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Tuesday, March 17, 2015

It Looks Like the Blowback from Patent Overreach Continues………

We are now seeing venture capitalists and other movers and shakers coming down hard on patent trolls:

What's the biggest difference between the letter about patent trolls that prominent VCs sent to Congress in 2013 and the letter (PDF) they sent out today? Four times as many names.

In total, 140 investors in startup companies have signed a letter to Congress asking them to implement changes to patent laws that have been debated for more than two years now. The move looks to keep one important fact front-and-center: "patent trolls," companies in the business of suing over patents, aren't just a plague for tech giants—they are a huge problem for medium- and small-sized companies as well.

"When a troll sues, or even threatens, a small startup, the results can be disastrous," the letter states. "Many of us have seen young companies fail in the face of such threats."

Among venture capital investors, 70 percent say their portfolio companies have been hit with patent threats, mostly from trolls. It's a situation which the letter calls "not sustainable." The letter continues:
Our Constitution favored a patent system to incentivize innovation and benefit all Americans. Unfortunately that system has been hijacked by some intent on exploiting Patent Office weakness, and all too frequently it now hinders innovation and chills investment, harming the new companies it was designed to foster and imposing a patent troll tax on new technologies.
The letter asks for patent reform legislation that includes provisions for easier fee-shifting, protections for end users of technology, limits on the scope of discovery, and increased transparency requirements. Under such circumstances, the group hopes patent owners would have to include more information in any lawsuits or demand letters they might send.
IP in general, and patents in particular, are a rent seeking behavior that we as a society approve of because of the the effect, as defined by the Constitution, "To promote the Progress of Science and useful Arts," is considered to be a societal benefit.

This makes IP law public interest law, and until we reevaluate our copyright and patent regimes through this lens, we are going to end up with parasites like NTP and Intellectual Ventures sapping innovation and vitality ad infinitum.

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