. Tivo’s patents helped defend themselves against Echostar and probably the reason why MSOs like Comcast are working with TiVo (just speculating here).

But I don’t want a system that protects the trolls or mega corporations and only works once in awhile.

So at the very least we need a better system.

I’m still not convinced I have the answer and ideally the best answer doesn’t require the courts to decide each time. That only helps big companies who can litigate forever.

(btw, this is the same logic I have regarding employee non compete agreements. I just want to get rid of them wholesale so the courts don’t have to deal with them each time.)

This an important issue and I look forward to getting smarter about it.

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Post Notes

  1. bijan posted this