Innovators Need Patent Reform
The undersigned are software and tech startups, or we are investors, lawyers, accelerators, and others who work with innovators. Startups face countless demands from patent trolls for licenses and royalties. These demands often frivolously assert vague and overbroad patents that cover common features of many websites and apps – like online shopping carts
, live chat services
, and order tracking. These demands cause extraordinary distraction, require expensive lawyers to respond, and often necessitate payment of nuisance settlements so we can move on with our business.
Patent trolls, particularly the smash-and-grab variety that prey on startups, do not innovate or add any value to the economy. They buy patents solely for the purpose of pressuring companies to pay nuisance royalties. Even rapid court victories cost several hundred thousand dollars, and pre-litigation costs can be tens of thousands of dollars. As a result, startups pay too much money to patent lawyers, which otherwise would pay developers to improve products or sales people to grow the business.
We urge Congress to reform the system of patent enforcement and litigation, and to include protections for tech and software startups that are already included in proposals offered by Congressional Republicans and Democrats, and by President Obama. Legislation should:
Create a cheaper, faster alternative to litigation by allowing the Patent Office to review – when evidence justifies – all business method and software patents so that start-ups have a chance to fight against the bad quality patents that are trolls' main ammunition.
Require the Patent Office to create public searchable demand letter databases so we can track the basis and volume of patent claims and quickly identify abusive trolls;
Reduce litigation costs by requiring parties to pay if they demand more than “core” technology documents, which are generally all that is needed to know if a technology is infringing.
Protect end-users of off-the-shelf hardware and software. Just as coffee shops should not be sued for providing wi-fi to customers, app developers should not be sued for using off-the-shelf APIs that infringe a patent.
America cannot afford to let extortionist trolls continue attacking innovative startups. Please support prompt and targeted reform of our patent enforcement and litigation system, including the referenced provisions that are already included in several legislative proposals.