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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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The Supreme Court Has Another Chance To Fix The Software Patent Problem

Comments (4)

I’ve been railing about the evils of software patents – how they stifle and create a massive tax on innovation – since I wrote my first post about it in 2006 titled Abolish Software Patents. Seven years ago this was a borderline heretical point of view since it was widely asserted that VCs believed you should patent everything to protect your intellectual property. Of course, this was nonsense and the historical myths surrounding intellectual property, especially the importance and validity of software and business methods, have now been exploded.

My post from 2006 lays out my point of view clearly. If you don’t want to read it, here’s a few paragraphs.

“I personally think software patents are an abomination. My simple suggestion on the panel was to simply abolish them entirely. There was a lot of discussion around patent reform and whether we should consider having different patent rules for different industries. We all agreed this was impossible – it was already hard enough to manage a single standard in the US – even if we could get all the various lobbyists to shut up for a while and let the government figure out a set of rules. However, everyone agreed that the fundamental notion of a patent – that the invention needed to be novel and non-obvious – was at the root of the problem in software.

I’ve skimmed hundreds of software patents in the last decade (and have read a number of them in detail.) I’ve been involved in four patent lawsuits and a number of “threats” by other parties. I’ve had many patents granted to companies I’ve been an investor in. I’ve been involved in patent discussions in every M&A transaction I’ve ever been involved in. I’ve spent more time than I care to on conference calls with lawyers talking about patent issues. I’ve always wanted to take a shower after I finished thinking about, discussing, or deciding how to deal with something with regard to a software patent.”

Companies I’ve been involved in have now been on the receiving end of around 100 patent threats or suits, almost all from patent trolls who like to masquerade behind names like non-practicing entities (NPEs) and patent assertion entities (PAEs). We have fought many of them and had a number patents ultimately invalidated. The cost of time and energy is ridiculous, but being extorted by someone asserting a software patent for something irrelevant to one’s business, something completely obvious that shouldn’t have been patented in the first place, or something that isn’t unique or novel in any way, is really offensive to me.

In 2009, I got to sit in and listen to the Supreme Court hear the oral arguments on Bilski. I was hopeful that this could be a defining case around business method and software patents, but the Supreme Court punted and just made things worse.

Now that the President and Congress has finally started to try to figure out how to address the issue of patent trolls, the Supreme Court has another shot at dealing with this once and for all.

I’m not longer optimistic about any of this and just expect I’ll have to live – and do business – under an ever increasing mess of unclear legislation and litigation. That sucks, but maybe I’ll be pleasantly surprised this time around.

  • Jeffrey Hartmann

    Around 2000 I used to write device driver code for XFree86 and the Linux Kernel as part of my job. We were always afraid that something very basic could be asserted by Microsoft or some other entity and make things very difficult for us. The graphics card companies all had very similar technology, but they all patented obvious things (S3 texture compression is one that comes to immediately mind) and made our ability to write open source implementations impossible in the United States and everywhere else that recognized the patents. The kinds of things that were patented typically were nearly obvious to an talented graphics software or hardware engineer, but they became hands off because someone placed a flag on a particular combination of techniques. The fact that someone can claim that ideas are property is ridiculous. MP3, GIF, LZW, sure they were very useful combination of techniques but our law let people and companies extract rent just because they had a novel idea and reduced it to code. I think copyright is more than enough to protect people. When it comes to things like I have listed above, you can’t just use my effort (copy my code) without licensing it, but if you spend the effort and craft an implementation yourself I shouldn’t have any claim on what you did. If you spent your own blood sweat and tears to make it work, I firmly believe that I can’t own that even if I somehow said this idea is ‘mine’ and filled out a piece of paper and sent it in to Uncle Sam.
    I really hope they finally do something about patenting combinations of math and abstract ideas, which is really all computer code is at the end of the day.

  • Jon Smirl

    I wonder if the First Amendment could be used as a way to separate what is patentable from what isn’t. The test would be that if you can achieve the result of the patent via speech or writing it isn’t patentable. For example any algorithm can be implemented via pencil and paper. It may take a long time, but that isn’t relevant. The First Amendment should guarantee us the right to make this speech and get the result.

    Physical processes are safe from this test. These is simply no way to produce a pharmaceutical with pencil and paper. Sure you can describe the process with pencil and paper but you won’t end up a drug at the conclusion of that process. Since you can’t achieve the result with pencil and paper the idea is patentable.

    So can the First Amendment be used as a test to differentiate abstract ideas (which aren’t supposed to be patenable)?

    • Richard Coyte

      Not the relevant standard. courts have ruled on the legitimacy of copyright protection. that’s fine and follows sentiment of the law but extending thatprotection to patents does not. besides, it would create an enormous, unwindable mess that would keep investors away because of uncertainty.

  • Richard Coyte

    The way to protect is creating a strong business around the development. if the idea is sufficiently original, and the originator is sufficiently ahead of others, success should be more than feasible.

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