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Why the Decks are Stacked Against Software Startups in Patent Litigation
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| Iâm sure you can already see the problem.
| What software startup has $5 million to burn
| on defending a case with no value-add? Even
| $500k? Iâd say it takes $1-2 million or
| thereabouts just to get through claim
| construction, which will give the parties a
| better sense of the overall merits of the
| case. One patent suit with a slightly
| determined plaintiff could very easily end a
| software startup just in legal fees, let
| alone the impact of the suit on gathering
| customers in the future.
|
| So, software startups have to settle patent
| cases very early, and at high settlement
| amounts, because they have absolutely no
| leverage. Invalidity takes years to
| litigate, so you canât threaten to
| invalidate the patent; same with inequitable
| conduct. Non-infringement arguments are
| great in theory, but the plaintiff wonât
| have a judgment day until the middle of the
| case at the earliest, after claim
| construction, when summary judgment motions
| are allowed (on most schedules), and thatâs
| several years of litigation and several
| million dollars away. The defendant could
| file for a re-exam, but once itâs filed, the
| defendant has no control over it, and it
| takes a few years to get through the PTO.
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http://www.technologyreview.com/blog/post.aspx?bid=358&bpid=25040
Our Unlimited Government
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| In the 1981 Diamond decision, the majority
| effectively reversed 1978's Parker v. Flook
| decision to disallow software patents. As
| Lee has persuasively argued, software
| patents have proven an overwhelmingly
| destructive force that inhibits economic
| growth by crippling small, innovative
| software developers. In both of these
| decisions Justice Stevens worked to limit
| the power of the government to reward
| entrenched interests. Yet this is a kind of
| jurisprudence that many, on the right and on
| the left, object to on grounds of judicial
| restraint.
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http://www.forbes.com/2010/04/12/supreme-court-stevens-government-opinions-columnists-reihan-salam.html
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