Enough Is Enough

I believe that software patents should not exist. They are a tax on innovation. And software is closer to media than it is to hardware. Patenting software is like patenting music.

The mess around the Lodsys patents should be a wake up call to everyone involved in the patent business (government bureaucrats, legislators, lawyers, investors, entrepreneurs, etc) that the system is totally broken and we can't continue to go on like this.

First of all, the idea of a transaction in an application isn't novel. That idea has been resident in software for many years. The fact that the PTO issued a patent on the idea of "in app transactions" is ridiculous and an embarrassment.

Second, Lodsys didn't even "invent" the idea. They purchased the patent and are now using it like a cluster bomb on the entire mobile app developer community. They are the iconic patent troll, taxing innovation and innovators for their own selfish gain. They are evil and deserve all the ill will they are getting.

Third Apple and Google, the developers of the iOS and Android app ecosystems (and in app transaction systems), did license the Lodsys patents but that is not good enough for Lodsys. They are now going after mobile developers who use the iOS and Android systems. The whole point of these app ecosystems is that a "developer in a garage" can get into business with these platforms. But these "developers in a garage" can't afford lawyers to represent themselves in a fight with a patent troll.

The whole thing is nuts. I can't understand why our goverment allows this shit to go on. It's wrong and its bad for society to have this cancer growing inside our economy. Every time I get a meeting with a legislator or goverment employee working in and around the innovation sector, I bring up the patent system and in particular software patents. We need to change the laws. We need to eliminate software patents. This ridiculous Lodsys situation is the perfect example of why. We need to say "enough is enough."

#VC & Technology#Web/Tech

Comments (Archived):

  1. Dave Snigier

    I couldn’t agree more. As technology keeps progressing and iterations become quicker, patents will only serve to encumber innovation. Last time I checked a patent costs 20k plus, which puts it out of reach for those garage developers.I do think there is room for patents in biotech, where the cost of development is much higher (for now).

  2. Fred Destin

    We’ve come to generally completely ignore patents and simply hope that we don’t infringe.  Whilst in some areas we have precisely defined innovation where patents may help prevent copycatting, in almost 100% of our companies we either are in no position to assess what’s out there (can you patent common sense ?  can you patent obvious processes and ideas just because the field of application is new ?  who will win the race to patent existing ideas applied to the latest platform ?)  or because we are evolving our companies so fast, usually focused on a whiteboard, that any attempt at defining whether we have freedom to operate is doomed.We live in a world where information flows at the speed of thought, and patenting has now become a sport for system arbitrageurs who can patent stuff faster than you can code it, then patiently warehouse it for the day it becomes valuable.  Useless. Just the same way investment banks have developed a core expertise around arbitraging the white space between law, tax and regulation with no societal good, the patent system offers a money making opportunity for experts whilst delivering no social good of any kind.And you know what, if you’ve invented, it’s been copied already in a jurisidiction you cannot control any way.

    1. fredwilson

      useless and dangerous

      1. Tim Davis

        Fred,IMHO the problem with software patents is the prior art that’s fundamentally attached and how easier it is to discover.In my mind, the bigger problem is the disincentive to work at the US PTO [or any PTO for that matter] because the salaries suck, you’re demanded to have unrealistic quota’s and that means only so much time can be spent on each filing by examiners who are mostly beginning – because ones they are experienced leave to join firms who pay them a lot more because they have examined from “the other side of the table”.It’s a talent glut that starts the cycle, approves poor patents, clogs the court with the attitude of “even if we are wrong [PTO] the Courts will resolve it – so we really can’t make mistakes” and increases litigation costs for all involved.I don’t think removing patents is the solution – there have been 100’s of instances where the “little guy has stopped the big guy” in all sorts of scenarios in innovation – tech or otherwise. The problem is that you have a system which is bursting because the pay cycle for PTO is low, pressure driven and this means you’ve inexperienced patent examiners who ultimately leave for high paying firms. Why wouldn’t they ? There isn’t any economic incentive to stay.Pay them more. Retain the best ones. Get better examination results, use an Open Source Prior Art system which allows community collaboration to increase prior art base and makes it harder to “prove” novelty. Stopping the trolls is a completely other matter IMHO. The patent system is designed to protect innovation – I’m not sure it was designed to facilitate companies purchasing huge packets of IP protection to simply stiffle innovation. Can’t agree with you enough that legislative restrictions should be placed around IP attaching to a product or service which looses it’s enforceability if it abstracts itself too far from this product or service – meaning companies who acquire technology can continue to gain from their acquisition [product/service] but which ultimately means that trolls who acquire IP don’t have anything to gain. They are too far abstracted which means their enforcability is dead.

        1. Ted

          I do wonder what constitutes a Troll though.  My old alma UBC is probably one of the worst US patent hoarders in Canada.  Their university patent office (which helps students and staff apply for patents) only go forward with patents that they deem can recover the costs either through licensing or spin-off development.  Technically, its the exact mentality of these troll-corps.Is a state university considered a patent troll?  Do they have the right to acquire patents despite not being an ‘active’ industry organization?

          1. Tim Davis

            In the construct of my test above Ted – I’d answer your question as yes. A University developing and researching technology doesn’t have an “abstract connection” to any patents they hold – they developed the technology and therefore have a direct association to the product/service – regardless of who they licence it to for further commercialization – arguably, without their initial cost of research and development the patent wouldn’t exist and the world wouldn’t benefit from their efforts.”Trolls” – at least in my view – have no direct connection to the patentable subject matter – a so-called “abstract connection” – and therefore aren’t actually “benefiting” from their effort in developing the patentable subject matter. They are essentially those entities who use patents purely as an enforceable mechanism in order to extract income from innovators and that’s a sad by-product of patents unfortunately. In Trademark law, trademarks registered in “bad-faith” can be extinguished and it would not be that difficult to extend such a concept to patents such that owners who acquire patent rights in bad-faith [that is, purely to stifle innovation without any direct connection to the patentable material] – should loose them.

        2. sachmo

          Pay for PTO is actually really good – i.e. for a software engineer not that far from working support for a major Wall Street firm.  I agree though, they are hiring poor software engineers and are not reviewing patent properly. 

    2. reece

      “can you patent common sense?”maybe we should patent common sense, package it up and sell it back to government employees.  😉

      1. Aaron Klein

        the only hole in your logic is an assumption that they would buy… 😉

        1. reece

          haha… touche.****

    3. sigmaalgebra

      “And you know what, if you’ve invented, it’s been copied already in a jurisidiction you cannot control any way.”Nope: This claim is a special case of a range of related claims that are all nonsense. E.g., there is the standard,”Whatever idea you are working on, someone else was working on it before you.”Let’s see: Let’s consider the set of all people who have worked on the idea. Then this set is well ordered on time so has at least one first element. Except for exact ties which have essentially probability zero, there had to be a first person working on the idea, and for this person the claim is false.If invent a mechanical device using, say, 1900 metal working technology and sell the device, then your claim might usually be true. Still, even with the product in hand, making a “copy” of it not always easy: E.g., pick up a good Stradivari or Guarneri violin, study it all you want, and still won’t really be able to “copy” it. Look the same? Weigh the same? Yup. Play the same? Sound the same? Nope.For something mechanical long difficult to copy, consider some of the old swords from Japan.Heck, commonly in practice, just some sauces in cooking are difficult to copy.For software, say, locked up inside a server farm and where can’t actually take apart some mechanical device, then it’s quite possible to have ideas that no one anywhere will likely copy for some decades.How to do that: Use a special case of ‘field crossing’ where the case is quite rare but necessary for the idea.Actually, as I discovered by accident, there is a huge range of such cases: (1) Start with a problem in practical computing or computer science. (2) Use some advanced topics in pure and/or applied math to get an especially powerful solution to the problem. If the problem is important in the economy, then the solution has a chance to be valuable.The work will likely be safe for a very long time because the number of people doing the field crossing from the math to computing is tiny. That is, the number of people working on problems in computing and computer science and with good knowledge of some fairly deep topics in pure and applied math is tiny. In particular, with this approach it is fairly easy to blow away chaired professors of computer science at famous research universities and editors in chief of top computer science journals. The reason is, nearly never did such people take the prerequisite math courses in grad school. Their students nearly always know less; people in business nearly always know still less. Net, such an idea, in software buried inside a server farm, stands to go for decades without being copied.Can math solve such a problem? Yup: Generally it’s the most powerful way.Have I been there, done that? Yup; that’s how I made the accidental discovery.Can such ideas be valuable? Sure!

  3. gorbachev

    The patent lawyer lobby will never let go of their gravy train. Let’s see if the non-corrupt legislators outweigh the corrupt ones.Though, I wonder, if software patents were limited let’s say to 12 months with no possibility of extending them. That should give the inventor the protection they need for their invention, while rendering software patents entirely useless to patent trolling douchebags like Lodsys.That could be a better sell to legislators than completely abolishing them.

    1. fredwilson

      that would be a fine compromise

      1. Firoze Lafeer

        But that 12 months of protection will come 3-5 years down the road. Seems like a silly little window. The root issue here isn’t patents or their lifetime, the issue is the USPTO inability to make good judgements in a timely manner. Software is just one field where they are particularly bad at it.

        1. AlexSchleber

          Agreed. I believe for software patents (if granted at all) it should be: Show us working code or bugger off… these vague, overly broad claims are a joke.Thanks to Fred Wilson for writing this post in no uncertain terms. I had a similar reaction over here (includes details on the utter shadiness of this entire episode): http://alexschleber.amplify…

          1. Dave W Baldwin

            Read your post… I have to wonder.By blanketing the small developers with the threat, isn’t it like BOA doing unto the smaller lenders threats re CountryWide stuff?  If you spook big enough, many will pay up out of fear.

        2. Will Spencer

          The inability of governments “to make good judgments in a timely manner” — that is one of the defining features of government.It reminds me of a passage from Milton Friedman’s _Free to Choose_:’What would you think of someone who said, “I would like to have a cat provided it barked”? Yet your statement that you favor a government provided it behaves as you believe desirable is precisely equivalent. The biological laws that specify the characteristics of cats are no more rigid than the political laws that specify the behavior of government agencies once they are established. The way the government behaves and the adverse consequences are not an accident, not a result of some easily corrected human mistake, but a consequence of its constitution in precisely the same way that a meow is related to the constitution of a cat.’

    2. Chris Clark

      I disagree. The IP lawyers I know are all extremely frustrated by the PTO. My father, a bio-tech patent lawyer who is nearing retirement age, has “junior” lawyers who he hired (and are now in their 40s) who have never worked on a single patent that has ever yielded a commercial product because of a combination of IP lawsuits and FDA requirements.The applications they write are often rejected (or approved) inappropriately by inexperienced and comparatively non-scientific patent clerks. A single granted patent that should have been rejected for obviousness can cause years of problems for customers and lawyers. Believe it or not, most lawyers want their clients to win, and they want to feel like they are successful in their work. Most don’t want to perpetually bill meaningless hours fighting off patent trolls.

      1. ShanaC

        Ot sounds like in biology they need to do a better job of hiring

    3. Elia Freedman

      I always wondered why anyone should be able to hold onto an idea (patent it) if they don’t use it. I can’t help but wonder if the best way to fix the patent system isn’t to overhaul it — which would be nearly impossible to do due to entrenched interests — but instead invalidate all patents if they aren’t used within a certain time period by the rights holder. In other words, use it or lose it.

      1. ErikSchwartz

        I like this idea. I also think you need to actually build and demonstrate the invention before the PTO issues a patent. I think one of the problems here is patents are issued to “inventions” that have yet to be bult. That tends to make them far too broad. But much of the innovation really comes from the iteration and honing of the building process.

        1. PhilipSugar

          I agree with both of your comments.  I don’t have a problem when something gets patented that has had a ton of work behind it.I really have a problem where somebody patents an “idea” or “business process”I don’t know how to define it, but its one of those things: “I know it when I see it”Watching what happened to RIM was an embarrassment.  They might be in a different position today if their management didn’t have to deal with that huge time/energy/money sink.

          1. fredwilson

            yupRIM was a big time victim of the patent system

          2. Pete Griffiths

            I don’t believe for an instant it would have made any differenceTheir problem is that they thought they were in the phone business (telephony and enterprise standard messaging) they woke up to find they were actually in the hand held computer market and they were being squeezed between open source common “standard” and high quality proprietary.Android = dos/windows/unixiOS= MacLa plus ca change

      2. A real libertarian.

        I fear that any legislative efforts would result in a law that considered suing people to be “using the patent.” 

      3. fredwilson

        that will at least get rid of trolls

      4. gorbachev

        That would cause the patent trolls to contract cheap overseas labor to create a simple prototype application with no real actual use. But they could still argue they are actually using it.

    4. sachmo

      It is a common question in history why the Industrial revolution happened when it did.  Rome for example had develop all sorts of sophisticated technology such as concrete, and running water. One of the reasons why the industrial revolution took off in England and Germany in the 1800s (among other reasons) was that they were the first countries to develop a patent process.Without patents there is no incentive for the individual who is not rich to invent.  Removing patents would just reward the rich who would be able to blatantly steal innovation. 

  4. LIAD

    Curious to understand the other side of the argument.Who’s playing devils advocate?

    1. David Semeria

      Fundamentally the patent system makes sense.If you invest heavily in R+D then you should be allowed to profit from that.The problems began when the USPO started allowing patents on obvious innovations, such as Amazon’s one-click purchase button in 1999.Yes, Amazon managed to patent a freaking button.When innovations are obvious it’s likely multiple companies will hit upon the same idea at the same time in a totally independent manner.But whoever patents first can hold the rest to ransom, even if they didn’t copy.And this is when the whole system falls apart.

      1. matthewcp

        I agree that patenting obvious stuff is a problem.  However I think the larger problem is patenting stuff with no intent of releasing a product. That is what happened here, and what is happening more and more.  People are sitting around doing searches on Google Patent Search and when they hit an “idea” that doesn’t have a patent, they start writing an application.  Then when it is awarded, they go straight to patent holding companies to sell, they repeat the process.These people are not inventing stuff in the way that Amazon was. Yes, maybe it’s a bit silly that Amazon was awarded that, but they actually use it, and it’s an important part of their product.  

        1. CEO

          yes, I agree w/ u matthew. that is a problem as well.

      2. CEO

        Exactly. The core of the issue is around granting weak and obvious patents.This post by Fred documents one an example, another is 048 (http://weblog.cenriqueortiz… correct the root problem: USPTO.ceo

    2. Ted

      I can play devils advocate.Let’s take a simple example of the Microsoft Kinect. There’s about at least 12 patents that protect the software that enables model tracking, gesture recognition, etc. A lot of it is based upon the work done at Microsoft Research Cambridge and other smaller labs around Microsoft.After that, the product engineers that took proof of concept models and algorithms and refined them into production ready software also no doubt added their own extensions.A patent is a manifestation/representation of the former group. These people provide no direct manufacturing or creation of end-consumer content, but they are just as important as the later group. A lot of the anti-patent arguments I read seems to discard or dismiss the business expense that goes into this.Abolishing patents is absurd as who in their right mind would want to fund the hundreds of engineers required to produce such a thing? You’d effectively have no visibility into your revenue stream if anyone can just build upon your work at no cost right after you ship.If such a world exists, we’ll start gravitating towards trade secrets again and never publish publically any innovation. Right now, you have two choices: patent or keep it a trade secret. Because of patent law, there is an incentive to actually release information. To some, it might seem unfair to use it against the competition, but that competition is was also entitled to file for a patent (which is cheap compared to every other expense). Should you go the trade secret route, your livelihood is explicitly tied to the trustworthiness of your employees. Your only deterrent to release is contract law and once the cat it out of the bag, it’s impossible to put it back in.I for one welcome people documenting innovation. Trolls I still have an issue with, but no matter what system you choose, there will always be someone to ‘game the system’. If you have issue with them, deal with them directly. Setup a non-profit troll-fund which helps startups fight patent trolls.

      1. Joe

        Trade secrets would be good because it would encourage more people to learn to create. It’s a skill like any other, not a God given gift. A society with more innovative people will succeed more than a society full of lawyers.In life your livelihood is tied to the trustworthiness of your employees. If you are a mine owner, you pay them fairly so they don’t steal, the diamonds.The fact you worry means you’re either exploiting them, or not employing good people. Neither reflects well on you.

        1. sachmo

          In an age where you can take 3D scans, unencrypt software, rapid proto-type – it is almost impossible to ‘trade secret’ any product actually released.  It would be possible for me – me personally – to reverse engineer a Kinect. Just about the only place where trade secrets are still used are in chemical / manufacturing processes that are never actually released to the public. 

      2. sachmo

        I agree entirely, good example. 

    3. J. Andrew Rogers

      Obscuring the discussion is the conflation of “business method patents” and “computer algorithm patents” under the common portmanteau of “software patents”. These have very different properties and arguments.Generally speaking, most of the problem is with business method patents, which was the subject of the Bilski court case et al and which are not allowed in most countries. Disallowing business method patents by throwing out “software” patents throws the computer algorithm patents out with the business method patent bathwater. Much of the objection is to disallowing computer algorithm patents, which typically are very difficult to produce and require significant investment.If you restrict the view to computer algorithm patents, the field is indistinguishable from other patentable fields such as chemical processes. Contrary to popular assertion, computer algorithm patents are relatively rare and the R&D to develop them is frequently expensive. Most programmers would be hard-pressed to develop a fundamentally new type of computer science algorithm that advances the art. If it was as easy as some people like to assert, there would not be so many algorithm problems in software that have seen no material advances in decades.There is a secondary issue that there is no theoretical distinction between computer algorithm patents and many other classes of patents, including electronic circuits and chemical processes. Indeed, they are allowed in many countries precisely because they are indistinguishable. There is nothing different or unusual about computer algorithm patents, any claim that can be made about them can also be made about e.g. chemical process patents.However, there are a couple practical problems with computer algorithm patents. First, the current term is arguably too long. Ten years would be a much more reasonable term. Second, while it does not affect computer algorithms any more than other patentable subject areas, the USPTO issues too many frivolous patents and their standards of review are poor. Third, computer algorithm patents are often difficult to defend because violations are frequently not easily discernible in the market place.In practice, more and more companies are using Trade Secrets for algorithm research as a reaction to the third point — even if you have patents, it is easy for people to use your algorithm research without licensing. In some algorithm areas, such as algorithms surrounding databases and BigData, academic research and publications have fallen quite far behind the state of the art in many cases because most of the advances are being done behind closed doors. This was the situation that patents were intended to prevent but practical issues are driving this result in any case. Consequently, computer algorithm patents are being used more to protect algorithms that would need to be publicly disclosed in any case. For the rest, it is trade secrets.In my opinion, it is difficult to argue that business methods are subject matter similar to other patentable subject matter. I have no strong opinion on computer algorithm patents except that they be consistently treated like all other patentable subject matter. 

      1. Ted

        I agree with you about computer algorithms being no different than chemical process patents.  But, I do contend that computer algorithms patents aren’t rare.  Pull up any SIGGRAPH paper and chances are good that the method described is patented.

  5. Mat Evans

    completely agree. when companies have to patent software tech just to make sure someone else doesn’t and then use it against them – then you know something is wrong.luckily here in the UK we don’t have software patents as such but there is a small amount of greyness around it – seems to depend on the function of the software, but i’m no lawyer.

    1. Ted

      UK has software patents in the same manner as the US and EU.  The only differences are in the issuing offices.  There’s a wikipedia entry in Software patents under United Kingdom if you want to read up more.  The section ‘Comparison of EPO with UK Practice’ highlights these office differences.I doubt the USPTO has any page as there doesn’t seem to be any rhyme or reason to what they accept 🙂

  6. RacerRick

    Fred, do you tell your portfolio companies to get patents? Or do you say not to?

    1. fredwilson

      we don’t encourage itsome do it and we don’t fight it

      1. David Semeria

        Of course the big irony is that the most effective defence against the trolls is get your own patent….This just adds fuel to the fire.I agree, it’s crazy.

        1. fredwilson

          i used to believe that but i am not sure it is true anymore

          1. Jorge M. Torres

            Patents are not a viable “defense” against trolls. By definition, trolls do not sell products or services that could be subject to a claim of infringement.

      2. ErikSchwartz

        When you liquidate a failed investment that owns patents do you sell of the patents? That’s where most of the groups like Lodsys seem to acquire most of their portfolio.

  7. Farhan Lalji

    Totally agree Fred.  What would you do as a start-up with the current patent regulations and systems though, do you keep building and working on a product and worry about patent lawsuits and licensing later on – the “if we’re ever big enough to worry about this we’re a success” or do you do significant patent research off the bat and make sure you don’t get caught up in this later on?  Legal bills on patent issues (regional and international searches) can get costly, is it worth the investment in the early days?

    1. fredwilson

      i don’t think its worth the investment in the early dayssome entrepreneurs feel differently and we are ok with the investment ifthey want to make it

  8. Alexlalas

    What a load of bs. So you want innovation but no patents? Do you even know how this works?To develop an idea (innovation) you need to invest a lot of money. Who would even think about doing that, if others could just steal it right away?btw, in the pharma industry patents are even more important. Half of us, if not more, wouldnt be posting comments here, if it wouldn’t be for patents.CheersAlex

    1. Fred Destin

      he’s talking software patents

    2. John Cromartie

      Clearly you’ve never had anything at all to do with software development.

    3. Sebastian Wain

      Uh!, sadly early innovators didn’t patent the “0” or the “+” (sum). The children in school could license it before learning.

    4. Rick Bullotta

      Alex, Fred was referring to *software* patents, not patents in general.

      1. Kaboom

        Fred wouldn’t know a software patent if it was delivered by David Kappos himself.

        1. fredwilson

          i’ve been dealing with them and their repurcussions for literally 20 years now. i’ve actually seen one of our portfolio companies sued for infringing a patent that a former portfolio company developed with our investment capital

          1. Ted

            That’s a nice sound bite, but assuming the coverage of the patent actually applied to Company B’s product, it begs the question why you didn’t advise company B that its infringing on something you’ve known about?If it was something extremely ancillary to the product, I can understand the oversight.

          2. russnelson

             You’re starting to see the problem, Ted. There are so many software patents that developers can’t comply with them all. But every software patent owner knows exactly what their patent says and they’ll be looking out of opportunities to profit. Asymmetric information.

          3. Ted

            @google-a2c6ee8c83fdee82e6ef17bf45c26dc4:disqus Well, that’s a cop out.  We have exactly the same problem in all engineering fields.  100% compliance is a myth, but it doesn’t mean you shouldn’t try.We deal with it by at least doing a patent search first (which is even easier now and more free than it has ever been in history).  Use the most common terms in your industry and then some.  Last thing you want when fighting a case is to be shown that you didn’t even do this minimum of due diligence.Sometimes ambiguity in filed claims can escape the search (it happens) or maybe it was suppose to be public domain.  If the patent claim has some merit (i.e. it’d be a drawn out case), then bite the bullet and negotiate a licensing agreement.  This can include cross-licensing if you’re competitors.  If you can’t come to an agreement and this comes to court, at least make the other side’s job harder by not letting them portray your infringement as being purposefully neglectful.I do understand where you’re coming from though as the process can seem a bit daunting and outside of our usual scope as a software developer.  I’m classically trained in engineering and this was part of our first year course load.  Maybe we need a similar patent process education in software development.

          4. gt

            Yeah, that process sounds like it really advances the progress of the useful arts and protects the little guy in the garage, doesn’t it Ted? What’s more if you search and fail to identify a patent which you’re later sued with, don’t you risk being hit with triple damages?It’s almost comical to watch this progress from outside the USA; once the bastion of innovation in software, now reduced to The ridiculous infighting and endless lawsuits. Anyone who thinks software patents are a good idea should try this thought experiment: imagine you were explaining & defending the “one click” patent to Benjamin Franklin.US citizens, here’s what you really need to get upset with your governance about, because pretty soon software patents will render the US software industry internationally irrelevant!

    5. Edward Sullivan

      First of all, Fred is discussing software patents and not patents in general.  Although, the fact that the PTO granted a patent on something not intellectually unique and obvious to those skilled in the art proves the point that there is a systemic problem with the patent review and approval process. In any event, this cumbersome, rigged and costly process is a drag on all innovation.  I wonder how many cures or great ideas die on the vine once the issue of patent-ability arises.  

    6. Anthony Foster

      Nobody would give up on something just because they can’t patent it. In fact, patents and the associated legal costs are so expensive, such that patents aren’t an option for many anyway.

    7. Jorgeleo

      If the investor needs a patent to protect the investment, to me it counts as if the investor knows that he does not have a great product. What recover the investment is great execution, not a great idea. Good customer service, high quality products, lower prices will go much further than the fear of being imitated.There are other industries were patents do not exists, and they are perfectly fine. Food is one for example, I don;t see Mc Donald suing Burger King because they also sell hamburgers. They both have the same product and they are both perfectly profitable. Gucci gets copied left and right, but it remains profitable too.So the question is valid… do YOU know how this actually works?I suggest watch this video:http://blog.ted.com/2010/05

      1. fredwilson

        patents are for sucky products?

        1. Jorgeleo

          yup… pretty much.

        2. dvhh

          I believe the iphone is covered by multiple patent

        3. Prokofy

          then why did you invest in that one you just mentioned above?!

      2. Ted

        Just for reference, McDonalds did file a patent in 2006 concerning the method and apparatus used to prepare certain snacks.  Its a wonderful 55 page patent on how to build a deli sandwich in a extremely reproducible manner.Process innovation is not the same as content innovation.

        1. Jorgeleo

          So… software is a process? or content? or a product?Should someone have a patent in the method and apparatus of 2 people programing together?

          1. Ted

            Methods and apparatus for implementing checkin policies in source codeUS: 7653893Filed 2005, Issued 2010 to Microsoft.

        2. ShanaC

          Do you have the patent number – I want to see that

          1. Ted

            The application was WO2006068865

      3. sachmo

        No way… I’m sorry but if you can get a roughly 20 year enforceable monopoly on a great idea that consumers will happily pay money for, then there is no reason NOT to patent an idea.  Sure, good customer service, execution, high quality products, low operating margins etc etc. are all things that a business should strive for, but if you are doing all of these things AND have a patent you’re in an even better situation. Why allow patents?  When the upfront cost of developing an idea is high, and the ability of rich entrenched competitors to copy that idea is low it is necessary to have patents to fuel innovation.

    8. fredwilson

      i have spent my entire business career, 25 years and counting, investing ininnovation.i certainly know how it worksclearly you do not

      1. Prokofy

        What you say is true. But you’ve spent your 25 years investing in *this kind of business* that happens to find it expedient to undermine and destroy patents.What is tragic about you, Fred, is that you don’t have a liberal vision broad enough to accommodate the diversity of classic capitalism and classic socialism, creating an environment where many kinds of people and businesses can make livlihoods, and instead, you drive ahead with technocommunism which ends up only benefitting a few oligarchs and pretending to give the masses some free stuff. It will be your doom.

      2. LissIsMore

        Agreed.  I have lots of ideas.  I even got one patented.  But turning the ideas into products/services that someone will pay real money for – which is what a free market encourages – is another kettle of fish entirely.  Bringing products to market is the payoff in a free market, not “having an idea”.

    9. Tyler Brownell

      He said SOFTWARE patents. Did you even read the whole article?

    10. Craig

      This maybe the case in some industries like pharma but in software patents the ideas are often neither innovative, sometimes they are just simple processes commonly used for years, or expensive to create (see previous bit about simple common process).I don’t know much about pharma R&D, but imagine if someone processed the use of a microscope. Not some super duper new microscope they developed, but common garden variety used for hundreds of years since the lens was developed. You might find this dumb and it could really get in your way of research if every time you looked through a microscope you had to pay $10 to some holding company. This seemingly ridiculous example is what is happening in the software industry, patents are being awarded for things like ‘clicking a button’.

    11. Guest

      “To develop an idea (innovation) you need to invest a lot of money. Who would even think about doing that, if others could just steal it right away?”um, well…

  9. Camille Appert

    What do you think about Paul Graham’s claim that “if you’re againstsoftware patents, you’re against patents in general” ?http://www.paulgraham.com/s

    1. Chris Puttick

      I think it’s utter nonsense. Is the whole “if you’re not with us, you’re against us” idiocy. The world is not black and white, on or off and few seriously believe it is. The whole patent system has become corrupted; it was created in a more innocent age. To protect inventors, great. To allow people to make money because they own the rights to an idea but are not doing anything with it? Illogical.

    2. fredwilson

      i’m not a fan of patents in general, but i understand their value in areaslike biotech and cleantech

      1. Ted

        I’m curious as to what makes those two industries different from any other?

        1. Tyler Brownell

          The incredible sum of money that has to be invested into research.

          1. Ted

            I guess $8.7B isn’t enough to be considered an incredible sum of money for just pure research.Source 2010 10-K for MSFT

        2. Eric

          That in biotech/physical sciences, one invents the design of a concrete physical object, rather than a process or an idea. It is much easier to tell (for a patent lawyer) whether the structure of a drug violates one patent or another compared to telling whether one violates a software or business process patent, and thus it doesn’t necessarily cause a chilling effect on a broad swath of innovation.

          1. ShanaC

            I keep having to repeat this – all programs can be reduced to a hardware implementation.  We just think that is a useless idea. (A general chip with a program will saticifice).  The fact remains that programs do alter “machine states” – so how are they not “physical” in a sense?

          2. Jessica Darko

            You’re right, but the objection is to patents in general, not just in software.  They pick on software because they think it is an easy target.The ideology opposes any ability to keep innovations secret.

          3. ShanaC

            I’m getting the feeling that it isn’t the patents that we find objectionable- it is their broadening scope of how they are used.

          4. Eric

            Inevitably, any idea has a physical component as well as an information component, but if the program’s hardware implementation is general (as most useful programs are), one could argue that the hardware implementation is trivial and therefore not novel. The distinction isn’t an easy one, like most things in law, but one needs to be able to draw a line somewhere for patentability between a math algorithm (not patentable) and a new molecule (patentable).

          5. ShanaC

            Yes, but then you can’t patent novel uses or creations of pulleys. And Iwould bet good money that hydrolic pulley systems are patented – and forthose who read the innovator’s dilemma, we all know what happened tohydrolic pulley systems….

          6. A real libertarian.

            @  Jessica DarkoBy all means keep innovations secret if you profit from it. These are called trade secrets and its a totally fair idea. I can’t make you tell me your secret anymore than I have to listen to you shouting “hey no copying” when I figure it out on my own..

          7. sachmo


          8. Ted

            In all industries, patents are defined as a ‘method and apparatus for…’ It’s defined at varying scopes, with the ‘idea’ method usually the first widest scope.  As you get more detailed into the physical apparatus, it starts to be more precise but at the same time, slightly less useful.  The top-most layer provides protection against people using your basic research and then using a slightly different apparatus to circumvent your patent.  For most intents and purposes, the detailed scopes are useless on a patent as rarely do people copy a physical implementation that deeply.  In software patent analogy, you’d be listing a LAMP stack or specific API. 

        3. solirvine

          Maybe the important difference isn’t in the industry, but rather in how the PTO evaluates the applications from that industry.  For example, many people seem to think that “in app purchasing” is an obvious invention, not novel at all, with plenty of prior art.  And yet, a patent has been granted, and is being asserted.  (I’m aware that the Lodsys patent is more nuanced than “in app purchasing”, BTW).Personally, I like the idea of peer review for patent applications.  I think the language of patent applications is deliberately obfuscatory and designed to confound even the most technically adept of readers.  Patent attorneys represent their clients (as they should!), but someone needs to represent the marketplace.

        4. Tereza

          Time to market.

          1. Ted

             Sure, there’s a subclass of software innovations (startups) that have short time to market.  But then a good deal of research-backed ones aren’t.  So where do we draw the line? 

      2. Charlie Crystle

        but it’s still patenting ideas. By the way, I wrote this great song called “Like a Rolling Stone”. Starts like thisOnce up a timeyou dressed so finethrew the bums a dimein your primedidn’t you?I’m not completely with you on this one–partly. If you own a patent, you should have to be actively using it, and you should be forced to license it to anyone for x% of revenue (low), and that should be automatic (no lawyers–low doc, easy, online, automagical.”…he’s not selling any alibisas you look into the vacuum of his eyesand say ‘do you want to make a deal?”

      3. Jamie Hamilton

        The problem with software patents is that they’ve been granted too broadly, for inventions that are obvious to any expert in the field. This doesn’t happen in other areas. The reason is that software patents only really got started in the 1990s, after some dubious Supreme Court rulings in the 1980s. Traditionally, patent examiners checked prior art by looking at previous patents. With software, there were none to look at, so they basically allowed everything, and decided to let the courts sort out the ensuing chaos. The courts, after all, had forced the patentability of software on the PTO, against their will. Unfortunately, the process off invalidating a patent is so onerous that it very seldom succeeds, even with patents that clearly never should have been granted. Maybe software patents will sort themselves out as prior art accumulates. I’m fine with patents on true innovations; it’s the obvious stuff that drives me crazy. In any event, the current situation is a disaster, a tax on innovation rather than an aid to it. The only real beneficiaries have been software patent attorneys. 

        1. sachmo

          I agree entirely. My conclusion though is that its the review process for software patents that has been broken, not the patent system itself. 

      4. willcole

        Don’t mess with my industry, but oversee others.  This is a problem.  People in the tech industry (myself included) don’t want the government involved and meddling in the industry, but are perfectly fine with them doing so in places outside their expertise or control.  This pops up on immigration debates as well.  But on the subject of this post, I’m fully on board.  

      5. loquacious

        I don’t understand them in software code. They are thought processes, buggy or not.  It is not a device that will keep your heart pumping!These are people who don’t understand developers, the consultant or freelance software Developer. Your kids could be sued for creating a software game, and putting it on the NET, because it was someone else’s idea (thought).Yes, that can happen.  However, the laywers like to go after the small businesses, which is the heart of America. 

      6. LissIsMore

        All patents have the same flaw:  they are a government grant of a monopoly position in the marketplace.  This distorts the market away from a free market and has large real costs which are born by the rest of us.Government-granted monopolies are dangerous and expensive and I don’t believe that biotech or cleantech are any exceptions.

  10. leigh

    yesterday u try to get lawyering fees down to 5K and today you want to get rid of patents.  somebody didn’t eat their cornflakes this morning.  🙂

  11. peterkayshow

    I understand your frustration, however your “solution” is worse than the cure. Clearly the patenting process needs improvement and perhaps something akin to crowdsourcing claims due diligence might be a step in the right direction. But to advocate destruction of property rights seems to indicate an utter lack of understanding the underpinnings of capitalism itself. All capital is based upon property rights. Music is NOT like software (although it too relies on property rights). Music doesn’t do my accounting nor does it fly my plane nor do the very lives of millions depend on it playing. Fix the patent system? Yes.  Allow patent claims on software that is truly innovative and advances the state of the art? Yes. Turn down bonehead claims that the USPTO doesn’t quite understand? Yes.  Destroy the patent system? Incredibly short sighted proposal with zero regard to its secondary effects, not the least of which is investment in risky innovation. I’m rather shocked that a smart guy like you would blurt something so shitty. 

    1. gorbachev

      Not destroy the patent system, just the software patents.

    2. fredwilson

      i don’t believe someone who comes up with the idea of a transaction in anapp has property rights to that ideaand i do not believe that idea is central to capitalismi am a capitalisti invest in execution, not ideas

      1. Steven Kane

        without wading in to the patent argument, fred, i feel like you are being a bit hyperbolic when you say you don’t believe property rights are central to capitalism.with respect, without property rights, there is no capitalism. capitalism specifically is a system where property rights matter. (versus say, communism, or anarchy, or totalianism, where an individual’s property rights do not matter.)also, a VC is the ultimate user of property rights. no? VCs do not do “execution” of any kind. they do not create any product or service. (which is perfectly fine by me!) VCs accumulate property — capital — then move it from one place to another, hoping to generate returns, that is, more property than they started with.

        1. Eric

          You either didn’t read his comment, his post, or are just not comprehending the distinctions he made. He’s referring to intellectual property rights for software, not property rights in general.

          1. Steven Kane

            No, in Freds comment, he says he doesnt believe property rights are core tocapitalism. Hence, my comment

          2. Eric

            From his original comment: “i don’t believe someone who comes up with the idea of a transaction in an app has property rights to that idea. and i do not believe that idea is central to capitalism”Where in there is a general statement about property rights per se? Let us parse: the antecedent of “that idea” (before “is central to capitalism”) is most probably “someone who comes up with the idea of a transaction in an app has property rights to that idea.” Notice that he has qualified his statement about property rights, so that the antecedent most likely isn’t “property rights” in general, but rather the entirety of the causal chain that someone formulating the concept of in-app transactions thus can obtain property rights for that particular concept. Presumably, he being a VC, he believes very strongly in other forms of property rights, owning equity in many different companies.Therefore, using grammar, a not-so-ridiculous supposition of his internal logical consistency as a venture capitalist, and looking at the overall context of his other comments and posts, you can see that he doesn’t say property rights aren’t “core to capitalism.”

          3. Steven Kane

            Wow. someone put regular coffee in the decaf pot?Thanks for all the effort. But I trust my own read, and Freds ability torespond and explain his views himself…

          4. SilentMobius

            You are most likely incorrect:”i don’t believe someone who comes up with the idea of a transaction in an app has property rights to that idea””and i do not believe that idea is central to capitalism “Two mentions of “that idea”. The first is the idea of in-app transactions the second may again refer the idea of in-app transactions or to the notion of an idea being subject to property rights. It is only a very hostile (and most likely incorrect) reading that could assume that all property right are being referred to in the second case.

          5. fredwilson

            i didn’t say that steve

          6. Eric

            Meh, I just find blatant misreading of what is actually a plain and clear statement to be annoying. I’m a scientist, my wife’s a JD, it’s par for the course.Addendum: I only felt a compelling need to spell it out explicitly because 1) you seem like you’re experienced enough to know what you’re doing, and 2) it seemed strange that you were misinterpreting Fred’s comments so wrongly.Also, I have this syndrome. http://xkcd.com/386/

          7. Nick

            Grade 3 comprehension quiz:”i don’t believe someone who comes up with the idea of a transaction in an app has property rights to that ideaand i do not believe that idea is central to capitalism”The author says he does not believe “that idea” is central to capitalism. What idea is he talking about? (Hint: look for “the idea of” which spells it out for your dumb ass.)

          8. Steven Kane

            Gosh, calling people names? Really?

        2. solirvine

          “…when you say you don’t believe property rights are central to capitalism…”I don’t see where Fred said that.  I’ll let him reply for himself, but it looks like his argument is that patent rights are being improperly granted for things that shouldn’t be proprietary.  That isn’t a rejection of property rights writ large.

        3. Guest

          Part of the problem is the meaningless phrase “intellectual property”.  This term was specifically coined to conflate the concepts of property and ideas.  Ideas are nothing like property, and no amount of legislation or arguing can erase this fact.

        4. mstearne

          I don’t think fred’s idea is that airbnb doesn’t own it’s idea and “property”.  It’s the ridicuuous idea that airbnb should be paying every piece of technology a piece of airbnb that makes airbnb exist as an idea. Paying the patent holder of TCP/IP, HTTP, SQL, Concept of Online Rentals, Concept of Online Payment, Concept of Data Transfer Over A Worldwide Network, Concept of Using a Mouse To Click on Items on a Screen, etc.  A system like this is not sustainable for innovation and stifiles it. 

          1. CJ

            The Concept of anything just shouldn’t be patentable.  The concept of the car or the concept of providing transportation by moving an object attached to wheels shouldn’t be patentable, the actual car is patentable.  That’s my opinion.  

        5. fredwilson

          i didn’t say “i don’t believe property rights are central to capitalism” stevei said i don’t believe that anyone should own the idea of a transaction in an app

          1. Steven Kane

            Ok.Do you believe property rights are central to capitalism?

          2. fredwilson

            when their is real propertya building – yesan idea – no

      2. JLM

        I get your frustration but property is the central concept of capitalism — using it to create more.

        1. Duane Johnson

          This is a prime case where research should be used to validate or invalidate your hypothesis. While I am a libertarian and capitalist, my idealism should never trump observations and better theories (all ideals are just “strongly held hypotheses”).Pragmatically, there has never been a truly capitalist society–all have introduced compromises (eminent domain, copyright and patent expiration, etc.) The question to me is, where does the evidence point if we want to optimize for greatest social and technological advancement?

          1. A real libertarian.

            nononoonono The fact that copyrights and patents expire is not the compromise, the fact that they exist at all is a giant compromise of exactly the same sort as a gaurenteed minimum income for the poor. We’re all paying a tax to the rentiers who own copyrights and patents. We’ve imagined that this is the only modal that brings progress, but the fact that Fred and a lot of other investors keep saying they invests in people, markets, execution, NOT ideas, is powerful evidence that we don’t need to invent the thought crime of infringement to get progress. 

          2. JLM

            The specifically enumerated powers of a government — property taxes, eminent domain, police powers (zoning, subdivision, utility allocation) and escheat — are not in conflict w/ capitalism.Capitalism is at the end of the day just an economic theory and to suggest there is a pure or undiluted form of it is to fail to recognize the reality of local color and flavor.The intellectual problem is that what poses as “optimization” is often really “maximization” and is an unwinnable battle.Good cannot be the enemy of great and signify failure when it is indeed what can get done right now.I cannot think of another civilization that has delivered such a high standard of living to its people than the US of A under whatever form of bastardized capitalism we may profess to practice.It is certainly not perfect but it is better than all the other alternatives.  We Americans are the only limitation on its effectiveness and success.All development in life is incremental.  

          3. FAKE GRIMLOCK


          4. JLM

            @FakeGrimlock:disqus Grim, babe, been to every country you note and none of  them can hold America’s jock.  Sorry.Lived in two of them and they are backward.You need to get out more, roboman.

          5. markslater

            JLMthats the most ridiculous statement i’ve seen you make. At least 3 of those countries Grim mentions trounce on the USA in terms of standard of living, and how civilized the population is. its the height of absurdity to think otherwise. And visiting is not living – living is many years of immersion in a culture and a country from which you can begin to form a somewhat sophisticated understanding of that culture and how civilized it is. I know because I’ve lived in 3 separate countries for over a decade each. 

          6. JLM

            @markslater:disqus Having a very, very tough time w/ your assessment as ALL of those countries are inferior to the US of A in not just a few but many ways.Some of those countries are nice little burgs but as a nation, no so much.I love Switzerland and could see it if it were not for the rampant antisemitism.  Oh, yeah, and the bank cheating and tax cheating.  And the fact that they funded the Nazis in WWII.  Small stuff undoubtedly but important to me.I very much love Australia but primarily as a merger candidate for Texas as they are so similar — big, bawdy and proud.I am a proud unabashed American ever since they merged w/ Texas.Now as to the brown trout fishing in NZ, sure it’s great but not at the cost of being a socialist paradise.

          7. markslater

            we can all pick holes in the history of states. Should we do a little history lesson on Texas? the holier than thou house of cards argument comes crashing down right around the time you look at mass migration out of that state due to segregation and oppression.culture can be measured by the simpliest of means. Visit your local steakhouse and see how people hold their knives and forks.

        2. fredwilson

          but ideas are not property, or at least they should not be

          1. sigmaalgebra

            I fully agree with your post at the top of this thread. Software patents are, net, a bad idea, and the associated trolls are steaming, reeking, bubbling, toxic waste.Your:”but ideas are not property, or at least they should not be”has some problems with it.One reason is, some ideas from research, including in computer science and related fields, and that can be presented, represented, described, and implemented nicely in software, can be darned clever, difficult to do the first time, quite powerful, and crucial to the commercial value of some software.For me, the solution is to leave such research, ideas, and software locked up inside a server farm, protected as a trade secret and not a patent. But definitely I want that work to be my ‘property’. This solution is good enough for me for now and a long time, but it is not very good for the economy as a whole.For an example, my understanding is that the idea for ‘extendible hashing’ as inRonald Fagin, Jurg Nievergelt, Nicholas Pippenger and H. Raymond Strong, “Extendible Hashing — A Fast Access Method for Dynamic Files”, ‘ACM Transactions on Database Systems’, Volume Number 3, September 1979, Pages 315-344.was patented by IBM.The full paper in PDF is super easy to find on Google.When I was at Yorktown Heights, our project used that idea; it’s super clever and was nicely powerful in our project.More generally, the idea is a super nice, easy to use, and efficient solution for a major fraction of the huge range of ‘hashing’ problems in computing. The idea is right up there with the best in Knuth’s ‘Sorting and Searching’.The idea is definitely a good example of good computer science research.So, in some sense, the work should deserve some legal ‘protection’ if the people who did the work want it protected.I agree that as a practical matter, we should not have software or business process patents, that the USPTO has made a big mess, that patent trolls are the scum of the earth and a serious problem for growth in our economy.But also I have to believe that copyrights and trade secrets are not strong enough to provide good protection for such ideas.For the extendible hashing idea, curiously, as a practical matter, except in rare cases, I doubt that IBM has any practical way to enforce that patent. The reason is, the idea, if used, typically is buried in software so deeply that it would take ether documented source code or ‘decompiling’ and a lot of study to see that the idea was being used. And if the software is running just in a server farm, I can see no reasonable way IBM could learn that the idea was being used. My guess is that the idea has been used often by people who learned the idea from the paper, a course, book, colleague, etc. and never thought that it might be patented.Where IBM might notice that the idea was being used might be in, say, Microsoft’s .NET or in some similar library in open-source.Also, likely and apparently, the work was done at IBM’s Yorktown Heights lab when that lab tried hard to support just any research at all as long as it was good research. So, that work would almost certainly have been done anyway without any possibility of a patent.

          2. Pete Griffiths

            Copyright I’d not strong enoughTrade secret is unworkable for some software

          3. sigmaalgebra

            My scrawl:That’s right.  E.g., for client software, decompiling is a risk.I am hoping that with my crucial software locked up inside my server farm, I can make trade secret protection work.But that is only a hope:  I can still worry about some legal ‘discovery’ process where someone shows up at my server farm and demands copies of everything.Let’s see:  Keep all my backups encrypted and off site “in a secure location”!At my server farm, have about three locked, steel doors have to pass through from the outside to get into my server farm.  When the uniforms show up at the first steel door, I click on a push button that shuts down my Web service and writes over all the data on disk.  Also, I have a little encryption device connected to a USB port on one of the servers, and that device goes into the furnace or some such.  Meanwhile, I head out the back door and catch a plane to somewhere.By the time I could afford such things, hiring lawyers might be easier and a reasonably solid defense.But, generally, again, I’m with Fred on this one:  Software and business process patents suck.Sure, as I’ve posted elsewhere in this thread, I know that some software is important ‘intellectual property’ that should be protected.  But, that said, I see no reasonable way to protect it except just trade secrets, that is, just don’t tell anyone and keep the software locked up inside a server farm.  And as you note, that is not all the protection we could want.Having the original intentions of patents also protect such software might be nice but in practice, as we can see all too clearly now, doesn’t work.  The solution is much worse than the problem.  So, just do without the solution.

          4. Guest

            was a copy

          5. Guest

             Dear Fred, I think it’s a very tricky topic. I generate tones of ideas every single day. I was giving away two business ideas to friends yesterday. Universally speaking “ideas are free”. This was the headline of my LALIAFLIA workshop a year ago. When we deal with the concept “making the world a better place” this statement always works, BUT when we enter the “infinite game” a.k.a. innovative entrepeneurship, protecting an idea turns into an egoistic strategy to gain more competitive advantage. It just depends on the perspective.

      3. sachmo

        business methods should not be patentable – i agree. But as a capitalist, even you must concede that there needs to be protection for smaller independent inventors having their ideas / work copied or stolen by rich corporations. The industrial revolution could not have happened without a functioning patent system among other things. 

      4. Pete Griffiths

        FredYou don’t just invest in execution you absolutely invest in ideas unless you specialize in fast followersIn which case patents are indeed a nuisanceThe question is not whether ideas have value – it is blindingly obvious that they doThe question is whether they are and or should be patentableAnd that requires more serious argument than you have so far presented

    3. aiming4thevoid

      “But to advocate destruction of property rights seems to indicate an utter lack of understanding the underpinnings of capitalism itself”Sorry, but wrong! Property rights are necessary for civilisation which is why you can find  laws pertaining to it as far as Hammurabi’s code. This is because physical entities are a scarce resource.Yet the concept of ‘intellectual property’ is barely a couple centuries old. It was not necessary for the Greeks, and neither was it necessary for Shakespear to create the amazing art we now are able to call ‘our culture’. Could the roman empire have grown to become the greatest ever known at it’s time if someone had ‘patented’ the concept of the aquaduct?Setting limitations of the spread of ideas is not necessary for capitalism, it is just necessary to create monopoly revenue to the people who come up with these ideas.

      1. Dominic

        I don’t think you can compare the IP rights of today versus the greek or roman empires.  Back then education was a huge barrier to entry and only a handful of people could design such things as an aquaduct.  It wasn’t as if someone could easily “steal” your aquaduct idea and reproduce it a few million times.  And if I remember my history correctly, the romans affectively owned everything in their kingdom which kind of makes your point mute.

        1. JLM

          In a “feudal” society the King or Emperor owns everything and granted “feuds” to his nobles in return for their paying taxes and raising armies in times of national crisis.This is literally where the concept of property taxes came from.In 1625, the English King converted to the alloidal system in which grants or feuds were not just for life but could be inherited, subdivided and sold thereby creating the property concept that came to our shores.This thinking was enshrined in the big C by the FFs who had already recognized the concept based on the 1709 Statute of Anne which was the first codification of IP in English law.

          1. Guest

            And feudal society was also the inspiration of ‘feudal relief’ a foundation of the modern inheritance tax. There is nothing new under the sun, or so it is said.

          2. JLM

            The American inheritance tax was a temporary tax intended solely to fund wars and no other reason.The current inheritance tax was not terminated at the end of WWI and thus continues unabated.There is no good intellectual basis for making death a taxable event.

          3. ErikSchwartz

            Technically death is not the taxable event. If you die and leave your estate to a tax free entity they pay no taxes on it.I can argue the estate tax both ways (and have no intention of leaving my kids enough money so that they don’t have to work for a living), but the politics of calling it a death tax is marketing the issue, not an accurate description of what happens.

          4. Guest

            @JLM:disqus I understand the American inheritance argument. However, my comment above was made for another reason. You often go back to quote English Common Law when it suits one instance (e.g. the idea of property rights) and then want to forget the types of legal precedence that that same period created in other areas (e.g. inheritance/death/estate taxes). My point was to try and get a response from you to better understand you and where you come from because you go back & forth a bit it seems to suit your stance is all.There apparently was an intellectual basis for making death a taxable event under the same feudal system you often quote. The King granted land & title to a person not to that person’s heirs. You can argue the intellectual merits but not the fact that some intellectual  effort went into the argument originally; I don’t think so anyway.

          5. ShanaC

            The statue of anne though was much more limited in scope, unlike some of our more generalized copyright and patenting statements.  The actual Statue of Anne makes it very clear that this for commercial enterprises…

          6. JLM

            Annie was the beginning but it was a beginning back in 1709.  The fact that it refers to commercial enterprises is to simply acknowledge that it was a statute intended to regulate the business application of IP.Of course it was limited in scope as it was the foundation of such thought and thought has evolved from that beginning.No surprises there.

          7. ShanaC

            Yes, but it seems the issue at hand is that the scope has gotten way way toobig

    4. Carlo Piana

      You don’t seem to understand what capitalism is all about, that is competition and success of the best fit, and what patents are, that is a limited in time and scope monopoly that help competition by allowing inventing around a patented solution that will become available after the monopoly period.Patents are not a property, they are treated like a property for convenience, so that they can be traded and so on. It’s a deal between those in need to seek revenue out of their R&D investments and the system that will eventually benefit from more innovation and a larger common public domain.Now think if software patents and patents at lage are useful to advance technology and competition, or aren’t they just the opposite? Is the deal still balanced?* R&D in software is ridiculously low compared to the extortion that can be generated* Technology advances to such a fast pace that 20 years is like forever. So no meaningful public domain period after the patent.* Innovation is so incremental and the required innovative step so low that in any field the patenting is granular enough to only create patent thicket, transaction costs and ultimately to stifle the competition from smaller and more innovative entreprises, because only the biggest can play that game* If capitalism is opportunity for everyone, then I am afraid that patents don’t deliver it, rather they oppose to it

    5. smithkl42

      Thomas Jefferson, in defending the patent system, made it clear that “ideas” can’t be owned in the same way that physical objects can. It simply doesn’t make sense to say that you can “own” an idea. The purpose of patents, therefore, is purely utilitarian, not moral: they exist to encourage innovation, end of story, full stop. If they’re not encouraging innovation, we should get rid of them. And I don’t think it’s possible to claim, with a straight face, that software patents encourage innovation. Other sorts do, I will fully grant that. But not software patents.

      1. fredwilson


        1. sachmo

          Owning a stake in a business – involving the employment of people, the movement of goods, the creation of new products, the trademarks and copyrights associated with those produces – seems more than just owning physical objects.  It seems more akin to owning an idea.And btw, industrial revolution – which made this country great – could never have happened without a functioning patent system. 

    6. taco

      For such explicit rebuttal (“blurt something so shitty”) your reaction is awfully light on content. Why is it “short sighted”? What “secondary effects” are we talking about exactly? And please be specific to software (not the usual pharma excuse, for example)

    7. russnelson

      A patent isn’t property nor a right. It’s a bargain. You document your idea and prove that it works by submitting a working model (you know, SOURCE CODE THAT ACTUALLY COMPILES), and in return, we give you a 17-year monopoly on profiting from that idea. If it were actual property, then it wouldn’t expire. If it were an actual right, the government would be constrained from violating that right. Instead, the government has to constrain OTHER people from implementing their idea simply because you had it first.

  12. Statspotting

    Fred, is there another side that you are ignoring, when the inventor is a small guy?

    1. Chris Puttick

      When the inventor is a small guy, the cost of the patent is a high bar; the cost of defending the patent utterly prohibitive. If your invention has market merit, but you haven’t got the resouces to put it into a production talk to a VC (including A VC of course…)

    2. fredwilson

      its the small guy who gets screwed the most by the patent system

      1. Andrew S

        “It’s the small guy who gets screwed the most by the patent system”I dunno, Fred.  I run Corp Dev (including our patent portfolio) for a large company, and we get screwed pretty hard.  Trolls and others asserting patents tend to look not only for deep pockets, but high numbers of units sold in order to maximize the licensing fees they can extract. We spend *way* too much time fending off trolls and other ridiculous claims. Maybe the grass is always greener, but don’t discount the cost this ridiculous system imposes on the big guys as well. Not just the economic cost, but the time our top architects and executives have to spend dealing with it.(On a side note, it has created market opportunities for innovators like RPX.)

      2. sachmo

        As a small guy who has patented something, I can say for certain that is simply not true. 

    3. Tereza

      Or girl.Women follow rules and get spooked by this patent silliness.I’ve seen some get hoodwinked into spending their first (personal) $20k on a patent.And it’s the people they trust (lawyers, uninformed prospective investors) who advise that this is a good idea.So then they try to raise money on a concept, which is DOA.

  13. Rick Bullotta

    Hi, Fred.  In previous comments on your blog, I’ve pegged the current state of intellectual property law as one of the top 3 inhibitors to innovation.  Patents themselves are not inherently evil, but vague and nebulous patents, the inability of the USPTO to discern significance and to properly gauge prior art, and the inevitable patent trolls that go on fishing expeditions to try to shake down anyone they can are problematic.With the high percentage of legislators also ex-litigators or other types of attorneys, I just can’t see this resolving itself without intense pressure.

    1. Ted

      A streamlined ability to just throw prior art into the USPTO’s yard and have them automatically discard invalid patents without going to court, would be great for everyone.But then they’d need way more manpower to do this and I don’t think the majority of taxpayers would go for it.

      1. Jon Cameron

        Ted:  They do have this process.  It is called ex parte or inter partes reexamination. 

        1. Ted

          Thank you Jon.  I learn something new every day.  Looking at the fees, it isn’t unreasonable.

  14. Lomig Unger

    hi,it may depend in which country you work. In France, patent is an exchange : you give information to gain the right to have a temporary monopoly. To my mind, every time someone’s not free to enter a market, it’s against human rights.If you don’t want to share your ideas and products, don’t sell them. And if you sell them, and if they’re good, don’t be surprised to get copied. Isn’t it success to be copied ?I agree with you, and not only on “software patents”, but on “patents” in general !

    1. Joran Greef

      Well said.

    2. whitneymcn

      In theory, patents in the US are supposed to work the same way — Article I, Section 8, Clause 8 of the US Constitution:”To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”The temporary monopoly is supposed to be an incentive to share the specifics of the invention so that society at large can (in due time) make broader use of it. A patent is a trade, not a reward.

    3. gorilla44

      To say that all patents are bad is ridiculous. Without the ability to patent, there would be no new drugs or medical devices. I completely understand and agree with Fred’s problems with software patents, but no one can intelligently say that all patents are wrong.

      1. bsoist

        Without the ability to patent, there would be no new drugs or medical devices?This is a common argument in favor of patents and it is simply not the case. It assumes that financial reward is the only thing that drives innovation. Without patents and copyrights, there would still be advancements in science, technology, and the arts.

        1. gorilla44

          It takes tens of millions of dollars (if not hundreds) to fully develop a drug or a medical device. Without patent protection no company could devote the resources to do that.Have you ever done a deal with a drug company? They spend more time on your IP than anything else, by far. They do that because they don’t want to spend the big money on getting a product approved and then watch their competitor take the product to market. Would you invest in a drug company that did not have IP protection on their products?

          1. bsoist

            I am not in favor of abolishing all protection of intellectual property. As has been said in other comments, the U.S. system was put in place to provide temporary protection. I have an issue with how these protections have been extended an abused, but that is a topic for another discussion. I was simply responding to your argument that “there would be no new drugs or medical devices.” Things might be considerably different, but there would be advances in medicine. No, I have not done a deal with a drug company but I live right in the midst of these companies (and other RD heavy companies) and I understand the advantage of patents – though I think it is very often exaggerated. 

          2. gorilla44

            Cowboy Coder & bsoist – you’re underestimating the amount of effort required to FULLY develop a drug or medical device. Yes, the initial discovery work is often done in a university lab that is govt funded, but that is not even 10% of the way to having a product on the market. The company (and it is not just the Pfizers of the world but often small biotechs) has to optimize, formulate, figure out dosing, complete all of the animal testing, scale-up the manufacturing, complete clinical trials, etc. So while there would still be innovation, there would be no new products.

          3. bsoist

            Valid point and an excellent distinction.I still disagree – I think we are prone to assume things must always be as they are now. Costs are prohibitive, in part, because of the legal issues – and lobbyists and advertising ( when did that start – telling every moron in the world what medicine his doctor should be prescribing?). And don’t pharma reps earn commissions?I do believe, and have already said as much, that patents for these kinds of innovations have been beneficial to society as a whole, because of the stimulus to innovate. Abuse of the patents, however, has not been good. Allegedly, drug manufacturers hold improvements to medicine for future “versions” in order to guarantee additional patents.I understand that the expenses are enormous and that these companies are only (allegedly) working within the law to minimize these expenses. They would be doing a disservice to their stockholders to behave in any other way. Corporations have one mandate – profit.There is something wrong with the system if it can be gamed so easily.

          4. Cowboy Coder

            Most drugs are developed in research labs that are funded by public tax dollars. Big pharmaceutical companies don’t do much of their own research. Once a new drug is found, the patent is handed over to a pharmaceutical company that didn’t develop it in return for them doing safety trials.

          5. IanMehr

            I’m afraid this simply is not true.  Perhaps you’re thinking of the following fact: more than half of pharma’s commercial drugs and pipelines are in-licensed compounds, predominately from biotechnology companies.  These biotech companies created their drugs from a combination of internal discovery, and some academic research.  Compounds from academic (government funded) research are among the most likely to fail, however, and often discoveries from academia are expanded and create new intellectual property owned by the licensor.  Without the profit motive, protected and motivated by US Patent Law, our pharmaceutical industry and the majority of its live-saving and health-improving medicines would cease to exist.  The timelines and financial investment required to discover, develop and commercilize a new therapeutic are VASTLY different than that for software, so comparisons between the two industries need to be made carefully.

        2. johneday

          Last year Pfizer spent $15 B on R&D.  If every time they brought a new drug to market, it was instantly replicated and sold by other companies, what return would you expect that investment to have? Furthermore, what incentive would Pfizer have to spend another penny on R&D next year?

          1. JLM

            Well played.

          2. bsoist

            John,I could not agree with you more. There would be no incentive for Pfizer at all. They exist for one purpose – profit. but that wasn’t my point. My point was that that the statement by gorilla44 ( there would be no new drugs or medical devices ) and by association, the more general and popular assertion that “without patents there would be no innovation” (which gorilla44 did not say, I know) – is false.If there were no patent protection …1. there would still be innovation – even in the medical field2. you are almost certainly correct – large multibillion dollar, international pharmaceutical companies would not operate as they do now ( or perhaps not exist at all).

          3. sachmo

            Actually there wouldn’t be nearly as much innovation.   In the orthopaedics field, nearly every major advancement (i.e. first successful clinical knee replacement, first surgical navigation system, first unicondylar arthroplasty) were all done by independent inventors – often doctors. Without a patent system, these people would not have had the incentives nor been able to raise the money to get their ideas off the ground. Some innovation, perhaps, but we would be moving faaaaaar slower than we are today without patents. 

          4. A real libertarian.

            They got that $15B by extracting a rent on sick people. If we just added $15B to the federal budget to fund university research the cost to the economy would be less severe. We could offset it by invading other countries for 1 less day every year. We could get all that R&D without anyone dying needlessly. It might not be as efficient, but what we’d probably lose are expensive pills for things like E.D. and what we’d probably gain is better science to address more serious and less profitable problems.

          5. MickSavant

            You are being a funny guy, right? Just have the gov’t spend $15Bn more on research? You’re kidding right? 

          6. synp

            Let’s take the R&D out of companies and instead let the government do it?  (or fund it – same difference)That’s a whole new definition of libertarian.

          7. MickSavant

            How much did they spend on legal fees? How much did they spend trying to get a drug approved by the FDA?Better yet, how much of that $15Bn was actually spent researching new molecular compounds vs. recycling existing drugs that don’t face FDA approval hurdles?There are many things driving that $15Bn number if we improved would greatly reduce the need for IP protection in order to justify investment…

          8. russnelson

             Why do drugs cost that much? Perhaps, instead of the government saying to the drug manufacturer “you have to test the drug to make sure it’s safe” we say to the drug retailers “you might want to test the drug to make sure any sane people want to buy your drugs”. So yeah, you’d get similar but not identical drugs from Walgreens, Kinney Drugs, etc. The key here being that Walgreens has a trademark and only they sell that drug. So they can capture 100% of the benefit without needing a patent.

      2. russnelson

        There have been two articles in recent years in The Freeman pointing out that patents have gotten in the way of innovation, and that when the patents in the steam engine field expired, suddenly there were many new inventions. So actually, yes, someone HAS intelligently said that all patents are wrong — and they have evidence to back up their claims.

    4. Jake Snark

      Patents don’t prevent you from entering a market. The patent holder was granted a patent for teaching about their invention. In exchange, they receive a temporary monopoly on the patent with the right to license that to others.You are free to enter the market provided you license the patent.One who is free to enter the market seems to be willing to invest their time in developing and marketing a product, buying  computers to develop on, buying computers (or utility time) to host their services, buying bandwidth, and so forth.Yet, somehow, they are unfairly blocked because they are required to also license the intellectual property of a patent holder?Walk into the Apple Store and walk out with a Macbook without paying for it. When the police arrest you for the theft, complain about not being free to enter a market.

      1. A real libertarian.

        “provided you licence the patent” => “so long as you pay the litigation tax”Stealing a computer is nothing like infringing a patent. You don’t get sued for imagining having a computer. Computers come with the right of first sale. They are not duplicated and transmitted by speech. Ideas are not property. The words intellectual and property should not appear next to each other. Their juxtaposition is a propaganda tool.

      2. russnelson

         Jake, you have a decidedly optimistic view of software patents. First, many of them are simply not innovative. Reinvention happens all the time — and the first to patent his reinvention gets to control all the subsequent reinventors. XOR’ing a cursor?? Patented even though painfully obvious and described in the literature from the very beginning.Second, you have the problem of patents existing but not being issued for years or decades later. Even if I manage to do a patent search and avoid existing patents, I could still get hit by a patent later.Third, it is extremely difficult to understand patents. They are written in a stilted fashion so that they cover all possible implementations of the idea.Fourth, patents make open source impossible. You can’t give away software if it requires a royalty. Given that the Constitution only allows for patents because the advance the useful arts, and open source advances the useful arts, it seems thatsoftware patents are not Constitutional.

        1. sachmo

          1. In other fields, XORing a cursor would have never been issued as a patent.  Wouldn’t meet the obviousness requirement.  The problem is the review process for software patents. 2. Patents are *rarely* issued decades later.  Even in the most backed up fields, I have only seen them issued perhaps 4-5 years after the initial filings.3. Specifications that are written in a stilted fashion are poorly written and to the disadvantage of the patent holder.  Most patents could be written better, but are actually not that bad in terms of the description of innovation.  Claims are difficult to understand, and are written to cover every implementation, yes.4. Actually open source makes patents impossible.  If you can prove that an open source implementation of a software idea existed before the patent, you can request a formal review of the patent and invalidate it.  Open source still has a place with a fully functioning patent system. 

    5. loquacious

      But we live in the US. I don’t want to live like France’s goverment. Open source code is good for newbies to CS…. It’s just good have in general.  You shoul dnot be punished for using it.  Having someone imitate you is the truest form of flattery. I have put a lot of code out on the internet hoping to answer questions, when some one gets stuck. No patents on code please!

  15. Gavan Woolery

    You are absolutely right.At the very least, it would be pretty simple to do the following:STOP issuing new [software] patents.Patents are ridiculous things, especially when someone CAN PATENT A GENE.  What’s next, patenting sentences?  Colors?  Odors?@twitter-217197178:disqus , @peterkayshow:disqus  — the patent system values ideas over implementation.If you do the same, then you need to reeducate yourself.  Paul Graham’s article on the matter is a good start.

    1. Ted

      As of 2010, a good deal of gene patents on things that were naturally occurring in nature were thrown out. The current state of things is that the USDJ supports patents on the process and discovery of genes that have been ‘isolated and altered’, but not on those that have only been ‘isolated.’So despite what mass media claims, your genes are your own.

      1. Tereza

        Did they throw those out? Thank goodness if yes. They were patenting strings of DNA happening in MY body and yours! WTF?!

      2. ShanaC

        The tests are still patented….

        1. Ted

           That’s fine.  Much like any non-trivial apparatus is in the industrial chemicals industry despite there being only a set known number of elements in this universe.

    2. Mike Cane

      >>>What’s next, patenting sentences?  Colors?  Odors?Those would actually fall under Trademarks.  And no, I’m not being snarky.

      1. Gavan Woolery

        @twitter-15650210:disqus – funny, I trademarks and copyright crossed my mind right as I said that 😉 – but you are right.

  16. Charlie Crystle

    We’ve filed some patents.But the way it works now is that we’re doing that as a defensive tool; we can only guess but it’s likely that every other line of code violates some patent. Needs to be overhauled. I still want some protections for innovators, but in a way that keeps things out of courtrooms and on the playing field.

  17. andyswan

    I love watching everyone use government as their own tool of destruction. There should be no patents, because patents hurt me!  There should be stronger patents, I need them against the big guy!Their should be no application discrimination by ISPs, because it hurts me!ISPs should be subsidized, because it expands my potential customer base!Unions should have more power, because that would help me!Unions should be harder to form, because that would help me!But but but government helped them in the past—now it should hurt them, to be fair!Food stamps and grants for me!Taxes for him!The only solution is a complete separation of government and economics.  Until then, we’ll be playing ping-pong with the currency of favors, connection and influence until the whole thing comes crashing down.

    1. Lucian Armasu

      Patents *may* help one (usually they are useless and waste of money), but it hurts all the rest that want to build something similar on top of that work. Before you say “but what will I do if they copy my work? The answer is keep competing. Fierce competition helps improve products a lot faster.

      1. Jessica Darko

        You don’t understand how the patent system works.  It allows you to build on their work.  That’s the purpose of patents– you publish your works so others can quickly come to the state of the art… and then extend it. They work just fine in that regard. The people who oppose patents aren’t wanting to make their own innovations, they want to copy others innovations.  Example: Google just copies the iphone after it was announced (previously they were making a blackberry clone) rather than spend the 4-7 years Apple invested in coming up with a unique touch interface. Apple published the patents, in exchange for patent rigths.  This lets google get up to speed with the state of the art, but they are then suppose to INNOVATE and come up with something new.  If they did that, it would be patentable. Instead, they just copied Apple.Those who oppose patents are bitching about not being able to steal, not an inhibition on innovation.Patents don’t stop innovation, because no patent would apply to an actually innovative idea (by definition.)

        1. Dana Blankenhorn

          There is a difference between software patents and medical device patents. You can invent your way around a medical device patent and create a new device that does the same thing. You can’t do that with software patents — they’re covering the underlying idea, not its specific implementation.Another difference. Device patents are covered by the clear language of the Constitution. Software patents aren’t. They were created by courts, in the 1990s. Before that they were illegal, and for good reason.

          1. Pete Griffiths

            Danathis is incorrect.  ALL patents include the description of a preferred implementation, which serves to demonstrate that the claims may indeed be implemented.  It is the claims that (if granted) are protected.As for your point about the constitution – I just don’t undertand it.  Would you mind elaborating?

        2. A real libertarian.

          How could Google make a phone that delighted its users without being accused of copying the iPhone? Do they just not get to make a phone for some number of years? We all have to pay a tax to apple for a decent phone to make sure that they are repaid for the research they do? That’s bullshit. If Google did the best they possibly could to copy the iPhone verbatim, their phone would still comparatively suck to most people. Have you ever compared going to an Apple store to going to say a Sprint store? Apple does not need patents to kick everyone’s ass. Nobody needs patents. Ideas are worthless. Execution is what makes money.

          1. ErikSchwartz

            Apple has patented delight.Anyone who delights customers is infringing on Apple’s patents.

          2. Aaron Klein

            This quite possibly might be the best comment in this entire string, Erik… 😉

          3. Jessica Darko

            How can you be a real libertarian if you think that competition requires theft? Google could delight its users by making something new and delightful– eg: innovative.Instead of making a pale ripoff of the iPhone.You may think ideas are worthless, and you could even make the argument that in your libertarian society patents wouldn’t exist.  I say they would, because even in anarcho-capitalism, contracts would exist, and innovators would simply require agreement to the contract before purchase, and probably reserve rights greater than patent without any disclosure.I’m ok with this, because I’m really a libertarian.Your notion that you don’t like the current system, and therefore theft — eg: the initiation of force– is justified, means that calling yourself a libertarian is dishonest.

          4. Ted Lemon

            So you’re a libertarian who likes government-sponsored monopolies.   Huh.

        3. fredwilson

          that’s such an idealistic view of the worldhave you actually built a company and been sued for infringing a patent that you don’t actually infringe?

          1. Jessica Darko

            If you wish to disagree with me, I’d prefer you make a counter argument, rather than making disparaging characterizations.I could sue you for those characterizations if I wanted to.  You can sue someone for anything you want.  The fact that bad lawsuits might be filed– and here I have to guess at your point, because you can’t be bothered to actually make it– is irrelevant to the nature (not “idealistic” but factual) of the current system.

          2. Sachmo

            I haven’t had tha unfortunate experience. I have however worked my ass off studying the pthe patent filing process in order to patent an invention that absolutely is unique, involviving both hatrdware and software. And I would hope that some version of software patent remain, otherwise literally billion dollar companies could copy my idea at almost no cost. I think the real problem is that the review process for the obviousness reqq for software patents is broken for some reason. They seem to get it right forf hardware, not sure why they are granting these ridiculous patents that shoiuld not hold up for software.

          3. Pete Griffiths

            Jessica is right Fred.  She is making serious points about the reality of the patent system (rather than popular characterizations). She deserves the respect of a serious analysis of her points rather than the slight of being ‘idealistic.’

        4. lei5ure

          “you publish your works so others can quickly come to the state of the art… and then extend it. “Yes, that’s the theory.”They work just fine in that regard. “You think?  I don’t.  Take the SmartArt feature in Office 2007 as an example.  There are around 10 patents on this, and even taken together, they don’t tell you as much about how it works than you can discern by using Word or Powerpoint, and then looking at the resulting XML.If disclosure in return for monopoly is the deal, we’re getting ripped off.  If monopoly to create an incentive for innovation is the deal, we’re paying a stupid price where no incentive is required.

          1. Jessica Darko

            I fail to see how poor microsoft patents mean we’re getting ripped off. You may think those patents are not really innovative, but that doesnt’ stop the really innovative inventions from being made public by the patent process. So, you haven’t made your case.

        5. Mike Rice

          why get a patent if you can open-source?

        6. JasonIvers

          You are likely not a software developer… the problem with software patents is the fact that the people evaluating them are not competent software developers themselves, and so they allow patents to be granted for things that are basic and obvious, like the patent mentioned in the original article, for an in-app transaction.  Amazon has been allowing in-app transactions since it started… their web site is an app by any reasonable definition that I can dream up.This sort of thing, or allowing software patents to be absurdly broad, happens all of the time.  It’s much more difficult to understand what should and should not be patent-able in software for outsiders than in many other industries… that’s why people can patent the same thing in different circumstances (doing something on an app on a phone vs on the web vs on the desktop) or things that are ridiculously obvious (like 1-click purchases from Amazon or the Lodsys patent, which actually fits both categories).

          1. Pete Griffiths

             It’s much more difficult to understand what should and should not be patent-able in software for outsiders than in many other industries.Easy to say. But is it true? You don’t substantiate the clIm in any way and studies show that in fact the “hindsight effect” is not just a problem with respect to software patents.

      2. fredwilson


        1. Andrew Sridhar

          I agree with Jessica Darko’s post above.  Not being sued (presumably) for patent infringement does not invalidate her argument. I’m sure we are all sympathetic with the problems with the Lodsys example and others.  But the solution does not have to be “no software patents.”  After all patents do disclose advances by others and provide incentives for innovation (especially “leaps” vs. “mousetraps”). Getting rid of patents might sound good, but beware the unintended consequence.Some alternative solutions are: (a) have a USPTO that is stricter in awarding patents only for unique and non-obvious innovations, (b) decrease the duration of patent protection.Additionally, while you theoretically cannot patent an idea, software and the internet have made it extremely easy to obtain de facto patents on ideas with a few lines of code.  Congress should fix this.  

          1. sachmo

            I could not agree more with your response.  The problem is *the review system* for software patents. The PTO is doing a bad job with the obviousness requirement, because the people they hire are probably not competent software engineers.  For whatever reason, they’ve actually done a pretty good job (considering the sheer #s) of patents filed for hardware. Getting rid of software patents entirely is an extreme response. 

          2. Pete Griffiths

            agreed.And there is a further complication.  There is an enormous amount of evidence that the ‘hindsight effect’ whereby that which has been brought into the world and become popular is then considered ‘obvious’ even when there is overwhelming evidence that it was not ‘obvious’ at the time it was invented in the past.

    2. JLM

      We need to get government out of the business of picking winners and we need to emasculate the power of the lobby.

      1. andyswan

        Out of the business of business, period….anything else IS picking winners.Emasculate the power of the lobby by emasculating the power of thegovernment. Damn founders and their outdated ideals of liberty….

        1. Guest

          I am always amazed at how many business people say they are for limited government but are happy to fund lobbying efforts for their particular cause. How does one support the notion of getting government out of business while simultaneously inserting business into government via Lobbying at (UPDATE: ‘and’ not ‘at’) contributions. It seems illogical to me. cc/ @JLM:disqus

          1. andyswan

            I would guess that many (accurately) consider it defense. I’ve seen somestaunch libertarians become very politically active AFTERtheir livelihood became threatened by our nannies’ preference for adifferent winner.Others are simply greedy and truly hypocrites.Most, however, have absolutely nothing to do with Washington DC in any way. You could be paying too much attention to the outliers.

          2. Guest

            RE: OutliersI try to pay attention & be thoughtful & mindful. I admit I do make mistakes so it is possible these are outliers. But I do not think what I witness are outliers, especially since my wife is a former Stats person … she would kill me if I didn’t recognize outliers.  :)I think hypocrisy is, unfortunately, the likely culprit … a possible natural state of the human experience when ideals square-off against the reality of physical existence.

        2. Mark Stansbury

          U.S. Constitution, Article I, Section 8: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

          1. andyswan

            The only logical conclusion to this argument, already solved by those pesky founders.I have a feeling that my comment is getting a lot of “likes” because people are projecting their own stance onto what I wrote.Protecting private property from infringement by others (unique ideas that are turned into physical goods certainly qualify) is a valid role of government….changing with the winds of innovation and public outcry to determine who should win and lose is not.

          2. Dave W Baldwin

            –Protecting private property from infringement by others (unique ideas that are turned into physical goods certainly qualify) is a valid role of government….changing with the winds of innovation and public outcry to determine who should win and lose is not.–That is where it is slippery.  You can claim to know the difference between the two while someone else claims different.The prob is everyone looks for the gov favor… when it comes down to getting your road paved.  Both sides yell about the gov… then just reward their backers when they gain power…the same goes for their cheerleaders.There is a way to change… just don’t think there are enough with balls to do it.     

          3. Anne Ominous

            Quote: “Protecting private property from infringement by others (unique ideas that are turned into physical goods certainly qualify) is a valid role of government….changing with the winds of innovation and public outcry to determine who should win and lose is not.”Quote: “Protecting private property from infringement by others (unique ideas that are turned into physical goods certainly qualify) is a valid role of government….changing with the winds of innovation and public outcry to determine who should win and lose is not.”The problem here, Andy, is that you have mis-characterized what patents and copyrights are all about. They have nothing to do with “protecting private property”.Holders of patents are GRANTED exclusive privileges (“rights” here is technically not the proper word) of controlling distribution of their works, for a limited time. And the purpose for doing so is not to “protect” the creator or the work at all, but to allow the creator to profit for a limited time in order to promote useful arts and sciences… which is a benefit to SOCIETY as a whole. Society benefits because the work eventually reverts to the public domain. It was not done for the benefit of the creators of such works at all, except as a way to improve SOCIETY. The founders recognized that without financial incentive, people would not innovate. (Nor do they, where such incentive does not exist. Not nearly to the same extent, anyway.)The entire concept of “intellectual property” (which is a fiction) was dreamed up by a group of — who else? — copyright and patent holders, in order to deliberately confuse the issue in the public mind. But make no mistake. If you write a book or invent a new widget, IT DOES NOT BELONG TO YOU. You are granted, by the government, certain privileges to it in order to profit from it for a limited time. No more than that.The problem here, Andy, is that you have mis-characterized what patents and copyrights are all about. They have nothing to do with “protecting private property”.

          4. A real libertarian.

            Isn’t enforcing an artificial conception of property an example of government butting into the business of business? One person’s rights to own an idea are another person’s arbitrary oppression. Enforcing patents makes thought crimes out of independent discoveries. There is no clear line separating what can be owned and what can not. Truly novel ideas ought to give the first mover a big advantage without patents. It seems to me that simply not having any artificial conceptions of property is also a perfectly valid solution that we ought to try. 

          5. fredwilson

            31 likes and counting!the post itself got 102 disqus likes so far.feeling loved today 🙂

          6. Will Spencer

            @Mark: Technology moves a lot faster now than it did in 1776.  “limited Times” should be a maximum of 36 months now.

          7. Erik Anderson

            That would probably work and I agree with it, if it didn’t take the patent office up to that time to actually approve a patent.Maybe 5 years instead

          8. Jon Cameron

            The AVERAGE time it takes to get a patent is almost 4 years.  Some can be much longer.  This is because the government takes the fees inventors pay to the USPTO and uses them for other budgets.  The announcement that the USPTO would move to a 1 year expedited process was scrapped a few weeks ago when more of the funds were diverted than what was anticipated.  So that patent would expire before it was approved which would eliminate patents in the US but not in foreign lands. 

          9. Jamie Hamilton

            Yes! Patents are authorized to promote progress in the arts and sciences. Protecting the property rights of inventors is at best a subsidiary goal. Where individual rights and social progress conflict, the constitution is clearly in favor of progress.  

          10. Haughtonomous

            The operative words are surely “Authors and Inventors”. If you buy a patent you aren’t the author or inventor, so in my view the patent should thereby be invalidated. I always thought that selling protection was something the Mob did, and that it was illegal.

          11. Ron

            “Something the MOB did…” remember Insurance Companies fall into that category. In regards to patents, they are like Unions, they serve their purpose, but they drive the cost of doing business up, and in  the end, they cause business to go abroad. Why – its cheaper, with less headaches. There has to be a happy medium with software, with the idea of prior art, when new inventions are thought about, roughly 100 people world-wide think of an idea that is the same. Only one gets the patent, then people start greating devices and software with similar ideas, that dont even use the software in native form. But since the idea was licensed, then we all have to pay for it. There is no easy solutuion, unless its either freeware, or used under open-source. Then it can be sold, so long as the source code is included…

          12. Laurence Gonsalves

            Ron: Insurance companies are more like bookies. Essentially you’re betting that something bad is going to happen to you. If you win the bet you get paid. There isn’t really inherently “bad” about this because if you buy insurance it doesn’t really affect me directly.Patents are much more like a protection racket. When you pay for “protection”, the mob (the USPTO) will break my kneecaps if I haven’t also bought sufficient protection (unless I manage to stay well away from “your” turf).[Aside: why can I only reply to Haughtonomous’s comment but not Ron’s directly?]

          13. ix

            In the IT field, patents pretty clearly don’t serve this purpose, so that article really supports doing away with them entirely.

          14. chris

            It’s the definition of that one little word discoveries that is a real killer.  I was hit with a pretty major infringement case were the inventor basically stated that he had come up with the idea to use the internet for and and all purposes of moving money and currency value between individuals and organization, companies, other individuals, etc.  I was running the third largest online payment company at time so of course was brought into the mess, along with Amazon, eBay I believe, and pretty much anyone else successfully playing a role in e-commerce.  The guy was a total opportunistic looking to stir up headlines and get a quick payday from successful companies, particular those with public shareholders.  His work product used to file his patents was a joke and was no more a discovery than someone saying hey I created the idea that people will go into buildings and people in those buildings will cook food and that food will be sold to those people going into these buildings.  Ok, all you places called restaurants now owe me money.  Disgraceful that lawyers are willing to take some of these cases and that courts don’t act sooner in striking them down.  While my company knew they were a joke, it was distracting and took management time and attention in depositions, reading through patent applications, meeting with lawyers, etc.

      2. Johnbucher

        People are the government. This is a democracy. Be the change rather than complain.

        1. appi2012

          One person cannot change something in a democracy. You need to voice your opinion and get a majority in favor of your idea if you want to implement it.

        2. ShanaC

          i’m not so sure how much power someone like me has in the government

          1. loquacious

            Let’s start a petition.  Contact all of you local and state representatives.  I live in IL and I know all of mine.  They will ignore you and send form letters, until it gets in the millions.If we get enough signatures, from registered voters. It has to go to congress.  That’s where we start.

          2. ShanaC

            Sure, for patents or for something liker term limits (actually with term limits that may be a constitutional issue)

        3. Jessica Darko

          That’s like saying the shopkeepers are the mafia thugs who shake them down. No, the shopkeepers are the victims, and the mafia thugs are the ones responsible for the shakedown racket.The people aren’t the government.The elections are a sham.  They are fraudulent, and have been at least since 2000, when as more votes are counted, vote counts for some candidates go down!  Now why could that be?  It’s impossible, actually.The government is the mafia.  The people are victims and you’re just blaming the victim.

        4. JLM

          A placebo at best and a toxic thought at worst.  We live under a representative form of government hardly a democracy.  Once we send a rep to Congress, he is the government.

          1. markslater

            Fire and forget.Short system of government. black swan event approaching.

          2. pho3nixf1re

            Term limits would solve the problem here. No more professional dictators and it would kill the lobby overnight.

          3. JLM

            Well played.Term limits are so obviously needed as water and oxygen.This is why the body politic is in such terrible condition.  The entrenched elected  officials from even places you cannot really change — San Francisco & Texas — need fresh blood to stimulate the brain if for no other reason.

          4. Fred H.

            Term Limits = Stop Me Before I Vote for the Fool AGAIN.

          5. pho3nixf1re

            @a13be9437fa2a8e13b8df38db7c9445d:disqus That assumes you have a choice. In our strictly dual party system, there is very little choice in political leaders, especially here in the South. By forcing term limits, it prevents complacency in choosing our leaders. With a term limit on House and Senate members, it forces the public to continuously re-evaluate our leadership and policies, rather than just voting for the same guy because I don’t want to vote for ‘that other party’.

        5. loquacious

          Dear Johnbucher,The United States of America is a Republic.  Please hold your hand over you heart and state the “Pledge of Alligence!”  It clearly states “To the Republic for which it stands.”  Why do I have to constantly tell people this?The only democratic part is when we vote for our “REPRESENTIVES'”, which represent our wishes an desires. A democracy would not work here.  That would be everyone in the US voting for laws. We hired/elect people/servents to do this for us, so we can continue our daily lives. When they make monumental screw ups, we do not vote for them and start a petition to get a law turned over in congress.  Yes, it takes years. Yep, sounds like a republic to me!BTW, we are 14 trillion soon to b15 trillion dollars in debt. That should bother you!

    3. Christian Romney

      Because leaving the markets to regulate themselves works so well. http://en.wikipedia.org/wik…But hey, kudos for taking the really lonely position that we should have zero government involvement in business whatsoever–at least it shows courage.

      1. andyswan

        Explain how any of the financial crisis would have been possible withoutFannie and Freddie purposefully and repeatedly buying bad loans with govtfunding and fiat.No chance those loans are made, much less levered, without the ultimategreater fool at the top of the chain buying them up with printed money.

        1. Jessica Darko

          EG: The financial crises was engineered in an attempt to paper over the last financial crisis (the dotcom bust) which was a result of papering over the previous financial crisis (the disco 70s.) The real crisis is the dollar bubble and it is going to be a doozy– when 70 years of inflation exported because the dollar was the “worlds reserve currency” come home to roost in the course of a year, and suddenly we’re in hyperinflation. 

          1. gorebash

            Sure.  Keep pointing the finger up the chain and you eventually land on the creation of the Federal Reserve.  There’s a big chunk of the real cancer that no one wants to deal with.  We ought to dismantle it completely so that politicians can no longer spend what we haven’t earned (for some ideal).  They will do it every time.

          2. Discit

            I agree. Them and their whole Trilateral Commission, CFR, Democrat/Republican cabal is a cancer on us too though. During the health care “debates” more conservatives would discuss expanding a Medicare single payer like option while democrats called them racist privelegers from one mouth while spinning progressive single payer advocates as radical to secure their big pharma big kickback ad funding and creating a funnel to big insurance company monopoly in the form of “mandated not really” and “guaranteed coverage”. The perfect combo to funnel public health care money to the war and put small insurance out of business while guaranteeing big phama profits. And this was the fake “good option” we were given while democrats had doctors and nurses arrested for trying to force single payer into the options and discussion.http://www.commondreams.org

        2. RationalThought

          Fannie and Freddie were the TAIL end of buying bad loans after all the wall streeters were leading the charge.  They weren’t even involved in (guaranteeing) the loans to start.  Fannie and Freddie were victims, not culprits.

          1. Discit

            No they weren’t. They appeared to buy government favors through the Democrat Black Caucus after they were found to be cooking books, building up the crisis to the end, Barney Frank and Chris Dodd style. This was after Congress discovered disaster looming and building, denied for years. Far from innocent.Repealing Glass Steagal was the fuel and protecting Freddie Mac and Fannie Mae stoked the coals. Those two things were directly and primarily responsible for the meltdown. The corrupt, bought and sold 10x over, two party system made it impossible for regular people who saw the obvious to do anything though.

      2. russnelson

         Markets don’t regulate themselves. People regulate markets.And, Christian, Andy is not as lonely as you think. Consider that we have separation of church and state here in the USA. At the time it was initially proposed, EVERYBODY agreed with you — that regulation was necessary. Well, we have proven that separating religion and state is like separating two quarreling children — good for both of them.Separating markets and state would similarly be a good thing. I support it.

    4. Lvid

      It is just about the guys that approve software patents – it is their job to decide that actually the notion of a “in app transaction …” is not something to issue a patent. It is like issuing a patents for using round wheels. So, I guess a lot of incompetency or corruption is going on there and some government clerks have to take responsibility for this. I guess the “best democracy” in the world must have a way to resolve this…

    5. Alexgauthier24

      right on the money.

    6. Vinuth

      Which would create much bigger entities than government itself to buy it’s way out rendering government redundant. money is the only power. who controls money, controls the world.

    7. LissIsMore

      Amen, Brother!

    8. Mark Essel


  18. maxniederhofer

    Hear, hear.

  19. Michal Illich

    I agree completely.And I’m glad that it is not possible to patent software in Europe.

    1. Carlo Piana

      Unfortunately this is not what happens. Despite patenting “software as such” being prohibited, the wording has been twisted by EPO so that all software is not “software as such”, but a machine implemented invention embodied also in software, so pure software patents as Microsoft’s relating to network protocols are released /en masse/ also in Europe. No SWpat free zone at all here in Old Europe too.

    2. J. Andrew Rogers

      You are mistaken, only “business method” patents are not allowed in Europe. And rightly so since they do not pass muster for as patentable subject matter, lacking even a meaningfully strict specification in most cases.  Computer science algorithms, on the other hand, are patentable in Europe. The logic here is sound as well: computer science algorithms are direct, unambiguous abstractions of electronic circuit designs which are patentable subject matter almost anywhere. This is the real world manifestation of the old computer science theorems that are popularly summarized as there being no theoretical distinction between the hardware, the software, and the data.

      1. Michal Illich

        It’s quite complicated matter – you can read multi-page explanation here: http://en.wikipedia.org/wik…In short: Article 52 of the European Patent Convention explicitly excludes for patentability “programs for computers”.And yes, some companies are trying to exploit it and find a way to still patent some software. But these are exploits, not a common law.

    3. J Nicholas Gross

      “And I’m glad that it is not possible to patent software in Europe.”Oh yeah, because we all know how the “no software patents” credo has  created a climate to allow those brilliant Europeans to innovate our “bad software patent” industry here in the US out of businessNOT

      1. Michal Illich

        I’m not saying that at all.(And I really don’t think that software patent rules are the reason why Silicon Valley is so innovative in IT.)

  20. Gregory Magarshak

    I completely agree. Or at the very least, if software patents do exist, their scope should be 2 years at most. 17 years? That is patently ridiculous for software.Patents are mostly for big boys to throw their weight around. Rarely do they actually help upcoming startups, and therefore, this whole pretense of enabling innovation is ludicrous. Open source software has been outpacing proprietary software for a while now. IE is the result of proprietary software development — there is a reason why WebKit powers almost everything on mobile these days.http://news.ycombinator.comhttp://news.ycombinator.com…I believe the next industry to be disrupted with “copyleft patents” will be the drug industry. I wonder what Bill Gates thinks about this, since he is involved in both industries — one as an entrepreneur, the other as a philanthropist. It seems a little off to me that many people can’t get their medicine affordably because some company has a patent on them for 17 years. The physics, math, geology, history departments can build on each other’s work, but the drug developers (biochemistry department, etc.) get whisked away to work in proprietary labs? Seems there should be an alternative. Copyleft patents FTW

    1. sachmo

      For hardware patents are an absolute necessity for start-ups… What is to prevent an entrenched orthopaedic device company from literally reverse engineering and mass manufacturing – say a bioabsorbable bone screw that some lone genius invents in grad school without patents.  Absolutely nothing.  

  21. Nahlyee

    Such nonsense, Fred. By that argument, investors like you are killing innovation because you make it harder for bootstrapping companies to succeed.Lodsys (an investor just like you) IS funding innovation. When they purchased the patent, the inventor got PAID. That’s the way it’s supposed to be. Besides, Lodsys “is seeking 0.575% of US revenue over for the period of the notice letter to the expiration of the patent, plus applicable past usage.” That’s hardly enough to kill innovation. 

    1. fredwilson

      they are not funding innovationthe idea of a transaction in an app is not innovativeit has been done for many many yearsand it is entirely obviousif there is an innovator here, it is applethey are the company that actually implemented a hugely successful in app transaction systemlodsys and the “inventor” who probably just sat around thinking of obvious things to submit bullshit patent applications for are simply a tax on apple’s innovation here

      1. Nahlyee Van Brunt

        Just because it has been done for many years doesn’t mean it was not innovative when the patent was awarded. You’ve been in the game for many years… I wonder where your outrage was then.

        1. fredwilson

          i’ve just seen enough of this crap and i’m sick of it

          1. Jamesdier

            Fred, you are not going to stop patents. Get over it.Our Gov’t’s legal systerm sucks. Someone had to say it.We have a Gov’t who can’t even protect artists from copyright infringement. You think the Gov’t gives a shit about patent reform?

          2. loquacious

            I am done too.  I agreed with you, and have ideas that we can do to spam representives and get coders to sign the petition. We  need to get rid of the FCC too….  Thank you Fred.

        2. ErikSchwartz

          If it was in common use prior to the application of the patent the patent should not have been awarded due to the prior art.Compuserve had transactions within connected software applications in the 1980s. If this patent was applied for later than about 1988 it was not a unique invention.

        3. matthewcp

          It wasn’t innovative because the “inventor” didn’t do anything with his innovation.  He sold it to a patent holding company.  Which was his intent all along.Lodsys are not investors.  They are letter writers.

      2. deancollins

        so find prior art and have it overturned, surely between you and a few VC buddies its worth mounting a defense….

        1. Twirrim

          Sure, at what cost to companies?  The Patent Office shouldn’t be rubber stamping such stuff without a modicum of thought.  That they do so is immensely harmful to industry both here in the US and internationally, and the damage extends well beyond the software / web services market.An ‘meat space’ analogy for what these software patents are equivilent to is that someone could patent the idea of ‘operating a switch, button or any other object with the result being that a light comes on’.  That could be a light switch, that could be plugging in a device to the mains and having the power light turn on etc. etc.What your proposing would have lighting manufacturers and other firms having to dig into the coffers to pay for the cost of then digging up prior art to say that a light switch has been in existence for x number of years.  You wouldn’t honestly expect them to have to do that every time someone passes such a patent?  It’s not just one patent but dozens of these types, all with lovely overlaps.  Lodsys isn’t the only company with an appropriate patent.  Not that long ago there was another one who’s fancy, but generic language boiled down to using ‘a mobile electronic device to purchase items’.  That’s a different patent, but basically the same thing as the Lodsys patent.  Why did the PTO allow two to pass?  The process is fundamentally flawed.Why do you expect software companies to have to keep paying out to prove prior art over and over again against every tom, dick and harry who doesn’t even have a competitive product, just some vague dreamer with a pencil passing bland and generic ideas past the PTO?Companies like Microsoft, Google, Nokia, IBM etc. have massive portfolios of software patents that they’re forced to maintain and terrific expense, just for defensive purposes.  That’s wasted money that could be spent on productive R&D, etc.  Anecdotally, Microsoft has in it’s patent portfolio a patent for the process of rewarding a user based on actions.  At the very least that makes almost every single game forfeit, let alone a slew of other things like foursquare, groupon etc.

    2. Dan Epstein

      Lodsys is an investor, but I’d argue they’re not funding innovation. If I run a firm that invests only in patents (and not in products or companies), I wait for other people to build products that use the technology or processes I’ve patented.  Then I tell them they need to pay me because I have the patent rights.To give a silly example, if I patent the idea of a flying car, but have no idea or plans how to build it, I’m making it harder for innovators who actually might build a flying car by taking away their financial incentives.

    3. Adrian Sanders

      I think the protection of IP in a traditional sense really does get thrown out the door in the software world. Software isn’t necessarily specialized and part of the inherent nature of hackers is to incorporate, chop and recreate – IP patents as they stand today are against this nature.In other forms of creative work there is:   Music production that incorporates samples. This got huge backlash when rap was new. Now it’s status quo.    Traditional Chinese poets would incorporate other author’s work (without quotation) often as hommage but never with the idea that they were stealing (really, stealing words…).    The internet makes copying easy. Open Source embraces it. Patent laws don’t need to be abolished but they need to catch up with the times. 

    4. Elia Freedman

      They bought a tax on innovation, not innovation itself.

  22. Joseph

    “The whole thing is nuts. I can’t understand why our goverment allows this shit to go on.”Is it a surprise that those who benefit most from the rules tend to be those who have the greatest influence in making the rules? The myth of the patent system is that it helps the individual inventor. But in fact its main purpose has always been to benefit those with the most wealth and influence, as they hold most of the vast majority of patents and only they have the resources to enforce their patent rights. Patents benefit the giant corporations that hold the patents, and nobody else.

  23. chewier

    Amen to this.  Unfortunately, though this just another symptom of America’s ligation-gone-wild business culture.  There are many lawyers bullying settlements through threats of ligation for nearly anything imaginable.  The bottom line is that unless you are a lawyer America can be a hostile place to run your business.    

    1. Jon Cameron

      chewier:  The US modified its patent laws to match the rest of the world.  They got close but still have work to do.  The question then becomes should US companies not be allowed to patent software patents, but China, Japan and Europe can?  That is certainly not the solution. Since we can’t change the world’s patent laws by changing US laws, we are stuck with the bulk of the rules we have in place.  Otherwise, we are simply at a disadvantage. When the Supremes ruled on software patents last year, I hoped we would see some clarification on the swinging door of software patents.  Instead, they kicked it wide open.

  24. cdent

    The real error made here was that Apple and Google licensed from Lodsys in the first place, validating, in some sense, the patent. If Apple and Google truly want open and innovative markets surrounding their products they need to avoid that.

    1. fredwilson

      that’s an interesting argument but i am not a expert in the law. i’d be interested in hearing experts debate that point

      1. Jorge M. Torres

        The law views a license to practice an invention as a covenant not to sue. The right to sublicense others is a separate right from the right to practice.  Think of it as another stick in the bundle of rights that are encompassed in a granted patent.  The licensor may or may not grant the licensee the right to sublicense, and I don’t know whether the granted licensees in this case include the right to grant sublicensees.The more relevant defense here is patent exhaustion.  It’s one of the more complicated doctrines in patent law.  You can learn more here:  http://en.wikipedia.org/wik…

    2. hypermark

      I would assume as typical in a case like this that Apple and Google would have secured a Covenant Not to Sue from Lodsys as part of THEIR licensing agreement, and in tandem, a right to SUB-LICENSE this as a part of a bundle of rights to parties including their developer ecosystem.   

      1. JLM

        And an indemnification which would choke a rhino.

  25. Lucian Armasu

    With lawsuits like these, no wonder lawyers thrive in USA and they can afford to pay even $100 per click in Adwords.

  26. Ben Hoyle

    Two questions:1) What is and what is not a “software patent”? (e.g. a patent on an FPGA configuration, machine code, fuse-rom, analogue computers?)2) If companies find loop-holes in the tax system, should we be abolishing taxes?I think Paul Graham’s 2006 article, posted in the comments below (http://awe.sm/5LjHF), provides the best contribution to this discussion: the issue is a tangled one, involving characteristics of the subject-matter (e.g. easier to change/develop), the system (e.g. legal time periods) and the players in the system (patent offices, courts, plaintiff, defendants, their lawyers etc – which also vary nationally and the courts even by state). And there are no easy answers. 

  27. Madhav Krishna

    I couldn’t agree more, Fred. I’m trying to develop a generic ‘Open Ideas Initiative’ to make ideas “open source” on my site iinspireus.com, so that they might be shared easily. As Matt Ridley says — exchange, specialization and co-operation through the centuries has led to the creation of the “collective brain”. It is the “meeting and mating” of ideas in the collective brain that gives rise to new technology and accelerates the rate of innovation.

  28. Ben Carlson


  29. Nahlyee Van Brunt

    Perhaps I should clarify… As an investor, Lodsys is funding innovators, and thereby their (future) innovations.

    1. fredwilson

      no they are funding people who sit around and think of things that have yet to be patentedthe real innovators are out building stuff

      1. Mike Rice

        this, this right here is what I’m talking about!

      2. Nahlyee Van Brunt

        I don’t think it’s fair to say the original inventor was not a “real innovator”. They might not have the pizzazz of Apple, but don’t discount their work.I agree that there is a serious flaw in the patent system, but that argument won’t win you any points. 

        1. Joe

          “Discount their work” means their work has inherent value.In what way does patenting existing obvious ideas have inherent value?

          1. Nahlyee Van Brunt

            I seem to recall the patents were awarded in 2007. It’s debatable whether the invention was “existing” or “obvious” at that time.Certainly, the patent review board didn’t think so.

  30. Dave W Baldwin

    This IS a slippery slope. To change the rules, you have to form a governing body to craft a ‘compromise’.  Here, we need to be realistic.  In the game of software, think of all the different angles representing interests?  Moving a step up, determining innovation/research that fits ‘need’ for patent vs. ‘no need’ expands the number of interests.You get the current administration to name a focus group and who comes out the winner?  Those that gave the biggest contributions to the current administration.  Move that down the ladder per committee members and who is in their district.Then add the interests from innovator/angel/latter fund/delivery vehicles and so on…In the end, the catch phrase will be, “We’re doing this to protect the bootstrapped innovator…”, but who will be protected?  Bigger money interests.I advise not placing all the chips in one basket regarding how to change it.

    1. Daniel Tunkelang

      From “An Open Letter to the USPTO” ( http://thenoisychannel.com/… ):Software patents do not achieve either of the two outcomes intended by the patent system: incenting inventors to disclose (i.e., teach) trade secrets, and encouraging investment in innovation.Software patents fall into two categories. The first category focuses on interfaces or processes. The second category focuses on algorithm or infrastructure innovations. Disclosure is meaningful for patents in the second category, but such patents are difficult to enforce. Hence software companies typically focus on the first category of patents, whose innovations require no incentive for disclosure.Software companies and entrepreneurs innovate in order to further their business goals and then file patents as an afterthought. Investors expect companies to file patents, but only because everyone else is doing it, and thus patents at best offer a limited deterrent value. In fact, venture capitalists investing in software companies are some of the strongest voices in favor of abolishing software patents.

    2. Daniel Tunkelang

      From “A Practical Rant about Software Patents” ( http://thenoisychannel.com/… ):If every company could sustain a “Never give up, never surrender!” approach, patent trolls would eventually go away, But this approach only works if everyone participates, requiring that every company forgo the competitive advantage it could enjoy from being the only company among its competitors to appease the trolls. This is a classic tragedy of the commons.But trolls are not the only cause for concern. Many established companies, including some technology leaders, are not averse to using patent lawsuits as part of their business strategy. Patent lawsuits can also be a way for larger companies to bully smaller ones.Many software companies take an approach to defensive patenting is to assemble a trove of patents that are useful for countersuits and thus serve as a deterrent. The most valuable defensive patents are those that you believe your competitors (or anyone else who might have an interest in suing you) are already infringing. Even if those patents would be unlikely to survive re-examination, the re-examination process is long and expensive, and even the most outrageous of patents enjoys the presumption of validity.A cost-effective alternative to the current approach for defensive patenting may be one proposed by Autodesk founder John Walker in 1993 entitled “PATO: Collective Security In the Age of Software Patents” (http://www.fourmilab.ch/aut… ).

      1. smithkl42

        I like Walker’s “PATO” idea. Unfortunately, I don’t see how it would work against patent trolls, and indeed, it might encourage them, because only folks who have no products that might be infringing would ever be able to sue. (On a side note, Nathan Myrhvold’s “Intellectual Ventures” troll-farm is a sort of for-profit version of this, but as they’re clearly out to make a buck, presumably by suing everyone in sight, it’s not going to have a positive effect on the industry.)

        1. Daniel Tunkelang

          I actually proposed a stronger measure in my post:A patent pool is a consortium of at companies that agree to cross-license each other’s patents — a sort of mutual non-aggression pact. But perhaps companies that only believe in the defensive use of patents should take a more aggressive approach to patent pooling. Following the example of NATO, they could create an alliance in which they agree to mutual defense in response to an attack by any external party (including trolls).

  31. Parafly

    I think for startups the patent thing is a big frustration. Entrepreneurs who are bootstrapping can’t  necessarily afford $10k + for filing a patent, and even if they file it they can’t afford to enforce it anyway, either in actual dollars or in the opportunity cost of time. Copyrights should be plenty sufficient for content. You don’t patent your blog posts, right?!

  32. marfi

    Looks like we’ve come full circle, Lodsys are pretty much doing what the Kind buddies did back in 1624 with the Statute of Monopolies. And from then it got only worse. Patents got extended, people started patenting things just to milk other people and put a big handbreak on progress, this is indeed big time nuts!

  33. Jeff Judge

    I completely agree that software patents should not exist. We have received infringement notices for simple things like submitting an SMS message to be sent via web service. The mere thought of this being something that is patentable (submitting an HTTP POST) is ludicrous and shows just now broken the system is. Given the size and reach of your portfolio companies, I imagine nearly everyone one of them has received dozens (probably an understatement) of infringement notices.What can be done here? How do we solve this problem? I ask you because I think you’re in a good position to make an impact here.

    1. markslater

      SMS message sent VIA a web service? really?

      1. Jeff Judge

        Really! http://www.mobilemarketer.c…I received the notice and threw it in the trash. What a fucking joke.

        1. markslater

          anything come of it – outside of yourself obviously!

          1. Jeff Judge

            No. We use a different protocol anyway (SMPP), so the infringement notice was without merit. I’m sure some companies paid up to settle though.Lesson learned, patent trolls are everywhere. At the time we were two years in business and hadn’t been involved in anything like that yet. It freaked us out but taught us that guys like this are everywhere.At some point, this system is going to really damage the natural flow of innovation and doing business. At a minimum, the USPTO needs to hire engineers with deep working knowledge and expertise across languages, frameworks, distributed systems, etc that have the ability to reject a patent that doesn’t make sense to grant.

          2. markslater

            right – thanks for the response. I imagine twitter must have been hit with this

  34. markslater

    I received notification from our patent lawyers that we need to go from provisional to non-provisional within the next 60 days. I am not a fan of the system that has been hijacked by trolls. But i believe i (and my co-filers) invented something unique. Am i perpetuating the cancer by filing?

    1. smithkl42

      Nah, you have to live within the current system. As Donald Rumsfeld once said, “We go to war with the army we have, not with the army we wish we had.” (He was wrong about many things, but not that one.) You need patents to get investor traction, and to defend yourself. But support efforts to reform the system, and for the sake of all that is holy, don’t go suing someone else (unless they sue you first, then the gloves come off), nor sell your patent to a troll.

  35. ClayJohnson

    Fred,I wish you and some other VCs would actually get together and share a lobbyist. I live here in Washington and have been working for quite some time on opening up the Hill to the people. It’s disappointing to say so, but writing members of congress doesn’t work. They have too many voices to listen to (see my post on this here: http://infovegan.com/2011/0…An average salary for a lobbyist is about $75k, A Good one will run you $125-150k. Certainly the return on investment there is significant. If the startup space wants to be taken seriously in Washington, the best thing they can do is look honestly at what moves Congress and emulate what succeeds.

    1. fredwilson

      silicon valley has their lobbyists alreadyi guess the “outside silicon valley” VC community needs one

      1. ShanaC

        I have a name if you need one, actually it is someone who has dealt in this area before

      2. ClayJohnson

        Silicon Valley firms like Google, Facebook and Apple, sure — they spend some dollars in DC on lobbying. And there are great organizations like CDT and EFF pushing Washington from an “internet freedom” and “privacy” point of view. But  I don’t see lobbyists here representing the needs of small tech firms or their associated VCs.From SBIR/STTR grants to the startup visa, to software patents, to, yes, net neutrality — congress and our regulators are not being educated on what startups need to flourish and succeed. 

    2. gorilla44

      Isn’t that what the NVCA is for?

    3. LE

      Circa 1999 I found it very easy to get meetings with key people in the Dept. of Commerce regarding domain name issues and ICANN.How easy?My lawyer wrote a letter and asked for the meetings. Just like that. And the meetings were as long as needed with multiple people, staffers, conference rooms. The real deal.What I was told (and what I found to be correct), was that the people in Washington were eager to have meetings about issues with anyone. And that they liked visitors.Later, on the Amtrak back, I ran into Rob Andrews (D – NJ) and spoke to him as well. His staffers practically pestered me for the next several YEARS seeing if they could do anything to help with the issues. They followed up quite frequently. (And back then I wasn’t even from his district.)The point I am making is this: Don’t think the only way you can have change is to hire a lobbyist to make your case. And it actually could be more effective to do the lobbying yourself. After all, part of lobbying is just bringing your point of view to the people who are the decision makers. 

  36. Christian Brucculeri

    I was consulting for a firm once and ran into this issue with a patent troll company called Pixfusion, who managed to hold up a dev shop, two agencies and a consumer product company from completing a marketing campaign because they own a patent on cropping a head in a photo.It was a value-destroying experience that everyone was worse off for– it just wasted everyone’s time and money. 

  37. Tereza

    …both executional as well as other approvals such as FDA, etc.

  38. donpark

    Perhaps a hacky solution targeting the lowest-hanging fruit, outrageous software patents, is called for. Say, a public official is appointed to overlook software patent issues. A Patent Czar, in effect, who can revoke outrageous software patents as they surface in the news.

  39. Tereza

    LOL great question, eh? Truly depends on which side of the table you’re sitting. You have far more stake in your own success than the ecosystem.Also depends on how much capital you have….and if your investors (or prospectives) care about patent protection. Weirdly some still do.Got to do what’s practical. I may get cancer from it but have to talk on my cell phone.Pass the headphones, please…

  40. Mark Burstiner

    I don’t think it’s the concept of patents that needs to go away, it’s the execution. If the trolls at Lodsys had actually done something with the patents & brought something to market that Apple was infringing on, they have every right to defend themselves. But, the fact of the matter is they obtained a patent for the sake of bringing someone else down. This shouldn’t be possible. I feel we need to revamp, not get rid of software patents. We need a software patent spam-blocker, if you will.

  41. SeemsOdd

    Fred – while I understand you don’t encourage your portfolio companies to file patents, I’m wondering if a portfolio company had a software patent in a particularly important space and it was being violated and threatening the investment, would you encourage the company to fight the infringement.  (not being accusatory, just curious how you see the other side of the coin.)

  42. LaMarEstaba

    The idea of patents is to encourage growth and protect the inventor. When inventors sell their patents and stuff like this goes on, it discourages growth and inventors both. The patent office should have never approved this patent.

  43. JonnyF

    I could not agree more

  44. Ted Dziuba

    Fred, I think we all agree with you here. Given that, what can we do? Who is the leader of this cause? You’re a wealthy and powerful person who has connections to other wealthy and powerful people – why not leverage that for the cause? I think almost everyone in the VC business would be on board with it (aside from the ones funding patent trolls of course), so that seems like a good opportunity to lobby the government to change the law.Take up the cause, and I think you’ll find broad support.

    1. fredwilson

      i’m in the process of doing that, at least in the way i can do that

    2. loquacious

      I would like Fred and Ted to contact me about putting together a petition/referendum, and getting as many programmers that are registered voter to sign it, please.I have a feeling that many will….. Gut feel….

  45. Joe

    Every law and action needs to be considered in terms of its impact helping looters.One florentine merchant in 1421 had found a competitive advantage by devising a method to load and unload ships faster. The other merchants could not get him to share his secret since once he shared it with one of them, they could share it with each other. So they created patent law to give him a guaranteed income from his invention. Florence is claimed to have done better as a result and beaten other cities.”Clearly ideas are valuable. Not everybody can be skilled at everything so sharing idea benefits all.” is the stated idea. So “society” those who could not invent these ideas benefits. Those who could not create benefit.However the premise of patents is that they are unique. Only one person could have created them. This is clearly wrong. Anyone could create a form on a portable device. Shareware has existed for aeons (it’s called busking). Many people could and did create video compression algorithms. Consider the number of competing claims on inventing the light bulb or the radio or the television.Patenting is expensive so only those with the money and time can patent. It takes time that could be spent on other inventions. So obviously it benefits the looters rather than the creators. The sad thing is to get good at something you have to do it often. If many people had to reinvent the wheel we’d get better at inventing. Patents are claimed to encourage innovation while all they really do is create monopolies and reduce the freedom of those who create.

  46. rafer

    How useful would it be just to get rid of the trolls? What if purchased patents (and patents of purchased companies) couldn’t only be used to defend suits and not file them? I’d rather get rid of the whole patent system entirely too, but that smaller change might go a long way to improving the situation.

  47. sizuco

    I’m don’t think patents or wrong, or even software patents are wrong. What’s broken is the way they are awarded. They shouldn’t be awarded for concepts that are rather simple and far-reaching (like Lodsys’ claim). But a complex algorithm (say, the MP3 compression codec, or an algorithm for genome sequencing, for example), should be patented so it can be licensed. What worked for mechanical patents (i.e., the telegraph), doesn’t work for software patents–so the concept needs some serious refiguring to determine what works and doesn’t work for the software realm. And patenting concepts (like “one click purchasing”) is just plain stupid. 

    1. Nospam

      The “MP3” codec is patented by a large and unknown number of patents. Many of them are licenseable in a patent pool, but the per-unit fee does mean that free software is not allowed to support MP3 files (at least in patent-encumbered countries like USA), which is why SoX and Audacity do not support them “out of the box” (which caused me as a user to waste much time today).But even the companies who have licensed the patent pool are still at risk of being sued by others who have not joined the pool. This is one of the highest profile and easiest to delimit functionality and people still can’t be sure how many patents apply. For random low-profile pieces of functionality in software there would be much less chance of proving that it did not infringe some patent.

    2. A real libertarian.

      It is probably impossible to make a profit coming up with a better compression codec today because of the patent system. The lawyers at the patent office and at patent owning corporations have no idea how compression algorithms might work and they will be completely unable to determine if your methods are novel. Your only hope is to be bought by a big brainy company that wants you talent and can fight a hugely expensive legal battle to have it legally declared, with no respect to the truth one way or the other, that your algorithm is novel. I am thinking of Google’s purchase on On2. This is clearly insane and of no use to society.

  48. JMichaelRoach

    I think the issue here is really less of the merits of software patents than the decision by the USPTO to issue this particular patent.  What are they supposing to protect with this patent?

  49. ErikSchwartz

    Here are the patents in question. They were issued in 2007 and 2009.http://goo.gl/E4xARhttp://goo.gl/cRK8gWe've got some people here who have built some software over the years. Set your minds to their 2007 settings and see if you think these were obvious and in common use 4 years ago.

  50. Anonymous

    Of course property rights are central to capitalism. Property rights are a super set of Intellectual Property Rights 

  51. Narg

    Software is an algorithm.  Algorithms are not patentable.

    1. J. Andrew Rogers

      Algorithms are almost always patentable. One of the reasons “business method” patents are generally frowned upon is that they are not algorithms in the sense that they have a strict specification.

      1. Narg

        You need to read up on your patents.  By law, algorithms are NOT elligible for patents.Patents = money.  money = greed.  patents are pure greed.

        1. J. Andrew Rogers

          Process patents are, quite literally, algorithm patents even when they have nothing to do with computers. They do not describe an implementation or reduction to practice, only the abstract process of moving from one state to another.  What do you think “process” means?I am familiar with patent law. Abstract processes are protected by patents, reductions to practice and implementation are protected by copyright.  This is as true for industrial chemistry (another subject matter I knew well with a lot of IP) as it is for software. For chemical engineers, the abstract algorithm and the reduction to practice are independently protected and independently valuable. It is not a novel feature of computer algorithms patents.

        2. sachmo

          algorithms that perform no useful activity – that exist purely in thought – are not patentable. computer programs modify physical pathways and create new circuits within memory.  They most certainly are patentable. Also, a lot of things = money = greed.  I.e. starting a company.

  52. Chris Homer

    Patents are extremely important when the cost to invent / innovate is high.  In the case of software, the relative cost is LOW.  I can get behind patents on technology that requires arduous regulatory approval (healthcare for example), but the idea that someone can sit down at their computer one sunday morning, write a small app and then be accused of infringing a patent drives me up the wall.   

  53. awilensky

    years ago, in 1990, I was consulting for the famous company that made jack Madden’s chalk talk Telestrator.  The company was interrand and the founder was a genius, Dr. Leonard Rifle. Long story short, he had, among thousands of patents, one where  there was a picture diagram of an instructor pointing at a “electronic blackboard” and the patent tittle was, “system for instructor led training with interactive system”. I asked him, “how you get that crap past the examiners?” His reply, “beats me!”. So I am with you there; and in the 1990’s when video compression was all the  rage, I knew the guys at picturetel, and one of the founders, Brian Hinman, said, “patents of compression algorithms are a blight on society, these formulas should be public domain, and the code should be copyrighted.”Right on Fred.

  54. MHSzymczyk

    Fred – well thought out blog post as usual but I disagree.  For any startup or entrepreneur that has a novel idea of software, without patent protection on their IP, how are they to protect themselves when going to market?  For our company, we patented our idea and have seen numerous companies try to replicate and mimic the idea we came up with (and took action on) before anybody else?  Without even patent pending protection on our software, what’s to prevent a much larger corporation from just muscling in and taking over the niche space we created in the first place?Also, there hasn’t been one VC pitch I’ve been involved with where the “What patents or IP do you own” doesn’t come up…

  55. MikePmalai

    How can you patent something that relies on IP you don’t own to even exist?

  56. awilensky

    Also, recall that the patent system as we know it today was based in the heyday of mechanical inventions, newly innovated electric devices and processes, and might have been valid for the paperclip or ball point pen, the original AC generators, or the telephone as originally conceived. Thee has to be some incentive to invent hardware and processes. In the Information and web tech business, one attains better protection from authoritative market entry than from IP law.

  57. Shyam Somanadh

    I’m not a fan of software patents and, like you, believe that they are increasingly stifling innovation and raising barriers to entry to such levels that the small guys don’t stand a chance at all.That said, I would wait it out till the licensing terms between Apple/Google and Lodsys is made public (not seen it anywhere so far). Licenses normally don’t naturally extend to cover 3-rd party usage and are often clear in those terms. It sucks, but it is a real possibility that the case is that 3rd-party developers are not covered by it.

  58. markslater

    Dont you invest alongside CRV? are you aware of their multi hundred million dollar position on patents? 

    1. Dave W Baldwin

      Remember, there are two gentlemen out on the West Coast who would never ever do anything in tandem following a big news story last year.  I believe they both jumped in on the same startup to invest recently.

  59. Omri Drory

    He’ll yeah! Copyright and trademark should be enough for software

  60. SD

    Ideas are actually a little bit like real estate or domain name squatters….there are a finite # of ideas, and the value varies widely. Investors like Lodsys (or domain name squatters) have put up $ with an uncertain return on this investment. Most of the ideas end up being worth zero. but some end up being valuable.I am not sure why this is a tax on innovation any more than real estate ownership is a tax on physical business. These are necessary components to build a business.I think the bigger thought is that this framework encourages speculation that is sometimes not grounded in intrinsic value or true cash out the door (like derivatives, domain names or plots of land). Is that good or bad? I would argue that its a consequence of the need to protect “important”  or “sweat based” ideas (like the kinect example someone used in another comment).

    1. A real libertarian.

      There is no justifiable legal conception of finiteness that applies to ideas. Domain names can not be independently discovered. I can not share my domain name without cost to my self. I can enable you to make a better widget by communicating to you an idea, but I can not do the same with property without likewise detriment to my self. Ideas are not property.

    2. Ben Hoyle

      Good point about land and domain name grabs. If I’m quick to spot a wanted domain name, register it and then sell it on for $$$, this may be unethical but it does not support an argument to get rid of domain names. Same for the old California land grabs, with respect to property rights.

  61. Havoc P

    Have to get software patents separatedfrom pharma patents in legislators’ and lobbyists’ minds so reform can be practical to pass.

  62. narendra

    Wow. Fred, unfortunately, you come off as incredibly naive and uninformed so ultimately you aren’t raising much awareness or focus, just stirring up a bunch of noise.I have been a victim of patent trolls and I am also listed as an inventor on several patent applications.Clearly, there are some abuses but it is naive to think that there will be no predators in any economic system.  I am sure your accountant uses the latest information/interpretation to save you the most amount of money on your tax return.  Systems like the tax code and patent process are incredibly nuanced for a reason and survive (with occasional revision) because they are pretty successful at what they were established for.Innovation hasn’t yet ground to a halt.You would better serve your community and the tech world by finding a friend who is an IP attorney and publishing an actual legal critique of the Lodsys patent or some concrete, legally specific ways that the area of software patents can be changed along with some good reasoning why those changes won’t require re-examination 5-10 years from now.

    1. smithkl42

      There are times when what’s needed is a detailed academic analysis and critique, along with nuanced, thoughtful suggestions for reform. And when it comes time to rewrite the patent laws, I hope that’s what the software community will provide. But first we have to convince Congress that the laws need to be rewritten. And nothing works better to get congressional attention than a mob with pitchforks and torches gathering outside their offices. If Fred’s blog post helps gather the mob, it’s doing everything it needs to do. Fred, if you get the mob, I’ll bring the pitchforks :-).

  63. Guest

    Why aren’t transactions considered prior art? They’ve been with us for decades, particularly in the relational database market. Programmers have been writing transaction managers forever, and many of these have, yes, have been in the client/server paradigm (which itself is decades old). Anyone thinking an app transaction is in any way new or innovative is working with a ridiculously short perspective on history (possibly just the last 20mins). “This stuff is so old, it must be new again.” Fail.

  64. Guest

    Why aren’t transactions considered prior art? They’ve been with us for decades, particularly in the relational database market. Programmers have been writing transaction managers forever, and many of these have, yes, have been in the client/server paradigm (which itself is decades old). Anyone thinking an app transaction is in any way new or innovative is working with a ridiculously short perspective on history (possibly just the last 20mins). “This stuff is so old, it must be new again.” Fail.

  65. Paul W. Homer

    Why aren’t transactions considered prior art? They’ve been with us for decades, particularly in the relational database market. Programmers have been writing transaction managers forever, and many of these have, yes, have been in the client/server paradigm (which itself is decades old). Anyone thinking an app transaction is in any way new or innovative is working with a ridiculously short perspective on history (possibly just the last 20mins). “This stuff is so old, it must be new again.” Fail.

  66. GordonQ

    Fred, I share your passion on this one.  I think software/method patents are a bad idea.I think there are two reasons why developers keep filing them: 1)  Many of your investor colleagues make it a component of valuation so, just like painting your house before putting it on the market, developers file patents to get a tick in the box on the valuation spreadsheets.2)  Their bosses at Big Co tell them to (sometimes with incentives).The USPTO needs to re-examine the concept of software patents, and if the VC community would remove the *software/method* patent line from the valuation spreadsheets, that would help too.

  67. OurielOhayon

    Fred, your best post EVER.

  68. Chris

    I’ve been developing software for 20 years, it’s safe to say if I had a brother in law who was a patent lawyer, and a different character, I’d probably be swimming in filthy cash.Software patents crush innovation. Writing a program is a software algorithm is a process of constant invention, but with patents I have to worry that of the 10 new ways of doing something I “invented” to do something today, that one of them might be patented. And the fact is that there’s patents on everything from search algorithms to one click shopping, there’s no way to know if the solution I just came up with is sitting in a patent book somewhere. The law as it stands now means that a purely creative exercise becomes a walk through a minefield – all the time thinking “sure that’s the easiest and best route, but can’t go that way, I guess I’ll have to go left first to go right.”The essential problem is that the lawyers and judges aren’t software engineers. If they were they’d realize how easy software inventions are to come by.

    1. loquacious

      Please help us get a referendum to stop this type of thing for software engineers.  Our lives are demanding enough to have to concerned about, oh I put this in my code if(X ==Y){}. Yes, that simple little code could be considered a software lawsuit, if someone patented that line of code.  Then, we (developers) will get to program in jail.  I certainly don’t have the money to bail myself out. Please see my point of view I am passing knowledge on to the next generation.  How is this going to happen if I cannot show them a simple if statement.

  69. Spiffy

    I couldn’t agree more.   After the Bilski case didn’t seem to conclude much of anything real, it looks like some other courts are starting to make semi-rational patent decisions.   The Accenture vs. Guidewire court case that’s been going on for 3+ years looks like they threw out Accenture’s patent because it didn’t meet the “machine or transformation test” and was too abstract.   I don’t get all the legalese, but http://bit.ly/lfAv5p has the full brief by the judge.  We can only hope that it gets used as precedent to throw out more useless software patents, and put patent trolls out of their leeching-from-society anti-productivity careers

  70. Joshua Odmark

    I couldn’t agree more.A short time frame for the patent isn’t enough, they need to be eliminated.

  71. Matt Medeiros

    Amen brother

  72. Azpimarseille

    Very good article, thaks  to the matt Cutts twitterSome addvices to communicate on my page http://www.poker-training-a…without patent ?? :p

  73. Guest

    Sex is Hard to Prevent: http://youtu.be/mNFRg1Tu1y8 – and Patents are Condoms :-)Human culture is based on an infinite exchange of ideas. The condoms are worn by individuals. Patents are outdated and have to be flexible. I can imagine that in the patenting process people who come up with ideas which are patented already, there should be a policy to allow both parties to collaborate. The patent holder should not defend his idea/ technology as if he/ she possesses it, but share it with the one interested in using it. In short patented ideas could be turned into a free market! lol – The trends are showing this possibility in a way. I mean look at quirky.com or ahhha.com

  74. davidlocke

    It was the Supreme Court that did this. The Supreme Court forced the USPTO to issue patents on business processes and software. This was part of the matriculation process where some domain falls under the control of the elites, aka lawyers. The USPTO did not have trained patent  inspectors, so prior art was ignored and subsequently patented. The courts are the ultimate arbiter of what is prior art. The intention was to stop the New Economy and put the Resource Extraction Economy back in control. Somehow the software industry ignores this and politically funds its own destruction by funding politicians that push the repeatedly failed neo-classical economics. It is no wonder that patent sharks exist in a mercantile democracy where both the democracy and the mercantile is at risk.

  75. scyphers

    Fred:I’d be very interested in hearing your thoughts as a VC.  If you were investing in a startup which created a unique and truly novel software concept and they did *not* file for a patent, would you view that as a breach of fiduciary duty?  If I were both a shareholder and of a litigious bent, I would rather concerned at such a lack of action.And I say this as someone who does not like software patents.

  76. Bpark73

    Elimination or reform? The former sounds a bit harsh and altogether counter productive in it’s own way. Wouldn’t you say that software patents have their rightful place and are a necessary part of the ecosystem? If so I would like to hear what you would suggest as reform?

  77. ZekeV

    There are many viable critiques of the lodsys patents from within current law.  But I think most commenters here would agree that we need to get rid of software-related method patents.  Most developers practice studied ignorance of the patent landscape b/c a rightsholder who can prove “knowing” infringement can obtain 3X damages.  And as a practical matter, if you are developing in a technological area where there’s a patent thicket, the best predictor of whether you’ll be sued is not whether you are clearly infringing someone’s right, but whether you are a competitive threat to an established business.  But this is not a new phenomenon, and does not exist solely w/r/t method patents.  For example, the Wright brothers, after pioneering powered flight, obstructed further innovation through aggressive patent litigation for years after.http://en.wikipedia.org/wik

  78. magnusdopus

    Patents work fine.  The problem are these patent trolls that exist only because of the business process patents.  Companies that do not create products and only hold patents should not exist.  Any product requires an array of patents to function.  If Lodsys actually produced a product it would be subject to the same patent infringement it wages on other companies.  Ascribing to this practice doesn’t invalidate a patent, it just values the patent accordingly.  Lodsys could still make money selling their patents to Apple. 

  79. Erich Wood

    From an investor’s pov, does a patent add value? Say an entrepreneur has built something that they believe is patentable and they will be looking for investment. Should they go through the patent process (or at least the provisional patent process) just to add value for potential investors? Even if they don’t believe in software patents themselves?Edit: I see some similar comments below now too.

    1. fredwilson

      i don’t think it adds any value

  80. Geppy

    Patents are useless either for software and either for the hardware. I was working in IC industry and sometimes the only innovation was to move a transistor from a place to a new one and file a new patent. Of course, that’s really good for lawyers who promise that simple change is defendable, just to gain money.Most of the patents out there are completely useless, because dependent on the language used to described them. So, what’s the deal?

  81. Andrew Watson

    Fred: “Every time I get a meeting with a legislator or goverment employee working in and around the innovation sector, I bring up the patent system and in particular software patents.”I’d be interested to know: what reactions do you get from said public servants?Thank you,Andrew

    1. fredwilson

      lip service, of course

  82. jlaing

    Agreed.Software patents are for sure about consolidating power and stifling innovation. Bootstrapping innovators don’t have the time or money to go after patents. And if they do, they are worthless because they don’t have the resources to defend them.The only people that benefit from the software patents are the already powerful and rich.Not to mention the fact that software should be copyrighted and not patented. Physical processes are supposed to be what is patentable.The system is completely broken for software patents.The only people I hear arguing for continuing software patents are IP lawyers and others who profit.Software already has property rights. It’s called copyright. It’s well established and works just fine.

  83. deancollins

    software patents arent bad persay, but non-novel patents are bad.saying that lodsys (or rathee ther company they bought) was the first person to ever think about in app purchases……. is short sighted.what about re-upping in a casino, technically that is “an inapp purchase”, the act of purchasing more chips at the table.

  84. TTY

    No patents PERIOD

  85. ChuksOnwuneme

    “the real innovators are out building stuf”. Enough said.

  86. Gopal Patel

    patent should include AMOUNT OF INNOVATIVENESS. AND RESTRICT THE REWARD INVENTOR CAN ASK FOR IT. ( IN TERMS OF TIME, FOR SOFTWARE PATENTS, TIME OF PATENTS SHOULD BE REDUCE HEAVILY, IN TERMS OF MONEY, IN TERMS OF NUMBER OF REPLICATION ETC, IN TERMS OF NEGOTIABLE AND UN NEGOTIABLE REWRADS ) . think about this. <– THIS WILL REQUIRED MORE EFFORTS. but overall , it will ease the pain on both side later. ( in terms of cost of lawsuits and discovery of patent infringement cost )

  87. Ben McGaughey

    So what are you going to do about it?

    1. fredwilson

      good question. i’m asking myself that too. we are doing some things already but apparently not enough yet

  88. Sam Birmingham

    I thought the following quote from Steven Johnson’s “Where Good Ideas Come From” might put a smile on your face, Fred:”… We are often better served by connecting ideas than we are by protecting them. Like the free market itself, the case for restricting the flow of innovation has long been buttressed by appeals to the ‘natural’ order of things. But the truth is, when one looks at innovation in nature and in culture, environments that build walls around good ideas tend to be less innovative in the long run than more open-ended environments. Good ideas may not want to be free, but they do want to connect, fuse, recombine. They want to reinvent themselves by crossing conceptual borders. They want to complete each other as much as they want to compete.”

    1. fredwilson

      well you know that i am a huge fan of SBJ’s 

  89. Sam Pullara

    I think we could solve the whole thing if only willful infringment was a crime. If you never saw the patent or used a product that used their IP you shouldn’t be liable for inventing the same thing yourself. The idea of patents was to get people to publish their IP but if no one is reading it or using it, that premise is suspect.

  90. Showme

    Fred.  What’s ridiculous and embarrassing is your lack of knowledge.  But it’s typical of people in the industry.  I bet you can’t even define what a software patent is, much less analyze one.Among other things you don’t seem to comprehend, is that software is embedded in just about everything we buy except food.  So, you tell us genius, where do you draw the line on software patents.  Wait, don’t answer.  You’d just be wasting our time.

    1. fredwilson

      i am already apparently

  91. Mark Nowotarski

     224 comments and not a single mention of reexamination.Sad.

    1. ErikSchwartz

      At a previous company we saw a competitor trying to file patents (when their application was published) in our space and we submitted a 3rd party prior art notice. You have something like a 90 day window to file prior art after the application publication.Given the turnaround time of the USPTO re-examination of a granted patent is not realistic for a startup to pursue. The application we submitted prior art for is still in the queue (nearly 3 years later).edit:It’s actually 60 days not 90 dayshttp://www.uspto.gov/web/of…

    2. fredwilson

      not a path a startup can pursue

      1. sachmo

        Why is that?

    3. sachmo

      yeah, i agree, re-examination is a better solution than elimination of an entire class of patents.

  92. Anonymous

    Hey Fred.  Patents don’t cover “ideas”.  They cover inventions.  Do your homework bud.

    1. fredwilson

      in theory, but in practice they are not covering inventions

      1. sbronstein

        I think you are being overly accommodating here to Anonymous…the so-called ‘invention’ that is being protected is by definition the idea of the invention. If patents only covered a particular instantiation of an invention then they would of course be redundant since that is actual property.

  93. llbbl

    I for one, TOTALLY AGREE

  94. Soft Headed Investor

    Hey Fred.  The day the SEC eliminates the Qualified Investor exemption is the same day we should eliminate Software Patents.  How’s that.

    1. fredwilson

      hey, at least i can keep wishing for good policies

  95. hypermark

    The greatest irony is that the patent trolls are specifically incented NOT to innovate. Were they to innovate, then they would step on someone else’s patent and that would provide the defensive measure to block them.  As a virtual IP house, they DO NOTHING so they can’t violate another’s patent.It’s a ridiculous, vile structure.

  96. Jessica Darko

    Great, then spend your damn money getting an amendment to the constitution passed.  While you’re at it, fund one that ends the PATRIOT act, the FBI, CIA, the illegal wars, including the “drug” war and the war on poor people, and the rest of the %95 of the government that is unconstitutional. I’m tired of you elitist rich jerks bitching about anything that bugs you, while our country is being frogmarched into fascism by the criminal family that is the Bush/Obama regime.You don’t like the constitution?  Deal with it, but deal with the million other things that are causing massive suffering across the country (and which are about to blow up in your face when the dollar bubble bursts.) Start reading http://www.mises.org, and learn a bit about economics.  How about putting some of that money to fixing this country, eh?Oh, who am I kidding, just delete this comment and keep bitching in your echo chamber.

    1. JLM

      Love a well delivered rant and who cares if any of it makes sense?  Not me.Well played!Of course I was totally ignorant about the Bush/Obama linkage but hey I love to learn.Nobody is going to “fix” this country if the solution is to make war on the most productive element in society.  You cannot create jobs by increasing taxes on the job creators.Let me guess — charm school drop out?Just kidding.

    2. fredwilson

      i would never delete any comment like this. you wrote it, you have to live with it. your idiocy is on public display forever more

    3. David Semeria

      I’ve heard camomille tea works wonders for intemperance.

  97. Andrew Hillman

    I believe patents should be granted only if the inventor is not using the patent for their own product or service within 12 months the patent should be put in the graveyard. “Use” should be the deciding factor in granting a patent. 

    1. fredwilson

      that would be helpful in getting rid of trolls

      1. loquacious

        Let’s start a petition for the “Software Freedom Act.”  Otherwise everyone’s butt will be flagging in the wind.  Since we are a repulic, you call and write all your representatives, and we can all sign the petition.  You must be a registered voter or they won’t listen to you.  Trust me, they will do anything for your vote.One of the state representative and/or senators will need to be pushed. 

  98. Revolves

    The problem here is not about whether patents are good or bad. It’s about what kind of patents get approved in the first place.Many of the patents represent those ideas which a little kid having no computer experience can come up with. Many ideas students come up with in their basic digital circuit design courses.What seemed to be a good candidate for patent 20 years ago may not be anything new today. We live in a fast world. Yesterday’s ‘Theory of Relativity’ breakthrough is today’s common knowledge. The only problem is, people granting patents don’t seem to get this point.

  99. ShanaC

    @fredwilson:disqus If you had a choice, would you want to revert back to the old way differences in software were handled, through copyright?Currently, certain kinds of corporate copyright extend up to 120 years. As “written” works, software could fall under copyright rules.  And the statues for lawsuits are in some ways more strongly negative. (don’t ask me, ask Richard Prince, who tried to get around “fair use”- it turns out that fair use can be extremely limiting)You could have a system instead where the max amount of borrowing in 2 lines of code.I actually get jealous of patents some days…

    1. Eric

      Copyright is a bit clearer than patents, in the sense that a “rephrasing” of a work in a limited way leads to no copyright infringement. Algorithms and processes would not fall to copyright, just specific implementations, the same way that facts, ideas, and whatnot in a text are not copyrightable, just the particular creative way in which those ideas were put into words/text/speech/music/art. As long as you write a program from scratch, the chance of accidentally infringing on a copyright are almost nil.

      1. ShanaC

        I would say that copyright is less clear, which is why there has been somuch legal wrangling over it. At some point it is the actual creativenature of the thing, because “rephrasing” has been interpreted so broadlythat there are movie makers that avoid birthday scenes/recut them to avoid”Happy Birthday.” Or Richard Prince’s most recent legal strangling. Or the20 second sampling rule.

        1. Eric

          Look at how big tech companies deal with copyright (since software is copyrightable, right here and now): I don’t see companies hoarding massive numbers of copyrights in order to protect themselves against possible litigation. On the other hand, I do see them hoarding patents, and their legal counsels encouraging this as a way to minimize potential liability. Hence, copyright is simpler and less of a burden to the tech industry than patents.Your examples are just examples of people wanting to use (sample, perform, whatever) things other people wrote. Whether that’s fair use or not, those are conscious decisions that are much *less* likely to happen accidentally compared to patents, and therefore copyrights are less chilling to innovation. I agree term lengths are ridiculous and copyright laws as used today are often stifling to creativity, but relative to patents, they’re a dream.

          1. ShanaC

            Why is there be less sampling of what other people did in coding -analgorithm is an algorithm, and I would believe that they are more likely toappear accidentally.With terms lengths the way they are, I could see it as extremely stifling. More so than patents. (actually, you know it is stifling when people arecreating technologies to track and stop fair use because of the massiveamounts of copying of writing on the web)

  100. Alex Trefonas

    It’s spelled “embarrassment”

    1. fredwilson


  101. Jessica Darko

    Also, since Fred Wilson has publicly advocated android, and android is nothing more than a cheap and direct copy of iOS, the self interest here is obvious.Fred doesn’t want patents because he wants people to be able to steal others’ work.Patent’s don’t stop actual innovation, because, by definition, an innovation is not covered by a prior patent. Wilson wants a world where Google can just copy Apple’s without having to invest the 4-7 years Apple spent coming up with a genuinely new product. And that is the world of the lowest common denominator crap that ruled in the 1990s.

    1. ErikSchwartz

      Google bought Android two years before Apple publicly showed iOS.Google bought Android a year before Eric Schmidt joined Apple’s board of directors.The historical dates do not line up with your paranoia.

    2. fredwilson

      almost every great innovation has been attacked by a patent troll 

      1. Pete Griffiths

        Any many innovations by small companies have been ruthlessly ripped off by large ones – even with IP protection.  

  102. Mark P Xu Neyer

    The government allows it to go on because the government is made up of lawyers, who are convinced the answer to every problem is more laws.

  103. devsoft

    that why government suck~

  104. Urf

    Hear hear! Patents must go, it’s the only way. It was a bad idea from the start, it benefits only the lawyers, and now it’s really getting out of hand.

  105. baba12

    Interesting, a VC wanting to scrap patents for software. I wonder how many VC’s fund software companies that have no patents or any IP protection. One of the things during due diligence done by VC’s  is to ask about how unique the product/service is and is it patentable or not.If VC’s were willing to fund and not be bothered by whether there is a patent or not then maybe things would change.Most innovators/entrepreneurs I know are ok  at sharing, it is generally lawyers and VC’s who want to protect and milk the cow.It would be interesting to see if USV adopts a mantra that says ” we invest in companies” patents or not. What does this post serve if all it does is create some furor and buzz but does not actually accomplish anything.

  106. Ctlaltdel

    Actually without the government, you won’t be able to catch the likes of Enrons etc. You won’t be able to prevent the big guys from eating/bullying the small guys. 

    1. loquacious

      With a nanny state goverment, you’ll have to be in your house by the time they say.Government does not create jobs, period!Enrons would have been caught they were baking the books.  That is clearly not legal in the state their CORP was in.

  107. ABJennings

    I just started an ask on AskForIt so we can all request software patents be abolished!http://www.askforit.com/201…AskForIt is my startup, by the way. 🙂

  108. Dana Blankenhorn

    Software patents are not a creation of Congress. They are entirely a creation of the courts. The fact that the Roberts Court refused to recognize this simple fact and decide the case on the merits — that it accepted “judicial law” (and from a lower court) as binding on itself, shows that they have no ideology beyond the result, which in this case was the enrichment of lawyers.I covered the patent mess at ZDNet for some years. One important thing I learned was that the idea of patents is received differently in health care than it is in software. A device can be patented, because you can invent your way around the patent. Software can’t be invented around. You’re not patenting any specific mousetrap, but the idea of catching mice.

  109. Michael F. Martin

    Don’t know all the facts here, but if it’s true that Apple and Google have already licensed these patents, then there is a good chance that these lawsuits will get dismissed very early under the Supreme Court’s recent decision in Quanta. Patentees are supposed to have only one bite at the apple (pun intended).

  110. Hjlocker

    One of the key criteria for a patent grant is nonobviousness.  Here is a great definition from this web sitehttps://www.cu.edu/techtran…So one of the issues with our current patent system is many patents that are granted are obvious to people reasonably skilled in the field and should not have been granted.  Nonobviousness: Nonobviousness measures the degree to which an invention differs from the totality of previous knowledge, and the degree to which an invention could not have been anticipated from that knowledge. At the time it was conceived, why might your invention not have been obvious to people reasonably skilled in the field? Are there ways in which it might be an evolutionary step? What is the difference between the proposed invention and what has previously existed?

  111. JLM

    Software programs — a combination of written commands from a prescribed language — and original creative works have much in common.Original written works are copyrightable — a combination of written words from a prescribed language such as English.Copyrights are for the life of the author plus 75 years — check me on this as I am operating from a long time memory here on the subject.Software patents are protected for 14 years, no?In many ways a patent is a public exposure of an idea and the setting of a countdown until the entire world can use it freeely and without compensation.Seems to me that it is not the idea of a software patent but the attendant time period of protection before the whole world can use it while giving the whole world a thorough view under your skirt.I would also opine that this is a substantially more ticklish issue for the US of A as software development is a strategic interest for the Americans and one we should not give up easily. 

    1. fredwilson

      we are going to give it up if we keep letting patent trolls go after our best software innovators

      1. loquacious

        Some of my best software came out of an ideas someone may or maynot have patented. Are you going they going to sue me now?  I don’t have to time to go look up everyone’s patent to see if I could get sued.  Anyway, I have posted several times how to start the ball rolling with the morons in the three branches of Federal Goverment, by that statement I mean all of them.  I do know the rules of our republic.

  112. ChitownKen

    Fred is right. The whole patent system is totally out of control, since at least Amazon’s  patenting of one-click buying ( http://en.wikipedia.org/wik… ). Maybe before.And software is not the only huge area where patents are being granted which stifle innovation and are contrary to public policy. Look at the area of genetic technology. You have companies being granted patents on genes and organisms, rather than simply on proprietary methods of testing for genetic mutations or creating genetically engineered organisms. Myriad Genetics ends up with a patent on the BRCA1 gene (the key genetic marker for breast cancer), so that a competing company cannot come up with a wholly new test without infringing the patent. (Fortunately the ACLU challenged this and the patent was overturned, though this is on appeal.) And Harvard obtained a patent on the “oncomouse,” a genetically engineered mouse used to test cancer treatments, which is not limited to their specific way of making the mouse but on any mouse engineered to have cancer (http://en.wikipedia.org/wik… ).Patents, if properly limited, might well provide appropriate incentives to undertake the costs of innovation. But the way the system has evolved, the more likely impact seems to me to increase the risks to innovators from suits by large corporations and therefore to discourage innovation. If so, then we are better off without them.KenKen “at’ mygoodcounsel.comwww.mygoodcounsel.comLegal Representation Made Simple

  113. ParallaxDementia

    I had to say something here as well. Let me refer you to my post about this because I was a bit wordy: http://parallaxdementia.tum

  114. Team Tenzo Drifting

    WOW BIZ INSIDER FINALLY GETS WITH THE PROGRAM AND ENABLES DISQUS?Highly doubtful, it’s only because it’s a guest blogger post :(Stop getting my hopes up!

    1. fredwilson

      i’ve asked them to run disqus on all my posts there and they’ve been doing that for a couple years now

  115. Guest

    Today’s post by @fredwilson:disqus might be generating enough traffic to clog the interwebz.

  116. sigmaalgebra

    Okay, about six basic questions for anyone with informed answers if not ‘legal opinions’:Preface: My work is based on some of my original ideas in applied math I have implemented in software. The software is to be the crucial, core technology of a new Web site. Now I’m writing the last of the software, the Web pages. My belief is that the math will yield higher quality results, difficult to duplicate or equal, for the users; my hope is that the site will be popular and that I will be successful financially.Right: The goal is execution and money in the bank, not just ‘ideas’, which as we have heard are “plentiful”, “easy”, and “pretty much worthless”. My ideas are original, advanced, powerful, rare and not “plentiful”, and difficult if only because even getting just the prerequisites to understand the work takes special talent, an undergraduate pure math degree, and a lot more later. The rest of the work is quite routine. So, the ideas are what is crucial. Still, the goal is money in the bank, actually JUST money in the bank. Yes, the work is fun, but I’d rather have the money in the bank and then do other things in music and mathematical physics.Okay, suppose my Web site comes up and starts to get popular.(1) Routine User Interface.For the outside world, about all they could see of my software is just the user interface. The user interface is just a routine application of HTML. So, first cut, my guess is that it is unlikely my user interface will be seen as infringing on any patents. Is this guess at least roughly correct?(2) Non-routine User Interface.If there is something ‘non-routine’ in my user interface, then once I have shown that user interface to the world it is ‘prior art’ and cannot be patented. In particular, no one else could see some non-routine aspects of my user interface, patent it, and keep me from using it. Is this guess at least roughly correct?(3) Server Software.All my software will run on my servers. So, how can a patent troll know enough about what is in my software to claim infringement? That is, it would seem that any of my software locked up inside my servers with nothing at all obvious outside would be immune to any claims of infringement of anything. What is the situation here? That is, what right might a patent troll have to force me to open up my software inside my servers, explain the original applied math, etc., and make the explanations public?(4) First Defense.If a patent troll claims that something about my user interface violates a patent, then maybe I can defend myself by slightly changing the user interface. What is the hope of this defense?(5) Second Defense.As long as I’m a small company, I will not have cash enough for lawyers to fight patent trolls. A guess is that as long as I’m small, the patent trolls will not regard me as a worthwhile target. But if by a mistake or whatever, I do get a letter from a patent troll lawyer claiming infringement, then why don’t I just drop the letter into the bit bucket and f’get about it? Just f’get about the whole legal process, ignore it. What can the patent troll do?E.g., if they get some big ‘judgment’ saying that I owe them money or my whole business, then I’ll just declare bankruptcy for my Sub-chapter S corporation, shut down my Web site, move, start up my business again under another name, and then send all the registered users of my old site announcing the new site.Then the patent troll can go through all their expensive legal nonsense again, spend two years or so in the courts, and again come away with nothing. My guess is that they will give up.Why not this defense?(6) Third Defense.There’s a chance my Web site will be the basis of a significant company throwing off lots of cash. Then if some patent troll shows up, I could hire lawyers. Generally this works?

    1. sachmo

      Patent your server implementation or whatever yourself.  Unlikely a troll would sue you, when they do, request a formal review of their ridiculous patent and provide examples to the PTO of places where it was implemented before they patent the idea.  Anyone can request a review of a patent.As for your own patent, use it to prevent others from actually infringing on your useful contribution to society and as a competitive advantage against other companies that you suspect of implementing the same algorithms

      1. sigmaalgebra

        Thanks.I didn’t know anyone could request that the PTO review a patent.One guess is to start by dividing my work into (1) what is visible in the user interface and (2) what is in the software locked up in the server farm and tough to guess from the outside.For (1) maybe I should patent any aspects of the user interface. Then if someone wants to have an overlapping patent, I might have a defense. Another defense would be just to have dated records on when my user interface went public and, thus, became ‘prior art’. I don’t know which defense would be better.For (2) if I file a patent, then I’m telling the world that the work is valuable. Too soon the work will be made public which I don’t want if only because it would be next to impossible for me to protect the patent because I would have no good way to know what was running locked up inside someone else’s server farm.Maybe one defense would be for me to find an obscure blog somewhere and put a description of my math there in an especially abstract form that would not obviously connect with my business at all. That blog posting would be nearly totally ignored. I could keep a dated copy of the posting, and maybe there would be a copy at Google for a long time.One thing I’ve learned posting on blogs is how to write a blog post that gets ignored! A great help is to include some abstract math, especially if don’t define the terms and don’t give intuitive explanations or indicate connections with applications!Then that blog posting would become ‘prior art’?If it is posted for only a week, is it then forever ‘prior art’? Hmm.I’m concluding that patents for software are junk and all the related effort is just wasteful mud wrestling with little to none of the good intended for patents.I want nothing to do with software patents: I don’t want my work ‘attacked’ via the patent system, and I don’t want to try to use the patent system to ‘protect’ my work.If I have to deal with the patent system, then I will treat it like an ugly, infected, poisonous insect to be whacked with a shovel and killed ASAP.Here I’m with Fred: “Enough is enough” of this “shit”.

  117. Roy Nallapeta

    Fred,I agree that patents are getting out of control, however there needs to be a good way to enforce or inculcate the culture of IP. People hardly see the distinction between their IP and patents. One of the fears by which patents are still in play today is of not gaining significant advantage due to a discovery or invention. If the govt works in that direction I think we will have a much better eco system

  118. Miha

    Nowadays it’s even normal to patent life! Look at what Monsanto is doing with genetically altered seeds. Patent laws should be altered and severely limited.

    1. A real libertarian.

      The especially disturbing part of Monsanto’s patents is that they’ve sued farmers for infringement after Monsanto has themselves polluted the land of those farmers with their “innovations” through their own bad practices, destroying the genetic diversity that was there. Genes are not property but they do have value and Monsanto willfully destroys that value for other farmers while claiming patent rights on its genes. I sincerely hope this is a myth. It’s such a Kafkaesque nightmare. http://www.sourcewatch.org/… 

  119. Les Stroud

    You got me thinking…I know that there are a lot of thoughts on how to reforms patents – shorter, more scrutiny, etc….but what would the impact be if they were non-transferable?  —-Idea 1: Eliminate Patent TransferenceIf a patent could not be purchased or transferred between entities…downsidewell, that would kill a number of acquisitions.  However, that would make acquisitions focus on acquiring actual developed technologies, customers, brands, or products.  This might be a better focus.  Lack of transference might get rid of the get out of bankruptcy free card, but this may be better for the market.  upsideThis would prevent companies from buying up large stashes of patents as a part of some nuclear standoff.  This would reduce the value of patents from an asset to a protection device (they are an asset now).  This would eliminate patent trolls.  This would reduce (but not eliminate) the incentive to patent without having a product.Elimination of transference solves one big problem, but not all of them.  If you couple it with an additional idea, however, it can work.—-Idea 2: Require proof of profits that the patent is to protect in order to win a patent suitFirst, 17/30 years is a little long in today’s world.  So, shorten them to 10 years.  This provides plenty of time to develop and monetize ideas while allowing the patent to go into the public domain within a reasonable time frame (the payoff for having a patent system).  With the time reduction, there is a catch.  Add the following two clauses: 1) no royalties can be required for a patent during any period where it is not protecting a profitable good or service 2) the patent expires after 3 years if a profitable good or service is not created before the patent’s 3 year anniversary. One extension, of 3 years could be granted if the entity can show the patent office evidence of work toward the production of a good or service during that time.—The combination of these additional clauses (non-transferabilty and proof of profit to protect) would remove the incentive to file a patent for an idea for which you have no intention to develop without creating additional burden or requiring significantly more staff in the patent office.  The burden (other than for granting the extension), would be bourn by the court if and when a patent suit occurred.  This would also protect those companies that are using the patent system honestly to protect their investment in r&d.In other words, if an entity wants to sue or request royalties for patent infringement they must have a product that is being damaged.  This is consistent with the intent of the current laws.  It expands it by requiring additional financial information about the product, shortens the term under various conditions, eliminates patent trolls, and still affords companies the protection they require for their efforts.Thoughts?

    1. fredwilson

      i’d rather get software patents eliminated but if that’s not in the cards then approaches like the ones you advocate certainly would help

      1. Les Stroud

        My premise was that there is too much infrastructure and money around the patent system to be able to effectively abolish it. Until I see a concrete plan on how you get from point A to point C, I just don’t think it is achievable (in reality as opposed to theory). Patents do provide value to society (even if the current system does also have a negative impact as well). Destroying that value and the associated industry would take significant political capital. For instance, abolishing patents would immediately devalue billions in corporate assets – causing companies to have to rebalance (think mark to market).  The country would need to absorb an entire industry worth of white collar workers.  That’s just the obvious stuff.  Who knows what the transitive economic effects would be.  The reality of governance in a republic is that massive changes are difficult and often span administrations. As a result, large changes are rare and often don’t last (see health care). So, it seems to me that taking an incremental approach is more likely to have an noticeable effect in our lifetime.  I don’t know if my ideas are effective enough and subtle enough to get passed, but I think they stand a greater chance than some alternatives.

        1. sbronstein

          The obvious incremental first step would be to stop granting so many patents, particularly in but not limited to software patents. And then a second step would be to invalidate large swaths of patents that are clearly obvious without requiring that someone litigate each one.

          1. Les Stroud

            Your suggestion won’t happen. There are too many dollars effected. That part is the reason nothing is happening on this.  The system is set up to for a limited amount of up front investigation and the use of the litigation process to work through the details of it’s validity.  Ideally, we would move the burden to the applicant. Right now, though the burden is on the defendants. The sum of the money paid by defendants and patent holders is greater in litigation than in application. Changing that would not be agreeable to the business interests of a bunch of patent attorneys (the people that have a really big lobby in washington). Anything that reduces their potential income will not make it through congress.  Right or wrong, it is reality. So, I was proposing something that would increase patent attorney income (at least for a while), preserve corporate asset valuations, not require expansive new funding to the patent office, and still provide patent protection to those who will use it. At the same time it rids the country of patent trolls and reduces the likelihood of patents being used in a manner that is inconsistent with the intent by requiring the patent to protect something that has an actual value.  Simply, it gives it a greater shot of happening while improving the overall system.

          2. sbronstein

            Yes, it is unlikely that any change will happen really due to the entrenched interests and the nature of interest group politics in a democracy.I have to apologize though – I saw your response to Fred’s response and thought it was your initial comment. I like your incremental suggestions. I agree that you do need to somehow coopt the entrenched interests in order to effect any sort of change in the law at this point in time.

  120. ErikSchwartz

    If hardware patents worked the same ways as software patents Alan Turing could have patented the Universal Turing Machine in the 1930s and we’d all be paying the Turing estate royalties.Patents in hardware are about the expression and manifestation of ideas, in software they just let you patent the idea.

  121. Lynch Burnham

     “Patenting software is like patenting music”  Huh?  Come ON Fred.   Music is copyrighted.  Are you suggesting your beloved bands give music away?  Are you saying that copyright stifles the making of music?  Without copyright there would be no music.And by the way, your investment in Soundcloud?  It’s dropbox with rights management.A bit self-serviving Fred.

    1. sbronstein

      > Are you saying that copyright stifles the making of music?  Yes. As someone who just emerged from working in the digital music industry for seven years, I can say unequivically – copyright stifles the making of lots and lots of music. Or at least the distribution of lots of music. Copyright is killing tons of musical innovation. If you look back through history, everyone ‘stole’ from what came before – classical composers regularly used melodies from previous pieces by others, etc. The modern incarnation of this is sampling and mashups. But most of the time it is logistically if not financially impossible to license every sample or song in a mashup, since the Supreme Court ruled way back when that you need to license a sample of any length.> Without copyright there would be no music.Really? Seems to me that people everywhere create music all the time for no reason other than the joy of creating and playing music. And have done so from when everyone was singing around the fire. Even today, the vast majority of musicians don’t make any money from it. Look at Tunecore for example – they have hundreds of thousands of artists who even pay hundreds of dollars each to distribute their albums to iTunes etc. Very few of these artists even make back the money they spent to get their music out there. They are doing it for the love of it, not to make money.

  122. Joao

    … and now, at least here in Europe, ‘they’ are talking about ‘SaaS certification’ :P! I ask them about apps and marketplaces .. try to show the patents dilemma … but ‘they’ are so innovate that will try, until the end, to bring to this century this kind oh last century business … … those ideas will lose, but, meanwhile, are causing a lot of problems to all this new generation of tech entrepeneurs …

  123. Richard Bennett

    Fred, have you ever seen a bandwagon you didn’t like? You profess love for all the misguided causes loved by the naive young advocates of open and free whateverware from net neutrality to this nonsense.The main problem with the whining about software patents is that there’s no such thing as a software patent. Therefore the law can’t distinguish software patents from hardware patents. Hardware is logic, and so is software, you see.So you’re really saying you want to abolish patents altogether.

  124. Jonathan Hunt

    Good post. FYI, New Zealand is on track to remove patentability for software. Entrepreneurs welcome. http://www.burgess.co.nz/la…

  125. Daniel DeLorme

    Realistically, software pattents are not going away. Too many people have skin in the game. So here’s an idea: what about amending patent laws to limit litigation to eithera) those who filed the patent in the first placeb) those who acquired the patent AND are commercializing products that use itThis would kick non-practicing entities (aka trolls) out of the loop while still having the support of small inventors and big corporations. IMHO that’s the only realistic way to get the legislation changed.

  126. sbronstein

    After I read _Where Good Ideas Come From_ and _What Technology Wants_ in rapid succession last fall, I had the opportunity to discuss this issue with Kevin Kelly himself. After reading these two books, I had come to the conclusion that we would be better off if we completely abolished the patent system. The notion on which it is founded – that we need to provide an incentive to inventors to invent and that individuals come up with unique ideas – appears to be invalid. Instead, ideas have a time and when that time comes, they emerge in lots of places at once. Given this, rewarding one inventor for filing a patent is basically just rewarding whoever happened to document the idea first. Or, should the so-called “Patent Reform” act pass, it will then reward who filed first. (see the answer to my question on Quora which indicates that this is going to make filing patents early even yet more important, even if, like me, you don’t like patents – http://qr.ae/JHYm)There are some situations where some sort of protection appears to be necessary. Bringing a drug to market via the FDA approval process is really expensive, so if we want to encourage companies to do this, we would need to give them some sort of monopoly on the idea for some period of time. I don’t know exactly how this would work but it would basically be patent-like but assigned in exchange for investment of some amount in bringing an idea to market or in exchange for actually bringing an idea to market within a certain period of time. Maybe you could do a reverse auction to push down the amount as much as possible? This certainly requires more thought.KK suggested that we should try to create an alternative framework for consideration by other countries around the world as they try to modernize their economies and legal systems. China appears to be a lost cause at this point patent-wise, but wouldn’t be great to provide developing countries with a different IP framework for their consideration that a large coalition of investors/entrepreneurs/etc says would foster greater innovation? While this obviously doesn’t solve the short-term and very urgent problem of software patents in the US, it could be worth pursuing in parallel as it could have big long term dividends.

  127. Rezsa

    A big problem is PTO’s incompetence in determining what’s “patentable”. And to those who like to patent algorithms and processes, I ask this: what would happen if math, physics, and chemistry equations get patented?

  128. Guest100

    Very similar Patent case with Neomedia and QR Codes last week (their Patents, which, yes, they purchased from others, with other people’s money) were upheld — Meaning that a dozen or more start ups in mobile marketing will have to close down unless they can afford to pay license fees; and even some big players (Microsoft and ATT) may get dinged, further causing confusion and apprehension in the barcode space (with possible image recognition and NFC ramifications).The US is failing in so many respects — truly, the economy sucks — we lose bright minds we educate because of a lack of intelligent immigration opportunities — and, it is clear that the US Patent Office doesn’t have a clue.

    1. russnelson

      Well, that just killed QR codes.

  129. Andy Hallock

    ‘I can’t understand why our goverment allows this shit to go on.’Seriously? This outcome is exactly what you should expect from Statism. The real criminal here is the State; Lodsys is just using institutionalized violence like most corporations.

    1. Wide Eyed Pupil

      I think you’ll find it was the business community that compelled the State to enact patent law all those years ago. In those days the business community _was_ the State  in case of most legislation.Are the universities that provided so much unrestricted knowledge and research in the past part of your “Staism” state?

  130. ariellephan

    This is the same problem with the financial market where regulation cannot keep up with innovation and complication in the product and field they want to have a control over. If everything is let loose, it’s bad. If you control it and do a mediocre job, it’s even worse. So, deregulation is a better choice in the short term. 

    1. Wide Eyed Pupil

      De-regulation of the financial sector is what just blew up your economy, ariellephan. Organised crime is rife in the US derivatives (and other trading) markets. SEC isn’t asleep at the wheel, the hearing minutes suggest they knew exactly the kinds of BS going on with credit default swaps and everything else, they just don’t care because the appointees are inside the winners circle.

      1. ariellephan

        Please note that I did not promote “de-regulation” in the financial sector. Neither  of the extreme methods of regulation in the financial markets worked as history has proved (tight then crying out loud socialism? loose then crying out loud at SEC doing nothing?). My point was that, they all are doing a bad job of controlling. Let’s just not go into Wall Street and stay civil. We are talking about patents in another industry.

  131. Tony Wright

    We’ve been debating your post on a mailing list and several patent folks contended that there were just as many VCs that were pro-patent as pro-abolish.  Hard to imagine this being the case– most of the investors I know hate software patents.  Thoughts?  I imagine you talk to a broader collection of investors than I do.

  132. Dave

    I agree with you that the current US patent system is woefully out of date, bureaucratic, and allows “patent trolls” to discourage innovation. However, removing the ability to patent any IP (including software) is going to all but destroy interest in research for new products. Reality is that most people like to get paid.I’d draw your attention to China, (famous for it’s disregard for IP rights) and the fact that while they produce and sell a great deal, virtually none of it was originally thought of there – in a country of a billion people!Finally, while I think I understand what you meant, it is certainly possible to patent music, as record company attorneys will be happy to remind you if you release your own compilation of Lady Gaga songs without her permission…

  133. Frankly

    Fred thanks for writhing this. It really affect all of us. It reminds me of the foursquare case.

  134. Eric Leebow

    Interesting post, it’s getting kind of nasty out there, and I’ve never even heard of Lodsys before, nor know what they do.  What’s worse is when someone takes your idea you thought of years before they existed, and then goes ahead and patents it or something close to it.  It’s also wrong that a company buys a patent to attack smaller innocent companies, and does not innovate themselves.  Software patents connected to hardware is a different story, hardware items are a different story as well.  If we got rid of all software patents, then we’d have to do the same to some hardware patents.  I spoke with a friend who is a patent attorney today, and he was telling me that they are really buckling down on “system and method” patents, making it more challenging to be awarded a patent.  The problem with the patent office is that the examiners are not always the “tech” people or the people who know most about the subject matter.  Some people on the outside do a better job of knowing what’s out there, or what has been patented.  It’s still an interesting debate, I’m a believer in patents (more for the hardware or kind that links software and hardware) that could change the world, not for people who abuse the system to hurt the innovators.

  135. Jackson

    Well that is an interesting opinion. I agree that we need to evaluate how we approach protecting the intellectual property rights in software carefully. It, along with business methods and “tax patents” need some sort of resolution. Trust me Fred, you are not the only one frustrated by the current system!

  136. Paul W. Homer

    It is fascinating how polarized the comments are for this post. Personally I don’t like the current patent system, but I can understand the original motivations behind creating it (although it seems to have gone horribly astray). My suggestion, which I wrote about a few months back:http://theprogrammersparado…Paul.

  137. Chris

    I whole heartedly agree.Patents are a bad idea.Patents that last 5 years or more, or indefinitely are a bad idea.Patents that any monkey could have thought of are a bad idea.

  138. sankaruppuluri

    Software patents by itself are not bad. The law/conditions under which they are granted is bad. You can say that trolls are taking advantage of the patent law around software patents. Abolishing the system is not the answer to that. If you abolish the system, there is no incentive to publish innovation. The notion of collaboration is lost. There is no security for an innovator (big or small) to spend dollars and create something new if she knows that there is some one out there who is just waiting to rip off her invention and build copies of it.The way out is to rectify the law to fix the loop hole. For e.g. you patent should not be valid (or you should not be able to sue) if you haven’t put your invention in practice or made reasonable attempts to do so. On other thing that could be done is to put some knowledgeable folks at USPTO to grant these software patents. That should help in reducing “obvious” patents out there.Taking advantage of the law is not something new. People/entities have done it in the past and Congress has come around to fixing the loop holes time and again. One big difference in the current scenario is that Congress hasn’t been as quick as the industry would have liked. As a result, a lot of firms are bleeding dollars to these trolls. I am sure that must hurt.



  140. paramendra

    What’s the solution?

  141. Twirrim

    They’re in the process of passing a major change to the patent system that will make it worse too, the 2011 Patent Reform act.Significantly it switches from ‘First To Invent’ to ‘First To File’, providing huge benefit to large established companies with dedicated patent staff/lawyers, over small ones without.  It also eliminates the grace period.  Currently inventors can take about a year to file a patent application without risk of losing their intellectual property. No grace period means inventors will need to start paying out for patents on stuff they’re not even sure will even work, just to be safe.It does nothing to improve the quality of Patents or the Patent examiners, or even do anything to improve the speed of the process which is already lauded as stifling innovation.There is a good Washington Times article here: http://www.washingtontimes….

    1. Dave W Baldwin

      Thanks.  It is unbelievable this sort of crap happens.  I’m going to place this on Fred’s blog 2 days forward where people have something to refer to in communicating with their Rep…

    2. sachmo

      First to file is what most European countries use. I actually think it is a step in the right direction, because currently in an interference it comes down to who has records of the invention before it was filed. In my own case, I have records of conception, but many other people I know working independently do not.  I think large companies actually have more of an advantage in record keeping than a lone inventor does – i.e. they people whose full-time job is to document meeting minutes, etc. First to file would eliminate interferences almost entirely. The solution for independent inventors is to take advantage of the provisional patent, and file early.  PPAs are cheap ($100). 

  142. Derek

    Kudos, Fred. Wonderful post. I watched this kind of thing happen in the DVR space when TIVO was fighting for its life, and it did detriment to everyone who matter. A bunch of thieves made off with cash they didn’t deserve, and the exciting tech never got innovated on.Remember the RIM lawsuit??  I mean.

  143. Nik86

    The US patent system is completely broken. This Lodsys is just one in a very long string of similar events.I was targeted by one of the patent trolls last year and couldn’t afford to defend against it so had to shut the company. They were provided with irrefutable evidence that I (and several others) had been doing what I was doing years before the patent was applied for, but they weren’t willing to be reasonable.

  144. RobG

    We have a great idea that we wish to take to market but for this same reason we are unable to. The patent restrng us to do so was one of about 20 registered at the same time, granted 5-6 years ago yet remaining unused.If we were to play ball and give this party a slice of our cake simply for their ability to file paperwork what would be the nomral arrangement in such a situation? It isnew to me and I am unsure whether the norm would be a straight license fee (advance + royalty?) or a stake in the company, or just whatever our lawyers are able to negotiate??any advice would be appreciatedRob

  145. Craig

    Yes, America does suck, suck so bad it is damaging the rest of the world.

    1. loquacious

      If you hate America, go live somewhere else.  Get out.  Quit your whining and complaining about it or trying to rip the constitution apart.  If you think socialism is so wonderful, go live in France.  If you think Communism is great, go live in Russia.  Please don’t be surprised when the kill you for speaking your thoughts.  I have had people in my family die so you can say whatever you want! 

  146. LT999

    “Patenting software is like patenting music.”I believe that’s called a copyright, and is how musicians ensure they get royalties for their work.  Without software patents I could write a groundbreaking new Operating System that would make me millions and then the first person to buy it could just reverse engineer it and sell and identical version with a different name. 

    1. loquacious

      If people had not repeated Elvis’s music or say the Beatles, we would not have the music we have today.  How’d you suppose music people learn music by copying others until they make their own original.  Which song to you like better “The night the lights went out in Georiga”  by the original singer or by Reba.  Or say “Blue Swayed Shoes” by Elvis or the other artist that first sang.BTW, it think that is sort of what Bill Gates did!!     

  147. Johann du Preez

    come to south africa! no such nonsense here

  148. Konstardiy

    Hey, you are right! Human civization needs one of two things:a) create an effective moneyless economics that is motivate people to labor, research, work and think, but makes the pleasure gotten from the process and result is motivation factor, not the money.b) Create other way to protect any intelectual property, that allows anybody take any existng innovation and IMPROVE it. Today most of software ideas are become old and becoming old just after 5 years after they created.

  149. Nate Boyd

    I don’t understand why software patents are fundamentally different from medical device or biotech patents.  Seems like the problem may be that software patents are being awarded for general concepts (“selling virtual goods in an online game”) rather than specific solutions/implementations (“a method of pricing virtual goods in an online game so as to maximize xy and z”).I get that Fred believes the system is being abused and could be doing more harm than good, which means that nothing at all would be better than what we have today. However, rather than eliminating software patents, shouldn’t we fix the system or replace it with something that creates effective economic incentives and protections?  Fred, don’t you have some ideas about what a better system would look like?FIFA football players can get a yellow card for faking an injury… what’s the equivalent in the patent world?

    1. ocschwar

       R&D in biotech and medical devices requires large amounts of physical capital in the form of laboratories, and large numbers of highly skilled people working together (well, larger numbers of them than in software.)

      1. Nate Boyd

        That’s probably an accurate generalization, and is certainly something that’s changed since our founding fathers crafted the patent system.  However, it seems to me that a brilliant invention that didn’t take much time to create should still be as patentable as one that resulted from years and millions of dollars of investment — otherwise, only wealthy individuals and corporations could ever hope to file a patent.I think that the problem seems to be in how patents are defined and defended (or used for offensive/destructive purposes).

    2. sachmo

      Agree entirely.

  150. Rommel Fernandes

    You’ve got a valid point. People want to make money.Cottages for rent in Goa

  151. Brianm101

    Trouble and unfairness of any patents in general is that they ignore that in todays enviroment nothing is unique and is always built on someone elses work.Its time for patents to go, only copyright to remain – and thats a an implied right.Could be lawyers on skid row time  – my heart would not bleed!

  152. Francisc

    Well done. Thanks.

  153. BuyGiftsItems

    There had to be a first person working on the idea, and for this person the claim is false. Buy Gifts Items

  154. Tim Green

    Can’t we just form a posse and hang Lodsys (just kidding homeland security)?  Why do we have to wait for sanity and justice?

    1. Mark Nowotarski

      You don’t have to wait for sanity and justice.  You can file for a reexamination of the patents right now.  

  155. giffc

    I could not agree more and love seeing you get mad about this. Software patents are ridiculous. Unfortunately there are so many people who defend them – academics who mistakenly believe they drive entrepreneurial success, big companies who can afford to make the system work for them. There are enough people on the other side that this debate seems to go nowhere. Or at least that is my impression.How to solve this? Letters to congress is not enough.

    1. loquacious

      I would like the people in this blog who think software patents are ridiculous to please get with me and we will start a referendumI will find out how many signatures are needed and will place it on a post or a blog.  I will personally go to Springfield, IL to present the referendum to my congress people face to face. We need all states to be in agreement, however.Your state representatives have to acknowledge it, or they are not doing their job as servants to the People.  That’s how it bubbles up to congress.  Trust me, political people want your vote.  If they vote against it, go have a visit with them and find out why.

  156. loquacious

    Agreed. Now, we need to get a petition started, and send it to all our congress people!After this whole tweet thing with a certain congressman, I know they don’t know how to operate a computer!  You should not legislate something you know nothing about, period!

  157. Santiago

    FYI, USA is the only country in the world where software patents actually exists. The rest of the world considers the code you write just as if it were a novel. You can register the code and you will own the intelectual property of the code you just wrote. But not a patent, which i agree that for software its ridiculous in its own meaning.

  158. Terry J Leach

    If patent trolling reaches a certain point, maybe software companies will begin to locate outside of the U.S. as a way to protect themselves from the racketeers. I’m absolutely certain that Chinese developers will not be robbed by the likes of Lodsys.

  159. Joe De Pinho

    Rather than harping on the patent issue, which is an important one, let me take a jab at another idea in this post: the app store.I propose a different app model for Market and App Store – rather than asking for payment upfront, let me demo a paid-app for 30 minutes and then ask me to pay if I want to keep it on my phone.  If I don’t pay, erase the app.  I feel like there are a lot of relevant apps out there that I don’t end up buying because I don’t want to take the $5.00 gamble, for example, on the latest iPad RSS reeder  (side note: for Android, I love feedly…tries to bring flipboard-esq interface to my phone).  By letting me just try them out, I will play with a lot more apps and, if there is a reason for me to use them beyond 30 minutes + I really like them, you’ll find that I will buy a lot more apps too.  Google, Apple: figure out a way to do this without enabling piracy and you’ll see your “eco systems” get more money IMHO.Best,Joe

  160. Sirius Lee

    As a non-US citizen I love the idea of killing business method protection in the US.  This is nothing to do with are patents good or bad, it’s because outside the US it’s all but impossible to get venture funding for a software idea.  If you really are a VC would you choose to invest in a product in an environment where it can be protected or not?  Of course the answer is simple.  This is the case with all VCs.  So the effect of the existence of a patent structure for software in the US is that it’s developers have access to all the funds.  There was no ‘dotcom’ bubble in Europe or India or China.  There are no Microsofts or Ebays or Facebooks or Googles or Oracles or … because there’s no structure for protecting investments.So stop your whining.  Sure, there’s the law of unintended consequences – patent trolls in this case.  But the patent framework, as badly implemented as it is, is a MASSIVE boost for the US economy and it’s not going to change.  Surely its better to modify the law to limit trolls.  For example, by only allowing patent infringement cases my companies actively involved in the sale of products implementing the patents.If you want to test your objection to patents, come make some investments in the UK. See how long it is before your investment is trashed by me-too products (usually from US companies).

  161. John Wilson

    Come join us in Europe, software patents dont exist here (for the time being).

  162. Guest

    Patents are good but I belive that there should be expiration date

    1. BlueCollarCritic

      The problem with expiration dates as of current is that with enough money they become irrelevant as one can just keep getting the expiration date extended and well beyond anything remotely resembling reasonable. Just ask Disney who has successfully managed to do this so many times that as of current their patents extend to beyond the life of the corporations (or something ridiculous like that). Patents are a good thing, the way they are currently implemented & managed is the real problem. Without protection of ideas people are far less likely to take risks developing an idea as someone with resources will just steal it once the inventor/investor has perfected it.  The real solution is to revert patients back to their original structure and eliminate this “Life+” period that many patents are now for thanks to big money.

  163. BlueCollarCritic

    The best investment is in Freedom.  Have you invested in it lately?

  164. johndefi

    Couldn’t agree more. It’s appalling that patent trolls are allowed to do what they do in plain sight. It’s criminal. And pathetic.

  165. Michael Anderson

    I both agree and disagree …  Agree:  Patent Trolls should be abolished. Disagree:  Software engineering absolutely meets the constructs of intellectual property and patents should apply. My solution is.  A software patent can only be enforced if the software / invention is actually brought to market and sold to customers.  More specifically, you can’t just file for patents and then subsequently troll for licensing revenue.

  166. zvozin

    (a) Not a lawyer, but I do find it weird that software is subject to both patents and copyright. Far as I understand, these two were created for distinctly different reasons, and no other type of creativity is subject to both at the same time.(b) What are the actual reasons the patent office allowed to make carnival fools of them by granting patents on flagrantly obvious things?

  167. Kiko44

    i could use a muffin right now.

  168. Asterix

    I’m aware of small firms using equipment and processes that they themselves developed openly publishing details to fend off attempts by better-heeled competitors to patent their work and put them out of business.It’s known as “poisoning the well”.A patent is a license to sue, basically.  Whether or not you can afford it is your lookout.Contrast that with the situation with copyright, where infringement is a felony and terms can run to 130 years.

  169. Colin Lee

    Good point on software patents.  Imagine if The Who had patented the power chord, an early blues singer had patented the 1-4-5 progression, and if B.B. King had patented playing the major pentatonic scale in any positions within the B.B. King Box.  We might never have had Van Halen, Black Sabbath, The Beatles, any Delta blues, or Stevie Ray Vaughn, for example.  Software can be just as much art as music theory is. The most elegant software reuses algorithms which have been used over and over again.

    1. Dave W Baldwin

      Here you go Colin… since I put Elton doing Who for Shana back when, here’s Who doing Elton:http://www.youtube.com/watc

  170. Jeff Saliture

    “If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.” – Thomas Jefferson, letter to Isaac McPherson, 13 August 1813

  171. Prokofy

    Fred, what you mean to say is that software patents cost you, not as a “tax on innovation” but as *competition*. To your open source or freebie or technocommunist model for development. That’s all.Software is intellectual property. It takes work, it takes thought, it takes creativity. And it’s ok to patent it. Certain things tend to become public utilities and free if they are really essentials, like water. Other things tend to become proprietary because they are scarce resources or because they are part of companies that need to pay coders who need to live on more than air and freeness — and that’s ok. Your hatred of patents seems petty and based on some particularist experience of yours and perhaps a small subset of your peers but is not something that is replicated across entire industries.Maybe you should try filing a few patents of your own, or funding developers that do, and you will see it different.Basically, andyswan says it best. You are against what gets in your way, and don’t see the bigger picture for the entire society.

    1. MarkSWeiss

      “It takes work, it takes thought, it takes creativity.”  This is not the same thing as saying your software is a wholly original mechanism with no prior art and should therefore be the only legal expression in code of the the thoughts therein.  It’s “ok” to patent original inventions.  Given the nature of software, which uses the inventions of many others every single time (languages, dev tools, libraries, protocols), which uses the same algorithmic patterns, design patterns, data structures, code packaging patterns, deployment conventions every single time, which builds on the ideas of past software in a constant evolution every single time, well it’s just hard to draw the line on wholly original.  So that is Fred Wilson’s first argument here — that this patent doesn’t cover something original.  This is the primary complaint in many objections to particular software patents, and the reasons are those I’ve listed above; it’s hard to invent something that meets the threshold of being worthy of a patent.  The second point Wilson makes here has to do with company’s buying up patents and then using them as legal weapons to sue whomever they feel they can successfully sue.  This strategy is legal but it has nothing to do with protecting intellectual property or rewarding the efforts of those creating scarce resources, etc.  It is in fact just profiteering and an activity that clearly adds no value to the economy.  So, your argument is a straw man — you are arguing for valid and legitimate patents, where Fred is arguing against illegitimate patents and activities that have nothing to do with legitimate patents protecting the creators of original inventions.

      1. hackster42

        While I lean more toward Fred’s position than Prokofy’s, I’d ask MarkSWeiss to reevaluate his comment that buying patents “is in fact just profiteering and an activity that clearly adds no value to the economy”, given the following observation: clearly the buyer and the seller of the patent came to an agreement on the “fair” (to each) price, and presumably the seller felt that they were being adequately compensated for their efforts in having created the scarce resource. Therefore, such transactions add value to the economy, in the Adam Smith sense.  Perhaps this activity enhances market efficiency since the buyer has a comparative advantage in enforcing the patentholder rights.

  172. aledalgrande

    I completely agree. And I’m a software developer.

  173. Dave W Baldwin

    Microsoft has received five times more income from Android than from Windows Phone http://www.asymco.com/2011/…an interesting piece of trivia related to the patent debate thanks to our friends at XYDO (I’m a little behind).

  174. ghunda

    Oy. Somewhere in here are a couple of salient points but it’s largely overshadowed by a an extreme opinion backed up by purely anecdotal (and poorly constructed) argument.”I believe that software patents should not exist.” OK. That’s a very bold statement and I’m not saying whether I agree or disagree. But if you’re going to make a statement referencing an overhaul of a largely ingrained process that would require countless hours, personnel, and money just to get the politics moving (let alone the implementation), I expect a well articulated argument with valid data including job growth, economic impact, and pace of innovation. Anything else is just yelling without consequence. These sorts of well reasoned arguments would provide the pieces to create the foundation and vision of why an insanely large ecosystem should even bother with this uphill battle.Then, there’s the ridiculous statements. “Software is closer to media than it is to hardware.” WTF, why? “Patenting software is like patenting music.” It’s called copyright, dude (Queen/Vanilla Ice, anyone?)Then, the rest of the “argument” is a summary/opinion on the Lodsys issue. What Lodsys is doing is shitty and patent trolling needs to be mitigated and eliminated if possible. I agree certainly agree with all the sentiments here but in terms of discussion, it one can possibly conclude is that the folks behind Lodsys are assholes. To extrapolate this into an elimination of software patents is ridiculous and the kind of sophistry I don’t expect from highly intelligent people like yourself.I agree with software patents needing a massive overhaul (not necessarily that they should be eliminated but that’s a worthwhile debate). My problem is that the kind of discourse presented here by an influential person does nothing to constructively move that conversation forward. It’s just annoying.I expect better.

    1. sachmo

      I agree entirely.  If you look at how successful the patent system has worked in eliminating ‘obvious’ ideas in other fields, its clear that its the review process that is broken, not the entire system. 

  175. Kin Tang

    cant agree more bro~

  176. Ken

    I’m so out of the loop, I didn’t know software was patentable. I remember when Microsoft won their copyright infringement suit made by Apple because windows was intuitively obvious. The fact that they were going down the “tab” organization method and had no clue about windows organization until they hired tons of people who designed the windows look for Apple. At the time, it was pointed out the weed wacker was patented, but software couldn’t. It could be copyrighted, but that “protection” was so flimsy Msft got away with murder. I thought that argument was so good, I agreed with the argument that software should be patentable. Now you are crying about about the flip side of the coin. Waa, waa. There’s always a negative light to any side. So you found it. I still agree with software being patentable.Now, with the weed wacker, if someone could invent a feed line system that never bound up, never fed too much out all at once, always fed out when it started to get too short…. Wow. Just as long as the idea of moving a monofiliment line really fast to cut something wouldn’t stop that invention in the first place… Should I patent it? Wait, I don’t have a working design in place. Well, at least I can copyright it, all I have to do is prove everyone else who has to work with a jammed up jumbled mess never independently came up with the idea as well.

  177. Cornelis Berend

    You are totally right, but don’t expect much from a government that continues to employ leading characters related to the Lehman Brother’s affaire and a financial crises that costs many of their citizens their homes and pensions. In your government perception, the Lodsys problem is a school example of what free enterprise should be.

  178. Patents In India

    I do make mistakes so it is possible these are outliers. But I do not think what I witness are outliers Trademark watch

  179. Jon Cameron

    The problem is most VC goes companies with at least one patent.  For entrepreneurs, it is patent or die. 

  180. sachmo

    Fred, I hate to say this because generally I respect your opinion – but you are completely biased in this matter and are not aware really of who the ‘little’ guys are. Your portfolio companies (that probably have several million dollars in hand after going through a VC round) are *NOT* little guys.  To use that term for them is a gross misconstruction of reality. Your portfolio companies are more like a small class of rich, well funded business people, against the big companies (whether it be patent trolls, IBM, whomever) of extremely rich, well funded business people. The true little guys are not represented in this debate – i.e. people who innovate / start companies with almost no money.  For the truly little guys, patents offer at times the only means of entry into an often competitive marketplace. In the robotics industry, there is almost nothing preventing a large entrenched competitor (whether it be a portfolio company of yours or someone larger like IBM) from reverse-engineering and copying an idea after it has been released.  Truly almost nothing aside from patents – of which both software and hardware play a crucial role in defining. When you advocate eliminating software patents, I don’t doubt it would be good for your portfolio companies, but it with almost near certainty would be bad for someone like me – who doesn’t rely on VC funding at all. 

    1. fredwilson

      every company we invest in starts as a little guy, just like you

  181. Mark Essel

    Preach on brother. I don’t understand the patent system.

  182. Jon Cameron

    Dan:  You can’t patent something you can’t build.  So that patent would be invalid. 

  183. Jon Cameron

    What does eBay, Google, Intel, JP Morgan Chase, Microsoft, Nokia, Sequoia, SAP, Yahoo, Adobe, Amazon, American Express, Apple, Charles River Brown University, Cornell, Defendant Invention Investment Fund, and Cisco have in common? Chef Myrhvold.  In a recent court filing IV reveals for the first time what many suspected: one of the largest holders of patents is shared by a pool of “investors.”   It is estimated that there are 30,000+ patents – the majority are software patents.  It seems clear that their lobbying efforts would likely trump. See the complete list of investors here:  http://bit.ly/mIGVyN

  184. LissIsMore

    Interesting and relevant opinion piece on the subject of patents published on the same day as this post.  It can be found here: http://www.thefreemanonline…In this post Sheldon Richman argues against the validity of patents altogether.  The opening paragraph reads:The libertarian challenge to the legitimacy of “intellectual property” has created some confusion. It’s understandable. For one thing, there’s an apparent inconsistency: If one favors property rights in tangible things, why not in intangibles? Pro-property IP opponents reply that the tangible/intangible distinction is decisive. When you take someone’s car without permission, not only do you have use of the car, but the owner does not. But when you engage in an IP (copyright or patent) violation, you have not literally taken anything. This is disputed, so let’s look more closely.

    1. fredwilson

      yup, that’s the rub

  185. Guest

    Why should software patents be treated any different from any other patents? Rather than vote to abolish all software patents, which is really just being bias to patents in other areas, it should be changed to only allow enforcement by companies actively making use of the patent. This will eliminate many patent trolls but allow those who genuinely came up with the solution to protect their rights.Afterall, you can easily argue that patents in anything hinder innovation, and not just software. Saying so, while somewhat true. means you’re ignoring the fact that all patents should be treated equal. And I certainly can’t agree that all patents as a whole be disregarded. In many ways, like a quote from the movie Lord of Wars, it’s an evil but a necessary evil. It has a purpose and it’s only right that people be able to protect their innovations (that they’re actively utilizing). This should also expand to other areas as well, such as trademarks, copyright, etc… 

  186. Guest

    God, there really should be a way to collapse comments or a line that shows which comments threads where. It gets almost impossible to figure out where the replies kicks in and which comments are original once you get down further in the comments.

  187. masabaer

    “A war of all against all using State monopoly privilege as a weapon”http://mises.org/about/3244… final writings on economics were written while he was intendant at Limoges, in the years just before becoming Controller-General in 1774. They reflect his embroilment in a struggle for free trade within the royal bureaucracy. In his last work, the “Letter to the Abbe Terray [the Controller-General] on the Duty of Iron” (1773), Turgot trenchantly lashes out at the system of protective tariffs as a war of all against all using State monopoly privilege as a weapon, at the expense of the consumers.

  188. Hackster42

    Should MSFT be able to stomp all over i4i? Probably not, and all i4i has for protection is their patent. http://www.nytimes.com/2011

  189. hackster42

    How can a guy like Greg Hughes protect his rejected app from being ripped off by AAPL?  http://www.huffingtonpost.c

  190. gorbachev

    The costs would go down, and/or only the innovations that would be worth the money would seek patents. Either way, it’d be good.The USPTO would have to address the processing times, but really if they didn’t, all that would do is discourage software patent filings. I see that as a positive.

  191. JasonIvers

    I don’t see what makes me a fool or arrogant, either one.  The examples aren’t “rains occasionally”, they are examples of why software patents in general don’t make any sense… taking functionality in one context and applying it in another and calling that a new “invention” doesn’t make any sense.  The fact that you put wheels on a motorcycle instead of a car doesn’t make that wheel a new invention.  Patent office employees don’t understand software development well enough to see when a patent application is an example of this.  If the people reviewing software patents had knowledge and experience as software developers, they would be far more qualified to judge what is “obvious”, as well as what actually constitutes a new invention in software, as opposed to just a new place to use existing inventions.