The Goodlatte Patent Bill

Yesterday the White House came out in favor of Rep Bob Goodlatte's patent bill. This is a good thing.

The Goodlatte bill doesn't have everything in it that we would like to see in a bill aimed at reducing the pain that patent trolls inflict on the innovation economy, but it is a good start and I think it can get improved in conference with the Senate.

One thing that was taken out of the Goodlatte bill that we would like to see put back in during the conference with the Senate is the broadening of the covered business method patent review process to include all business method patents.

In the five plus years that we have been working to educate government officials about the blight that patent trolls have wreaked on the startup sector, I have seen a huge shift. We have gone from elected officials being ignorant about this issue, to be aware of it, to now being as outraged as we are about the troll issue. That's a good thing and the result, I think, will be better laws and better processes to out bad patents and bad actors in the system. This is long overdue but welcome nonetheless.


Comments (Archived):

  1. jason wright

    is ‘trolling’ illegal?better to innovate around the troll block, which means that the troll is perhaps an ingredient of innovation, to define who is a troll? isn’t it just a vested interest opinion?a beautiful pearl has at its center a dirty bit of black grit. that’s how they form.

    1. fredwilson


      1. jason wright

        it’s illegal?

        1. fredwilson


          1. jason wright

            i know where you’re coming from (the greater good et.c.), but it is going to be difficult to frame legislation to fairly combat this behavior. some people are going to get minced who perhaps shouldn’t be.

          2. fredwilson

            Who are they?

          3. JamesHRH

            Jason’s thinking is the wrapper of legitimacy for trolls like these guys – http://www.wi-lan.comI actually worked for the founder of this place. He thought he should get paid for having ideas, which is patently outrageous.Not my type of gig.

          4. jason wright

            i’m just mulling over where the line is drawn and on what side people might find themselves, and whether that is fair or not.

          5. Jorge M. Torres

            There’s a chance that individual inventors who cannot or don’t want to commercialize their inventions themselves will get hurt. The bill makes it more costly to enforce patents, and reflects a clear policy choice that favors execution over ideas. If you think ideas are a dime-a-dozen, and that execution is what counts, then you tend to support this bill. If you place just as high a premium on ideas as you do on execution, then you tend to have serious concerns with the bill.

          6. JamesHRH

            These are all things Fred believes in…….

          7. JimHirshfield

            Were patents originally intended to protect ideas? Or were they intended to protect produced inventions?

          8. Jorge M. Torres

            Putting aside the question of whether original intent is the standard we should use to craft innovation policy for the 21st century, I think the original intent was to protect ideas as a way of promoting industry in the early Republic. But the framers understood that made too strong, patent rights could have unwanted anticompetitive effects on the development and commercialization of new technologies. That’s why they limited the term of a patent to 14 years.

          9. JimHirshfield


          10. JamesHRH

            I am not sure I agree.The ability to execute has changed dramatically – telecommunications, transportation logistics, payments. i do not have a degree in US history, but it would seem to me that patent law was intended to protect young companies from companies with established distribution.I think the legislation should give 10 year protection but that patents should not be filed until you can show 24 months of market engagement. A separate part of the patent office reviews the legitimacy of your business efforts (i.e., I called 2 investors, they said no, I sulked for 23 months, doesn’t cut it).The patent office becomes even more backlogged probably, but that probably makes Fred happier.Everyone hates trolls because the don’t serve customers. Force them to do so & everyone wins, is my thinking.

          11. Jorge M. Torres

            The law allows prophetic patents, which are patents where the claimed invention hasn’t actually been made (the technical term is “reduced to practice”). But to be valid, a patent must disclose to the world how to make and use the claimed invention without forcing a member of the public with technical skills to engage in a lot of guesswork. In some important cases, perhaps not the ones you cite, it could be cost prohibitive to reduce the invention to practice, in which case the inventor is better off keeping her invention a secret. Society loses the benefit of her disclosure in that case, which is why I think it’s right to allow patents even where the inventor has not reduced the invention to practice.

          12. JamesHRH

            Thanks Jorge – you obv’ly have your hands dirty here & I buy what you are selling.But, we are in Elon Musk Hyperloop territory, no?Sorry about this guys – attempting to DSQS on my iPhone4S, which is, now, basically impossible.I cleaned up this garbled comment.

          13. Jorge M. Torres

            Definitely not in Hyperloop territory for the large majority of these problematic patents.The way I see it, there are going to be costs no matter what changes the Congress makes to the patent law. The policy questions are: Who should bear those costs and how do we minimize the unintended consequences of new legislation? IMHO, forcing all inventors to reduce their inventions to practice would impose costs on the wrong parties, i.e., resource-constrained individual inventors who would be denied access to the Patent Office. The Innovation Act (Goodlatte’s bill) has a number of provisions, esp. the proposed litigation reforms, that tweak the conditions under which patent owners can use the courts to enforce their patents against others, thereby imposing higher costs on the correct parties, i.e., the companies whose business model all too often consists of asserting patents of questionable validity against startups, indie devs, and end-users.

          14. Dave W Baldwin

            Don’t know and that’s why the border line gets sticky. If she keeps her invention secret, the odds overwhelmingly go with someone else figuring out that magic ingredient. The hard part is to beef up those odds requires encouraging innovation since the majority of those involved will follow the safe path (like claim your as good/better than Stanford in NLP) which usually retards the pace in achieving an important milestone.Do really appreciate reading the debate between yourself and @jameshrh:disqus

          15. Jorge M. Torres

            Yes, totally agree, beefing up her odds of success is about so much more than just helping her get a patent.I’ve enjoyed the banter with @JamesHRH too. Opportunities to have conversations like these on the web are what make AVC awesome.

          16. Dave W Baldwin

            Ah, yes.

          17. Pete Griffiths

            Strictly speaking the original intent wasn’t to protect ideas, it was to encourage their dissemination by protecting their exploitation for a defined period. And yes, absolutely, the 14 years was their sense of a socially beneficial tradeoff.Your point about whether the original intent should continue to guide us raises tricky questions. I think that a major problem is that in many discussions on patents people discuss IP and Patents as if it is homogenous whereas its role and the social compromise we might wish to strike is IMHO very dependent upon the realities of the field of innovation. And this makes crafting legislation incredibly difficult. How to we craft one body of law that recognizes that no CEO is going to invest millions in a new drug without strong patent protection and simultaneously wards off overly general business process patents that arouse so much ire? How do we frame NPE legislation in a way that doesn’t hurt companies like ARM? the devil is in the details. 🙂

          18. Jorge M. Torres

            Excellent comment. My point was that the framers understood patents as a means to an end, as you describe. Sorry if that was not clear. And your point on exceptionalism in the patent law, or the notion of having different patent laws govern different technologies, is spot-on. While desirable in some cases, it’s awfully hard for Congress to get it right. The Hatch Waxman Act, which contains all the exceptions that apply to pharma patent law, is a good example. It’s incredibly complex, and its interpretation has filled volumes upon volumes of case reporters over the years. Pharma patent practice a true speciality within a specialty with a handful of practitioners in the country (maybe less than 10) who truly understand how the regime works and how to use it to get the best results for their clients.

          19. Pete Griffiths

            Thanks Jorge :)The irony is that the same problem exists even within fields where most seem to find the situation clear cut – such as software patents.To my certain knowledge there are classes of software IP that:a) cannot be protected as trade secretsb) cannot be protected by copyright (basically worthless for software)c) are business critical IPd) cost millions to develope) without protection can be easily copiedThis kind of software is unlikely to be developed by a responsible CEO no matter how loud the protestations of those who insist that first mover advantage is enough. So without the protection incentive to develop that patents were designed to provide innovation in these areas is likely to be severely impacted.

          20. Pete Griffiths

            They weren’t intended to do either. The objective was to provide an incentive for inventors to publish the details of their inventions rather than, for example, hold them as trade secrets. It was believed that the temporary monopoly granted would result in rents but that this was a price worth paying for the subsequent public access to the innovation.

          21. JimHirshfield

            That’s very interesting

          22. Dave W Baldwin

            Had to put up with a punk like that ’til he left for Texas this past Summer 😉

          23. jason wright

            isn’t it a case by case basis?

          24. JamesHRH

            I do think that the classic story that is attributed to Doritos (totally unfounded, to be clear) is what Jason is thinking about.Story is that Frito Lay bought out an entire district of a small producer of nacho chips. Literally scooped up every last bag in Orange County.6 months later they had Doritos (identical product to the small producer) on the market. Small producer got crushed.Urban marketing myth……with the big issue being the unfairness to under resourced innovators.OTOH – how about the wildly successful ‘we scale your great product’ P&G approach, of which Swiffer is the poster child (http://www.pgconnectdevelop…) ?Yet another competitive issue for VCs…..

          25. Jorge M. Torres

            I also like Quirky’s approach to helping independent inventors and tinkerers get paid for their ideas.

          26. Vineeth Kariappa

            Y din they expnd faster instead of complaining?

          27. JamesHRH

            b/c they did not have the ability to build a business.typically, they are also have control issues.they have idea, maybe even first level product, but they cannot market it (lack of confidence / skills) and they cannot bring someone in who can market it (lack of trust / confidence / skills).

          28. Vineeth Kariappa

            more r less; all excuses. With doritos, you are talking abt a country with crazy amt. of money, any1 would have funded it. ( btw, the dorito example, din have any patent, n nothing was unique!)wrt ur general post, if they idea, product n they still make excuses (cant market is an excuse), they should start flipping hamburgers.

          29. JamesHRH

            Completely excuses, but more of those types of people exist than anyone would care to admit to – and they like the idea of being able to sue someone for $$$ (play the victim card).Don’t agree w Doritos comments – it looks, today, like they had nothing of value, but they did. The chips were the best in the market. Frito Lay reverse engineered them and then took them national in a fraction of the time (est’d distribution beats to-be-built distribution).No one talks about startup distribution as a key issue, but it is the single greatest hurdle to any new company.

          30. JamesHRH

            Vineeth – I misunderstood the context of this question.I do not have hard facts to back up the Doritos story, but the idea was that a smaller producer was making a great product and growing….but Doritos reversed engineered their product, produced a duplicate and used their existing national distribution (channels & ad $$$0 to bury the slower growing, smaller producer.My earlier response was meant for the troll part of the comments……

          31. LE

            Exactly. It’s an analog problem (like most things in the law) not digital with clear cutoffs (like speeding..)

    2. LE

      how to define who is a troll? isn’t it just a vested interest opinion?If someone wants to troll they will be able to game any definition that you put up to prevent the trolling. I really believe that. Come up with any definition and I will be able to figure out a way to game it.

      1. jason wright

        i agree with’s not one for legislation to address. it’s one for the market to address. i sense that Fred may not be happy with the behavior because it adds an extra cost burden to a startup/ rapid growth company. i may be wrong on that. i’m not quite sure. pure altruism is a rare thing.Fred calls the music industry “fuckers” because of their restrictive control of music rights, and the way they jack up the price to creative wannabe music distribution startups. i understand his frustration, but these established players can’t be just legicuted out of the way because they won’t cooperate with the new wave.

  2. Jorge M. Torres

    I’ve changed my own views over the past 5 years as I’ve worked with more startups and founders who have been impacted or who have had friends impacted by patent assertions. The substance of the debate has changed too. It used to center on eliminating software patents, but now includes many calls for commonsense reforms, some of which are incorporated in the bill, aimed at reducing litigation burdens. Goodlatte’s bill has a fair amount of opposition in Congress and especially within the IP lobby, so it will be interesting to see what, if anything, the president gets to sign into law.

  3. pointsnfigures

    The strategy on this has to be different than something like pension reform. Baby steps-so I guess any movement is good movement and like a good football coach you look at down and distance after the thing is passed and call a new play to get the process started again.Patent trolls are leaking capital out of the system and killing innovation. That costs GDP and jobs. Should be enough to get any elected official going-unless they are bought and paid for by the lawyers.

  4. sbmiller5

    is there something we can do to support this?

  5. jason wright

    is bunnycast going to be a soundcloud acquisition?

    1. Matt A. Myers

      Unlikely, at least not solo anyhow – you’d want VoiceBunny to go along for the ride.I wonder if Fred had to update the embed code or if it just magically updated (with or without Fred’s prior knowledge). 🙂

      1. fredwilson

        they worked with me on itthey wanted it at the top of the posti did not want that

        1. Matt A. Myers

          Ballsy of them to ask – or just absent minded about UI/UX (or not caring)? Being seen or noticed by more people doesn’t automatically equate to good …

    2. fredwilson

      don’t think so. but i really do like the service

  6. Robert Heiblim

    Thank you Fred. I have gone to Washington and spent time with officials educating them about this. I have personally been held up in both costly and ridiculous ways over the years, so it is great to have you and all others on board. Clear rules and fairness are needed to keep innovation going. This is an issue for everyone.

    1. pointsnfigures

      Have you blogged about how you got held up? (Or, can you?) Would love to spread stories about how real world situations are hurting.

      1. Robert Heiblim

        I can blog about this, but to be honest do not have a lot of followers for my blog. I have several stories both sad and funny and in all cases a waste of time and money that hurt innovation.

        1. Andrew Kennedy

          chicken and egg problem. i am willing to bet you don’t have a lot of followers because you don’t blog regularly and not the other way around. drop a link here to your blog and I am happy to check it out as I am sure others are as well.

      2. Jorge M. Torres

        Check out the work App Developers Alliance is doing in this area. In the run-up to this vote, they collected founders’ stories and did a roadshow to surface the issue in a number of communities around the country.

    2. LE

      I have gone to Washington and spent time with officials educating them about this.That’s great and I have done the same. I found it a great experience and even got a nice letter from some government attorney (2 pages iirc) that was more than lip service for sure. (I know bs when I see it and this was a really good non bs letter). Had several meetings and they were genuinely all ears to know what was on my mind.

      1. Robert Heiblim

        I agree with you. I have been able to change minds and get commitments. I have now found more and more members “getting” the issue. It will not be all anyone wants to start, but it does look like progress so we keep on pushing

  7. William Mougayar

    Good luck with it. I remember you posted this 3 years ago.”80% of hacker news readers think software patents should be abolished.”…

    1. Vineeth Kariappa

      i recall more than 1 mention. wasn’t there a day to “protest against patents”?

  8. Dave W Baldwin

    Good luck. It is hard to do something like this in a consumerist society. I wish I could find the new commercial that salutes all the innovation born in the garage. A marketing campaign saluting innovation moving into subject at hand would be good, both on this subject and the “what do we need an education for(?)” topics.

  9. LE

    In the five plus years that we have been working to educate government officials about the blight that patent trolls have wreaked on the startup sector”Educate”. Which is exactly what someone should do when they have an issue which is important to them. This is lobbying of course. It doesn’t matter if you do it yourself or you hire someone else to do it. Lobbying is educating and influencing. The fact that your opponent has more money that you do doesn’t mean you don’t get a voice or can’t be heard. Or can’t change something. And just because someone is using money to get their voice heard is really no different than using money to gain any advantage in life. (Welcome to the world and the way it works). You can either complain and do nothing or put in the effort to level the playing field.It’s also about effort. Effort at doing something instead of just saying shit and whining and wondering why things aren’t going your way, easy and just happen to your liking. I can’t tell you the number of battles that I have won simply by putting in more effort than the opponent. Instead of just complaining.

    1. fredwilson


  10. Lee Blaylock

    We all know the squeeky wheel gets the grease. Everyone needs to keep up the noise and pressure lawmakers until the trolls go back to the deep caves where they should whither away in ignomonity.

  11. FlavioGomes

    Fred, what major core aspects of patent law do you agree with?

    1. fredwilson

      i am not a fan of patent law but i can put up with some aspects of it

  12. Alicia

    the original intent was to protect ideas as a way of promoting industry in the early Republic.

  13. Tom Labus

    A Republican Bill in the US Congress that’s good for the economy. Let’s see if it passes.