
How Like.com Shut Down A Competitor–And Broke Up Its Funding Round - churp
http://blogs.forbes.com/tomiogeron/2011/04/28/how-like-com-shut-down-a-competitor-and-broke-up-its-funding-round/
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vnorby
Like has always been a problematic company. I've heard from many people that
they didn't even use computer vision or any algorithms for most of their
matching, and a lot of it was done by hand in other countries. I don't really
know why Google bought them, to be honest. Even the product they launched at
google, Boutiques.com, had a 50% decline in traffic after launch:
<http://siteanalytics.compete.com/boutiques.com/>. Good domain names only get
you so far.

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ksolanki
While I do not agree with the patent bullying especially because the said
patent was very general, I would not go to the extent to say "they didn't even
use computer vision or any algorithms for most of their matching". I know a
couple of smart computer vision engineers who worked there, and probably the
stuff done "by hand in other countries" was getting the training data and
getting a lot of it, which I think is fair.

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iag
Having been bullied by a bigger company in the past, I feel really bad for
Modista founders.

My best wishes to Arlo and AJ. What comes around goes around, the valley is a
small place and these things don't go unnoticed.

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rgrieselhuber
The problem with cases like this is that the only reason Like.com was able to
get away with it is because of how much money they had.

The patent system, in cases like this, is merely camouflage for anti-
competitive drive-bys.

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michaelpinto
What concerns me is that the patent troll mindset has filtered down from the
usual big players to the little guys who are starting out. I think if you've
done something unique like come up with a cure for cancer you deserve a
patent, but on the other hand so many patents seem just a bit too vague.

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VladRussian
>I think if you've done something unique like come up with a cure for cancer
you deserve a patent

even in this case i'd say it depends on whether it was done on your own dime
or public money

~~~
kenjackson
Unless the public money came with a string that says, "no patents" then its
fair game (its not unusual for the university, for example, to have first
right at patents if done there). Everything is done partially on public money.
You use public money to drive the paved roads. Public money to build and
research the foundation of the web. Public money to have police and a judicial
system so people don't simply take your ideal completely with no attribution.
Public money that funded prior cancer research that you read.

~~~
VladRussian
>Unless the public money came with a string that says, "no patents" then its
fair game (its not unusual for the university, for example, to have first
right at patents if done there).

that just shows wide-spread mismanagement of public money. At all the private
companies i've worked, i signed the document that all my patents done on the
company's dime, are to belong to the company.

>You use public money to drive the paved roads.

And thus the contractor-builder of the road can't charge the toll on the road
(well, except for the cases when he got a sweet deal what normal people would
consider mismanagement of public funds )

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kenjackson
_that just shows wide-spread mismanagement of public money. At all the private
companies i've worked, i signed the document that all my patents done on the
company's dime, are to belong to the company_

But private companies are very different than governments. Private companies
generally want to make sure that no one else has this IP, but themselves.

A government, at least a capitalist one, is generally happy that you're
incentivized to invent and create patents. Although they may want to also have
use for themself, but it needn't be exclusive (like your employers desire).

In US we have the Bayh-Dole Act which gives you ownership of your invention,
but of course, the US has a "non-exclusive, non-transferable, irrevocable,
paid-up license to practice or have practiced on its behalf throughout the
world".

I don't understand how you can consider that mismanagement of public funds. It
seems to satisfy both the capitalist angle and the greater good.

And to be clear this only applies if you take direct funding from the
government, typically in the form of a grant, where you sign a specific
agreement. Using public goods, such as the roads, street lights, food
inspection, don't impose any obligation on your part -- except taxation.

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VladRussian
>I don't understand how you can consider that mismanagement of public funds.
It seems to satisfy both the capitalist angle and the greater good.

As a shareholder(taxpayer) of this corporation(government) i think it is a
mismanagement of the funds to allow for the uncompensated re-assignment of the
rights to the direct products of the direct investments done by the
corporation. You think it is not. Difference of opinions. As in the example i
mentioned before - when contractor/builder gets full rights for the toll on
the road he merely built and when he was paid in full for the work - i'd see
this as mismanagement, and you'd see this as the capitalist angle and the
greater good. Difference of opinions.

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kenjackson
_i'd see this as mismanagement, and you'd see this as the capitalist angle and
the greater good. Difference of opinions._

Fair enough... maybe it's obvious from the name: Vlad _Russian_ :-)

~~~
VladRussian
yep. I've got a chance to study Marxism theory which clearly state main
principle of capitalism as "whoever owns the investment owns the profits"

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ilamont
From Figure 5 of Like.com's patent:

 _510\. User selects an image of a merchandise > 520\. Perform image analysis
> 530\. Perform similarity operation to identify merchandise that is similar >
540\. Return result with images of merchandise deemed similar_

From Fortune column, a description of what Modista could do:

 _It could take a particular handbag and match it to other similarly shaped
and colored items._

According to Kumar, "Modista’s technology was better". Then, Kumar "contends
that the patent should not have been given in the first place" and "Modista
should’ve been given the chance to compete on its own merits."

I don't know about the validity of the Like.com patent or how different
Modista's processes are from those described in the claims of the Like.com
patent. But, looking at the patent issue from another perspective: How would
Kumar feel if one of K9's other portfolio companies -- such as twilio, whose
cofounders have filed for several patents -- learned about an upstart with a
very similar technology? Would he be willing to let the company compete with
twilio on its own merits? Or would he want twilio to play hardball, too?

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ksolanki
Image similarity search has been around since eternity (read early 90's), and
a patent claim that _Perform similarity operation to identify merchandise that
is similar_ (510 -- 540) should not have been awarded in the first place.

~~~
iwwr
It's patenting a math theorem by replacing the generic variables with more
concrete objects. This too could be patented: _"a technique for calculating
the number of facade bricks of a stone pyramidal structure"_

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gyardley
The lawsuit's a bit aggressive, but taking a meeting with a VC when you're not
fundraising in order to mess with someone else's raise is fairly common.

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kenjackson
Really? I had never come across that myself. Are there any stories you can
relay yourself or links? Very interesting.

~~~
gyardley
Probably not in public, no.

The next time you get called by a junior analyst at a time when you're not
raising and haven't gotten any tech press, it's likely because someone else is
raising -- ringing up competitors is a pretty standard part of due diligence.

You can sometimes figure out who's out raising just by asking your own
investors -- they tend to know what's going on at other firms.

Not everyone is sweetness and light in this situation. Really, blocking a
competitor from raising is the only reason why you should take the call.

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pedalpete
The author makes a big mistake saying 'If [Modista] was better than Like.com
it would win'.

The best technology doesn't always win, and I'd argue often doesn't due to a
myriad of issues.

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colinplamondon
'Shutting down a competitor' is known colloquially outside Silicon Valley as
_winning_.

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tomjen3
Which is why the US is spiraling down the toilet while Silicon Valley is doing
better than ever.

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ChuckMcM
Hmm, underwhelmed to be sure.

The blog article would be better if it wasn't 100% whine. Linking the original
[1] would have been better HN material.

Nobody told the founders at Modista to file a patent on their work? There's
$2500 bucks that would have been well spent. They could have simultaneously
achieved patent protection and a re-examination of Like.com's patent. Since
Like's would come up as an office action, they would turn around and send all
the prior art that shows why their idea isn't like that patent but that even
that Like's patent didn't have any original ideas, which internally could have
started other wheels rolling.

Like it or not, you have to file patents for things that you are doing that
are cool. This does two things for you, one it brings out people who might
have applied for or done something similar, and two it gives you a way to
prevent other people from jumping into your space. The Like.com guys did that,
the Modista folks did not.

[1] <http://k9ventures.com/blog/2011/04/27/modista/>

~~~
suking
Good luck getting a decent patent attorney for $2500... order of magnitude or
2 off.

~~~
ChuckMcM
Actually I've filed several patents, have a few that have issued over the
years too. I hope you weren't mislead by some attorney that you have to be a
lawyer to file a patent.

I don't know if you read stuff from Nolo press [1] but we are fortunate that
you can get the help you need for filing a patent in Sunnyvale [2] The last
time I checked the filing fee was like $1500. You do need to put it in the
form required for the application, and you need to respond when the patent
examiner sends your patent back with questions.

Attorneys are nice, they provide a service which takes a lot of worry out of
things and some of them are pretty aggressive at getting the patent issued
even if the claims whittle down to something fairly obscure but they do charge
by the hour. The last time I saw the bill for doing the patent paperwork it
was about $12,000 total.

[1] <http://www.nolo.com/products/patent-it-yourself-PAT.html>

[2]
[http://sunnyvale.ca.gov/Departments/SunnyvalePublicLibrary/R...](http://sunnyvale.ca.gov/Departments/SunnyvalePublicLibrary/ResearchOnline/PatentsandTrademarks.aspx)

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fedd
useful info, thanks, though even a $2500 could be a problem for a startup, not
even $12000

