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[News] Why the Patent System is Unfit for Small Businesses

  • Subject: [News] Why the Patent System is Unfit for Small Businesses
  • From: Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx>
  • Date: Thu, 15 Apr 2010 08:58:14 +0100
  • Followup-to: comp.os.linux.advocacy
  • Newsgroups: comp.os.linux.advocacy
  • User-agent: KNode/4.3.1
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Why the Decks are Stacked Against Software Startups in Patent Litigation

,----[ Quote ]
| 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.


Our Unlimited Government

,----[ Quote ]
| 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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