Report on startups versus patent trolls

James sez, "Open Technology Institute at the New America Foundation published a new report on patent assertion and startup innovation. Authored by Professor Colleen Chien from Santa Clara Law, the report examines the experiences of venture capital investors (VCs) and startups with patent assertion including dealing with assertions from patent 'trolls' or non-practicing entities (NPEs). The report includes 'Views from the Trenches' with testimonials from VCs, startup founders, and patent practitioners offering commentaries and personal stories of the unique challenges startups and other small businesses face in dealing with the patent system as discusses how existing and potential legislative, judicial, and market-based responses and can be tailored to better meet the needs of startups and resource limited companies."

Recommendation 1: Fully fund the PTO and its quality initiatives including tightening functional claiming and expand low-cost access to the PTO’s transitional program and other forms of post-grant review by reducing fees for small and micro entities and supporting and prioritizing collaborative challenges to patents asserted against large numbers of defendants, particularly by downstream users and small entities.

Recommendation 2: Make patent cases about the merits, not about who can outlast or outspend the other side, by permitting more discretion in awarding fees and costs for non-core discovery and promoting uniformity and early dispositive rulings, for example by requiring the Patent Pilot Program to implement and measure the impact of best practices.

Recommendation 3: Make patent risks more manageable for startups by requiring demand letters and complaints to disclose the real-party in interest, claim charts, related litigations and reviews, and licenses that could cover the target.

Recommendation 4: Make startups less attractive targets by limiting the liability of downstream users and the precedential value of the settlements signed by small companies.

Patent Assertion and Startup Innovation (Thanks, James!)