Bilski and Patent Reform

Those us of who are ardent supporters of patent reform were hoping that the Supreme Court's opinion on the Bilski case would strike down the notion of business method patents, the worst kinds of patents out there and a huge tax on the innovation sector. Unfortunately we did not get that outcome, the Supreme Court basically punted on taking any stand on business method patents. Bilski did not get his desired patent on hedging energy risk but that decision was based on fairly narrow and technical grounds. Here is a thorough analysis of the Bilski decision.

Regular readers of this blog know that I believe patents, particularly business method and software patents, are largely a negative for the startup sector. While patents are often thought of as protection for "the little guy", the truth is most patents are owned by large companies and increasingly by patent trolls. As my partner Brad talks about in this post on the USV blog, almost a third of our portfolio is under attack by patent trolls. 

A startup that becomes successful in this day and age will most certainly face a number of patent infringement cases. A perfect case in point is this patent infringement suit against Twitter by TechRadium that makes messaging systems for public safety, the military, and utilities. Twitter will spend untold sums defending itself against that suit.

What I am doing and many others are doing as well is educating our government about this issue. If the US intends to remain the best place in the world to do a tech startup, it needs to address patent reform. At least one Senator agrees. Pat Leahy put this statement up on the Internet yesterday. The money quote is:

The courts, however, are constrained by the text of our outdated statutes, and it is time for Congress to act.

So the Courts turned out to be a false hope for patent reform. It is time to turn our efforts to Congress. I hope you will all join me in reaching out to your representatives and explaining what is wrong and what has to change.