Why We Need An Independent Invention Defense
My partner Brad wrote an impassioned plea for an "Independent Invention Defense" for patent infringement claims. He starts his post with this observation.
Almost a third of our portfolio is under attack by patent trolls. Is it possible that one third of the engineering teams in our portfolio unethically misappropriated technology from someone else and then made that the basis of their web services? No! That's not what is happening. Our companies are driven by imaginative and innovative engineering teams that are focused on creating social value by bringing innovative new services to market. Our portfolio companies are being attacked by companies that were not even in the same market, very often by companies they did not even know existed.
We can argue about software patents or patents in general. I'm not a fan. I don't think they encourage innovation in many sectors, maybe most sectors. But I recognize that they play a role in protecting inventors from others blatantly stealing their innovations.
But anyone who has spent a significant time in technology based businesses will understand that two groups working completely independently from each other will often solve a problem similarly. One group is not copying or ripping off the other group. They are simply coming to similar conclusions about how to get something done.
In these cases, it makes no sense to protect one group from the other. Nobody has taken anyone's "intellectual property." Both groups should own their inventions outright without having to license technology from the other.
That's not how it works today and as a result, our portfolio companies and entrepreneurs and startups all over this country are paying a very high tax on innovation. Read Brad's post for more details on the costs of bad patent policy and what we should do about it.
I’m sympathetic, but think about how easy it would be for somebody who did get an idea from a public patent filing or other public disclosure to hide or destroy the evidence, and then claim independent invention.Maybe patents are too easy to get, but there’s a reason why we have them as an alternative to trade secrets — which do provide for independent invention as a defense. The reason is that trade secret litigation is even messier and more expensive.Tell your portfolio companies to go sign up with KPCB and CRV backed RPX Corporation.
that’s a patent troll of another sort in my bookwe don’t want companies collecting patentswe want companies innovating
I agree. But absent a healthy IPO market, even companies outside the pharmaceutical and biotech arena have no incentive to create entirely new markets for entirely new products without the risk-reduction factor of strong intellectual property rights.Startups need money from VCs. VCs make money by selling startups. Big companies buy startups. Sure some big companies will take chances on new products — but not new products that threaten to make their entire business model obsolete.There is a place for strong patent rights in our economy. The problems with the system are due to the antiquated methods of filing and examining patents.If you really want to solve the patent problem, then you should fund a startup that could provide for a better clearinghouse for inventors to meet entrepreneurs and get their ideas in the commercial pipeline. Except that that’s just what companies like RPX are trying to do.
Correct: Just one of the better questions is when we say “we want to innovate” is-what is the true cost of the patent? Innovation isn’t cheap because a lot of it is failure ior never gets around to being used, or is only part of a slow buildup.I’m not sure if RPX delivers on that problem.
i disagree Michael. there is plenty of incentive to start and build companies without patent protections. i can’t think of a single one of our USV portfolio companies that is relying on IP for its value.
It’s a terrible distraction, but perhaps it’s really an opportunity in disguise? A market for cheap patent defense.A patent bubble so that those that opt in can build without the troll tax?
Fred,What do you think of a company that insures against patent trolls? It would have to consist of lawyers to know whether the company has a defense but it may help avoid a large portion of these frivolous lawsuits.Have you heard of companies offering equity to law firms for the sole purpose of representation in court?
that’s like throwing more fuel on the firewe need to make it harder to litigate in the first place
With the current legal system in place it’s pretty challenging to do that. It seems that a lot of the people who are able to change the way things are gone prefer them being kept.I do see your point – it’s similar to nuclear stockpiling where neither side is going to attack but is wasting resources on stockpiling that they could be focusing on something else.
Agreed. That’s a classic example of shaving the bear (ie. treating the symptom instead of the problem. See: http://sethgodin.typepad.co…
Since complete legislation revamp is probably far, maybe as a compromise step is to go back to concrete patents, and try to promote a legal demand from software patents application to handle the full source code.This have the following benefits:1. Reluctance to file the application in the first place2. Less applications, abstract concepts can be filed in 24hrs, full source code not3. Easier proof of existing prior art: once you see the source code, probably somebody somewhere had done that.4. Easier to re-write code that does not violates the patent
Every time this comes up I start ranting about the theory of Multiple Discoveries. Blows me away that this isn’t just a given in people’s mind, like gravity.Instead of a rant, this time I’ll just give a quote and a link to Wikipedia:”The concept of multiple discovery is the hypothesis that most scientific discoveries and inventions are made independently and more or less simultaneously by multiple scientists and inventors.” [http://en.wikipedia.org/wik…]
I just don’t believe software patents serve a good purpose at all. They neither promote innovation (a tax indeed) nor help consumers. Is independent innovation defense the backstop because forces arrayed against killing software patents are deemed too strong?
The term “software patent” is a portmanteau, there are very different kinds of patent under that umbrella. You have “business method patents” (e.g. Amazon one-click) which are dubious under most legal jurisdictions (soon the US it seems) and you have “algorithm patents” (e.g. RSA algorithm) which are allowed world-wide. It is useful to specify which is being talked about.The difference is that algorithm patents are patentable because they are a strict machine specification e.g. direct reduction to an electrical circuit. Business method patents have no unambiguous reduction to a strict machine.
good clarification J Andrew — I’m referring to business method patents
I tend to agree. But holding a patent, or at least filing for a patent, is commonly used in our industry to help determine if something is really innovative or not. I don’t recall when I have spoken to a VC about any technology without the patent question coming up at some point. Having a software patent is valuable or perhaps not having one can be costly. Maybe this is starting to change.
come visit us Tony. you won’t hear the word patent. i promise you.
LOL, I’ll keep that in mind.Sent from my BlackBerry® from Optus
I can’t speak to life sciences or energy, but in software/Internet I find that many VCs ask the patent question merely to check for defensibility. Savvy ones know you win a market through execution and timing, not patents. Ideas are important and essential, but just a starting point and I feel like general culture still subscribes to an unhelpful fantasy about the *brilliant idea*.
i think so Giff. taking patents head on is going to be a long and hard fight
Software patents are indeed a hairy beast, but surely you can’t mean that you are “not a fan” of patents in general. What about biotech & pharmaceuticals? The pipeline for developing a drug and getting it through the FDA can run well into the hundreds of millions. Exclusivity is absolutely necessary where the costs are this high. Again, when talking about an internet service – different story. But in almost all other sectors patents are absolutely necessary to encourage innovation. I’m sort of shocked at the generalization.
i meant what i said. i don’t believe that there are many truly novel ideas
I agree, and so does the patent office, which is why we patent inventions, not ideas. Software patents are problematic for exactly that reason – they tend to be expressions of ideas. Curing cancer is an idea; the implementation is the patentable invention.
There are certainly problems with the current patent system when it comes to software patents.The system needs to be better at identifying patent applications that have prior art or those that fail the obviousness test. If the necessary improvements were made, true original inventors would be better protected and patent trolls would not be able to so easily interfere with entrepreneurial innovation. I think community powered solutions like Article One Partners will go a long way to help identify prior art and limit a big percentage of the unnecessary/superfluous/obvious patents that are issued.
This is how I see it. Examination systems need to be brought in line with post-Kleinberg-algorithm search technology. The way patents are filed, prosecuted, and examined today is basically the same as how it was done in 1836 when the first real Patent Act was passed.Why, for example, can’t inventors post videos that explain and market their work on the PTO website?Or why aren’t software claims made in terms of pseudocode or UML diagrams rather than one sentence in English. Claims, in particular, need reform. Claims should be made in the language that inventors use to communicate their ideas to each other in a particular field. This is how drug claims are made. Why the same is not done for software is more the result of inertia than reason.
Fred, the absolute best post on this subject is by Vivek Wadhwa on TechCrunch. Have you read this?http://www.techcrunch.com/2…
thanks for that link John. A very good post indeed. i was able to correct one fact Vivek got a bit wrong.
Amen…A lot of these patents are taking obvious things and putting them together in an obvious way. Yes it’s new, but not innovative. Things like Amazon’s one-click. Once I develop a way to charge for things online and a way to remember your details, why would I not let you buy with one click.I wish there was a way to evaluate obviousness. Like give a handful of engineers your problem statement and 20 mins to draft a solution. Anything they come up with out of your patent.Heck, I’ve seen patents where the title was enough for me to know exactly what they were trying to “invent”.
What we need is a new litmus test for what is patent-worthy. After all, it’s pretty damn hard to credibly argue that society benefits when, for example, Amazon is awarded a patent for its “one-click ordering” business-process since gravity would have led to the same outcome in due course (i.e., it’s obvious; the output of focusing on the best user experience, and the highest yielding path for converting an engaged prospect to a paying customer).In other words, why treat patents like winning the lotto, with awards gained simply by virtue of buying a lot of tickets or being first in line? By contrast, when Amgen spends hundreds of millions of dollars in R&D on cancer curing drug development, they NEED a patent to protect against cheap generic copycats that would otherwise obviate the incentive for making the risky investment in the first place.
i agree that the pharma business model requires something like patent protection to make it work. but that is an outgrowth of the regulatory regime that exists in that market. that issue could be solved in other ways if need be.
Complex, for the simple reason, that changing the regulatory workflow would also require tort reform, as in US at least, a lowering or re-definition of regulatory standards would lead to a torrent of lawsuits, as some percentage of people get sick, die, etc. from drugs that otherwise would have still been in testing mode before being commercially released.Sad to say, if there is one area that I am cynical is how many of our laws are governed by the inherently litigious nature of our society (both protecting against lawsuits and providing the framing for same). Alas.
I had thought one of the requirements to get a patent was for it to be “non-obvious”. However, it doesn’t seem like that rule is applied. “First to file” does not equal “non-obvious,” but that seems to be the main test.I think if you put a few smart guys in a room and asked them to think about a problem and can come up with a similar/same answer in a day or two then it shouldn’t be eligible for a patent. It wasn’t so much an invention as it was a logical solution to a new problem.Also, too many software patents are just combinations of other things that are already public knowledge. Those shouldn’t be allowed either.
Darn, I’m late to this whole party, but, really, expanding the meaning of “obvious” is probably the simplest fix we could implement for the patent system. The KSR case (see http://scholar.google.com/s… ) unshackled the meaning of “obvious” a bit, but still didn’t give courts enough options. One of the big problems with our current framework is that, for a judge ill-equipped to really know the details, “obvious” is a nuclear option that kills the lawsuit entirely. Judges tend not to like to do that; they tend to like to put genuine factual disputes before a jury. Some middle ground options (i.e., burden shifting or the like) if the court finds the patent “likely obvious” or “likely non-obvious” or something similar would help the situation considerably.If I can get through some so-called “work” tomorrow, I’ll write more at my blog.
Fred, given your ability to see into a lot of startups, I’m wondering: what portion of patent lawsuits against startups are from people actually using the patent productively?
it’s extremely rare. if you read brad’s post, you’ll see that one of our companies was sued by another company who had a patent but could not figure out how to build what they had patented. our portfolio company settled and part of the settlement was our company building the patented technology for the patent owner. can you believe that?
That’s shocking. Have you really invented something if you can’t make it work?Given your answer, I would love to see some reform. I’m ok with patents being used to defend companies that are actually innovating by making novel products and putting them out in the world. But using the patent system to impede innovation seems perverse, especially given that the constitution allows patents “to promote the progress of science and useful arts”.I wonder if we should bring back not just the working model requirement, but an ongoing requirement to sell a product.
In order to be valid, the description in the patent must enable one skilled in the art to make and use the patented invention. Otherwise, it’s nonenabled and violates the statutes. What did the patented technology relate to?
William, I think this is the only real solution. Requiring that a company actually be trying to exploit the patent before it can claim infringement is the most plausible practical approach.
I agree. Companies that are not trying to apply the patent (“exploit” is the wrong word since that’s exactly what patent trolls do) should not be considered to have standing.
Point a)Forget it if you want to invest in anything involving biotech, pharmaceuticals, or with a huge upfront cost. The patent makes people feel better. Even if it could have some nasty backlashes later (like I dunno, BRAC1 and 2 screening. That is still under patent in the US.)Also, the comparison was made to literature in one of the links out: Remember in the US, literature can have up to a 95 year copyright after publication or 120 years after creation on it because of the “Mickey Mouse”/Sonny Bono Copyright Term Extension Act. There hasn’t been an object “written” since 1923 with a registered copyright that has passed into the public domain.I would bet considerable sums of money if I had it that the patent trolls would turn into copyright trolls- a considerably more expensive bargain, since I really don’t want to be hearing about “orphan code”You might want to think about segmenting the patent system or examining the problem more closely instead rather than saying patents are inherently bad or good.And you might want to keep track and start publicly listing trolls. Nothing like a witchhunt to scare people off.
Totally off topic: Since this is the first time you are linking back to the USV site since the new look was announced (it was more beta last time) just want to say it is looking squeaky and good.
Thanks for the great posts Fred and Brad. Fred you hit the nail on the head with your comment to DanGoldin: “we need to make it harder to litigate in the first place”.And Brad nails it in the last paragraph of his post: “If, on the other hand, the troll was required to show the startup had some prior knowledge of their technology, the burden would be shifted to the attacker, and this blatant abuse would come to a grinding halt.”In essence you make the troll pay before he/she ever comes knocking on your door. How? Brad says it above – make the troll show the startup had prior knowledge.Now let’s take it one step further – If the troll files a lawsuit and loses then the troll and/or his/her legal firm pay treble the amount plus legal costs.And it’s a lot easier to get a little regulation inserted into existing laws then to change the government’s outdated patent process.This is something the VCs should pool together and get done and btw, this would easily take care of all industries, tech, pharmaceutical, biosciences, etc.Like Brad said the patent trolling would come to a grinding halt.
If you’re troubled, there’s a 501(c)(3) in Boston – the Free Software Foundation, which has started a campaign at http://endsoftpatents.org to try and sound the death knell for these nonsensical creations. If Union Square is looking for a tax deduction, I think that’s a good place to look. …though Bilski might render the whole thing moot; stay tuned: http://news.swpat.org/2009/…
thanks for the link to end software patents. we’ll go take a look.
Similarly, I feel the same happens with design. As soon as I think I came up with a new concept, it’s already published in some architecture magazine.. no fun.At least I know that I’m onto something and maybe someday someone will recognize my talent and I’ll get a big break. Until then I guess it’s back to the drawing board as they say 🙂
it sucks we have to think about building defensible ip, no one said the path would be all sunshine and roses.
The “independent invention” excuse sounds like the Biggles excuse to me: “it seemed like a good idea at the time.” Get with the program. I usually hear patent-troll whining from OSS zealouts, not VCs.Everytime I read a patent, I go through the four stages of Patent grief: Fear, Denial, Acceptance and Workaround. And there’s gold, gold I tell ya, in the workarounds!It is a primary and incredibly important role for any CTO of a technology company to ensure that the provenance and patent status of any technology their companies use is known and understood. There is no excuse for not knowing the patent literature in your field in the age of Google Patent Search.The USPTO is a fantastic and underappreciated source of knowledge. Remember the deal that patents present: teach the world and get 20 years exclusive use. There are 2 parts to the deal. Consider the alternative. We called it the “Dark Ages.” Now it’s just a quaint place we simulate in multiplayer online games, thank goodness.
if you take the time to discover prior art, then you are clearly infringing
Yes, that’s what we call “wilful infringement.”Are you seriously suggesting we legally recognize ignorance? In most cases a single google search will give you a good idea of how original your idea is. And that is what we are talking about — originality.”Sorry, your honor, I really couldn’t be bothered with all that tiresome googling. I just assumed I had the idea first. Honest.”It is frustrating to describe the difficult, generally lonely and outrageously hard work of inventing new and valuable technology to people who seem to think that it just springs from the forehead fully formed or is delivered like manna from heaven in a sun shower.The US patent system is one of the greatest contributors to wealth on the entire planet. It allows technology to be economically exploited and property rights to be legally enforced. If you fundamentally question the patent system you are really questioning capitalism. There are tweaks that can be applied, sure, but I would leave you with these 2 facts: (1) only a tiny fraction of patents ever end up in the inventors’ own products and (2) only a tiny fraction of those ever get litigated. Much better to grant as many patents as possible to give as many startups a chance to raise money and get going, and then sort out the ownership of the tiny fraction of ideas with similar invention dates in the courts as needed.Much more efficient, fair and open.
“In most cases a single google search will give you a good idea of how original your idea is.”No, not really. Even if we limit ourselves to talking about software patents, that’s still a vast field including many specialties. Sorting through all of the possible prior art can be a full-time job, and all the searches in the world can still yield a false negative if some other group somewhere files while you’re still doing the arduous translation into legalese – or, God forbid, continuing to innovate. For example, two of my own patents are on cache-management and clock-synchronization methods. Go ahead, do your single Google search and see if you can determine which implementations of those ideas might infringe which patents. That ought to be fun.”It is frustrating to describe the difficult, generally lonely and outrageously hard work of inventing new and valuable technology”Yes, it is. I’ve been there, done that, and have proof (x5) of having done it. I suspect that certain others participating in this conversation can’t say that.”If you fundamentally question the patent system you are really questioning capitalism.”Oh, bull. Do you even know what “capitalism” means? It in no way requires that there be any form of exclusive “intellectual property” whatsoever, let alone the ridiculous form we have. I happen to be among those who believe that patents in general are a public good, even though the patent system is often abused (especially with respect to patenting algorithms), but I think it’s despicable to wrap pro-patent arguments in patriotic sounding mumbo-jumbo just to stifle debate.”Much better to grant as many patents as possible to give as many startups a chance to raise money and get going”What you seem to miss is that “grant as many patents as possible” actually *inhibits* the incubation of startups, not only in terms of funding but in terms of ongoing idea development and revenue generation as well. Startups need to be free to innovate, free from the fear that their entire business will be ruined when some company that employs only lawyers and not inventors comes along with a should-be-invalid submarine patent on something they had legitimately and laboriously invented themselves.
The idea of a “clean room design” has been around a long time. In fact, one of those probably powers the BIOS on your computer.http://en.wikipedia.org/wik…Software and business methods should not IMO be patentable. Even Google has not patented all of their algorithm, preferring to go the trade secret route. This is probably the most valuable code in human history.
Why don’t you just by Wi-LAN (WIN.TO) as a hedge?
Disclosure: I am currently in application for a (hardware) patent. I am developing a hardware/software/system combination. I am bootstrapping. Until it all comes together it is all pre-revenue. When I approach investors THEY need to feel the idea is protected before they will talk to me. I have been in the process of application for nearly 5 years in Europe and the US. It has cost me a lot of money and is the principal external expenditure of the whole project- but it is evidence of my partner’s and my faith in the concept.If I could have had the investment to be “first to market” I would have been far happier. I am aware that a US university has spun-out a company with a concept similar to mine with a later priority date. They are in a better position to turn invention into innovation as they are receipt of research funding and have professionals to support their business development- however I would feel cheated if I did not “get my share”. There is little value to investors in my proposition (as a 2 person concern) unless I have value in the proposition – and time and again that comes down to a protected idea.It is taking too long and costs too much – but without protection I would not have put effort into developing the idea in the first place.If I was just developing a tweek in some new search methods, or yet another media sharing/delivery system or yet another way of being social on the web I might think differently. There is less risk in the tech development and more focus on getting click through. Funding hardware is hard, funding education ideas is harder. The patent is the only thing that makes the struggle potentially of value to the inventor.
In an ironic way patents actually cause ‘ip theft’. If two companies invest a lot in research an come up with the same solution, the one that files a patent first actually steals all the investment done by the slower company. The slower company paid for the research to create the intellectual property, and also has to pay for using the patent, even though they did their own research. They are being robbed of the intellectual property they created themselves.The faster company is misusing patents to steal from the slower company: ip theft.
Under current U.S. law, the first party to invent (not file) is the true inventor, so your conclusion is incorrect for the U.S. Europe and other countries are “first to file”, which is simpler but arguably less fair. There is legislation that would change the U.S. to a first to file system.
Software patents contradict the original patent idea in two fundamental ways: (a) they patent **abstract** rather than **concrete** and (b) they patent **application** rather than **innovation** (e.g., patent on email on mobile devices: this is an application of existing prior art).Both issues are exactly the opposite of the patent system spirit: abstract and application, instead of concrete and innovation
The problem is a global one as well. You can have a patent defense that stands in the US, but then you have European and Canadian patents as well. Think the independent invention defense is needed, but it needs to be globally recognized.
The rule of the jungle where inventing is nothing and constantly innovating is everything can work well in many cases, but not in all of them. Your portfolio companies don’t need patents as they have the means to innovate and develop, but what about small companies without the means to defend themselves and innovate? Without some protection similar to patents, big companies will simply copy everything from small companies. If Ms. X invented an unbreakable glass she won’t get much out of it as it will immediately be copied by everyone, but this is also true for tiny software ideas of which there are millions. Letting Microsoft appropriate anything they want won’t give small developers much chance. When you are backed by VC’s, that’s a different matter.Patents are, or should be, designed to protect the weak, not Microsoft (and regulations can be made in some special cases like the pharmaceutical industry).
Right but even so the small company should not be able to go after the bigcompany if the big company’s engineers came up with the idea independently
That’s true, but it would make it completely unenforceable, given the lawyers the big company can hire and how difficult it is to prove. In fact further, such an amendment would be a boon to patent trolls because they will be able to demand all kinds of information to prove their case. Big companies wouldn’t want to open up all that information and would need to settle.
Sorry, A VC, but do you know who’s driving the aggressive acquisition of software patents in my experience? The VCs. At my last two startups, it was the VCs who insisted that folks do all the work (and it is boring tedious work) to file patents, and when companies don’t make money the obvious way it’s often the patent portfolio that’s held out as representing their value to last-minute buyers. The people doing the actual innovation probably wouldn’t have expended nearly as much effort on acquiring patents if it had been up to them.
Not this VCYou are hanging out with the wrong crowdThere are a number of prominent VCs who are opposed to software patentsMy goal is to increase the number
Good for you, Fred, and I’m not being sarcastic at all. I mean that most sincerely, and think we need more like you. As for the “wrong crowd” though, I think you’ve effectively said that the vast majority of your peers are the wrong crowd because the “press for exploitable patents” attitude is by far the most common. Even if that weren’t the case, I and most inventors don’t get to choose which VC “crowd” we work with. For every engineer who starts their own company, there are twenty others who do most of the actual patentable innovating. Those twenty join because of the technology involved, often overcoming their distaste for some set of VCs or for VCs in general, in preference to working at another company with better backing but less interesting technology. The inventors have no leverage, so any pressure for change has to come from elsewhere.
i think you are right. the vast majority of our peers are wrong on thisissue. it will take time to change their views and i plan to work on it
you guys need to make your arguments simpler if you want people to understand and get passionate about it. i could barely comprehend brad’s post, although frankly it’s probably not worth trying. it sounds like a basic problem with governance/regulation, having a government that actually works is a requirement to any issue involving regulatory policy. you guys don’t want to do that, no one does save the 9/11 truthers and other fringe people. we’re growing in numbers but people need to feel the impact of bad government more before it gets through. basically, it gets worse until we choose the consciousness shift, i.e. accept the truth that sets us free.
A bit of a simplistic question… why, if you want to get rid of software patents entirely, don’t you just tell startups to put anything they think may be patentable by someone in the public domain as soon as possible? If they really are coming up with these things simultaneously, then it’s a straight way to kill the patent process.
Perhaps the trouble stems from the fact that the present patent system prohibits *all* unauthorized use of an idea where it should only really protect an idea from blatant copying. If company A has an idea, then a (richer) company B comes along and profits from that idea by lifting it wholesale and integrating it with its own well-establshed products, then there is a problem. However, if company B comes along, takes the idea, significantly expands on it, and perhaps combines it in non-ituitive ways with other ideas from other sources, then what is the problem. Of course, key terms such as “significant original expansion” and “non-intuitive combination” will have to be defined, but that is the general gist.Setting patents to work like that, should, I think also take care of the problem mentioned in the post. Two teams working separately will almost always come up with different implementations (or “expansions”) of similar ideas, while patent trolls would generally lack implementations/expansions altogether.Just my $0.02…
This has always been a source of major frustration for me. I see it today in my Droid phone which does not allow me to ‘pinch’ ‘zoom’ my screen (unless I root it). I do see the need for patent protection though. I hope that we eventually see this resolved – somewhere in the middle. Perhaps a patent holder should only have 5 years to ‘productize’ their innovation or the patent becomes null and void. Should the patent holder productize it immediately, they would HAVE to license it to others for a % of revenues.http://twitter.com/A_F
There are some who call Nathan Myrhvold’s ‘Intellectual Ventures’ a trolling outfit. Do you agree?
i don’t know enough to comment. but if looks like a duck …….
so if nathan myrhvold is involved the slur “troll” sticks in the throat?
well if he sues one of our companies, then i’ll gladly call him a troll publicly
sorry, but i find that confusing, and contradictoryas you and i (and everyone who cares) know perfectly well — its not only*not* a secret, its also been written up extensively in the media as well asin numerous interviews with myrhvold, see below — that myrhvold is filingand acquiring third-party patents as fast as he can thru his venture-fundbacked firm, Intellectual Ventures, or IV.)and IV is developing products at best for only a small minority of thepatents, and is bringing even a tinier number to market.and all the while IV is soliciting monies from tech companies — $50 millionis the starting ask — to ostensibly protect them from patent litigation,etc etchttp://j.mp/2IDQgzhttp://online.wsj.com/artic…but while you and brad and so many others decry patent owners in heatedrhetoric and derogatory slurs, myrhvold and IV gets a pass? unless he sues?or unless he sues one of your portfolio companies? (so if he sues me he’snot a “troll”?)btw, I think myrhvold is not only NOT a patent troll, i think IV is goshdarn brilliant, and as important to “innovation” as venture capital itself.they are demonstrating and proving that ideas, inventions, inventors andartists are the most important part of the innovation food chain. notcapital, and not corporations.but lets assume you’re not giving myrhvold a pass because he’s such asuccessful influential figure in the tech industry, and not because IV isbacked by many tens of millions of dollars from some of the most successfultech venture capital firms, eg Charles River Ventures and the restinstead, lets take at face value that you really do mean the definition of a”troll” is that narrow – a patent owner who sues third parties (even non-USVportfolio companies) for alleged infringementso. a question:if that so-called “troll” wins that litigation — if a judge and/or juryfinds that the patent itself and accompanying infringement claims are valid– does the “troll” label come off?if not, why not? does the act of trying to protect ones IP itself deservescorn?but if one agrees the “troll” label comes off if the litigation issuccessful (in a court of law), then why does anyone have the right to callanyone a troll at any time?um, that’s guilty until proven innocent.and we as a society actively try to protect people from being unduly andgroundlessly ridiculed by establishment powers — its called libel lawany case, bottom line:nathan myrhvold, and IV, and Charles River Ventures and the rest, eitherare, or are not, “trolls”. suing your portfolio companies have nothing to dowith itover to you…
I think its an awful development. But we don’t agree on this and never will.
understoodbut i’d still like to hear one set of VCs calling another set of VCs (andNathan Myrhvold) “patent trolls”or hear why they’re noti don’t understand why one set of people get a pass on the public derisionand it kind of sums up the whole situation to me – which is a lot moresubtle and complex (and a lot more rife with conflicts of interest) than theheated rhetoric makes it out to be
What’s the hang-up with VCs? Why not just substitute “VC” with “business person”At which point the argument boils down to some business people trying to create value with technology, whereas a second group are merely gaming an antiquated system to shake down the former.
no hang up with vcs (why do u say that?)gaming the system? a lawful IP owner pursuing their rights under law?sheesh
Because you were talking about one VC-backed entity suing another.The system is being gamed because the trolls are hoovering-up patents (and the more obvious they are the better) with the explicit aim of suing companies who may be completely unaware of the patent’s existence, and have frequently arrived at their solutions independently (back to obviousness again).Just because it’s legal does mean it’s right.
fair enoughbut ignorance of existing patents (or of the law) is no excuse
Brad’s post highlights two great areas for improvement for the USPTO. (Which, given its resources, does an admirable job.) Obviousness relates to the quality or validity of patents. A patent must be novel, useful and non-obvious. If a patent was in fact obvious, the patent is of a low quality, and this should be able to be shown through prior art.Prior art is potentially invalidating information that shows a patent’s ideas were known by a particular date. But there’s just too much information out there for the USPTO to do all the research. The best solution to finding the right prior art is opening the search for prior art to the public.Two examples of this (full disclosure: I work at Article One):- Peer to Patent (www.peertopatent.org/): works with the USPTO to find the information relevant to assessing the claims of pending patent applications- Article One Partners (www.articleonepartners.com): rewards individuals for finding prior art for specific patents.By allowing anyone to submit prior art, patent quality will improve. At Article One, we have found that providing rewards results in finding the best prior art possible. That prior art might, in this case, show that a troll’s patent was in fact obvious at time of grant.
It seems to me that most contributors to this discussion have “software patents” in mind, by which they mean “business method patents”. The US has led the way in granting and enforcing business method patents (under their “anything under the Sun” approach to patentability) and have thereby brought the entire patent system into disrepute in the process. It isn’t helped by the US litigation system, the presumption of validity (the Governement can do no wrong) and the way patent damages are calculated. That is why patent trolls exist. It needs a shake-up. The Supreme Court in the Bilski case isn’t going to offer a quick fix though.Europe is much stricter than the US when it comes to computer-implemented inventions, requiring some form of non-obvious technical character/effect before a patent is granted. It isn’t perfect though.Where I take issue is with people who say there shouldn’t be patents at all, or that there shouldn’t be patents for software. The term “software” covers a wide range possible technologies, not just Web 2.0 applications. Why should a physical set of levers and cables for controlling a fast jet (Soviet style) be patentable, but not the rather clever software which stabilises the rather clever F16, which couldn’t fly without it? J. Andrew Rogers is right: it is an umbrella term.Finally, it is also my experience that undue pressure is heaped on start-ups by VCs to protect everything, diverting huge amounts of time and money at an early stage without thinking through whether that adds any value. Filing a patent application shouldn’t be a sticking plaster to keep VCs happy.[I should add that I am a European & UK patent attorney, so I have a vested interest!]
Made a ton of arguments on Brad’s blog. I think the independent inventor’s defense would seriously degrade ALL forms of IP protection, not just software ones.And if you are a start up in the hardware field (think robotics) this would be terrible for you.
instead of patent defense – spend your time on patent law change.For me personally when the eff/neomedia debacle got overturned (http://blog.collins.net.pr/… i realised the ‘tax’ if doing business in the USA is a major problem.The ability to patent a “remote database lookup” is just ridiculous.
I would agree that the whole patent system, especially when it come to abstract concepts, is challenged. There needs to be reform by the USPTO in specific areas, when it comes to prior art review and testing abstract concepts and obviousness. The system is also being crippled under the speed at which innovation occurs today as the USPTO struggles to handle the volume of submissions.On the bright side of patents, I have seen examples of many cases where patents really help the “little guy”. Examples where without patents, the the smaller companies would have been rolled easily by larger corporations. It would be a shame to throw away that protection.It does stink when you (and your portfolio companies) find themselves in the middle of patent litigation, especially when the holders do not demonstrate use of their patents. They simply hold, waiting for someone to trip along so they can strike. There are, however, many valid inventions granted every day that are not held by the former and holding these patents really adds tremendous value for the inventor.
I remember the day we released Intense Debate to private beta only to see Disqus on TechCrunch a few hours later. We were amazed that this could happen, but in retrospect I am not surprised. However, it was ironic for it to happen on the same day.It bothers me to no end that people will walk down a street, see a green leaf and then proclaim every green leaf belongs to them. There needs to be punishment for these frivolous lawsuits, but I am not sure how.
the intense debate/disqus situation is but one of many examples i could citebrad feld backed a company called veripost in boulder in mid 2000. i backeda company in NYC called Return Path the same month. neither of us know aboutthe other company. they were working on the identical problem. the twocompanies ended up merging.it happens so often
Agreed.I think the lesson is to plan on having competition sooner rather than later no matter how innovative your product.One of my mentors once told me that when you start your business “your are setting up all future obstacles.” This would include how your business stacks up in a competitive environment.
…and patent environment.
To use your example, I suspect something like Disucss shouldn’t be patentable because it’s obvious to one skilled in the art. When we launched SnapYap, Seesmic and Talkbox launched at the same time. People all over the world develop similar ideas or close to the same. Happens all the time when concepts are obvious to those skilled in the art. I expect it to happen when developing products and hopefully the product has better features or is easier to use or has some other differentiating factor that makes it stand out with users.The US Patent System, although challenged, is still a powerful mechanism for the little guy to protect their invention. Without something like patent protection, large corporations would continuously steamroll the little guy. The biggest issues for the USPTO are related to evaluating the abstract and uniqueness of submissions and developing a way to get rid of the blight of approved OBVIOUS inventions or inventions with prior art, that currently plague the system.Estimates place the whole patent process at $10,000 – $15,000 per application. When you compare to what some start ups spend on engineering, or marketing, or swanky offices, it does not seem like such a large investment — especially when you consider it could be creating the single most valuable asset for the company, if the concept is something that takes off.Patents protect the little guy. They protect real innovation. Do they create cruft and headaches? Yes. But they also create real value for true inventors. Take the story of Ernie Moody. Ernie Moody is the inventor of Triple Play Draw Poker. If you have ever played video poker in a casino, you may recognize his invention. It’s the crack of video poker and is highly popular. When he inventing this, he was flat broke. He was the living definition of the ‘little guy’.http://www.casinoplayer.com/archive/0410cp/CP10…If he did not make it a priority to patent his idea, then I suspect IGT (and every other major gaming manufacturer) would have steamrolled him. Period. Instead, 2 years from launching his invention he had a $25M/yr licensing business.I do think the idea of an independent invention defense is interesting, but I suspect proving the idea was developed in independence is tricky.
I should also add a note about the headache of dealing with lawsuits related to patents. I have been part of startups that have dealt with this. It seems Twitter is being sued and I know there is prior art to what twitter is doing. I guess we will have to wait and see how their case plays out.
Fred, here’s an outstanding article that I thought you would find very interesting and it goes to the heart of what you’re saying:Reducing the Cost of IP Law
link is missing peterthanks for thinking of me
Weird. I clicked on the link in my reply and it worked. Here’s it is – http://mises.org/daily/4018
awesome posti tweeted it up and emailed it aroundthe guy nailed it
Patent trolls are proving to be a plague on intellectual property and upon innovation; they are private entities that effectively work to bring the federal patent law system to its knees. I’m not sure about the viability (in practical terms) of the independent invention defense. But one thing is fairly clear: if enough people keep making noise about the patent troll problem, I suspect that certain government entities will eventually have to step up and take action against the practice of trolling.http://www.generalpatent.co…
I don’t think it does. If you’re fortunate enough to be making enough money on one-click that Amazon comes after you, you can choose to bite the bullet. I don’t agree (in case it isn’t obvious) that doing away with intellectual property protection is a good idea. I only agree with doing away with the abuses of it.Amazon should sue you and you should get UNSQV to help you organize and pay for a defense that says that one-click shouldn’t have been granted because it was obvious.
It doesn’t, but the existing standard of obviousness should. All that is necessary is for obviousness to be evaluated diligently, by competent people, and that doesn’t happen because the ratio of patents to examiners is far too high. The only way to change that is to limit the incentive for people to file “speculative” patents that might be quickly found invalid the first time they’re tested – e.g. because the plaintiff is making no effort to apply it (see above) or because it’s inappropriately broad (see here). If plaintiffs had to limit claims, prove application, and prove deliberate copying, fewer would bother filing (let alone litigating) a patent like one-click. Maybe stiff penalties for frivolous or vexatious pursuance of invallid patents would help too.
The patent owner has to sue you. The patent examiner isn’t relevant at that point, it’s the court that matters. If you have documentation that shows that you put the “art” in question into the public domain before the patent was issued (or filed… I don’t know which applies), then it’s worthless.
the problems is a third of our companies are being sued right now. it’s likely to go up, not down. just putting stuff into the public domain doesn’t solve that problem
I thought you were trying to make a case that software patents are bad for mankind. Public domain solves that in the long term better than trying to do away with intellectual property protections.Getting sued sucks. But are you really trying not just to stop future software patents, but to invalidate the ones that have already been granted? Wouldn’t you be screwing a lot of investors?I would think you just have to cope with the current litigation and try to figure out how to reduce it in the future. Do your portfolio companies have other “art” that they may be sued for someday?
i am in favor of contributing technology to the public domaini like open source softwarebut neither of those is protection for a startup when it gets sued