Aug 22 2012

A Software Entrepreneur On The Madness Of Software Patents and Trolls

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.