A VC - Latest Comments in Entrepreneurs 1 - Patent Trolls 0

Re: Entrepreneurs 1 - Patent Trolls 0

Maryland Realtor — Fri, 07 Nov 2008 14:43:10 -0000

The whole situation is disappointing, really. I'm an entrepreneur, former startup founder and dabble in application development (on the "idea" side) - not really a "high tech" insider, but the real story here is that the ideas are only useful in the hands of those who can actually EXECUTE. Some advice I got long ago from a business mentor - it's better to have great execution of a mediocre plan/model than mediocre execution of a great plan/model (or idea, in this instance). In a struggling economy, why would we want to stifle ANY innovation? To keep attorneys knee-deep in work?

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Thu, 06 Nov 2008 20:12:48 -0000

That's an interesting suggestion

Re: Entrepreneurs 1 - Patent Trolls 0

Mark McGuire — Tue, 04 Nov 2008 14:16:25 -0000

I'd love to see the system modified for biz method patents to bring both the time for examination and the exclusionary period shortened to recognize the speed of innovation in today's marketplace. Just as one example, our last start-up was purchased within 18 months of launch by Microsoft, but it will probably be another 2-3 years before our patent applications on the biz are even examined. The system should reward innovation at the early growth stage of a company and grant a reward that balances the fairness of rewarding a good idea with the way monopolies stiffle consumer choice. I'd love to see a system that examines every patent app within 6 months and provides a three year exclusionary period. Charge huge application fees if need be, but make the system work. You can see my full argument here if interested: http://flywheelblog.com/200...

Re: Entrepreneurs 1 - Patent Trolls 0

charlie crystle — Mon, 03 Nov 2008 12:19:12 -0000

likely.

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Sun, 02 Nov 2008 15:56:13 -0000

We can also agree to discuss it f2f next time we see each other and I bet
we'll find that common ground

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Charlie Crystle — Sun, 02 Nov 2008 14:32:40 -0000

Yes they can--that's part of the the point of patents. We outcompete through innovation. we innovate, they copy, we're screwed. they can outspend and outmarket us if they want to, no question. Yes, it gets easier. But the same tools are available to the big companies as the little ones. And time is still a factor. Build a new innovative part that increases efficiency in cars by 30%, someone reverse engineers it and has it in China at a fab plant in a few months, before the company has a chance to gain market share.

I think we're just going to completely disagree on this. (I don't disagree about trolling; I think there's some middle ground there.)

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Sun, 02 Nov 2008 13:52:12 -0000

Charlie

I don't think patents can stop big companies from ripping off small
companies

And using the legal system as recourse seems like a huge cost to everyone

The only thing that small companies can do is outcompete the big companies

Which I think is getting easier every day

Re: Entrepreneurs 1 - Patent Trolls 0

gregorylent — Sun, 02 Nov 2008 10:14:00 -0000

how much should that business be protected?

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Charlie Crystle — Sun, 02 Nov 2008 09:39:39 -0000

He was successful until he got ripped off. He was ripped off by Apple, Microsoft, Aol, etc--you name it. Small companies get crushed by large, monolithic companies simply because of scale. That's wrong, that's not a level playing field, and, btw, that's NOT the rules as any of us understand them. They've made hundreds of millions from his work.

You're basically saying that if you shoot someone successfully, he should have no legal recourse because, well, you shot him, first. You rob someone, the victim should have no legal recourse.

Surprising line of thinking.

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Sun, 02 Nov 2008 08:38:15 -0000

What makes Thomas Edison¡¯s work transformative is not the idea, it was the
execution

I have huge issues with IP as we define it in this country. Of course I
think you should be able to own real property but intellectual property is
another matter

The painting of starry night, the real thing, is priceless

But the image of it is worth nothing. It¡¯s everywhere

Ideas are everywhere, but the person who turns them into real property, a
business with cash flows, is who deserves the pay day

Re: Entrepreneurs 1 - Patent Trolls 0

Steve Kane — Sun, 02 Nov 2008 07:43:08 -0000

Hmmm. Well, that is certainly... radical. That calls into question the very
core value of intellectual property. Which you basically set at zero? So
artists can not claim ownership of a song or book or poem, just because they
created it?

And where will you draw the line? Why is one form of property proteced but
others not? As a legal/conceptual matter property is iether poperty or not.
So, how about so-called real property rights? Why should someone be able to
claim ownership of a house, or building, or land? Just because they live in
it? Maybe an ³entrepreneur² developer could re-hab my house and make several
smaller more affordable residences which some people might argue is a much
better use of the property (not me!)

And what about real property that is not lived in? Or not even utilized?
Should Ted Turner's zillion acres in Montana be open to development because
Turner is obviously not being entrepreneurial? Etc

Malcolm gladwell makes a good argument that neither ideas nor entrepreneurs
are actually all that critical or valuable -- that its actually the
continuous serendipitous confluence of property people events eras and
timing which ³create² innovation

http://gladwell.com/2008/20...

But none of that matters for one thing as someone who tries to traffic in
ideas I have to object that creative and productive and novel ideas are much
more valuable and rare than you seem to believe. There are 100 million
guitarists but very few David Gilmours and Jimmy Pages. There are 1 trillion
images but very few Starry Nights. There are a zillion blogs but only one
AVC can I simply repurpose your blog without ttribution or compensation
and plug my own advertising platform around it and pocket whatever is
earned?

Second, property rights are as core to liberal democracy and capitalism as
any wrinkld old parchment statement of ideals. Before our very recent modern
system of property rights, by definition literally anything and everything
that could be considered ³property² was de facto controlled in perpetuity by
a nobility or aristocracy that is, feudalism. Sk your friends in london
still to this day the royal family owns all of london -- homeoners don't
won homes they have 99 year leases from the royal family! Etc

Thomas Edison invested the time and effort and thought and massive risk of
failure to discover a filament that would work in a light bulb. Anyone else
could have done the same; many tried. TE deserves a market reward for the
successful effort. As yet, the best mechanism anyone has come up with is a
patent system -- which btw the USA founders also thought a cornerstone of a
capitalist/democratic system and spent much time thinking about same and
creating an IP system, in 1790, immediately after the american revolution...

Re: Entrepreneurs 1 - Patent Trolls 0

brlewis — Sat, 01 Nov 2008 22:56:40 -0000

You are right to be puzzled about this. Theoretically, ideas are not inventions, and ideas are not patentable. Starting a decade ago, for all intents and purposes, ideas have been patentable. Hopefully this recent decision is the first of many steps back in the right direction.

Re: Entrepreneurs 1 - Patent Trolls 0

Edward Daciuk — Sat, 01 Nov 2008 21:58:44 -0000

Darn. I guess it doesn't bode well for my business method patents:

- Business process of selecting a good location for retail store
- Method for using the color red to indicate a sale online
- Method for the phrase "Thanks" in communications to customers following a sale

Guess I'll have to fall back on actually building a business.

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Sat, 01 Nov 2008 21:22:14 -0000

I just don't get why we are trying to protect someone who thought of something before anyone else. What matters is the people who act on the idea. Ideas are a dime a dozen. Entrepreneurs who can actually turn an idea into a business are not

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fredwilson — Sat, 01 Nov 2008 21:18:11 -0000

What's the point of inventing something if you just patent it and sit on it? It does nothing for society and then when someone else does invest the time and money to commercialize it, they get sued by someone who just happened to think of it first? I don't like that system

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gregorylent — Sat, 01 Nov 2008 19:04:10 -0000

the exaggeration of the concept of individuality in america is turning out to be costly to society

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Sat, 01 Nov 2008 18:32:14 -0000

That sucks

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fredwilson — Sat, 01 Nov 2008 18:15:19 -0000

I feel badly for your friend but if he wasn't successful commercializing his
ideas and others were, I tend to think the people who were successful should
not have to face litigation from your friend

I am in favor of darwinian capitalism

I think it produces the best result for society

Re: Entrepreneurs 1 - Patent Trolls 0

fredwilson — Sat, 01 Nov 2008 18:05:13 -0000

Yup

Hundreds of thousands of dollars that could otherwise be spent on new
products, new customers, new employees, more sales people, etc, etc

It makes me sick to my stomach thinking about it

Re: Entrepreneurs 1 - Patent Trolls 0

William Reeve — Sat, 01 Nov 2008 13:11:22 -0000

Nobody has mentioned that the issue is US-only. In Europe (and ROW so far as I know) 'business method patents' are unenforceable and software is practically impossible to patent. For very good reason, imho, for I fully agree with Fred's comments above. But I just think it worth noting that the issue is a US-centric one and is one (of not many) ways in which Europe is more 'pro-entrepreneur' than the US.

Re: Entrepreneurs 1 - Patent Trolls 0

dave — Sat, 01 Nov 2008 12:57:40 -0000

I am in the middle of a bs "business methods" patent infringement claim with one of my portfolio companies. The technology has been in use since the 1970's. The "patent" was filed in 2001. Now the troll is going after all the "infringers", including one of my companies who have their own more detailed patents from the 1990's. Let's hope the ruling stands up. It's costing us hundreds of thousands in lawyers to defend.

Re: Entrepreneurs 1 - Patent Trolls 0

Charlie Crystle — Sat, 01 Nov 2008 11:28:39 -0000

Fred, I have to disagree with you here to some extent. "I think there shouldn't be any software and business method patents at all"

I have a friend who built a software company around an invention--something we all use on a daily basis now. He was copied time after time, and now his invention is in every cell phone, iPod, tv set top, music website, etc, etc, etc.

He shut his product company down after pushing that stone up the hill for seven or eight years (viable company, wasn't a failure by any means). And now he's seeking to enforce his patents, which he filed for before many of these companies even existed, and before the others were even in the game. And he'll very likely win (plenty of investment and on-board lawyers to take it to court with a few choice offenders).

And he should. Those were the rules. He played by the rules, and many, many companies ripped him off (some of which you might have invested in) who did not, in fact, play by the rules. The idea wasn't theirs, they made money at a cost to him and his investors.

It's as though I come up with a product that's black and sweet and fizzy and call it Coke. It's as though I pen a song called Like a Rolling Stone that's word for word, note for note the same as Dylan's and call it mine. Not great for Dylan's investment, or Columbia's).

I agree that the effect of ripping off patents can lead to positive consequences--you allow a free for all mix of ideas and talent and innovation without barriers, and some positive stuff will come out. But the expense of the original inventors. Yet patents don't have to be obstacles to that. Hell, could we at least ask nicely when we're about to rip off an entrepreneur? It's very possible they'll say yes. Or deal. Or say no. But it's their right, not ours.

Re: Entrepreneurs 1 - Patent Trolls 0

gio — Fri, 31 Oct 2008 21:33:53 -0000

Most software that is actually valuable implements its original concepts internally and is protected by trade secret.
Thats' why employees sign NDAs. Only ideas that will be externally visible, as 1-click buying, needed patent protection. If it can be hidden, patenting is foolish, since it makes the idea public, and available to others for implementation in internal code, which will be hard to discover by the patent holder.

Re: Entrepreneurs 1 - Patent Trolls 0

gregorylent — Fri, 31 Oct 2008 18:24:29 -0000

protection is based on fear and greed. best not to ennoble those traits so much that the frosting covers the reality. and you don't have anyway of knowing how much innovation has been lost because of too narrow a focus on money.

Re: Entrepreneurs 1 - Patent Trolls 0

gregorylent — Fri, 31 Oct 2008 18:18:16 -0000

innovation is a natural human trait.
patents protect the monetization of innovative ideas.
something is lost when the innovation is motivated by money, instead of for the pure idea.
we don't have a metric for this loss, but our society suffers a consequential imbalance from limited motivations.
long term, i am against copyright and patents, we have to think "we" instead of "me", because it has greater strategic value. long term.