Ok, so yesterday my first patent was awarded by the Patent and Trademark Office. I laugh sometimes when I talk to young startup entrepreneurs and in their zest for describing their young company they say "And we have 2 patents". I say, really you have them awarded? And they say, "ah, well no we filed a provisional". Ok, good enough – you got nothing.
(Patent fresh from the mill?)
While at Raindance the development team there (now most of which are here at Lijit) filed 9 or 10 patents over a 9 year period. The first patent was provisionally filed in 2000 and has been "in process" for the last 8 years. Yes, I said 8 years.
(Raindance Patent Binder)
Many think that Software Patents are stupid. I conceptually agree with this statement. Having spent what seems like millions of hours constructing these, baby sitting them, defending them; it is really all wasted time and effort, at least in a conceptual sense. There is no way for a software engineer or system architect to have any idea what exists out there to either copy or avoid (whatever the motivation). The process is protracted, and in this case eight years have passed – what about the poor guy that thought up the same concept 1 year after I did and has made 7 years of revenue with it? Should he now have to license that idea? Should he have to back pay on 7 years of revenue?
But more importantly, I have absolutely no confidence that the patent I just received is really actually valid. You read a lot of debate out there about how many patents are overturned or invalidated in court during litigation. I really don't know how many are invalidated, but I can say having seen the process pretty close that I have no doubt that most of the key patents out there around "computer screen sharing" (used heavily in web conferencing) contain a good deal of the same concepts and they all have been awarded over the last 20 years. They simply claim the same things. Or, at least they don't meet the bar of being unique and unobvious.
So, why author patents? Because everyone else is (wow, there's a concept you can sink your teeth into). As a public company CTO I got asked all the time about our patent portfolio and how we intended to use it. We had some patents that had been assigned to as a result of our acquisition of another company, so the question was valid, even then. I always answered the same way, "we intend to use them defensively". Early on I never really saw that play out, but in 2005 after hundreds of hours of effort we successfully defended against WebEx, who came trolling offensively with their portfolio. Or, more specifically NCR's patent portfolio they had purchased. On one side of the coin, thank god we had those, patents – on the others side of the coin – two companies locked in multiple lawsuits suing each other over intellectual property neither really created and quite frankly in my opinion invalidated each other. Winner? Company with the largest pockets, we won (kind of) we paid less.
Of course the original idea of patents was to level the playing field for the little guy. Protect the intelligence of a person who could dream big but did not always have the resources to do something with the idea. Well that just doesn't work – at least not today. You can be a little guy holding a patent but unless you have huge resources to go after the violator, it just isn't going to happen.
I'm a firm believer it's not the idea, it's what you do with it in the market.
(NEXT UP: in my extremely short patent series, How to retire on patents. In this post I will tell you how to retire by litigating a patent you filed earlier in your career, but has nothing to do with who you are suing)
good post todd....you are totally correct on the software call on the legitimacy factor... it just happened to me yesterday on the patent comment too...as looking at the doc i noted only being an application. i didnt ask if it had been approved actually as i was too immersed in this companies revenue projections which were way out of wack.
Posted by: gwin scott | 2008.02.07 at 04:03 PM