

How to sue Microsoft - and win - edw519
http://money.cnn.com/2009/12/23/smallbusiness/i4i_microsoft_lawsuit/index.htm

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tptacek
This is a great strategy if your lifelong dream is to get rich off a legal
settlement. It's not at all instructive for startups.

Note the delay from filing the patent to having it issued: theirs was
unusually fast. The last patent filed in my name took over 8 years to issue,
and Arbor had very excellent IP lawyers. That's 8 years before you can even
file a suit.

Assume you instantly find a deep-pocketed violator of your patent. Add up to a
year just to get to the point where you're ready to sue, and several more
years to pursue the lawsuit. Spend --- according to this article --- several
million dollars just in legal each of those years.

Then flip a coin to see if you get anything back.

Patents are a waste of time for startups. If your company is even around for
the entire window of time needed to execute this strategy, you've done
something wrong.

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grellas
Excellent points about the article but, in my view, it is too extreme to say
that patents are a "waste of time for startups."

Patents can and do help startups with their positioning for funding, among
other things, though software patents usually are a waste of time, as is _any_
strategy based on the idea of using patents to take on a large player in the
marketplace, unless one wants to become a patent troll.

~~~
tptacek
But every hour spent on patents (and babysitting patent lawyers takes many,
many hours) is an hour not spent executing on the core business. So you have
to ask yourself, what's going to improve my positioning more: the same freeze-
dried reconstituted IP PowerPoint strategy used by every other VC-backed
company, or N x $50,000 more revenue?

Just to be devil's advocate.

~~~
grellas
Just speaking from considerable experience that a _minority_ of startups can
benefit hugely from a good patent strategy (e.g., saw one of my early-stage
fiber optics clients get to $400M annual run rate and multi-B valuation, with
the dozens of patents filed by its founder proving to be a major factor in
valuation at interim funding, at IPO, and at ultimate merger with JDSU).

I find your overall logic compelling, however, as I have seen startups use
patents all too often for empty positioning, at considerable cost.

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DenisM
_Two years spent in and out of courts across the U.S. cost i4i $10 million in
legal fees._

Ouch.

~~~
wglb
As noted here previously: <http://www.tinaja.com/patnt01.asp>

He says that $14 million or so is the break even point for patents.

