Wednesday, May 20, 2015

How to kill the next generation of US startups

The proposed Innovation Act (HR 9) is supposed to target only patent trolls. But as the National Venture Capital Association and 144 major universities warn, the bill's poorly drafted provisions actually will undermine the startups and small businesses responsible for nearly all breakthrough innovation and job growth in the United States.

At the very least, Congress should ask powerful supporters of the bill like Google and Amazon to explain their recent (and rather convenient) change of heart regarding patents.

When Google was a startup, after all, it filed its seminal PageRank patent before it even had a business plan, venture funding or a domain name -- and then paid Stanford University $336 million in shares for an exclusive license to it. But today Google claims that patents (especially software patents) "hinder innovation" -- a rather disingenuous argument from the first company in the world to build its initial success on a software patent.

And what about Amazon's famous one-click software patent, granted in 1999? Only 23 days after it obtained that patent, Amazon filed a patent suit against its then-larger competitor Barnes and Noble.

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