The Greatest Business Risk You Don’t Know About – Your Business Will Be Sued Over Patents

Your business is at risk. For a lot of money. No matter what type of business you are in,  you are susceptible to a patent infringement lawsuit.  The worst part about this risk is that there is nothing you can do to protect yourself.  You are a victim in a business world horror movie. Unfortunately , there is no one to scream “no don’t do it. Don’t open that door” and protect you. All the doors are open and the trolls are all attacking.

Why wouldn’t they  ?

Put yourself in the position of a patent troll.  If the laws changed in your industry so that if you filed a lawsuit against any small business in the USA you were pretty much guaranteed to win or at worst get a settlement, could you overcome you internal greed and walk away from all that money ? You, maybe. You might do the right thing.  But these are lawyers we are talking about here. There is no chance the legal industry would pass up on a box full of money sitting right in front of them.  Its free money to them. They are grabbing for it.

While we often read about the big patent lawsuits with Yahoo, Google, Facebook etc, it is the untold number of mid size company settlements that are hidden by non disclosures that we never read about that should scare the hell out of you.  Thousands and thousands of companies are being sued or threatened with lawsuits over patents. It is by far the biggest risk that medium sized businesses and corporate America faces today. It is a fungus among us.

And Im not saying that every company is at risk of having 1 patent lawsuit come their way. Nope. EVERY company in America is at risk of having 2, 3, 5, 100 patent lawsuits coming your way.  If you have a janitorial service company, you are at risk that the USPTO will issue a patent to someone who says they have invented a new way to optimize the path you should take when mopping  a commercial kitchen. Then maybe they will issue a patent on the fastest way to wash kitchen utensils. If you wash spoons first while holding them upside down, you could be at risk. Ridiculous ? Not in the current patent environment. The economic problems we face will hurt your business.  Patent lawsuits can kill your business.

Oh, and before I move on, will someone please tell the NCAA and the Bowl Championship Series that there is a patent on most configurations of playoffs for a football championship. Our patent office at work.

So what should you do ? You should first contact your local Senator and tell him.her that without protection the only firms  that are going to be left in this country are law firms that specialize in patent law suits. Ok, maybe that’s an exaggeration, maybe.

This is a problem that obviously makes me incredibly mad. When it comes to this issueCongress is a bunch of gutless , ignorant pansies on their knees to the IP terrorists of the business  world.  They won’t  realize what is at risk until the number of companies  in their districts going out of business after being sued for ridiculous patent infringement skyrockets.

Which of course leads to the question of why haven’t more companies gone out of business from patent lawsuits ?  Simple answer – because the small businesses that can’t afford to pay for protection or settle lawsuits  are further down the pecking order. The lawyers are grabbing the low hanging dollars first.  They are going where the money is, which is medium to super-sized businesses. The Googles/Facebook/MicroSofts, etc of the world.

Once they finish there, they will move down the food chain. It will be worse than a science fiction movie where the aliens try to consume all of our resources. In the not so distant future, trolls will go after companies knowing that while there isn’t cash available from small companies, there are assets that will be available to them once they bankrupt those companies. This is exactly what will happen if laws are not changed.

What can you do as a small business person to protect yourself ? Honestly, nothing beyond complaining to your Congressperson. The only option I have found is to buy into companies that aggressively sue over IP. It is a hedge against patent law. Put another way, if you can’t beat ‘em, join ‘em. Sucks, but there aren’t any other options that I can see.

 

58 thoughts on “The Greatest Business Risk You Don’t Know About – Your Business Will Be Sued Over Patents

  1. Pingback: The Godfather (i.e., Nathan Mhyrvold) | IP Troll Tracker

  2. Pingback: » Patent Trolls :The Ratliff Report™

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  4. From the EFF website: “The current crop of copyright trolls sue anywhere from 20 to 5,000 “John Doe” defendants in a single lawsuit, pinned to a list of Internet Protocol addresses that they claim to have seen downloading copyrighted movies using BitTorrent. Then, with the courts’ permission, they send subpoenas to Internet service providers for the names and addresses of subscribers. The trolls then send threatening letters, demanding settlement payments to “make this go away” or face being dragged into court – often in a faraway state. Over 200,000 U.S. residents have been caught up in these suits, with many undoubtedly settling simply to end the harassment.

    The trolls are, of course, following a trail blazed by the major music labels through the Recording Industry Association of America. Beginning around 2003, they sued about 35,000 people, using the courts’ subpoena powers as a private investigation service to find names and addresses. The RIAA ended its lawsuit campaign in 2008, apparently realizing the damage that suing its own fans had done to the industry’s image.

    It was perhaps inevitable that the vacuum would be filled by opportunists with no public image to protect. Since 2008, troll lawyers have sued about six times more people than the RIAA ever did, and pursued them even more aggressively, probably netting millions in settlements. Some have faced court settlements for cutting corners in court procedure, and one was even caught practicing law without a license. But this scheme wouldn’t be a viable business model without the draconian imbalances of U.S. copyright law and legal precedent that the entertainment industries and their lobbyists have pushed through Congress and the courts. Link to article is: https://www.eff.org/deeplinks/2012/05/hollywoods-trolls

    Comment by Debra Contreras -

  5. I think pointing the blame at patents is a bit misguided…the problem is broader than that, it’s the legal system in general. You think patent lawsuits are bad? Have you seen the things people sue for these days? Everyone of course knows of the famous McDonald’s hot coffee lawsuit, injuries are another famous case. There are some cases where people are in the middle of committing a crime (drunk driving, robbing a house, etc.) and get hurt and suddenly they are suing for outrageous amounts of money. The whole legal system is totally out of control.

    Oh yes, you can argue in many of these cases the suit gets dismissed, or there’s a minor settlement, but the costs in time and money for companies and individuals is enough to seriously hurt them.

    I remember a case not too long ago where a company in Florida was sued by some women feeling descriminated against because the company had no female employees, it then came out that no women had applied. The case of settled, etc. but the legal costs of just going through the process were outrageous!

    There needs to be significant accountability added to the court system, frivolous lawsuits needs to be identified as such and there need to be consequences, for example, anyone filing them needs to be fined the cost of the other party’s court expenses, plus they need to pay for wasting the court’s time. I’d suggest the lawyers have to share a percentage of this cost so they aren’t so eager to encourage their clients to sue in such cases.

    Let’s remember the financial incentives here. Who really wins primarily through all this legal action? Primarily it’s the lawyers. They have a ton of incentive and very little accountability when it comes to encouraging all these suits, turn some accountability back on them and see what happens.

    Comment by Michael Bruce Rosmer -

  6. Pingback: Master Daniel B. Ravicher: Is Obama’s Patent Reform Hurting American Small Businesses

  7. Pingback: Daniel B. Ravicher: Is Obama’s Patent Reform Hurting American Small Businesses | WestPenn Journal

  8. Pingback: Daniel B. Ravicher: Is Obama’s Patent Reform Hurting American Small Businesses

  9. hey! thanks for sharing.. its really informative

    Comment by Barbra Mullan -

  10. In my business… as a social media manager… I’m tasked with overseeing many projects at once. The right tools are key in managing any sort of project. Managers can easily track the objectives of their team using tools like Objectiveli. No more post it notes and spreadsheets. It’s in beta and I love ot be the first to try out new tools! Check it out: http://www.blog.objectiveli.com

    Comment by Kelly Loubet (@Childhood) -

  11. Oh yes idiots – Mark Cuban is going to respond to your requests for this or that. “Mark… Could you recommend some good books i can buy instead of borrowing at the library…. Mark… could you elaborate on your ‘buy in’…. blah blah blah…”

    Tip for you pathetic clueless trolls…try http://www.google.com ? Mark ain’t gonna answer you.

    Comment by Bradlee TheDawg -

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  14. Clearly you are risk adverse. You may be unveiled on other flanks you may not consider. If ur legal agreements never protected you from certain suits then your unveiled to the same risk as the business your doing organization with, that affects. A red seaside strategy may eliminate some risk, I offer to help you assessment.

    Comment by dupdis -

  15. This is an extremist view at best. Even one of your fellow sharks had her IP lawyers tell her they are putting new rules into place to curtail patent trolling. The issue here is protecting property and ideas. If I invent a widget, I should benefit from the development of that widget, not some offshore company that knocks it off and sells it. The thing to fear is patent bullying, where large, deep pocketed companies intimidate smaller businesses. The small business person can’t be intimidated though, and has no need to be if they filed their patent properly. The rules are there to protect the person who owns the idea, the person who created it.

    I have made this analogy before in this ongoing “argument” of yours, now I ask you directly: If I set up a website tonight selling Dallas Mavericks shirts without the proper licensing, how long would it take your lawyers to shut me down? I am willing to bet it would be less than 24 hours.

    Comment by hotdogman -

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  18. Mark bought a million dollars worth of stock in the company Viringo, symbol VRNG, they are suing google for a little over 600 million…. He has joined them no doubt.

    Comment by Taylor Wuthrich (@wuthy19) -

  19. I like the idea of patenting the method of patent trolling and then suing the crap out of all the patent companies. I also like the patent insurance idea. Mark, maybe you can invest in these two ventures?

    Comment by Dale Ting -

  20. Mark, you are a billionaire with huge influence and TV presence and all you can say is, join them? That’s all you have?! No Longer a Fan. Yeah, that sucks.

    Comment by Scott Shelton -

  21. We have a problem, the “original” need for a patent, copy-right or trade-marks have been compromised. I do not remember the time length of the protection for each item but I do believe there should be limits. I also believe there should be limits on cost and time it takes to receive these; I believe a year is too long and even now the office is back-logged! The cost and time are the main reasons my games and designs (products) may never see the light of day. The law suits that clog our system as well as attorney fees, put the small business man out of business even before they leave the house. If I had the power I would add more workers, whom review applications, add and up-date “all” computers in the office. I would protect this office from government greed and allow our United States to grow. We should protect these ideas and modification on older products for a time limit but we also must not starve out the designers because of retail greed. Each new product or idea would, I hope mean new or additional workforces and relieve unemployment numbers.
    I would like to see more patents and faster processing times but this may mean new blood and equipment. We already have Super-computers, why not use them for this, then use the unemployed who type to input text, scanners to input art, and review dates and data for duplication. I do not know if this would of helped Bell or not but for those who are still to come! I hope to see this come about while I can still see.

    Comment by David M Barker -

  22. Mark, it is disappointing to hear you are joining the patent trolls. Every time I come up with a good idea I try and do research to see if anyone already has a patent. It takes away from my productivity — and of course innovation — greatly.

    Why not practice what you preach and fight the good fight?

    Comment by Chad Hensley -

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  25. While I find “use it or lose it” an interesting idea, I believe patent trolls will continue as long as they are incentivized. Patent litigation is a speciality .. its usually not found in civil courts but rather patents, trademarks and copyrights are federal court issues and there is no “small claims court” in that arena. Litigators typically get $400 – $600/per hour; rarely, if ever do they take cases on contingency. Trolls, however, are paid by a portion of what they “recover” — so this is pretty much the same as taking a case on contingency … HUGE difference and a very uneven playing field.

    To walk thru the door of federal court for a copyright /trademark issue you’re going to need $25K.. once into discovery, you will need likely another $50 K and if you’re lucky you can maybe squeak through on that. For patents, you will need $100K just to walk into court and you’ll be squeaking through on $500K. If you prevail in court than many of those costs will be borne by the losing side. HOWEVER, as a small business owner with 2 patents and copyrighted material that is currently being stolen, I need to have a $25K retainer always in place and the wherewithal to access another $50K tout-de-suite (ie Immediately). So as a small business person I’m in a catch-22… I have (properly) invested in protecting my IP … yet to enforce it costs me a great deal of money.. and turning a blind eye and not enforcing means #1 I’m allowing people to steal from me and #2 also may prejudice my future enforcement actions if past “non-enforcement” can be cited in court on some future date. It’s just crazy.

    I obtained my patents so that my work would be protected and I would be able to continue to grow my business and license to those who wanted to grow with me. Business is good, the product has proven itself in the marketplace. For me, current growth/expansion plans are on the back burner as a goodly sum of my money is tied up enforcing copyright infringement issues from those stealing my created products… I haven’t had issues yet with those trying replicate my (patented) business… what I’m fighting now are those stealing the actual work-products I’ve created even though they are federally registered, and have proper copyright notices and a trademarked logo on them. It’s very sad to witness such greed borne on the notion that its “only wrong if I get caught — otherwise it must be OK.”

    You want to stop trolls … find a way to cut the (considerable) payout that incentivizes them as it is also a relatively low risk for them… increase the risk to them and reduce the amounts they are collecting.

    Comment by SMARTePLANS -

  26. Comment by timidmouser – “provide means for targeted business to find each other, share information and pool resources.”

    timid mouser the problem you mention is a bit complex. The “how” to share information and pool resources is the real sticking point. The targeted businesses usually find each other once they’ve been sued. Working together may or may not be in their interest. Even if the companies do want to work together, a group of companies sued on the same set of patents typically involves many different law firms. Sometimes the defendants all hire one or two law firms so that legal fees can be divided, but that’s not the norm.

    Even if companies could pool resources in a joint defense situation (cash or knowledge), It’s difficult to effectively share information toward a common purpose. If you look at the issue from the infringement side, different systems operate differently so each company often makes arguments unique to it. Sure the companies’ lawyers can work together to understand the claims, but how the claims apply to the accused systems is distinct for each company. An argument for one company may not translate well for another company’s system that functions differently.

    Most of the shared information and resources are devoted to challenging asserted patents. Article One Partners has been mentioned before. AOP can be used to find prior art for a group of companies to invalidate dubious patents. Everyone wins if the patents are invalid. Finding the prior art is only the first step though. It needs to be understood.

    The companies can also pool resources to reexamine the asserted patents.

    In each of these situations, the lawyers still need to explain how prior art meets the claims, and NPEs often assert a large number of claims.

    The typical approach is to divide up the prior art into different buckets among various law firms. The law firms then look at their assigned bucket to see how the prior art applies to claims. That analysis is put into claim charts. The claim charts and prior art are then exchanged between the law firms with indications about what is the most promising in each bucket. This approach is not very effective because the prior art really needs to be integrated together to tell a coherent story of prior industry development. In most instances a single piece of prior art doesn’t teach everything required by the claims to tell the story. The buckets need to be integrated together.

    We’re trying to solve the problem of helping lawyers truly collaborate to challenge patents. We allow lawyers to engage with each other and share their collective understanding of the prior art. Using a cloud-based “analysis” template, the prior art can be mixed all together in one big bucket of prior art. Just search for “invalidity charts” to find us and see videos of our system in action.

    Comment by Jay Guiliano (@PatentCrowd) -

  27. Dear Mr. Cuban,
    I’m a longtime lurker and fan that decided it was time to comment. I’ve enjoyed your blog for a long time and nobody loves you on Shark Tank quite like me. You’re a good writer and I like the topics you cover, but I don’t come back here because you’re Hemingway, I come back because I have respect for your actions. For the most part I believe you practice what you preach and you preach about doing the right thing. That all said though, I’m disappointed to hear about your investment in Vringo and I’m more disappointed in your explanation as to why.
    “If you can’t beat em’, join em’. Sucks, but there aren’t any other options that I can see.” I know that the best thing that I can do in this situation is to give you the benefit of the doubt and just assume that if the situation were fully explained it would give validity to the investment. If it isn’t something you are not proud to stand up for though, it is a stab at all of your good work. One of the replies above quoted some scripture about being anxious, but if I were going to quote you a scripture it would be a quote from 2nd Peter that says, “It would have been better for them not to have known the way of righteousness than to know it and turn their backs on the holy commandment that was committed to them.” Like I said before, I want to give you the benefit of the doubt, but I think we are all going to need better justification than “if you can’t beat em’, join em’.

    Comment by JC Holmes -

  28. The solution is a “use it or lose it” policy on issued patents, which I believe I’ve heard/read Mark propose before. If you don’t license or create a business around a patent issued to you within a year (or two) your patent becomes void and it’s open season for that innovation again. This would deter “patent trolls” and “patent squatters” from sitting on a useful innovation until someone else brings it to market.

    I see all these people that claim, “I own 200 patents, blah, blah, blah” and when asked how many are on the market today all you hear is crickets. Squatting and trolling just hinders actual innovation and economic advancement.

    Comment by Shawn McCarthy (@ShawnyWayne) -

  29. Definitely another winning post. If you can’t beat them, join them! (The Yale Book of Quotations, which attempts to trace all famous quotations to their earliest findable occurrence, lists this as a proverb. The earliest citation given, in the form “If you can’t lick ‘em, jine ‘em,” is from the Atlantic Monthly, February 1932, where it is described as one of Senator James E. Watson‘s “favorite sayings.”)

    Comment by John Park (@pgiselfdirected) -

  30. I am from Canada and the situation is not that much different particularly as most Canadaian patent filers will also file for US patents. What a shame that the original purpose has become so distorted. My philosophy is, if you are determined to file a patent to help protect your great innovation go for it. However don’t ignore the reality that for a patent to have any value and ROI you have to rely on good business strategy and execution to generate profits and protect your idea. That is the best possible thing you can do. Too many people focus their efforts on getting the patent and fail at business execution

    Comment by Randy Flewelling -

  31. Mark, in answer to your questions: From MC> Im curious what your patents are for ? … the patents are for unique property pictorials that sell high end luxury homes faster. And how would those who are “using your IP” even know you exist ? .. at the present time the copyright infringement cases I’ve fought so far steal my drawings and use them — so yes, they know I exist … And did they start “violating” your patent without knowing your patent existed?…Again, I’m fighting copyright issues for each specific product and have yet to get into the greater area of patent infringement —- but yes the drawings they use still have my copyright and logo ON THEM when they are being re-used. And why dont you start a company with this IP and use the legal dollars you spend for your company ? Yes, I have a company operating successfully in Houston and am at the point to expand to other areas, but lack the necessary capital to go forward.

    Comment by SMARTePLANS -

  32. Dear Mr Cuban,

    You are an educated man. I pray I can write as clearly as you do.

    You wrote, “Your business is at risk. For a lot of money. No matter what type of business you are in, you are susceptible to a patent infringement lawsuit. ”

    False. There are probably 1000 other bad things that will happen to a business before being sued over patent infringement – employee theft, break-in, IRS problems, bankruptcy, fire/water damage.

    People talk to much about litigation. It is a way overrated risk. How many people can you actually name that have lost money from being sued? 1? 2? 3?

    Gentlemen, stop worrying about tomorrow – tomorrow will take care of itself, as Jesus said.

    Philippians 4:6-7 ESV / 137 helpful votes
    Do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus.

    Matthew 6:25-34 ESV / 90 helpful votes

    “Therefore I tell you, do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on. Is not life more than food, and the body more than clothing? Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? And which of you by being anxious can add a single hour to his span of life? And why are you anxious about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin, yet I tell you, even Solomon in all his glory was not arrayed like one of these. …

    Maybe you believe in a god that doesn’t control the world. I believe in Jehovah-Elohim-El Shaddai – the God that controls everything according to the counsel of his will. Ephesians 1:11.

    I pray you gentlemen will stop wasting hours speculating about litigation and listen to the voice of Him who cannot lie.

    Your lowly servant,

    Andrew Christopher Bain
    561 444 9294
    e24light at gmail.com

    Comment by Andrew Christopher Bain -

  33. I’m back! I found a good site about the patents and such, helpful or not. I just like to contribute – Carmichael ->http://www.faqs.org/patents/

    Comment by carmichaelreid (@CarmichaelReid) -

  34. Is there any sort of insurance that a small business can buy or a fund that they can start to provide protection for potential litigation–the way doctors pay malpractice premiums?

    Comment by postman5 -

  35. I seen your other blogs on this issue get some heat and so I was waiting and sure enough you came back fighting :0) Job well done! Not just a technical, this is a sure solid knock out! People don’t mess with Mark, just join the winning team now before the game is over! -Ben :0)

    Comment by Ben (@BenArnold4U) -

    • Hey Ben, excellent question. Small business owners should purchase the pocket book called Black’s Law Dictionary (I have the fourth edition by Bryan A. Garner) and find a local paralegal service. Responses can be made to illogically litigious claims, and the entire cost could be kept under $1,000.

      Comment by alexlogic -

  36. I love getting your messages in my email box, thank you so much. Your words kick the pants off anything I’ve heard from other gurus because you actually care and are not just trying to sell yourself since you’re already filthy rich and could’ve left all of us far behind you a long time ago, thank you buddy for staying around, you’re truly not just a friend, but a true humanitarian because you care about all of us not just the few. God bless you Mark! And yes patent law is as messed up as tax law but there’s no way around it, so thank you for the insight and heads up! -Ben :0)

    Comment by Ben Arnold -

  37. For further coverage of the patent trolls This American Life has a great episode on it: http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

    Comment by Timothy and Mallory (@BootstrapIncome) -

    • Hey Timothy and Mallory, thanks for responding. I tend to favor the written word because once it is on internet in word form, it is more easily searchable.

      Comment by alexlogic -

  38. Hey Mark, is anybody collecting patent lawsuit horror stories and making them available on the internet?

    Comment by alexlogic -

  39. Interesting TED talk video on patents here: http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_troll.html

    Comment by Mike McCaffrey -

  40. Mark, here’s another part of the issue. It takes up to 4 years to get a first response from the USPTO (other than for patents with fewer than 20 claims), so pre-emptive defensiveness isn’t even possible. I know this because we just got our response telling us to split our patent into 2 patents last week, after waiting 3.5 years. In the interim, we had to make a decision about whether to pay about $250K for translations & international filings (after the initial PCT protection expired) without even knowing which or any of our claims would be allowed in the US. This is a huge challenge for startups. Comments?

    Comment by Susakajo (@susakajo) -

  41. Mark–

    Great thoughts, but there actually is something you can do.

    I work for a commercial insurance broker. We actually deal with patent insurance. It’s a little known product, and a lot don’t know it even exists. Fewer understand it.

    In a nutshell, there are two forms of it: offensive and defensive. What most are looking for is defensive. The policy protects you in the event you are sued due to some sort of patent infringement. When patent trolls come sniffing around, and they realize you have the means to fight back (i.e. your policy), they typically pack up and go on their way. It’s violently expensive and time consuming for a patent troll to actually go through the process of suing you and collecting. They are usually looking to shake you down for licensing fees, a quick settlement, etc. And if they do start shaking you down for licensing fees, you will never be negotiating from a position of power.

    Offensive simply pays for you to go after someone that has infringed on a patent you own.

    We’ve unfortunately seen many companies get driven to the brink of bankruptcy defending against this kind of stuff. Some have even abandon a product/strategy for which they invested considerable resources. The policy is expensive, and takes a ton of time to underwrite, but for the few and far between that have it, it’s been beneficial.

    Let me know if you want some more info.

    Thanks,

    Connor

    From MC> you should post information in a new post , along with rates and offerings so readers get a sense of whether or not its something they can use.. Thx !

    Comment by Connor (@voyageofthedip) -

  42. I’m with Mark. I know of one patent troll that is going after companies in the 1 million in revenue range. They went after my company too. Luckily we used a third party to get the technology and our contract requires them to defend us from patent issues that come up with their software. But the patent is BS and this company adds nothing to the world.

    Comment by Kevin Stecko -

  43. Mark,

    Out of curiosity, how does your dislike for most patents affect your relationship with Lori Greiner. She seems proud of her 108 patents…..

    Comment by Jayson Morgan (@MorganJayson) -

  44. Mark – Clearly you are risk adverse. You may be exposed on other flanks you may not consider. If ur contracts don’t protect you from patent suits then your exposed to the same risk as the entity your doing business with, ouch. A blue ocean strategy may eliminate some risk, I offer to help you review.

    Comment by Rob Hemel (@robderhem) -

  45. As a bootstrapped business owner who is threatened by a US patent troll, and a long-time reader of your blog, I could not agree more.

    I think there are a few things that can be done to fight the trolls though, even if that is not a full solution:

    - provide free information about patent law, what is at risk in a patent lawsuit, what is the procedure, the time frame, how to request reexamination from the PTO. Just getting that information from a patent attorney can cost you thousands and most people naturally assume from the high-profile cases that fighting back is cost-prohibitive. Maybe it is, but at least make an informed decision.

    - information about the economics of patent trolling: form letters, standard license agreements and mass lawsuits. I was heartened by this tidbit: http://www.techdirt.com/articles/20111017/02232216379/mass-infringement-lawyer-complains-about-too-many-people-challenging-his-lawsuits.shtml and I think the economics can be changed to put more burden on the trolls and less on the businesses.

    - raise awareness that a settlement puts you at the mercy of the troll (opening your books, confidentiality, admission of guilt), who can later come back for more or call his friends.

    - list resources, like names of attorneys willing to help at a reasonable price. You may not need to pay a lawyer $500 an hour to mount a basic defense against a ridiculous extortion attempt.

    - generally provide incentives to fight back or at least speak up and make the public aware of the size of the problem.

    - provide means for targeted business to find each other, share information and pool resources.

    And of course it would be great if large “non-evil” companies would put their money where their mouth is and lobbied for real patent reform.

    Comment by timidmouser -

  46. disappointing post mark!! yes of course you are right about the disaster that is the US patent office and how patent trolls are a threat to businesses of all sizes in the land of the free. BUT the solution is NOT to call your congressperson, and the even worse solution is the “if you can’t beat ‘em join ‘em argument”!!!?!?!?!

    the real solution is a non-violent revolution relying on civil disobedience. if you’re too scared that’s fine, you can go down the hopeless path of calling your congressperson (as if they’ll listen) or the morally bankrupt path of trying to profit from trolling (remember that most of us are considerably less wealthy than you and so this avenue is often unfeasible, in addition to being morally bankrupt).

    it’s time for declaration of independence 2.0.

    Comment by kidmercury (@kidmercury) -

  47. The other very important thing coming up is the change from “first to invent” to “first to file.” My patent lawyer told me about this a few days ago.

    Wikipedia:
    “The law will switch U.S. right to the patent from the present “first-to-invent” system to a “first-to-file” system for patent applications filed on or after March 16, 2013 ”

    That means if you invent something and are using it, and it is working, someone else can come along and patent your idea, and own you.

    Right now, if you invent and document an idea, and are using it in a cave, and if someone else across the country later patents your same invention, they can’t sue you, because you can prove you were “first to invent”….you have protectional rights without having to spend any money on a patent.

    Maybe we can develop a patent on how to be an effective patent troll.
    Patent the actual trolling methods. Patent strategy offense plays, its like football, patent those actual plays. Ever thought about that?
    Thats a $1B dollar idea, but I don’t have time to do anything with it, someone else go figure out the details.

    Comment by Todd Andelin -

  48. Comment by Patrick James Sweeting -

  49. Caroline -
    Of course Fred Wilson hates the patent system, it is constantly siphoning money from the companies he’s invested in. I would bet, however, that Fred is also invested in a few companies that have profited from the system and that you’ll never hear him complain about that.

    Twitter’s new assignment document isn’t really all the press has made it out to be. The clauses that define what constitutes “defensive” leave Twitter almost complete freedom to sue in the name of “defense”. Take a look at http://techcrunch.com/2012/04/17/twitter-ipa-analysis/

    Comment by Shaun -

  50. It is good to see you publicly state your reasoning for the recent Vringo investment.

    The sad truth is that you are correct. The current legal system is designed such that there is a giant box of money sitting in front of “inventors” and lawyers. As long as someone is taking advantage of the laws, everyone should be taking advantage of the laws. I am the inventor of just over 30 issued US patents (with about 80 more pending). Only 7 of them are assigned to me, the rest are assigned to my employer (a very large software company – in the top 5). Much like you, my employer recently decided to switch from maintaining a purely “defensive” IP portfolio to maintaining it for offensive and defensive purposes… Perhaps having everyone abuse the system will finally convince congress to change it – but, in the mean time, party on!

    Comment by Shaun -

  51. Hey Mark-

    What’s your opinion of small- medium sized businesses filing patents in order to protect their businesses from above? Is it worth it? i.e the time and effort–

    Also, if you don’t see any reforms by congress, do you think there could be “PatentExchange.com” where people buy and sell patents one day?

    Thanks-

    Patrick

    Comment by patrickjobrien -

  52. I disagree that you have to join them. Fred Wilson, one of the VCs at Union Square Ventures with a portfolio that includes Twitter, foursquare, and Zynga, posted about this recently. Twitter has pledged to act only defensively: http://www.avc.com/a_vc/2012/04/the-twitter-patent-hack.html. I don’t think that we should bow to patent trolls or become them. There’s another option.

    Comment by Caroline L (@LaMarEstaba) -

  53. I’m (apparently) on the other side of the fence. I own two patents and have a third one pending. I just settled a potential lawsuit with someone who misappropriated my IP, in this case it was copyright related; not patent. I have another such case shaping up. I have worked hard to develop my IP and obtaining patents is not cheap, quick or easy. I made the investment in unique IP, time, money, and attorneys to execute successful filings, and can only hope the federally registered patents/copyrights will (continue to) protect me from aggression and/or misuse and misappropriation of my (protected) IP. I’m not the agressor; I’m on defense… and all could be avoided if those who wished to use my IP would contact me to license it to them vs. “acquiring” it behind my back and using it for free. The cost to them would also be considerably lower. Unfortunately, my observation is that those who are intentionally misappropriating my IP appear to have a faulty moral compass —decisions do not appear to be made on what is “right” and what is “wrong” but rather on their assessment of the probability they will get caught. An unfortunate assessment on many levels — as fees when caught can be quite steep… well in excess of an up front license and right-to-use they could have (easily) negotiated for and purchased.

    From MC> Im curious what your patents are for ? And how would those who are “using your IP” even know you exist ? And did they start “violating” your patent without knowing your patent existed? And why dont you start a company with this IP and use the legal dollars you spend for your company ?

    Comment by SMARTePLANS -

  54. Mark,

    That’s a good thought, but how can I share that with my senator since you’ve joined the dark side and now have that idea/concept copyrighted?

    Oh to be the little guy and not have to worry with that yet.

    Keith

    Comment by kglaws -

  55. Mark, can you elaborate on your “buy in” to companies that aggressively sue over IPs? Also, aren’t you becoming part of the problem buy buying into them? How are you justifying that?

    Jake

    Comment by jakehyten -

  56. Hopefully you can personally return this comment or someone just as knowledgeable. I am keeping up with this Oracle vs Google lawsuit… Can anyone let me know where I can find good books or information on Patent Law that I can own, instead of constantly rent out from the Library. Thanks Carmike

    Comment by Carmichael Reid -

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