Patent and Immigration Reform Activities

h1b in canadaTwo of the public policy things I care about are patent reform and immigration reform. I believe our patent system – especially with regard to software and business method patents – is completely and totally broken. And our immigration system – especially concerning immigrant entrepreneurs – is an embarrassment.

There is suddenly a lot of focus and attention on both of these issues. That’s good, and I’m hopeful that it will result in some meaningful positive changes. It pains me to see other countries – such as Canada, the UK, and New Zealand – be more progressive, open, and forward thinking around entrepreneurship and innovation than the US. There are days when I’m discouraged by our political system, but as I’ve gotten older and spent more time with it the past few years, I’m getting to a zen state of not being discouraged, but rather accepting the reality of the process and just being consistent and clear about what I think is important and how to fix it.

On the patent front, Twitter recently finalized a powerful approach – the Innovator’s Patent Agreement (the IPA). With this, they’ve agreed – as a company – to only use their patents defensively. I think this is extraordinary leadership on Twitter’s part. Our government and the USPTO is not moving aggressively to fix a problem that is now stifling innovation in the software industry, so leaders in the software industry can, and should, take matters into the own hands. As Fred Wilson describes in his post today, the IPA is an incredibly clever and forward looking approach. I’m proud of my friends at Twitter for providing this leadership and I encourage entrepreneurs and investors to understand the IPA and consider applying it to their patent approached.

On the immigration reform front, today is the second to last day of the March for Innovation. Go to the March for Innovation page to tell your Senators how important this issue is and read what a bunch of tech leaders are saying on the Mashable March for Innovation page. If you want just my thoughts, you can go read them at Broken Innovation Shutters Innovation.

  • applaud Twitter. Just read a book you might like that will give you hope on govt. America 3.0 Rebooting American Prosperity in the 21st Century.

  • 100% with you on the patent reform. Biggest obstacle to innovation out there!

    #CIR is too big and broad of a beast for anyone to fully understand the system and fully be able to understand the possible impacts. In computer systems, you make incremental changes to understand the impact and if the result is driving the “curve” in the right direction. The Big Bang approach only leaves us hoping for the best, and this is way to big to just hope for the best.

  • Anon Y Muss

    Hi Brad,

    Regular reader, first-time commenter here. Just wanted to add my two cents to this in the form of my personal history.

    I was born in a third-world country. I studied at my country’s top engineering school. After graduating, I got a job programming for a financial-services startup in a first-world country not known for being terribly friendy to immigrants (not the USA). Despite this, I had no difficulty, and no waiting period, getting a work visa for this country. This was in the 90s.

    Five years later, my company wanted to open a US office. By then I had risen up the company ladder myself, so I was tasked with leading this effort. The bureaucratic hoops I had to jump through to get (and keep) my US work visa were beyond belief.

    No country in the world has a visa process that is as onerous, time-consuming, documentation-intensive or just plain insulting as that of the USA. (I speak from experience; thanks to my nationality, I need visas to almost every country I visit — and I’ve visited a lot of countries). Most US citizens have no idea how humiliating visa interviews are; how nasty border officials can be to foreigners; how biased their baseline assumptions are; how debilitating the imbalance of power is; and how little recourse applicants have, when the system fails to work properly, as it all too often does.

    My original visa application was 100s of pages long. I had to provide exhaustive personal details: a list of every country I had ever visited, details of every job I had ever held, proof of every skill I claimed to possess, and of course every single bank, payroll, health, insurance or investment statement I had ever received. I had to provide equally exhaustive corporate details for the firm I worked for: founding and incorporation documents, cap tables, financial statements, business plans, financial projections, and a 100+ page report about the technological “secret sauce” that I was coming to the USA to implement.

    The best analogy I can think of is with corporate due diligence. The visa process was every bit as comprehensive as a due-diligence review carried out by a top-tier law firm, but with one critical difference: at no point in the entire visa process did I get the impression that the person on the other side had any clue about who I was or what my company wanted to do in the USA. It was a sort of “vanity diligence”, if you will: it ticked all the checkboxes, but explored nothing substantive.

    That’s not all. I had to do this every year! And I had to leave the country to do it. Yep, you read that right. Every year, I had to leave the USA, line up outside a US consulate or embassy, re-apply for my work visa, submit 100s of pages of documentation, wait a week or more for the visa to be issued, and only then return to work. Two of my colleagues from the overseas head office who worked with me in the USA had to do the same.

    Can you imagine the amount of time, effort and dollars wasted on this bureaucratic idiocy?

    Just to be absolutely clear: our US office was a huge net benefit to the US economy. We hired many US employees. We bought US goods and services. We sold our product into the US market, giving customers a choice that they did not previously have. Our technology was used or licensed or copied by several other firms in our space; in our own small way, we advanced the state of the art in our industry. As individuals, we were paid substantial salaries, we paid substantial US taxes on these salaries, and we spent all our post-tax earnings in the US economy. Since we were all young and healthy, none of us were ever a drain on the public coffers.

    But it was tough. The dead-weight loss of all that bureaucracy was a distinct competitive disadvantage for us. Also, if I’m being perfectly frank, I just got fed up with answering the same old humiliating questions every time I crossed the border or applied for a visa. (And remember, I have brown skin and come from a third-world country. I couldn’t even take refuge in snark or sarcasm, for fear of being sent to Guantanamo. You think I’m kidding? I’m not.)

    A few years later, we closed our US office. There was nothing wrong with our performance in the US market; we were doing as well there as in any other market. We just felt that the “extra” costs associated with the US did not justify the returns. There were better opportunities elsewhere, in markets that were more friendly to foreign ventures.

    All our US employees were offered jobs in our head office. Some accepted. The others were let go.

    The company did well globally, despite closing its US office. It was subsequently split into 3 separate businesses. The first business IPOed in its home market for several hundred million dollars. The second business was sold to the global industry leader in our space for a similar sum. The third business is still privately held; my guess is that it has 10-100 employees and 10-100 million dollars in revenue.

    None of that money reached US investors, partners, employees, associates or government revenues. No jobs were created in the USA. And you can’t buy my company’s offering in the US any more. There’s only one loser in this anecdote and it’s not the company I worked for.

    Okay, so that’s my first anecdote. It’s ancient history now, to be sure. But the reason I bring it up is that I see it happening again right now in my current job, which brings to my second anecdote.

    Today I live in Canada. I moved here a few years ago for personal reasons. I’m now on my third startup, and it’s the most promising thing I’ve ever done. We’re addressing an established and huge market. We’re solving a well-known “hard problem” for this market. Our solution uses unique and patented technology, and gives us a very wide moat. We have a talented and very productive team and an outstanding company culture. Our traction is fantastic. And we have lots of funding.

    The one thing we do NOT have is a US office. And we’re not likely to get one soon.

    Why not? Visa issues. We would dearly love to open a California office — our customers are there, our competitors are there, and you can’t beat the Silicon Valley ecosystem for depth of talent, insight, connections, access to funding, mentorship and community. But at what cost? We’re a small firm, running lean; we don’t have the time or resources (or the inclination) to jump through bureaucratic hoops to get US work visas for the team.

    My co-founder is a native-born Canadian citizen, but he has a clearly Arabic name and is even more reluctant to visit the USA than I am; google Maher Arar to understand why.

    So I guess we’ll muddle along here in Canada the best we can. Our business is a pure web play so we can serve customers anywhere in the world, without moving to the USA. Sure, we won’t be able to leverage the US startup ecosystem, but we won’t have to deal with the US visa bureaucracy either. If we succeed, we won’t hire US employees; we won’t pay US taxes; we won’t enrich US investors; and we won’t pay it forward to the US startup community. We’re doing all that in Canada, and will happily continue to do so.

    I guess that’s fine. The US government is not going to worry too much about losing our business. After all the odds are still vastly against us, as they are against any individual startup. But add them up — add up all the talented, exciting, revolutionary new startups around the world that would love to set up shop in the USA, but cannot, because of visa issues — and suddenly this does not look like a great situation for the US to be in.

  • James Mitchell

    Brad, are you willing to put your money where your mouth is? What about refusing to purchase products from any tech company that uses software or business method patents offensively? This would mean, for example, not purchasing Apple products, since Apple is one of the most active plaintiffs in this area.

    • I’m not sure what kind of computer or phone I could use since Microsoft and Apple are both asserting patents offensively.

  • Guy Lepage

    Hey Brad, first time commenter. I am a Canadian entrepreneur and I have to say, that yes there are quite a few talented and smart people in Canada but I wouldn’t say Canada is innovative, at least on the west coast anyway. It’s EXTREMELY difficult to get funding in Canada as VC’s generally come from ‘old money’ and go about things differently than in the US. Unless you’re in mining/commodities, Canadian VC’s very unlikely to take a bold idea and invest in it. This kills innovation as you can imagine.

    As for promoting entrepreneurship, Canada is famous for assisting outsiders before their own. I was an elite triathlete. USAT did more for me than TriCanada by far. Budgets and vision just wasn’t there unless they saw promise at a very young age and even then only 5 guys in the country get backed. The fact of the matter is that these government driven socialist programs usually only benefit businesses when the program is in place. The second that that government funded ‘fad’ (program) is gone, Good luck running your business in Canada. I think sometimes the grass looks greener on the other side of the fence in this particular instance.

    Lastly, Canada is about to go into a deep recession and with all of the old money that is here. Old money VC’s will only invest in what they know. And what they know is commodities and real estate. Funding an innovation company outside of those two sectors in Canada will become even more difficult unless you head south as we are doing.

    • We’re getting better and more aggressive about all this. But I don’t see the same signals from your last paragraph. I see the opposite actually- a lot of new and progressively managed money is becoming available to Canadian entrepreneurs.

      Please feel free to contact me if I can offer help or guidance. wmougayar AT gmail.

      • Guy Lepage

        Hi William, maybe it’s a west coast thing? East coast is definitely more progressive than the west. Will gladly contact you. Cheers.

  • Funny that pic also came to my mind on this “Immigration day” when I posted it earlier on AVC. It was gutsy of Canada to plank it in the heart of Silicon Valley just outside of SFO.

    We’re learning to be more aggressive and competitive from the US 🙂 But at the end of the day, we’re part of the same macro ecosystem. We don’t want the US to sneeze too many times, because we will catch that same cold.