Daniel Tunkelang reports a sad and true story of a startup threatened by patent lawsuit. A much larger competitor called to say "shut down and come work for us, or we’ll crush you with a patent infringement suit." Yikes!
Whether or not you believe that there should be software patents–and there is room for reasonable people to debate this question–I hope you agree that the situation my friend is facing amounts to legalized extortion. I understand that no system is perfect, and that our legal system requires compromises that have inevitable casualties.
Nonetheless, my friend’s story does not feel like an isolated incident, but rather evidence of a systemic problem. There are a lot of software patents floating around right now of dubious validity, many of them granted to companies that have since folded and have unloaded their assets in fire sales. It would be sad for this supply of ersatz intellectual property to impede the real innovation that the patent system was intended to protect.
The legal or patent appeal systems can to deal with this, of course -- eventually. Unfortunately, a firms options for recourse take time and money -- both in short supply in startup land.
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