I regularly get emails and have discussions with entrepreneurs who are on the receiving end of a software patent lawsuit. Many of these are young companies, often with little or no revenue. It’s total, completely madness. If you don’t believe me, read the latest rant from a young entrepreneur on the receiving end of a software patent lawsuit from a troll.

My startup, all five employees and $0 revenue, is being sued by a patent troll. It is madness.

Software patents are weapons of mass extortion. The trolls know that the cost of patent litigation is huge- millions of dollars for a thorough defense. The vast majority of companies do a simple cost benefit analysis and settle. It costs a pittance to file a lawsuit, a fortune to fight. A troll can sue many companies and live off the settlements. Trolling is a lucrative, legally sanctioned business model with virtually no risk. The longer this continues the worse it will get.

And getting a patent is not that hard. For less than the cost of a small friends and family round you make a series of claims that describe your “invention”. Sort of a technical concept document written by a lawyer. There is no code required, no detailed product spec. You don’t have to build anything. We are being sued for having a UI connected to a server connected to a mobile device. And get this- data goes back and forth between the UI and the mobile device. Break through, right? Yes, according to the Patent Office.

And just like with illegal extortion, patent extortion causes real personal and economic pain:

I wake up in the middle of the night with my hands clenched like lobster claws. I’ve actually cried from the injustice and worry;
Every three hours of legal advice costs the same as an on-shore customer service representative with benefits for a week.
A full legal defense could be my entire future Series A. And who is going to invest in that round when use of funds says “litigation”?

It is romantic to fight but the trolls know that a startup’s number one job is to stay alive. Screw romance. Screw justice. One lawyer I consulted told me not to read the patents- they were irrelevant. And the troll agrees. He said he didn’t really understand my business and didn’t care. We just looked like other companies he has sued. If your startup hasn’t been sued yet, don’t worry. You will.

What we need is leadership. But where are our leaders? In court. It’s disgusting. The millions spent haggling over the curvature of an icon could fund a massive lobbying and social action effort. Is it possible we can send a million tweets about happy cats but not stop patent extortion? We’re a community that believes in big dreams and blowing up obstacles. We can do this. We just have to try.

August 22nd, 2012 Categories: Patents Tags: patent trolls, Patents, software patents

Mike Pritchard

This is my biggest fear working in this industry, and its just killing innovation. There is just no defense, if you file your own patents that just like sending a flare into the sky inviting a patent Troll – and even if you have a solid, well defined patent, it doesn’t matter as you can’t afford to defend it. Software Patents need to go, period.

And how do these guys even find you? From my own personal experience based on a lawsuit aimed at me, it was an automated bot that found our EULA. I’ve heard similar stories about automated searches of patents, so file at your own peril. Don’t use a legal template for your EULA.

Now if only the top players in our industry could stop fighting each other, and help lead the charge to put an end to this madness, surely Apple, Samsung, Google can see this is a war of attrition, there are no winners except the lawyers!
- http://www.feld.com bfeld
  
  Good idea not to use a template for your EULA, not just for this reason, but also because a generic EULA may not be protecting you for what you actually want!
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http://simplifilm.com/ Chris Johnson

So what can we do? A fund to fight and never settle, paid by a load of people? Shaming patent trolls publicly? Paying them a visit at all hours of the night? Networks should outperform douchebags….
- http://www.feld.com bfeld
  
  It’s really really hard and is going to take a long time. At some point there will be a total system meltdown.
- James Mitchell
  
  Shaming them is not going to work.
  - Michael Roberts
    
    Ha, yes, they’ll be ashamed all the way to the bank.
http://byJess.net/ Jess Bachman

Yeah this stuff is scary for sure. Are they are tips or strategies to avoid trolls, at least until you have some resources to properly deal with it.
- http://www.feld.com bfeld
  
  There are no good strategies. You either fight or cave. Neither is good.
  - http://byJess.net/ Jess Bachman
    
    Sorry, I mean strategies for staying off a trolls radar. They have to find you somehow. Someone below mentioned not using standard EULAs.
    - http://www.feld.com bfeld
      
      I don’t know of any great strategies but I’ll start looking for them – it’s an awesome suggestion.
    - http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim
      
      might sound naive but is the address of your startup affect how easily you get sued? In other words, are some States better than others when it comes to protecting you from patent trolls
      - http://byJess.net/ Jess Bachman
        
        good question… I wonder if your startup is in France or Canada if this would even be an issue.
http://www.charliecrystle.com Charlie Crystle

clog their pipes. metaphorically, too.
- http://www.feld.com bfeld
  
  That made me think of the Eddie Murphy banana in the tailpipe moment from Beverly Hills Cops.
  - http://www.charliecrystle.com Charlie Crystle
    
    lol. exactly.
http://petegrif.tumblr.com/ Pete Griffiths

I feel for the OP and I agree that there is serious abuse going on. I would however like to correct one statement that has become part of the conventional wisdom but which is incorrect.

“And getting a patent is not that hard. For less than the cost of a small friends and family round you make a series of claims that describe your “invention”. Sort of a technical concept document written by a lawyer. There is no code required, no detailed product spec. You don’t have to build anything.”

This is highly misleading. On the contrary…
a) getting a patent is hard, it is a grueling expensive process
b) you can’t get a patent by making a series of claims that describe your invention and this statement reveals a common misunderstanding about the relationship between the description and the claims sections of the patent
c) a lawyer can write claims but is highly unlikely to be able to write the description
d) there is no ‘detailed product spec’ but the standard for a patent is that the description should be sufficient for the invention to be constructed in a reasonable amount of time by one with ordinary skill in the art. So you don’t have to build anything but it must be something that can be built.

I don’t expect an average entrepreneur to be a patent expert but these kind of misleading statements, made no doubt not just in ignorance but out of legitimate frustration, just continue to perpetuate major misunderstandings about the patent system.
- http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim
  
  spot one about patent
- http://www.feld.com bfeld
  
  I disagree with you in the case of software patents. There are a huge number of shitty software patents that have been issued. In recent years it has started to get a little more rigorous but it’s still amazingly easy to patent something that is either non-unique, completely obvious, or not novel (where the definition of a valid patent is unique, non-obvious, and novel).
  
  In addition, many software patents are written by lawyers with relatively light input from the developer. Minimal disclosure (no source code, for example) – and often no disclosable source code actually exists anyway because the idea is being patented rather than the implementation of the idea. And – if you study the history of patents, you should not be able to patent an idea.
  - http://petegrif.tumblr.com/ Pete Griffiths
    
    We have a longstanding disagreement about some aspects of this. You are of course absolutely correct that there are shitty patents, as indeed there are shitty lots of things. The system is certainly not perfect. The problem I have is that people speak about this topic very sloppily. Inaccurate statements are made about what are actually terms of art with fairly precise meanings and it doesn’t help to perpetuate such misapprehensions.
    The system can self correct because a truly shitty patent with no meaningful description or with lots of prior art can be invalidated, but I recognize that it is a painful process to mount that defense. This is a systemic problem for sure.
    - http://www.feld.com bfeld
      
      And I’d like to make sure we are saying “software patents”, not “patents.” All of my view is specifically on software and business method patents.
      - http://petegrif.tumblr.com/ Pete Griffiths
        
        An excellent point to make clear as people tend to overgeneralize about patents and draw sweeping conclusions without perhaps considering the impact on industries they are not so familiar with.
    - joelgwebber
      
      It’s true that people often speak sloppily on this subject. But I believe you’re vastly underestimating just how rotten the entire system is with respect to software and business-method patents. There is absolutely *no* question that it’s remarkably easy to get a bad software patent through the system. I’ve seen it done repeatedly, and sadly been required to contribute to some of them through past employment.
      
      All it takes is an obvious idea that hasn’t been described very explicitly in past patents (note that I say patents, and not academic literature or in industry, because that’s all the examiners seem to check), a few days, and a few thousand dollars in legal fees. It’s common practice at large companies (both those who subscribe to the troll and “defensive patent” strategies) to tell engineers:
      
      “if you have anything you think could be remotely patentable, *even* if you think such a patent would be horse shit, email our patent attorneys and we’ll get that sucker on paper and to the patent office with very little effort on your part.”
      
      I’ve seen it at more than one large company — hell, when Sun decided it needed more defensive patents (which Oracle famously tried to use against Google), the engineers had a bloody *contest* to see who could get the stupidest patent through the system. They still joke about some of the dumb patents they got through — just ask James Gosling about it.
      
      These shitty patents rattling through the system aren’t small in number, and it’s absolutely *not* the case that they don’t get used offensively — I’ve been deposed in at least one garbage patent suit (against Google, among others, by a well-funded troll with an extremely dubious patent). I was happy that Google had the wherewithal to fight (and a strong stomach for litigation, rather than settling). But it was a *huge* waste of time and money.
      
      I really don’t believe this system can self-correct. Doing due diligence on software patents would be a *huge* undertaking, and I wouldn’t be surprised if only 1% or so were novel enough to be worth monopoly protection, by a standard that any reasonable engineer would apply. The structure of the patent office just can’t support this kind of diligence — especially now that said office is funded almost entirely through application fees now. We need to restrict patents to the very limited set of domains where they do more good than harm. Software doesn’t need them.
      - http://petegrif.tumblr.com/ Pete Griffiths
        
        One question I simply don’t know the answer to is ‘how much easier is it for a large company like IBM to get a patent than for a small inventor?’ In other words, does the halo effect influence the patent examiner such that they give such companies and easier ride?
      - joelgwebber
        
        FWIW, I’ve seen the process on both sides (filing and being sued) in a large company, and the filing side in both funded and unfunded startups (people who give advice on such things often advise startups to go ahead and file patents, because it sometimes figures into the murky calculus of valuation in acquisition negotiations, stupid as that usually is).
        
        In a big company, it just magically happens. The patent counsel and their army of imps just takes whatever shlock you hand them and turns it into the proper set of incantations to get it through (you probably know the drill — nested dependent claims, very specific “incantational” terminology and all that). You get a little bonus and a pat on the back and never hear of it again.
        
        The funded startup was a similar situation, but they were a bit more circumspect trying to get as much into one patent application as possible in order to minimize legal and filing fees. But it wasn’t that hard to get through.
        
        In the unfunded startup, we were also very careful to get a few things into a single patent. We knew most of it was horseshit (there were a couple of novel-ish ideas in there, but nothing I’d consider worthy of monopoly protection). I think we spent a total of around $8-10k on the whole process, and most of it just sailed on through the US examination process. It ended up being mostly worthless, though, because we were really lax about timing of disclosure and all that, which makes it mostly indefensible internationally. But the novelty test in the USPTO seems to have been largely ignored.
      - http://petegrif.tumblr.com/ Pete Griffiths
        
        Jees. I’ve been thru hell getting patents on stuff on the expedited track when I have done a ton of research on prior art etc, know our stuff to be novel and non-obvious and we were meticulously careful on timing and disclosure. Sounds like it’s as random as any other human endeavor.
    - StevenHB
      
      The system cannot correct because the cost of forcing a correction (i.e. fighting a bogus suit) exceeds 1) the cost of settling and 2) the financial power of the startups that tend to be the targets of the trolls.
  - Corrections
    
    You also make the mistake of saying that defending a patent costs “millions” – in the contrary filing a demurrer or filing a response costs the same filing fee as the cost of filing the suit. This is called filing the Answer.
    
    The problem is that most techies fold and many of those who fold do so before a lawsuit is even filed. If the patent is shit, simply call the trolls bluff and respond with a demurrer.
    
    Further, a demand letter is just a demand until a suit is filed. Many people seem to talk of a demand letter as “being sued.” If there is no case # in a court with jurisdiction you are not being sued, you are being threatened. Big difference.
    
    Your emotions are correct. The patent system needs restructuring. However, Pete is correct too in that you make many exaggerations that may in fact scare unknowing techies into paying those same shitty patent trolls, because the techie thinks those trolls hold more power than they do.
    - http://www.feld.com bfeld
      
      Yup. And then the following nonsense ensues. The troll – who’s lawyer is often on contingency – files the suit. Then the madness begins. I have rarely found filing a demurrer to be effective.
      - http://petegrif.tumblr.com/ Pete Griffiths
        
        A question. The trolls typically file many suits on the same patent – sometimes hundreds. They like to go after a few companies they see as weak to set precedent. What is people’s experience funding one company to fight the suit whilst the others stall?
      - http://www.feld.com bfeld
        
        I don’t think this works because of two reasons: (1) it’s impossible to coordinate the activities of the defendants – they all have their own motivation / strategy and (2) if the funding comes from one investor, then anyone else who is stalling is essentially a free rider on the one investor, which eliminates the motivation of the one investor to make the investment in the first place. Theoretically you could create a group of all the investors to fund on some proportional basis, but then a smart troll will just take that entity out of the suit!
      - http://petegrif.tumblr.com/ Pete Griffiths
        
        Makes sense. Thanks.
- Jan Hansen
  
  You are living in a fantasy world. Patents have historically deliberately been filed with omissions regarding know how. In some cases people who tried to follow instructions of chemical patents could suffer severe injury.
  Patent system has been perverted to the point where all aspects of it which were supposed to serve the public good have been eroded.
  - http://petegrif.tumblr.com/ Pete Griffiths
    
    I believe I agreed that the system is imperfect. I am unclear how informing me that I am ‘living in a fantasy world’ is anything other than patronizing and rude.
- StevenHB
  
  I’ve read a number of software patents in my day and helped to create a software patent application (one of things in my past of which I am least proud).
  
  All of them have been completely obvious to even a marginally competent practitioner of the art of software engineering. Most, if not all, have also been preceded by prior art. My recollection regarding the one that I helped write was that the results of the “search for prior art” turned up patents that were more similar to each other than they were to the silly-but-obvious thing that I was working on.
  
  I challenge you to show me one, just one, software patent that is both non-obvious and actually novel.
  - http://petegrif.tumblr.com/ Pete Griffiths
    
    One problem stems from the popular use of the word ‘obvious.’ Frequently, once the question is asked the answer, with the benefit of hindsight effect, can appear obvious. But inventions that are novel can be relatively simple after the fact. The trick with invention is to see necessity and find a solution not to invent something so complex that even when its workings are revealed it appears non-obvious. In this sense inventions can be compared to conjuring tricks. It is also why the fact that something has not been done before for a long period despite its apparent simplicity teaches that it is non-obvious.
    
    It is a similar semantic problem with novelty. The test is not whether having seen something you regard it as breathtakingly brilliant and path breaking. There are many things that are novel, they have not been done before, but are stupid and useless. It is tempting to find oneself judging novelty by the quality of the invention rather than its relationship to prior art.
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James Mitchell

If you compiled a list of the 1000 smartest software developers in the world, and asked them what they thought of quality of the patent examiners in the U.S. Patent Office, about 999 would say they are dumb as a rock. There are huge number of software patents granted that even someone like me — a reasonably competent software developer, at least a few decades ago — knows there is prior art before the “new” idea was supposedly discovered. The fact that almost everyone who knows a lot about software says they are a bad idea should mean something, I would think. It’s not like there is much disagreement among the software gurus on this issue.

So we take a really bad idea and then add really dumb patent examiners, and we end up with a total disaster, a bad idea badly executed. Even if software patents were not inherently stupid, the fact that the patent office is not able to distinguish between true originality and a bogus claim is sufficient to throw out the whole idea.

The readers of this post may be interested in a recent decision by Judge Richard Posner. Although he is a federal appellate judge, for kicks in his spare time he serves as a trial judge in patent cases “because they are so interesting.” (We all get our kicks in different ways.) This case involved Apple and Motorola suing each other over alleged patent violations. Poser — considered by many to be the father of the law and economics movement — made mincemeat of both sides’ claims and dismissed all claims with prejudice. Both sides are appealing. If the appeals court affirms Posner’s judgment, it would mean a substantial change in law. Here is Posner’s decision:

http://betanews.com/wp-content/uploads/2012/06/Posner-June-22-Apple-order.pdf
- Athox
  
  If he ever decides to become a politician, he should give the internet a call. There’s some money with his name on it.
- http://petegrif.tumblr.com/ Pete Griffiths
  
  The judgement is indeed interesting reading. But I think it would be a misreading to characterize a 38 page closely reasoned highly technical set of arguments as some kind of rebuttal of the idea of patents or of software patents. I see no evidence in the text for such a conclusion, indeed he is very clear that patents are property and that holders have rights. The cases in question were attempts to gain injunctive relief and on technical grounds these attempts were refused, that’s all.
  - jrochkind
    
    yep, that’s all a judgement can do, rule on the specifics of the case before the court. Posner’s opinion on patents and software patents can instead be found on this op ed: http://www.theatlantic.com/business/archive/2012/07/why-there-are-too-many-patents-in-america/259725/
    - http://petegrif.tumblr.com/ Pete Griffiths
      
      Thanks for the link. Excellent piece.
      - Rohit5
        
        Indeed, worth reading. patents ,discovery, programming all are different things for different people, what matter is innovation.
Universal_Mind

depressing. !!
http://twitter.com/davidpayne11 david payne

Lets all thank Apple for popularizing this fucked up concept of suing people based on ridiculous software patents.
- http://darwinweb.net/ Gabe da Silveira
  
  Are you effing kidding me? Not every thing in the world is about how butt-hurt you are over the brands that you choose to identify or not identify with. Big corporations are basically complicit in the patent game, but the real damage is being done by trolls which has absolutely nothing to do with Apple, Google, Microsoft or any other major brand for which you have such strong and important opinions.
  - http://twitter.com/davidpayne11 david payne
    
    Oh yeah? Tell me when was the last time Google sued someone for a ridiculous patent, bitch? STFU if you haven’t been observing this industry or if you have no clue of what I’m talking about. Don’t argue just to defend Apple or for Fuck’s sake. Asshole.
    - hurr durr
      
      The last time Google sued someone was three days ago, but good work “observing the industry”
      - http://twitter.com/davidpayne11 david payne
        
        Well, hello fag,I’m sure it wasn’t for the rounded corners, or I’m pretty sure they’re just counter-suing…That’s simply better than suing someone for rounded corners and stealing their pull-down notifications. Apple has a long history of patent trolling..they even sued a restaurant because it had the name ‘Apple’ in it and Amazon for using the term ‘App Store’. Get your facts straight before you point your fingers, bitch.
    - http://darwinweb.net/ Gabe da Silveira
      
      I wasn’t defending Apple at all. Go re-read my comment and try again at basic reading comprehension.
    - http://petegrif.tumblr.com/ Pete Griffiths
      
      Hate to be teacher but this is a nice forum where people try to have manners no matter how frustrated they may be.
      - http://www.feld.com bfeld
        
        Pete – thanks for being a teacher. Dave – you are welcome here anytime but please keep it civil – issues like this generate strong feelings and that’s fine, but the goal is for us to all learn from each other, even when we have different opinions.
- http://petegrif.tumblr.com/ Pete Griffiths
  
  Most of the patents Apple is suing Samsung for are not software patents, they are design patents.
http://codeflow.org/ Florian Bösch

Software companies by far and large don’t like patents, but they stockpile them for “defense” purposes based on the MAD (mutually assured destruction) theory. That theory as not worked (see the Apple nuclear patent exchange).

Taking MAD out of the picture *nobody* likes software patents. No company likes them, no developer likes, no computer scientist likes it, nobody and I mean really nobody likes them.

Except the trolls, of course.

Stop this madness! If implicit consensus is that they’re bad, then the explicit consensus should be that they’re bad, and if everybody agrees they’re bad, we can stop doing software patents.
- Michael Roberts
  
  MAD doesn’t work against non-practicing entities – a troll *has* no business to block, except for the business of suing you.
http://www.facebook.com/hakan.bilgin Hakan Bilgin

Good questions asked…

Patents and related issues are actually a crippling mechanisms we’ve inherited from the industrial society. IMHO, patents existence were valid previously but has no place in the IT age and should definitely not apply to software. As many of my developer peers, I’m not alone with these opinions and the existence of OS-community clearly states that fact.

Having said that – changing the rules of the game will take time. Instead, adapting to the rules of the game is another way to go and this is my idea;

Start a non-commercial institution, financed by 1-25 dollars (low fee) donations from developers. Companies might donate as well but the institution is not bound to any services in return. This institution and its trustees / administrants are replaceable by democratic votes online from the dev-community.

The purposes of the institution are;
- patent the patentable ideas / submissions from its developer members
- administrate the patents
- never use its patent arsenal offensively. Only to disarm situations involving patents.
- “protect” young startups (preferably “pave” the way, if possible)

Generally, the main purpose of the institution is to serve the community.
Because, in the long run – our industry benefits from faster evolution.
The sabotaging trolls doesn’t stop the evolution, the effect is just a deceleration.
Even if it’s not clear – this harms everybody…in the long run.
- Jan Hansen
  
  All patents are evil. but software patents are more evil than other patents.
  - http://www.facebook.com/people/William-R-Mosby/1176981657 William R. Mosby
    
    Its a little late, I realize, but this looks like a good place to interject my standard silly patent: http://www.google.com/patents/US7028023. A linked list. 2006
mrgaribaldi2263

Shouldn’t juries on software patent trials be loaded with developers? The Fully Informed Jury Association could be helpful in this regard.
- http://www.feld.com bfeld
  
  Oh yeah, but they aren’t. And the cost of going to trial is still absurd.
http://www.facebook.com/benbuie Ben Buie

If we can’t get rid of software patents all together, maybe we should fight that software patents can only provide protection to the original owner. So, if Motorolla files a patent, the ownership can’t be transferred to a third party or even a bigger company that buys them. Thoughts?
- http://www.feld.com bfeld
  
  Twitter has proposed this – Innovators Patent Agreement – and I’m a big fan – http://blog.twitter.com/2012/04/introducing-innovators-patent-agreement.html
- Dcall
  
  So if a startup innovates and gets a patent but can’t afford to sue then they can’t sell the technology to a big company that can. In other words, let’s screw small businesses on both ends. Brilliant well thought out plan.
http://petegrif.tumblr.com/ Pete Griffiths

There’s an interesting piece on software patents here:
http://www.inc.com/christina-desmarais/patents-an-ip-lawyer-dishes.html
Michael T.

Even worse, what money you pay them may end up going overseas to support terrorists.
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Lee McMillan

Word… I am w/ a large company who was sued by a troll for simply using an HTML tag for roll over pop-ups. It’s a simple tag build in to the official HTML standards, maybe if it was a square with rounded edges we would have known better.

I guess this fit our world today, legal extortion for “donor” lawyers, small fines for bankers that would like the rest of in jail and no charges for theirs if you happen to have been in politics – i.e. Corzine.
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http://technbiz.blogspot.com paramendra

MAD Before Common Sense http://t.co/aSQ1LnHW
http://twitter.com/Ironhelix Ironhelix

”
And getting a patent is not that hard” Bull. Clearly you haven’t filed any patents. It’s a lot harder than you think. But instead of complaining about not being innovative just make a deal for a license, which may help your business since you would have protection for the technology you’re building that someone else came up with before you. I’m really sick of the whiners that complain and disparage inventors that HAVE innovated that that think they should not pay/license because they are a $0 startup. I guess it’s ok to pirate music and not pay the artist, or download a movie and not pay for it. I don’t disagree that there are Non-Practicing Entities (NPE’s) that have no intention of building the inventions of the patents they hold or acquired, but not everyone that has patents is a NPE. I’m entitled to receive payment for my inventions from companies that infringe because I thought of it, filed it, and prosecuted it through the PTO at GREAT expense and should be rewarded for my intellect, not disparaged because you didn’t think of it and don’t want to pay.
- http://context.io Bruno Morency
  
  You’re missing the point. You’re not disparaged “because we didn’t think of it and don’t want to pay”. We thought of it and so did tons of people. We did so independently and sometimes even prior to your filing. We see no legitimate reasons why we’d have to pay and that’s why you’re being disparaged.
http://yrihf.com John Bailo

This was made worse by Obama signing legislation last year replacing First to Create with First to Patent. What this means is that even if you can prove with evidence that you were the first to conceive of an idea, someone else who patents it first will lay claim to the intellectual property.
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