Ongoing Patent Fights Mean Startups Are Now Wasting What Little Money They Have At The Patent Office

from the not-cool dept

Last week, I had the chance to chat with the General Counsel of a well known internet company -- not a "giant" one, but one you've almost certainly heard of -- and we got to discussing Twitter's new patent assignment agreement with its employees, and whether or not other tech companies would start offering the same thing. He was a bit skeptical, and pointed out that, even at a company the size of his (big enough to have a full time general counsel, for example) they had applied for exactly zero patents. He said he's tried, but none of the engineers at the company have any interest at all in patenting what they're working on (actually, in talking to someone else later on, I heard that the bigger issue is that some of the employees are thinking about ways to open source their work). Either way, the lawyer noted that, because of that, any patent assignment agreement was something of a waste of time. His company just wasn't interested.

Unfortunately, it appears that not all startups are working that way. With Yahoo's patent fight against Facebook getting so much attention these days (not to mention other big patent fights involving companies like Google, Apple, Microsoft, Oracle and others...), it seems that startups are (rather reluctantly) spending a lot more time (and money) at the Patent Office.

This is, to put it mildly, crazy. The two biggest scarce resources for startups are time and money. Throwing them away on getting patents is a huge waste, and it's main purpose is to act as insurance against failure or against jealousy over extreme success. Basically, most patents are completely useless. But if a company is failing, then perhaps it can sell off its patents. And, if a company is succeeding, then suddenly others will start suing it for patent infringement -- and the hope (rarely realized) is that having at least a few patents in the portfolio means that other practicing entities won't sue for fear of getting sued back (patent trolls are exempt from this, however).

It's really too bad that the state of the patent world today is such that are most innovative companies are basically forced to throw away time and money to apply for patents they never want to use.

One separate aside on this story. The article talks about the Twitter IPA agreement, and later quotes the founders of the startup Everyme as saying they support the IPA, but: "their first three apps were already with the U.S. Patent and Trademark Office by the time IPA was available, though, and they don’t plan to refile them." This sentence makes no sense. The IPA has nothing to do with the USPTO and the patent filing. It's merely a part of the assignment agreement, leaving some portion of control with the inventor. In fact, Twitter -- who does have some patents -- has said that it's using this agreement retroactively with patents that were applied for before the IPA existed. So there's no reason to refile the applications at all. In fact, the IPA is entirely separate from the actual patent application.

Filed Under: ipa, patent assignment, startups, uspto
Companies: apple, google, microsoft, oracle, twitter, yahoo