Startups want to make stuff, not patents

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7 Responses to “Startups want to make stuff, not patents”

  1. Jorpho says:

    For founders, this means that in the very likely event that you fail to make your cool idea into a business the first time round, you will not be able to try again for 20 years, until the patent expires — because there will be a patent troll lurking in the bushes, waiting to bleed you dry if you ever figure out how to make a go of it. 

    Alternatively, if you fail to make your cool idea into a business the first time round, you will not be able to try again, because someone much better at making cool ideas into businesses may step in and cut you out of any chance of making it to market yourself.

    The patent trolls (and the collusion of investors with them) would seem to be the problem here, not the patents.

  2. Roy Trumbull says:

    Edison got into a number of patent battles but lost the one on the light bulb. In those days you had to have a judgement in your favor in each one of the federal districts. Today a high percentage of inventions granted a patent never result in a commercial product. Depending on the projected life, companies make something using a proprietary process and get it on the market quickly and won’t bother with a patent. Defending a patent is very expensive. I knew a man who was sued for infringing a patent. After the two parties got to $100K in legal fees they came to an understanding out of court. Patents are used by trolls and by one company seeking a tactical advantage over another or to force that company into a patent pool.

  3. Daemonworks says:

    Or file the frivolous patents in your own name, and license them to your business, then sell them yourself when the business fails.

  4. screwt says:

    Cory, I think there is a slightly less cynical reason why VCs want patents (which may of course be in addition to the cynical one…).

    If you don’t attempt to patent something – however obvious – that your business relies on,  then someone else might patent it instead. Then when the company is successful, someone can sue you for infringement. For the VC, that’s a risk they don’t want to take – it detracts from their investment.

    This risk isn’t just that some other failed startup may have patents that can be used against you. The whole issue of tech patents is actually stacked against innovation:
    - a small, innovative startup typically has no resources spare to do anything except invent stuff. They are creating new ideas, but don’t have time to patent them.
    - a large, established megacorp may not be generating ideas at all. But they have the resources to file for many patents – however spurious. Many large companies have reward programs that reward employees for filing successful patents. All they want is a large patent portfolio.

    This means that the companies who are actually developing stuff don’t have patents, and those who aren’t, do. And that means the innovative companies are at risk of being taken down by established players who can litigate them to oblivion.

    This whole system encourages everyone to patent everything they can, if only to say “if you file against us for X, we’ll file against you for Y”. And it leaves everyone exposed to parasitic patent trolls. The system as it stands does not protect innovation.

    • Jorpho says:

      If you don’t attempt to patent something – however obvious – that your business relies on,  then someone else might patent it instead.

      But you can’t patent something that someone else has already put out on the market, patented or not.  At best, you can patent an improved version and prevent someone else from using the improvement.

  5. Andrew says:

    I don’t know that I’d characterize producing a patent as expensive, especially if you’re doing the work yourself.   Write your document in Word, add your diagrams you made in Visio, drive to the PTO in Crystal City, pay your 190 bucks.  The toughest part was finding a parking place. 

    • Jorpho says:

      Producing a patent application might be cheap (just look up good ol’ Mr. John Quincy St. Clair), but producing something that actually has a chance of being granted without shooting yourself in the foot in the process is another matter.

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