Almost a third of our portfolio is under attack by patent trolls. (opens in new tab)

I would really like to see something along the lines of a TED talk in which the presenter stands up, spends a couple of minutes demonstrating some kind of really interesting new technology -- something that could really help people, either in their lives or in their jobs -- and then the presenter would pause for a moment and say, "...but none of you are going to get to use this", and continue the talk but on the subject of patents.

I don't think people really understand the extent of the problem. I think they need to see exactly the damage that's being done before there will be any energy put into fixing it.

I do think that patents hold a valuable place in certain areas of research and development, but there are also areas in which patents are crippling development.

> They pick on startups because undercapitalized small companies cannot afford to be ideological. When faced with the prospect of extensive legal fees and a huge distraction, they do the pragmatic thing - they settle.

Patent trolling reminds me of a game of chicken. I wonder whether chicken strategies have been tried to combat it.

For example, if the start-up could position themselves so that it is profitable for them to defend themselves if they are sued by a patent troll, and the trolls were aware of this (and rational), the trolls may be scared to litigate. This could be in the form of "insurance" that pays out when the company successfully defends itself against a patent claim. Ideally, the fact that the company is insured would thwart off trolls, so the premiums could be lower than what companies currently pay out in settlements.

I'm a little cautious about this post. He is exaggerating by stretching the definition of "patent troll", if I am reading correctly. A true patent troll is a company that produces nothing except lawsuits. With a company that produces something and also sues over patents, there is at least the possibility of a countersuit / crosslicense / armed truce.

I assume their portfolio companies pool their patents together for the common defense. If not, that might be a good idea.

Still, with 26 portfolio companies, he's claiming 8-ish concurrent lawsuit threats... that's alarming. On the other hand, their portfolio is pretty high-profile (Etsy, Twitter, Zynga, Foursquare, Indeed, etc).

Also he doesn't put this claim in historical context: is this normal for a maturing (and very nice) portfolio? Are they going after the tender young startups or the bigger ones?

An addendum from Fred Wilson (another one of the partners at USV): http://www.avc.com/a_vc/2010/01/why-we-need-an-independent-i... -

"But anyone who has spent a significant time in technology based businesses will understand that two groups working completely independently from each other will often solve a problem similarly. One group is not copying or ripping off the other group. They are simply coming to similar conclusions about how to get something done.

In these cases, it makes no sense to protect one group from the other. Nobody has taken anyone's "intellectual property." Both groups should own their inventions outright without having to license technology from the other."

I really feel for smaller companies here as I know people with great products who have been trolled out of existence.

I wonder if there is a non-legislative fix available because I've heard about programmers wanting patent reform for as long as I've been programming and I believe almost no substantial progress has been made.

Brad mentions that larger companies have more resources available for fighting patent trolls. What if VCs set aside a pool of capital for defending their investments from patent trolls as part of raising their funds?

The idea would be to create a pool money whose size would ward off patent trolls. I'm sure it would take a few victories in court, but it could establish a precedent and change the game.

It certainly seems easier than attempting to reform patents.

Check out this patent. It appears to be for storing web page state in the web page itself and transmitting that state using HTTP POST. I'm not even kidding.

http://www.google.com/patents/about?id=wIEoAAAAEBAJ&dq=5...

It's especially interesting to read the "referenced by" list on that page. "Incorporating state information into a URL" ... "Method for transmitting images over a network" ... "System for tracking the purchase of a product over the internet."

Seriously, what are we going to do about this?

The fundamental problem with patents is that it rewards the first person to file a patent, disregarding the possibility that two people can synchronously, or asynchronously come to the same idea independently of each other.

I guess the "American" (assuming you're in America) course of action is to speak to your senator to push for reform and help evolve our government. If that fails, ditch the government altogether and either start or move to another country.

I'm curious, has anyone ever seen a software patent novel enough that it could be considered a "non-obvious" solution to the problem that the inventor is trying to attack?

Personally, I don't value software parents much.

I think they are a giant waste of money. You spend $20K on lawyers, to get nothing more than the right to spend more money on lawyers in the future.

That $20K could be better invested elsewhere (like on product improvement).

I think it would be worth considering eliminating software patents.

However, I don't think an "independent invention defense" is a good idea. It would essentially eliminate all patent protection. Basically, the absence of proof that you knew a patent existed, would get you off the hook for infringing on it. This means that as long as you had the right set of rigorous policies in place, you could operate with complete immunity from patent infringement claims.

If all employees were trained (by mandatory corporate training) that "under no circumstances should you ever read any patents, ever", and "if you ever have any doubts about anything being patentable, direct the question to our lawyer", and you were very strict about enforcing it, you could make a case that pretty much every invention was discovered independently.

That would defeat the whole purpose of patent protection. The idea is that by getting inventors to disclose details of their invention (which benefits society), that they get a monopoly on its use. Without the monopoly, there is no point in having a patent.

If software patents pose a fundamental problem, then I think the best course of action is to eliminate software parents, not to undermine the entire patent system.

"Almost a third of our portfolio is under attack by patent trolls."

That quote astonished me, I never really knew the extent of the problem.

Somebody should patent the process of patent trolling. Then, at least, there would just be one doing it...

Though perhaps there's a selection bias at work? Maybe 'competing' venture funds are doing more thorough IP due diligence?

God damn I hate nothing more than patent trolls. I'm positive that Lucifer is reserving a special place in hell for them, because there's no question they're going to burn.