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Disruptive Competition Project

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Selling Gridlock


Rarely is spam so instructive.  My colleague received an unsolicited email today that nicely encapsulates how seriously off the rails the patent system has run.  Wavepoint M&A, a self-described “International M&A” specialist with a particular focus on the tech sector, sent out a mass email advertising its sale of HP patents for “location-based services.”  The very first selling point listed in their sales pitch was the kicker:  “Provide a greater barrier to entry in your business sector.”  Well, at least it’s honest, which isn’t always the case in patent-mongering.

A consistent theme that we will elaborate on at DisCo is how the patent system is broken.  As it currently operates, particularly in the software space, patent thickets impose entry barriers largely because of the uncertain and highly-abstract nature of many of the patents granted (not to mention the sheer number).  It’s like trying to avoid trespassing without knowing where private property starts and the public street ends.  At the end of the day, you probably won’t try to walk down that street.

Naturally, this negatively affects startup companies trying to bring their products to market. Good luck trying to figure out what patents pertain to you if you want to get into the smartphone space, as even conservative estimates put the number of patents at play as around a quarter of a million.  As some great new research shows, it is effectively mathematically impossible to not to infringe on a software patent when creating new software. That’s right, apparently no new original ideas exist. Good luck setting up that software company in your garage… and you should probably make sure your second (and due to the sheer number of patents, probably your third, fourth, fifth and sixth) hire is a patent attorney.  Did I mention these guys are pretty expensive too?

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.