[CPlatypus]

The OP wouldn't seem quite so hypocritical if VCs didn't put immense pressure on startups to generate patents. Don't tell me those patents are supposed to be purely defensive, either. They were supposed to stake out a bit of technical turf, just like Yahoo's doing. I'm not saying it's right, but I don't think much of demanding patent generation on one hand and then complaining about their use on the other.

If you want to oppose software patents - and you should - then be consistent about it. Either forego them entirely, or require via contract that they be used only defensively. The latter is the approach taken by my employer, BTW, who also spends more money than anyone else fighting software patents. As schizophrenic as that strategy might seem, I believe it's the right one for the crazy world we live in.

[spolsky]

Union Square Ventures, of which Fred Wilson ("the OP") is a partner, is an investor in my startup (Stack Exchange). They never put pressure on us to generate patents. They have been consistently anti-patent for quite some time. They have complained frequently that a third of their portfolio is under attack from patent trolls. They have organized fundraisers and meetings which I have attended with Senator Chuck Schumer from New York to press their position for patent reform.

Maybe YOUR stone-age, backward-ass VC thinks that startups should generate patents, but don't tar Fred Wilson with that brush.

[brudgers]

As a publicly traded company, Yahoo does not have the same discretion as a company like StackExchange.

I also suspect that startups capable of the sophistication StackExchange brings to the selection of a VC are a distinct minority.

[CPlatypus]

I got tired of this and other VC games after my tenth startup a couple of years ago, so I guess it is possible that attitudes have changed. Even if Fred is one of the good guys, though, I'd still bet that he's in a small minority. That's the real point, which of course has been missed by most of the responses. Pick a random startup and go look for patent applications. Most of them clearly are pursuing that strategy, and most of those are likely to be doing so at the behest of their investors. This has been going on for many years, so why is it suddenly evil when Yahoo! does the totally inevitable? Is there seriously any reason to believe that Etsy or Twilio - USV companies for which I've already found applications - wouldn't? This kind of thing won't stop until people like Fred refuse to invest in companies that are pursuing patents without a binding commitment to use them only in defense, and for all their strong words they don't seem to be doing that.

[stevoski]

"Dima is Russian. Some Russians are crooks. Therefore Dima is a crook."

This bad logic is what you are applying here.

[Karunamon]

Firstly, an analogy to people is going to cause a lot of emotional load for no reason, so this is flawed from the word go.

More to the point, these patents are objectively BS. Go look at the claims. There is not a single, novel claim among the whole lot, and you could probably pay a college kid an hour's wage to find prior art on every single one of them.

[fredwilson]

we don't do that at USV and never have. i agree that the VC industry is guilty of that practice, but we are not.

[brudgers]

I don't think that in general the practice is something over which the VC industry should feel guilty. Venture Capital has historically and continues to fund industries where patents are appropriate, e.g. semiconductors.

Software patents are problematic, but only because of the general features of the patent process and the fiduciary responsibilities of boards of directors to their shareholders.

[bobv]

Not nearly good enough as an answer. I've watched dozens of investors pressure founders about patents. Usually it's in the guise of the valuation of a company - what intellectual property am I investing in? - and the idea of defending himself later is used as a rationalization.

It doesn't matter at all whether Fred's firm does this. Union Square Ventures isn't suing Facebook either, that's another behavior they're not engaging in. They're also not actually coding software.

What matters is that Fred wrote a seething post about the patent system without mentioning how many if not most bogus patents get created in the first place - at the urging of the other guys on his side of the table.

[CPlatypus]

"I encourage all of our portoflio companies to file for as many as they need"

http://www.avc.com/a_vc/2006/04/patently_absurd.html

If you're letting them spend your money on filing patents without any kind of binding commitment to use them only in defense, and there's plenty of evidence at USPTO that your portfolio companies are still doing just that, then you're not clearly any different than any other VC in that regard.

This madness will not stop until there's more retaliatory capability than first-strike, and that won't happen as long as there's money pouring into the acquisition of first-strike weapons. Those who fund the stockpiling are culpable, no matter what they say as they're doing it.

[corin_]

It's quite possible that Fred's actions do make him a hypocrite here, but can you show that they do, rather than waving your hand at him and calling him a VC?

[route66]

Fred's official standpoint is here (the slug already says it):

http://www.usv.com/2010/02/software-patents-are-the-problem-...

Of course it is not clear if he lives up to that stance in all cases (http://www.usv.com/investments/) , but I read CPlatypus' statement more as pointing out the structural problem.

[CPlatypus]

That's not Fred's official standpoint. The author is Brad Burnham.

[corin_]

Funny that him being a VC is specific enough to argue your case, yet an official blog post from his company, written by a partner of his, is a little too vague and probably doesn't represent his opinion.

[CPlatypus]

His blog title is "A VC" plus right at the top of the page it says "Fred Wilson is a VC and principal of Union Square Ventures" so yeah, I think I was on pretty firm ground there.

[JoachimSchipper]

There is no doubt that Fred Wilson is a VC. You haven't shown that he pushes startups to apply for frivolous patents, though.

[lusr]

Not only that but Fred would have to push for enforcing the frivolous patents for OPs criticism to be justified.

[CPlatypus]

No, he'd just have to allow that. Anyone can say they're spending all that money on lawyers for purely defensive purposes, but without a public written commitment it's just BS. If the talent leaves and the business dries up, the intellectual property is often the only asset remaining. That's why VCs demand it, so they can minimize their losses by capitalizing on the IP. I have friends whose names are on patents that have been abused, and they're livid about it (or in one case severely depressed) but there's nothing they can do. If the intent is to use patents only defensively, why not put it in writing? If somebody doesn't, anybody else who believes that will be the case anyway is hopelessly naive. It's part of the game plan from before the moment of filing.

[CPlatypus]

No, sorry, I'm not in the room at other people's startups when they do that. What I can do, however, is look at the list of investments at Union Square Ventures where he's a principal. Then I can find patents and applications for founders and VPs at Etsy, Twilio, GetGlue, and others. I've probably been at more startups than most in this thread, and I've been under that pressure myself, so I know exactly how that happens. Do I know Fred was involved here? No. Does it seem likely? Yes. He sure doesn't seem to take a strong stance against the practice, does he?

[webwright]

Wow. Stereotypes are a real timesaver, eh? Judge the man by his actions and words. Not his freakin' job title.

[nikcub]

This comment is nonsense and is guilt by association. Fred has been on the record numerous times advising startups not to bother with patents.

[CPlatypus]

[citation needed]

[nikcub]

for starters, in the comment section of the original post

and besides, the onus of citation should be on you with your crazy broad assumption that Fred has placed 'immense pressure' on startups to generate patents.

[CPlatypus]

I just looked at all of Fred's comments on that thread, and saw no such thing. Please don't lie just because you find the truth about startups and patents inconvenient.

[pg]

Please don't lie just because you find the truth about startups and patents inconvenient.

Will you please stop? The fact that you're having to hop all over this thread defending yourself should make you reconsider what you said, not start calling third parties liars for contradicting you.

[larrys]

He may be wrong and he may want to consider his views based on what others are saying. He may also be annoying you and others.

But the fact that he has to "hop all over this thread defending" does not mean he is wrong in what he is saying. Edit: It just means the group here does not agree with what he is saying. The group has disagreed with what I have said in the past as well.

I appreciate hearing his views although he uses language that I wouldn't use "lie" etc.

But I also don't believe in bullying. Saying "will you please stop?" in a "we don't need you around here" way seems parental and a put down to me regardless of whether it's deserved or not.

[nikcub]

you mustn't have looked hard. Fred is very well known for his views on patents. from that thread:

http://www.avc.com/a_vc/2012/03/yahoo-crosses-the-line.html#...

http://www.avc.com/a_vc/2012/03/yahoo-crosses-the-line.html#...

more importantly, where is there even a single citation of Fred placing immense pressure on even a single startup to generate a patent?

You should retract your comment, since you made it all up.

[doktrin]

The burden of proof is on the accuser. In this case, that would be you. I enjoy HN for the evidence-based approach that most posters take.

Claiming someone is guilty by association or virtue of their profession is bad form.

[davemel37]

I think his point was that these "Specific" patents were bogus patents in the first place...

"None of them represent unique and new ideas at the time of the filing. I supect they all can be thrown out over prior art if Facebook takes the time and effort to do that."

I do think that pre- IPO this is a pretty dirty play. You might have a point if you can show a case where Fred Wilson or VC's sues other companies right before an IPO on bogus patents...I am not aware of any such instance.

[CPlatypus]

That's a fair point, but I don't think it gets very far. He also goes on to say, "I don't think there's a unique idea out there in the web space and hasn't been for well over a decade." That's a pretty common attitude. Have you ever seen anyone say "yeah, that software patent is truly novel"? Ever? I haven't, so he's not really making a distinction between these specific patents and others. Without such a distinction, he's essentially saying that any patent suit would be wrong . . . but then why do he and his ilk put such pressure on startups to generate the raw material for those suits? Whether Fred himself is actually hypocritical on this point is not clear, but without a strong statement from him about that kind of pressure - and there's none in that post - he still seems so.

Is it a bit dirty to do this immediately pre-IPO? Yeah, I think so, even absent other concerns. But Fred's comments go far beyond these specific patents at this specific time. He talks about a very general "unspoken line" that web companies shouldn't cross. It's the general statement I object to, not the specific one.

[brlewis]

Please see route66's comment which points to Union Square Ventures' official position on software patents. (USV is Fred's VC company.)

To answer your question about novel software patents, yes, I've seen people say the RSA patent was novel. However, novelty is only one of three requirements for patentability. RSA is essentially a mathematical algorithm patent. It's not statutory material for a patent, any more than Benson's patent was.

[harryh]

Any chance you could post (or privately send to me) information about the process by which you contractually set up patents so they can only be used defensively? I'm very much interested in doing the same.

BTW, you're taking a lot of heat in this thread that you don't deserve. I work at a VC funded startup (with USV as an investor no less) and I basically agree with you.

[CPlatypus]

Don't worry about the heat. Karma here has no value, or perhaps even negative value, to me. What I'm saying about VCs, startups, and patents is real and important, even if some self-interested HN'ers don't want it heard or even if Fred was the wrong frame on which to hang that picture. I'll burn some karma to get the word out about the real source of the problem and the real solution.

To answer your question, of course IANAL but the way to do this is to assign the patents to an external entity such as http://www.patentcommons.org/ or http://www.openinventionnetwork.com/, where that entity has a charter allowing only defensive use - and preferably with other entities involved to enforce that charter. A public statement like http://www.redhat.com/legal/patent_policy.html doesn't hurt either, though it's not legally binding. Now, PC or OIN might not be the exact right vehicle for you, for other reasons, but that's the basic approach.

Disclaimer: I work for Red Hat, which is a strong proponent of this approach and supporter of these organizations. Until software patents go away - and Red Hat is supporting that effort too - this is the only way to play the game that is both safe and (IMO) moral.

[vidarh]

I've worked in, and co-founded, several VC funded startups, and even have my name on a patent. Despite that I have never come across a case where the VC's pushed for patents at all, and several where they thought it was a waste of time and money.