
The Patent Pledge - anateus
http://paulgraham.com/patentpledge.html
======
tc
It's not immediately clear to me whether this solves any part of the current
problem. But on reflection, I believe I understand the motivation here.

Big companies that use patents as a revenue stream (MSFT, IBM, etc.) typically
bide their time and bring a patent lawsuit once a new company is established
and there is blood to drain. It's the threat of such a lawsuit in the future
that can negatively impact investment in a startup, as the right collection of
patents could conceivably capture much of the economic surplus of a new
venture. Alternatively, a big company might use the threat of a patent
lawsuit, now or in the future, to push a young company to agree to an early
acquisition.

The pledge doesn't seem to have much impact on these scenarios, even if a big
company were to follow it rigorously.

Most of us, I believe, would prefer to see companies make a stronger
commitment: "No first use of software patents" [period]. Google hasn't made
this pledge, but to the best of my knowledge, they've acted in this way so
far. It does seem in line with "don't be evil."

That said, I think I see what PG is going for here. He wants companies to make
a pledge that, at a minimum, allows a new product or service to be tested on
the market. That way, if it gathers traction, it will attract investment
despite the threat of patents, and the new company will be able to mount a
reasonable defense.

Perhaps more importantly, though, by allowing the product to succeed first,
even in a modest way, it makes the offensive use of patents worse PR for the
big company. Killing a successful product with patents is no longer an
abstract issue. It takes away from customers and the market something very
real.

~~~
pg
If you want to start a movement, you can't aim too high initially, or you just
stall. The patent pledge in its current form is at least fairly easy to
swallow. If it sticks, it will have the effect of making patent suits against
competitors seem more dubious, which would in turn prepare people for more
exacting versions.

How far ultimately would you want to push it? I honestly don't know yet.
Patents may have some utility. It's a very complicated question. I've read a
lot about the history of technology, and I can't say for sure whether things
would have gone better or worse without patents. The topic seems to be one of
those where on average the strength of people's opinions is inversely
proportional to how much they've studied the problem.

~~~
jbooth
Well, it stinks when you try to do something good and then catch a bunch of
crap from people doing nothing, for not doing enough. So I don't want to do
that.

But here's the thing - while this is good, the Intellectual Ventures of the
world are actually wining and dining congressional aides and maxing donations.
The financial industry got that patent carve-out a couple months ago that
_only applied to their industry_. Until tech people get into the game, full-
court press in DC and get actual job creators and moneymen in front of
congressmen telling them that this stuff destroys jobs, they're not going to
be represented.

You're not obligated to go on a personal crusade on this, and it sounds like a
big hellish pain in the ass that would be a net loss for you personally and
for YC by entangling you in politics. But until someone does, people in favor
of patent reform are going to be unilaterally disarmed.

Maybe some sort of industry lobbying group for small tech biz that's not
beholden to the big corps would be effective. A small amount kicked in by some
of the major angels/VCs, and a limited lobbying mission of "stuff that
everyone can agree to" which would certainly include abusive patent use.

~~~
earbitscom
That is the precise point of this initiative. Since lobbying for reform is
timely, not going to make immediate change, and ultimately becomes a war of
finances, the goal is to bring consumer awareness to the issue and create an
environment where being on the pledge list is a big benefit to companies. It
also puts those companies together on a team for this issue, which may lead to
other "rules" that help force the change. Since it's not targeting patent
trolls with actual products, you may even end up in a situation where large
companies on the list decide that the only people they litigate against are
those who are inhibiting innovation from others. For example, Bump won't
license its patent to any companies not on the list. Basically, stop blocking
innovation, or be blocked.

~~~
jbooth
Yeah, since posting I realized that a list of pledgees is exactly the kind of
list you want if you're going to form an industry association based around
this issue. So good on pg in general.

------
beagle3
I disagree that this will help, because the established companies the pledge
would apply to are a secondary problem and mostly seem to fight each other
(has Microsoft asserted patents against a startup? has IBM? has AT&T? when
they asserted patents it was against multi-million dollar businesses!). The
primary problem is patent trolls (see e.g. lodsys / intellectual ventures) for
whom this pledge could be considered self-harm.

I will quote myself from [ <http://news.ycombinator.com/item?id=2855835> ]
here for another solution, one that actually can _easily_ go through
government (except for the intense lobbying against it by whoever enjoys the
current patent regime); you can read there for some discussion if it is
interesting. Quoth myself (with minor editing):

Intellectual "Property Tax". Have everyone declare the value of their
intellectual "property" (patents, copyrights, trademarks) - each and every
item, for that year, on their tax return, and have them pay 1% of the value as
"IP tax", per year.

Clarification: you can set a different value every year. The value may drop to
zero because a competitor's patent solves the problem better; or it may go up
because it becomes essential to something that becomes commonplace.

That amount is what one pays for a compulsory license or if successfully sued,
and up to 3 times that for willful infringement, per year -- and no more. (But
of course, a patent owner can always negotiate a lower payment, as is done
with music recordings that have compulsory license agreements)

All of a sudden, everyone has an incentive to state a reasonable value for
their patent. Copyright catalogs that are not being published (old music
recordings, old books, old movies) would be assigned 0 value by copyright
holder, to avoid tax - which means anyone can freely make a copy. If they
believe -- at the end of the year -- that someone is making a profit at their
expense, they can set the value as high as they want at the end of that year,
pay the tax, and sue the profiteer.

Simple, elegant, and coffer filling.

edit: put missing link

edit: added clarification about setting value each year anew.

~~~
veyron
Everyone will game the IP tax by valuing it at pennies -- after all, they may
not directly be using it may not have a fair market value before they take
someone to court.

As a real-life example of people gaming these types of taxes, people buy
expensive (>100K USD) cars in europe directly (i.e. taking delivery in
stuttgart) to save on the sales tax: driving it around for a bit ensures that
the car is technically "used" when brought back here, circumventing new car
taxes.

~~~
defen
I haven't thought through OP's proposal, but your objection is covered - by
valuing a patent at pennies, a company would cause compulsory licenses/willful
infringment penalties to also be worth pennies.

~~~
veyron
No but the taxes would have to be paid only after a successful patent case.
The point is that the patent has no real market price until the first
successful willful infringement penalty. Until that point, the price is
arbitrary.

~~~
beagle3
Until _before_ a patent case. The taxes are what gives you the ability to sue
(and a limit to the damage you can be awarded), and there is no guarantee you
will win your case of that your patent will not be invalidated.

Again, you have to pay the tax _before_ you can sue, and then you can only sue
for the value reflected by the tax for that year, no more (and you are still
subject to invalidation, etc).

------
ansy
PG, was this pledge created in response to litigation you have experienced
with YC companies?

There doesn't seem to be much evidence companies with fewer than 25 employees
are getting sued unless there's something left unspoken here.

I think it would be more constructive to begin the discussion of what patent
reform should resemble so that companies and individuals can show support for
it. Some kind of software patent working group that can put forward a vision
that everyone can get behind. If enough people and companies come to support a
way of thinking then it will slowly affect current behavior and ultimately
shape the legal framework of the future.

Even if it was a problem that companies smaller than 25 were being sued for
patent infringement, I'm not sure the legal litmus test should be how many
employees are at the company.

~~~
pg
IIRC none have actually been sued, but one has been sent a letter saying
they're violating a competitor's patent. What made me start thinking about
this idea was a combination of that letter, this story:

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

and the fear that YC applicants working on education software have of the
notoriously litigious Blackboard.

~~~
tgriesser
Interesting, it looks like Blackboard has their own interpretation of a
"patent pledge," but it only covers open-source and non-commercial software.

[http://www.blackboard.com/About-Bb/Patents/Patent-
Pledge.asp...](http://www.blackboard.com/About-Bb/Patents/Patent-Pledge.aspx)

~~~
nl
They did this because of the outrage from the Moodle community over some of
these patents.

There was talk of a formal attempt to get some of them overturned but this
pledge took a lot of the heat out of the outrage.

------
dctoedt
AlexBlox asks in an earlier comment: " _does publicly stating this pledge bust
any opportunity to double back (i.e. it is more legally binding than just a
pledge?)_ "

A court might well hold a company to such a pledge, on a theory of "equitable
estoppel." This type of defense to an infringement charge is always highly
fact-specific; here's an example of a case in which the defense succeeded:

A patent owner accused a manufacturer of eyeglass frames---which it had
previously sued for infringement---of infringing other patents. After back-
and-forth correspondence---in which the manufacturer denied infringement---the
patent owner went silent for three years. In the meantime, the eyeglass
manufacturer expanded its marketing efforts for the products in question.

The trial court held that the manufacturer was not liable for infringement, on
grounds that the patent owner's actions, in view of all the circumstances, had
misled the manufacturer into thinking it would not be sued. The appeals court
found no error in this holding [1]; it explained that:

" _In the context of patent infringement, the three elements of equitable
estoppel that must be established are:_

 _(1) the patentee, through misleading conduct, led the alleged infringer to
reasonably believe that the patentee did not intend to enforce its patent
against the infringer;_

 _(2) the alleged infringer relied on that conduct; and_

 _(3) due to its reliance, the alleged infringer would be materially
prejudiced if the patentee were permitted to proceed with its charge of
infringement._ "

[1] Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., 605 F. 3d 1305 (Fed. Cir.
2010) (affirming summary judgment in favor of accused infringer),
[http://www.cafc.uscourts.gov/images/stories/opinions-
orders/...](http://www.cafc.uscourts.gov/images/stories/opinions-
orders/09-1147.pdf)

~~~
colanderman
In that case, what's stopping large company X from forming a shell company of
one employee which performs services for X using patents held by company Y
which has made such a (potentially legally-binding) pledge?

------
ScottBurson
Here's another proposal that doesn't rest on social pressure, the
effectiveness of which I fear Paul overestimates.

Start a non-profit coalition with the following rules:

(1) All patent disputes between members will be resolved by binding
arbitration. The arbiters are a panel of domain experts (not lawyers!). There
is no presumption that an issued patent is valid.

(2) If a member of the coalition is sued by a non-member, the other members of
the coalition make their entire portfolios available for a defensive
countersuit. When a member's patent is used to defend another member, the
former is compensated by the latter on terms set by arbitration.

(3) There is no restriction on using one's own patents to sue non-members.

It would also be stated policy, at least in the areas of software and business
model patents, that the arbiters would be directed to apply a very high
standard of obviousness, so that most issued patents would be of little use in
an arbitrated dispute.

Could such a thing work? No voluntary system can address the patent troll
problem, as trolls have nothing to gain by joining it. But for practicing
entities, it seems to me that membership in such a coalition could be
beneficial, by reducing the likely number and expense of patent disputes.

~~~
macrael
It is my understanding that this was pretty much exactly the pitch for
Intellectual Ventures, and now they have sunk to aiding and abetting trolls.

~~~
r00fus
Is IV a non-profit? I think this idea might actually work if you dissuade the
profit motive from corrupting the initiative.

------
geebee
One line from this essay has me a little worried...

"A clumsy parasite may occasionally kill the host, but that's not its goal"

This came up in a previous discussion on HN where I made essentially the same
point. As someone pointed out in response, a parasite can get away with
killing off the host as long as there's somewhere else to go next. In fact, a
parasite could wipe out an entire species as long as it can make the jump to
something more resilient.

it was just a short aside, but here's a link the the thread...

<http://news.ycombinator.com/item?id=2760148>

------
acangiano
> Please join them!

Paul, there is a major oversight here. The site <http://thepatentpledge.org/>
doesn't even have a contact form. Also, you may want to make the links
nofollow.

~~~
artursapek
Yeah I noticed the same thing. Should the companies email pg directly?

~~~
TeMPOraL
Maybe they should put an announcement on their own websites, and pg will
update the site accordingly?

------
nailer
Patent trolling big companies is just as unethical as trolling small ones.

PG: Red Hat, a multibillion dollar business, already has a working patent
pledge - they won't use patents except defensively against people who attack
them first. Copy that and use it.

~~~
artursapek
I disagree. Patent trolls often just aim for a comparatively meager payout for
licensing from their victims, who are usually too small to be able to afford
the much more expensive option of taking it to court (and perhaps winning).
Therefore a loophole in justice.

~~~
SoftwarePatent
This is exactly right. Tragically, it is cheaper to settle a baseless lawsuit
than to win it. It makes business sense to give trolls money.

------
guelo
My personal pledge is that as a programmer I refuse to work for any company
that goes on the attack with software patents, this obviously includes Apple
and Microsoft. I also refuse to participate if asked by my company to help
create a patent, I am willing to be fired over this.

Since good programmers are a scarce resource if enough of us took this pledge
it could really start having an effect.

~~~
ghshephard
The problem with that worldview, is that Patents play a number of very
important defensive and value creating roles in a small company, that is not
related, whatsoever, to their use in an offensive (in both senses of the word)
manner.

See: <http://paulgraham.com/softwarepatents.html>

In particular:

"We do advise the companies we fund to apply for patents, but not so they can
sue competitors. Successful startups either get bought or grow into big
companies. If a startup wants to grow into a big company, they should apply
for patents to build up the patent portfolio they'll need to maintain an armed
truce with other big companies. If they want to get bought, they should apply
for patents because patents are part of the mating dance with acquirers."

~~~
guelo
That's the type of pragmatic individual reasoning that collectively just
perpetuates and reinforces the current system. If we can't rely on government
then the only way to change it is by being unreasonable.

~~~
ghshephard
The thing about being a leader, or a bellwether, is that you need to walk
outside the mainstream, be just a little bit crazier than your colleagues, but
not so crazy our out of the mainstream that you leave everyone behind.

PG's position is clearly not in the mainstream of the business world (though,
one might argue that, if anything, he's more conservative than his hacker
audience) - but he's close enough to their interests that he may encourage
followers. Or not. That's always the risk of being a leader - you may step
out, and people may not follow.

He does speak to their interests which is, "If you want to hire great
developers, you should align your corporate ethos with the best and brightest
that you want to attract" - and, in general, large companies virtually never,
ever, sue _small_ companies for _software_ patents - so they have little to
risk.

------
bpm140
PG suggests that this won't stop the trolls but it might deter more
traditional companies.

Does anyone have stats on who is doing the most damage to early companies?
Given the press, it's easy to think that trolls are the biggest offenders by
an order of magnitude. Is there data that suggests otherwise?

~~~
kirillzubovsky
Indirectly, this pledge my also help to slow down the trolls. Trolls buy up
patents in order to sue or resell. Startups have no money to pay up, so the
only option is to resell. But, if a potential acquirer has pledged not to use
patents against small companies, buying them off from trolls wouldn't make for
a good public image. As a result, trolls won't press on the patent holders, at
least until they are acquired by a company that is capable of paying the bill.

~~~
beagle3
... thereby making it cheaper for trolls acquiring patents, like Intellectual
Ventures, as there is less market for the patents -- but not slowing them
down.

------
brianlash
Because it's one line and because its implications are that important:

For quantities you can count (windows, money, people...), the word is "fewer."
For quantities you can't, the word is "less"

The pledge should read: No first use of software patents against companies
with _fewer_ than 25 people.

~~~
blahedo
No.

Your formulation is not incorrect, but pg's is correct as it stands. The word
"less" has been used in a range of English dialects for both countable and
measurable things, for more than a thousand years. See e.g.
[http://itre.cis.upenn.edu/~myl/languagelog/archives/003775.h...](http://itre.cis.upenn.edu/~myl/languagelog/archives/003775.html)
for some excellent discussion on this issue, and actual corpus data to back it
up.

------
samgro
I have a PG question for PG: what problem does this solve?

I see 2 problems currently.

1\. Microsoft suing Android makers, and other similar examples, where large
companies burn billions of dollars of our economy over something pointless.

2\. Patent trolls like Intellectual Ventures and their shell companies suing
startups.

How does this solve either of these problems? Who really needs this?

~~~
tlb
It solves the chilling effect of patents on startups. Many startups have
avoided entire domains because of patents. Large enough companies can
negotiate reasonable license terms or fight patents in court, but small
startups cannot afford the risk of a dispute.

~~~
tzs
> It solves the chilling effect of patents on startups

How?

------
ayanb
From the <http://thepatentpledge.org/> website -

\---

These companies have agreed to be the first to publicly renounce aggressive
use of software patents on small companies. Please join them!

A Thinking Ape, Airbnb, Bump, CarWoo, DailyBooth, Disqus, DotCloud, Greplin,
Hipmunk, Justin.tv, Loopt, Songkick, Stripe, Weebly, Wepay

\----

I think the whole YC gang is going to promote this aggressively, which means a
strong network effect. Remains to been seen what happens outside this network.

~~~
bhickey
Do any of these companies have patents that they could use aggressively?

------
gphil
The content of the pledge seems to indicate that there are a lot of (or at
least some) cases where large companies are suing very small companies (< 25
people) over patent infringement. Is this the case? I've only heard about the
patent litigation between the tech giants, and not anything about small firms
getting sued by larger ones. Are there any recent/high profile examples of
this that I missed? Or is it just something that goes unreported?

~~~
TrevorBurnham
The recent This American Life ep "When Patents Attack"
([http://www.thisamericanlife.org/radio-
archives/episode/441/w...](http://www.thisamericanlife.org/radio-
archives/episode/441/when-patents-attack)) started with a segment on a startup
called Fototime, which was very small (certainly under 25 people) and had to
settle a patent suit at great expense. (As part of the settlement agreement,
they aren't allowed to say how much; only that it was just short of what would
have caused them to file for bankruptcy.)

~~~
justinsb
Fototime was threatened by a NPE (aka troll); I can't imagine this pledge
could have helped them.

~~~
TrevorBurnham
True.

Incidentally, for those who are curious, the three patents used against
Fototime (as well as more established companies like Flickr) can be found at
<http://www.google.com/patents?id=uiAPAAAAEBAJ>,
<http://www.google.com/patents?id=0J8DAAAAEBAJ>, and
<http://www.google.com/patents?id=-QEWAAAAEBAJ>. The first two actually feel
substantial and specific (probably _too_ specific for Fototime to have been
infringing); the third one is just a simple database schema and a flowchart,
which is madness (though it, too, is so specific that it's unlikely that
anyone was actually infringing).

------
ianlevesque
This is ultimately not a helpful avenue to pursue. Asking companies to please
not abuse a favorite group of companies (in this case startups) is not a
solution to this problem. It's very similar in my opinion to the patent
exceptions being carved out in congress right now for the finance industry
(their favorite group of companies). We need to be striving to help everyone
with patent reform, not just our favorite types of companies.

------
danmaz74
I appreciate the good intention of this proposal, but it doesn't really make
so much sense. Tech startups are small businesses, but their goal is to grow.
With that pledge you could only grow up to 24 employees, and what then? You're
ready to be slaughtered?

This problem needs to be fixed at its root, with a different law.

------
maximilianburke
So if a company grows beyond it's sub-25 people are they expected to then
license any technology they're infringing on? Could this lead to an even
bigger penalty if the company is made aware that they are infringing when they
are small and doesn't act on it when they grow, thus willfully infringing?

~~~
TrevorBurnham
I think the idea is that if the company is successful enough to have grown to
25 employees, it stands a better chance of having access to competent legal
counsel and other resources. The penalty might be bigger in monetary terms,
but smaller in terms of making the founders' lives a living hell.

------
Adaptive
This is a "spirit of the law" with no "law".

PG's solution, while elegant and functional for individuals, will fail for
corporations.

We have a spirit-of-the-law in America with regards to being a citizen: you
pay taxes and receive benefits of living here. Corporate persons are, one
would imagine, also party to this spirit of the law, yet they not only ignore
the spirit, they find ways around the tax laws on a regular basis.

Even if companies were forced to comply with this by law, they'd just find
away around it. Sub-25 person shell companies making up large corporations.
Who knows.

The fundamental problem is the same as with the rest of corporate personhood:
we have given corporations the rights of individuals but they lack the
implicit ethics and social peer pressures which result in moral behavior.

------
bourdine
PG, you're absolutely right - IP is a real problem, that so far no one has
decided, but I think Moon have also another one side - limits to 25 will run
to huge number of small startups that can not be grow more then 25 peoples and
this is can stops investment from venture capitalists. I think, we dont need
draw a line between huge and small startups. We just need another patent
system - transparent and work well as we need. At first, we need to know, was
gived a patent on our inventions or not - by few clicks. At second - we need
to know, what kind of invention and claims for it was pended but still have
not sugessted. At third, we need to see all climes of concurents patents -
because we are allways can invent another one claims, and build on them ower
new products, that we can protect. I think we can solve this problem - as
technicians, we are much easier to prepare a bill and after appeal to members
of Congress or the legislature with a request to meet our demands.

We need to change the whole system. Obtaining a patent should be a simple
thing as buying a domain name or product in the online store. Now, placing an
order, we practically give it to the blind - we do not know if already issued
a patent for the same invention or is it the same invention is filed by
someone. We do not know this and therefore has a great chance that in six
months we will letter of refusal and then we just lose time. This is I'm think
about. And, IP and Patents is a strongly related to my startup, I'm will apply
to YC W12.

------
wharryman
Several have already pointed out that this pledge doesn't address the top
biggest issues with the patent system: Non-Practicing Entities (trolls) and
'weaponized' IP litigation.

It would be more interesting if someone with the necessary legal muscle could
design an effective and legal "IP shelter" from the U.S. patent system . The
structure would be some series of foreign companies/organizations that could
claim immunity for internet products as they would be 'foreign' and therefore
not infringing. There are obviously many legal and tax issues that make this
difficult (PCT, not viable for physical products, etc). However, if it could
be designed and then templatized, much like Series funding documents have
become, then it would allow any startup, but especially ones that attempt to
tackle traditionally hostile industries (MAFIAA), to exist in a 'safe haven'
away from the utter nonsense that US intellectual property has become.

Even if it creates some $X burden on startups, I am sure that most startups
would be willing to pay this expense if it takes the risk of an Armageddon-
like legal suit out of their startup picture. It would also be a forcing
function on the US legislature due to loss of prestige and possibly revenue
(imagine if the next Google incorporates in Canada and only a subsidiary works
in California due to patent concerns).

------
SoftwarePatent
This pledge boils down to "shine light on bad actors", but I doubt it will
change any behavior. Only rent-seekers [1] want software patents to exist, and
you can't decrease their reputation any more, it's already 0.

The S. Ct. already had their big chance in Bilski to dial back software
patentability, and they blew it. Our only hope is Congress. (/me shudders
hopelessly)

And to anyone suggesting we abolish patents completely: they increase societal
utility in many sectors, most notably pharmaceuticals.

[1] lawyers and trolls.

~~~
guelo
I'm not so sure pharmaceuticals are an example of good patents. Most of the
patented research is actually paid for by taxpayers through the NIH, and then
paid for again by patients through exorbitant prices for 15 years. Then there
is the problem of people in the third world dying because of the high prices
charged by patent monopolies.

~~~
pjscott
The patent monopolies are partly there to offset the very high costs of
getting FDA approval, which are there in order to ensure safety and efficacy,
to prevent people from dying from unsafe pharmaceuticals. And this causes
people to be unable to afford drugs that could have kept them from dying,
because the prices need to be high to pay for the testing.

I'm not sure what the right balance is between caution and cost in FDA drug
trials, but I think that the procedure should probably be made less rigorous
(and long, and expensive) than it is today.

~~~
Daniel_Newby
The U.S. FDA desperately needs to adopt the EPA's window sticker model. You
can market an inefficient car, but it has to have a window sticker that tells
the customer exactly what they are getting into.

------
djb
This is a nitpick but I think the pledge should read "No first use of software
patents against companies with _fewer_ than 25 people," since people are
countable:

<http://englishplus.com/grammar/00000214.htm>

------
dotBen
I'd like to see a different Patent Pledge.

One where software engineers pledge not to participate in formal patent
creation. Because ultimately, all of the software patents out there were
'authored' by a software engineer. You have to have the person that actually
invented the new implementation on the document.

Sure, your employment contract says that any IP you create on your employer's
dime is owned by your employer. And so, sure, they could go out and pursue a
patent for some new implementation that you invent. But you can stand up and
say no, that you won't participate in the _'patentization'_ of your work (ie
the formal, legal work to obtain the patent).

And without your involvement, it would likely fail. It certainly makes a
statement internally and externally, at least.

How does this work? Well, you can make that commitment - in writing and
verbally - when you join a company. Or you could simply state as much,
formerly, in an email to your boss and superiors tonight when you get home.

With the software engineering talent market what it is anyone but a dope-shit
code monkey has the leverage to dictate terms.

~~~
Daniel_Newby
_Well, you can make that commitment - in writing and verbally - when you join
a company._

With most employers, the statement is "For a period of one year after leaving
employment, I will review and sign all documents needed to attain intellectual
property protection for work done in the scope and course of employment."

~~~
dotBen
Yes, exactly. Which is why you would redact that line and tell them you can
only sign the contract without that clause.

In the current climate NO software engineer should be signing any employment
contract handed to them without making some change - there is tons of
opportunity to leverage better terms in the current market.

~~~
ghshephard
dotBen - do you work in Silicon Valley? Unless you are a CxO, there is almost
never any modification of the employment contract, and certainly never any
surrounding the IP elements at a VC funded company of any stature.

In 95% of the cases, if you won't sign the contract as provided, it's a deal
breaker and you aren't hired. I'm not saying there aren't exceptions for
special cases. And, clearly for non VC funded companies there is more
flexibility - but the employee contract in the valley is pretty much an
immutable template.

~~~
dotBen
ghshephard - yes I live and work in SF and Silicon Valley and have done so for
6+ years.

I always dictate my own terms on contracts. I advise others to do so too.

Have you tried to hire engineers in Silicon Valley? I've heard of employees
who've negotiated $50k cash signing bonus, 8 weeks holiday a year, a personal
assistant to do their grocery shopping, agreement that the founder will
personally invest $300k in the employee's future startup (these are
separately, not the same contract).

Good engineers can get whatever they want.

------
AlexBlom
I like the idea of pledging, though there may be some variance (what if a
startup violates a startup, margin is high, the technical innovation was real,
etc?) That being said, there is a lot to be said in simplicity.

I'm no lawyer - I have to ask the logical question - does publicly stating
this pledge bust any opportunity to double back (i.e. it is more legally
binding than just a pledge?)

------
EGreg
The purpose of patents, as I understand it, is to propose a compromise in
order to promote innovation: the company which publicly discloses its non-
obvious innovations through a patent is granted a MONOPOLY RIGHT by the
government, and enforced by the courts, to prevent anyone else from
implementing this invention without paying licenses. (Depending on the
country, they may be forced to offer licensing, or not.)

In the software industry, patents are unnecessary. Because whatever is
patented, even if it is not obvious WHEN patented, it (or a variant of it that
falls under the patent) nevertheless becomes OBVIOUS to lots of people a mere
3-4 years later. Therefore, we can easily explain how a 20-year monopoly has
wound up HURTING the industry rather than helping it. Companies implement an
invention WITHOUT rummaging through new patents that come out every year. It
is obvious that most of the stuff implemented in the software industry was
arrived at in a different way. Non-practicing entities can sue those who
actually implemented the invention 3-4 years later. Meanwhile, those who
implemented it, get hit with a suit.

Therefore, patents have now become a tax on innovation.

I repeat: the inventions were not obvious AT THE TIME THEY WERE PATENTED. And,
those who ultimately implemented them DID NOT READ THE PATENTS in order to get
the idea for the invention. Therefore the system is not serving its purpose.

Patents are an exchange between the inventor and the public. The inventor
discloses how an invention works, and in return gets a monopoly for 20 years
so that no one else can implement it.

In open source, the IMPLEMENTOR not only discloses a theoretical thing but
actually builds it AND releases all the inner workings of it, AND others can
build on top of it. So we get the upside with no monopoly. Why do we need the
latter, then, if so much innovation happens without it?

------
Estragon
I suppose it would be a good start, but the self-interest in this proposal
stinks a bit. What's the distribution of employee numbers in companies in
which Y Combinator has a stake?

~~~
pg
Actually most of the value of our portfolio consists of companies with over 25
employees.

~~~
ntoshev
Of course, the bulk of the valuation is in the startups that have grown
enough. You still have vested interest to protect startups while they are
small, this is when you add most value anyway.

------
damonpace
The only problem I see with patents is the legal process (legal bullying). It
should not take 2 years and $1 million to prove your innovation does not
conflict with another patent. That's ridiculous! Ideas & companies are killed
by the threat & cost of going through a lawsuit, not by the threat of actually
losing a law suit. That's why so many companies would rather pay a fee to use
a patent than actually go through a lengthly lawsuit to fight the patent
owner. (See Microsoft & many phone manufacturers.) It's called legal bullying,
not patent failure. It doesn't just happen in the school yard anymore. PG is
simply trying to get the 6th graders to stop picking on the kindergartners, so
the kindergartners can play safely in their own playground.

------
zachbeane
See also <http://www.paulgraham.com/softwarepatents.html>

------
graiz
1\. Large companies aren't on this list and are unlikely to put themselves on
the list. There is no competitive advantage to be there.

2\. There's a presupposition that small companies are somehow better then
large companies. I can say that a company like Lodysys is likely under 25
people. You don't want to put yourself in a position where you have agreed not
to be agressive with any company based on their size. Many of the Inc. 500 are
under 25 people.

I'd rather see a simpler pledge.

> We will use our patens defensively, not offensively. > (Optionally) > We
> will license our patents only to others who will use them defensively.

~~~
Maascamp
Agreed. You're the first person I found on this thread who seems to share my
belief that simply white listing every company with 25 employees or under
(based on headcount alone) is extremely naive.

------
mas644
Not a bad idea...like Paul said, it's a start. Here's a comment that I read
from some user on Slashdot regarding the Apple vs Samsung/Motorola patent
dispute that summarizes my feelings:

"Look, you pack of fucking navel-gazing fucktards. Put down the fucking guns,
agree to pool your resources to buy sufficient hookers and Caribbean vacations
for Congresscritters to have the existing patent system tossed out the door.
We get it that you all sort of started out accruing vast numbers of patents,
some good, some bad, some absolutely fucking moronic, in no small part to fend
off attacks from each other and from evil little patent trolls, but look at
how it's complicating your lives. You couldn't roll out a steaming turd
without someone somewhere trying to claim you infringed on a patent they own.

Apple, you're now one of the biggest companies around. If anyone can afford
the required number of prostitutes, golf club memberships, or whatever it is
those corrupted evil bastards in Congress have an appetite for. Google, come
on, you could help out here, same with Samsung. Then you can, you know,
compete on the quality of your products, rather than trying to stuff newspaper
down each others throats in what can only be described as the bonfire of the
idiots."

------
briguy
I am sure there are a thousand reasons that these ideas would not be feasible,
however I have been thinking of two other approaches towards software and
business process patent reform. (1) would be to shorten the time that a patent
is valid to 1 year . Give the Company who 'invents' (and goes through the
patent process) a small head start, however in today's quickly changing world,
I think that this shorter time-frame is more proportionally in-line with the
R&D investment of these types of processes. Patents that protect the Physical
items (that in general are more costly to develop and take a longer time to
implement due to the more expensive and time consuming manufacturing
processes) the protection would remain longer (engines, chip-sets, medicines,
etc) I think that these shorter term-limits will shake out the patent trolls,
yet still allow a patent holder some opportunity to leverage their work and
license to companies that could not wait the 1 year, however after that, it is
all about execution. (2)Perhaps another approach (and much less realistic)
would be to keep the existing term limits, but have a prix-fixe license fee
schedule/menu for all software and business processes. There would be a few
Tiers of patents (i.e. Class 1, Class 2, Class 3, etc). You would apply to a
patent (and a Class) and the license fees would spelled out for the annual
license fees. Perhaps the Amazon 1-Click Patent would be Class-1 (i.e. "pretty
darn obvious" and the fees would be $100 per year), etc. Anyone willing to pay
the fee could license the patent (no one can be denied). This would also stop
hoarding, and would allow people with legitimate inventions to monetize their
investment, however still allow those that feel that they can execute to also
move forward an innovate.

------
fedcir
Afer reading the story about Ugmode/Modista, a suggestion for any start-up
facing this problem in the future: GET THE WORD OUT ABOUT YOUR PROBLEM!

1\. Escalating embarrassment of like.com could have soured their potential
acquisitions and forced them to settle. 2\. If lawyers hear about your
problem, they might help you. If you had the ability to reach every lawyer,
professor and law student in the country, you would find someone. (Maybe not
someone great, but someone who can at least avoid a default judgment and keep
you in the game for another couple of years, and possibly emerge victorious.)

n.b. You do not need, or, probably, want, a patent attorney to litigate a
patent case. Patent attorneys do tedious stuff with the PTO, courtroom
litigators convince judges and juries. Nor do you need a lawyer from your city
or state. You could have some kid fresh out of law school in Alabama dialing
in to Northern District of California judicial teleconferences and filing your
motions electronically.

\-- Former patent litigator who would have liked to help, if he'd heard about
this

------
dethstarr
I think this is a good idea in theory, but the patent trolls are ruthless as
ever. Their primary motivator is making money, and I doubt they'll stop their
actions.

On the flipside, if this can garner public pressure against the trolls-- and
perhaps some real action in changing the laws, I think the world would be a
better place.

Keep it up Y Combinator!

------
bengebre
Having just listened to the "When Patents Attack!" podcast today
([http://www.npr.org/blogs/money/2011/07/26/138576167/when-
pat...](http://www.npr.org/blogs/money/2011/07/26/138576167/when-patents-
attack)), I question how this addresses what I saw as the fundamental
challenge with patent trolls -- shell corporations. These companies are
spawned as needed to sue the alleged patent infringers. Since the shell
companies are just a bunch of lawyers and the ownership of a patent, there's
little in the way of assets to counter sue for (i.e. there's not much for the
suing entity to lose). I don't think these guys will be swayed by a moral or
ethical argument either. And since these shell companies don't employ coders,
well, I don't expect it will impact who coders decide to work for.

------
nathanb
Potential problem: I suspect many patent troll companies are small (<25
people), and the patent pledge could potentially prevent companies from taking
preemptive action against these trolls. I don't think this is a dealbreaker,
but it's a probably unintended consequence which should be drawn out.

------
collint
I think you could come up with some sort of patent truce, you use a search
engine that finds overlapping patents. The truce comes with a
constitution/trust that declares some metrics for that search engine. Any
patents that go over that metric are not to be used for litigation by members
of the truce.

You can require members of the trust to invest in the trust at level relative
to market cap. Breaking the trust results in loss of the assets/cash invested.
The trust can also fund a defense pool/lobbying budget to protect the
interests of the trust. Namely that members outside of the trust cannot
successfully litigate on patents the trust hase agreed are frivolous.

edit: obviously transparency, open membership and some high profile members
are useful for such a plan.

------
corbet
Companies with less than 25 people are relatively unlikely to have
sufficiently deep pockets to attract patent attacks in the first place. And
trolls, of course, won't care about the pledge. Nice idea, but doesn't seem
that useful to me.

------
mhp
Why not just have all companies pledge not to settle frivolous patent suits?
The way the trolls make their money is by realizing that its cheaper for these
companies to settle than to duke it out in court. The lawyers don't even care
if you aren't infringing because it really doesn't matter. The trolls survive
because people aren't willing to fight it out against them and they can pick
on the weaker and smaller companies. If everyone said at the outset, "I will
fight to the death a frivolous patent suit with all of my resources" the
trolls would run out of easy targets.

------
Kilimanjaro
There are millions of programmers in the world and most of us don't like
patents. That should be enough to prohibit them by consensus. If we don't
raise our voices in our own field, nobody else will do it for us.

I applaud that move.

------
wingo
The thing is, does software innovation happen in companies? Yes, but also no:
universities and free software also play a role.

Patents are largely a problem of companies buying government. But what about
the people?

------
bfe
This might usefully and reasonably be expanded to cover an individual or a
non-profit of any size including universities, as well as a small company, in
parallel with the Patent Office's definition of a "small entity" for reduced
fees.[1] Companies suing universities for patent infringement for doing
research is similarly problematic for innovation.

And, I think the intent would be served equally well by getting rid of the
restriction to software patents.

[1] Although the small entity rules define a small company as a maximum of 500
employees, rather than 25.

------
rsuttongee
I think this is a great idea and that it will prevent pledging companies from
engaging in patent abuse, but I wonder how many large companies will bother to
sign up for it. I imagine that if Apple/Google/MS all just take a pass that
they won't catch much flak for doing so.

I wonder though if we could make the whole thing more effective by also adding
an underlying threat to the pledge:

That any company, patent pledging or not, who violates the <25 rule will have
their talent actively recruited away by those companies that have pledged.

------
chc
Have any lawyer-types looked at this? IANAL, but I kind of doubt corporate
lawyers will allow this even informally. For any target that a big company
would want to sue, I'm pretty sure that going through with this pledge would
leave the company vulnerable to a _laches_ defense (basically, "You should
have sued me _before_ I invested billions in this") once the little startups
aren't so little anymore. If I'm talking nonsense, anyone can feel free to
correct me. It will be cool if this works.

------
jessriedel
From what I understand, the key points of software patent reform would be (a)
significantly raise the bar of "non-obvious" and (b) shorten software patent
lifetimes. The related issues of small companies being at a disadvantage (due
to economies of scale with litigation and patent portfolios) seems rather
orthogonal.

Since this pledge would only address this issue of secondary importance, which
seems a lot less salient to the public, I can't imagine it getting off the
ground.

------
abbottry
People make crappy products then slap patents on them so no one can compete
with them. For the greater good of society this should be illegal, competition
breeds innovation right, if you make something crappy, you should welcome
someone else to make it better, after all, if it was something you actually
used, YOU would want it to be the best, no?

Also, patent trolls that create patents for ideas they have, and are
completely incapable of executing.

Software patents are crap.

------
mparr4
>Technology companies win by attracting the most productive people, and the
most productive people are attracted to employers who hold themselves to a
higher standard than the law requires.

The problem is, the ones doing the suing (like blackboard which PG mentioned
in a comment elsewhere) are the weaker companies with a lot to lose (as
mentioned in "Are Software Patents Evil") who probably aren't attracting the
best people to work for them anyway.

------
greengarstudios
pg is concerned with startups, and I am too. But I think a lot of the rest of
the world is concerned about what's going on between, say, Apple and HTC.

------
marquis
I'm a fan of the declared, taxable value of patents rather than making an
arbitrary pledge that could result in a surprise attack.

My main concern is that the knowledge of a small company possibly infringing
on IP (regardless of whether you feel patents exist or not) greatly disrupts
the acquisition options by a larger company, as they would devalue the smaller
company based on expected patent licensing/legal attacks.

------
matthodan
Does anyone else find the pledge hard to read/interpret? I think I read it 3
times before the meaning sunk in. Granted, I hadn't read the rest of PG's
article yet. Short and memorable (e.g. "Don't be evil") might be better. My
suggestion: "[Insert company] won't sue companies with less than 25 people for
patent infringement." It ain't perfect, but that's what I got.

------
pilom
"when established companies with bad products use patents to suppress small
competitors with good products. This is the type of abuse we may be able to
decrease"

This is not abuse. This is the purpose of a patent. It gives you the ability
to be as shitty as you want and still be the only gig in town. Society says
"wow you're terrible, but thanks for letting us all know how you did it!"

------
huhtenberg
Just a relevant anecdote from the trenches -- a friend of a friend was a co-
founder in Israeli start-up and they were approached by a Redmond company with
an investment inquiry. An inquiry which was backed by a patent that would've
been used to sue the startup should they not enter negotiations. And so they
"negotiated" and in the end took the money. The end.

------
jayfuerstenberg
I'm worried that this pledge would legitimize software patents on some level.

Even if the road to a software patent-free world is a long one I think it's
better to pursue that than compromise this way.

What if a company hires its 26th employee? Is that an invitation to litigate?

I commend Paul Graham on at least trying to contribute his ideas but I think
we need to think more on this.

------
T_S_
Volunteerism doesn't work when there is too much money at stake. How much has
that green consumer really done for the environment without assistance from a
carbon tax? Like calls for conservation, this is well-intended, but a
distraction from the real problem, which is that the patent system is badly
engineered for innovation.

------
cgopalan
I also hope the patent pledge site will progress towards discouraging
companies like that of Like.com by including instances of how they shamelessly
killed Modista. Like PG, I am still ambivalent about patents (though mostly
believing they are bad), but clear cases of misuse like these need to be
emphasized and publicized.

------
mlinksva
''The patent pledge is in effect a narrower but open source "Don't be evil."''

I get 'narrower' but what does 'but open source' mean here?

------
arikrak
Why should small companies deserve special protection? If the current patent
system is just, let them sue anyone big or small. If the system is broken,
they shouldn't be suing big companies either. How about a pledge not use
ridiculous patents to sue anyone? That may be way too vague, but that would
make more sense.

------
artursapek
Speaking of patents, (although this is a month old now) I recommend everyone
listen to the show This American Life did covering patent trolling:
[http://www.thisamericanlife.org/radio-
archives/episode/441/w...](http://www.thisamericanlife.org/radio-
archives/episode/441/when-patents-attack)

------
thethimble
The problem with this pledge is that any company that would make the pledge
and stand by it already isn't a patent threat.

It's the companies that would make the pledge and break it or not even make
the pledge at all that are the problem. Beyond a little peer/public pressure,
this pledge does very little to address those companies.

------
officialstation
I was checking the source code for <http://thepatentpledge.org/> and noticed a
reference to favicon.ico which is not there (returns a 404 Not Found):
<http://thepatentpledge.org/favicon.ico>

------
dodo53
What about as a further peer-pressure type 'good citizenship' patent thing - a
voluntary pay $x per patent in your portfolio to a non-profit which uses money
to search existing patent-base and seek to preemptively invalidate
invalid/frivolous patents. You could have a little badge on your website or
some such.

------
jakestein
Is there a way for other companies to make the pledge from that site? Or is
this limited to friends of PG for now?

------
oemera
Great idea pg but what exactly does it fix? After you have 26 employees they
will take you down like before the pledge. What can a company with 26
employees do against a arsenal of lawyers and patents? Do you think after
having 26 employees you should have enough money to counter the attack?

------
bshanks
Jennifer Urban and Jason Schultz are developing a legal construction called
the DPL (defensive patent license) to solve this problem.

[http://www.google.com/search?q=defensive+patent+license+DPL&...](http://www.google.com/search?q=defensive+patent+license+DPL&tbs=qdr:y)

------
tcarnell
Great stuff! I would add my company, but there is not point - I have no
patents!

I think until we see Microsoft, Google, Oracle and Apple on that list it wont
be worth much.... and if we do see Apple on that list, would be believe them?
and would they care if we didn't believe them?

------
justinsb
Do non-trolls really bring patent cases against small companies? A company of
<25 people probably doesn't have the cash to make a financial settlement
worthwhile, and if a small company has a good product it'll have >25 people
soon enough.

------
earbitscom
PG - Could this lead to companies on the list agreeing not to license their
patents to patent-unfriendly companies? Seems that could do a lot to pressure
bigger companies into leaving smaller companies alone.

------
EGreg
I agree with pg, although I am concerned this might take away from the urge to
reform software patents the real way:

I would propose to eliminate software patents, or limit their time frame to 2
years. The industry moves way too fast and 17 years is way too long. I know pg
wrote that "if you are against software patents, you are against patents", but
consider this: the 17 years are completely out of proportion to how quickly
the software industry moves. And the pace at which they are submitted is
simply too great for the patent office to do anything appropriate in most
cases. When we apply the patent trade-off to it, you get a negative result,
not a positive one.

The patent trade-off is essentially that the company discloses their "secret"
invention to the public, in exchange for a 17 year MONOPOLY (enforced by the
government) on so much as implementing this invention in any context.

In software, innovations such as "in-app purchases" or "one-click buying" may
not be obvious in 1997, but a couple years later they become "incremental
improvements" that are pretty obvious to everyone. In fact, OPENNESS (open
source, especially on the web with HTML, CSS and Javascript) has been the
biggest driver of innovation, and not patents. Clearly, there are other
motivations besides having a monopoly, and those motivations don't need the
patent system at all. In contrast, they are being stifled by the patent
system.

No one read the lodsys patent in order to "invent" in-app purchases. They were
just bloody obvious to implement when the time came. Almost any experienced
practitioner in the art would have said it was obvious when they were
introduced. Then Lodsys came out of the shadows and demanded money.

My point is that the very purpose of patents is being undermined. It is
supposed to promote innovation, by letting companies feel safe disclosing
their "trade secrets" and "secret inventions". In reality, though, these
inventions are extremely obvious to everyone when they are introduced a couple
years later, and all software patents accomplish is the downside of the
compromise: namely, a patent troll (a company that never implements anything,
but just files patents) actually comes out and leeches money from those who DO
implement the innovation.

That makes innovation more expensive, and patents become like a tax on those
who actually IMPLEMENT ideas -- which we all know is much more important than
merely HAVING them. For up to 17 years anyone implementing this will have to
pay, and is the industry better off? Not at all. It moves so fast, that in a
couple years, what was patented by a troll becomes the next obvious step.
Software patents for 17 years are not benefiting society.

------
philipkd
Can someone clarify for me, what does "no first use" mean? Does it mean you
can't sue a small start-up for being the first to use a patent you already
own?

~~~
TeMPOraL
I understand it as "we will not fire at you unless fired upon".

------
zdw
The number thing is abusable. Witness facebook still operating under the SEC's
500-person limit:

[http://dealbook.nytimes.com/2011/01/03/facebook-and-
the-500-...](http://dealbook.nytimes.com/2011/01/03/facebook-and-
the-500-person-threshold/)

I'm not aware of any measurement method that any moderately smart rules lawyer
(aka anyone who's played more than 5 hours of a strategy video game or pen and
paper RPG) couldn't figure out a way around.

~~~
byrneseyeview
One way to frame that is "This is abusable. All you risk is the NYT writing an
article trashing your behavior." The 500-shareholder rule is fairly obscure
among laypeople, and pretty much only popular among people who litigate the
cases it creates. So someone patent-trolling might suffer even more.

------
gord
Its a bandaid where a bazooka is needed... but its an epsilon of improvement
in the right direction.

------
piotrSikora
From the companies that pledged so far, how many actually holds any patents?

------
davedx
I'd like to see a site for crowd-sourced prior art. That would be cool.

------
motters
As far as I know, pledges are legally worthless.

------
Benjo
I'd love to see an rss feed on the pledge site.

------
mikeklaas
Anyone know how many employees Lodsys has?

------
dev1n
It's the Gentleman's rule for patents.

------
FredBrach
I think it solves everything unless patent trolling.

Here is why. Well let's say Microsoft marks its name into the current patent
pledge because it’s so green to be in the patent pledge even in its current
form.

So now, it is the same as always, Microsoft will not be able to pursue ANY
company which SEEMS to be a STARTUP at a given time from the point of view of
the mass. Do you understand? Microsoft can’t say: “Hey! Are you dumb? This
company has 26 people so I can sue them. Don’t troll me fools!” Hello the
greenness… That’s too late! The goal is to be green, nobody care about the
strict truth. I think even a hype company with 500 people can be safe with the
current patent pledge.

And probably it may even overtake the patent framework. It may be almost a
"don't sue a startup" pledge.:d

------
lhnn
>Already most technology companies wouldn't sink to using patents on startups.
You don't see Google or Facebook suing startups for patent infringement.

You would, however, see Facebook sue startups for using the word "book" in
their website name.

~~~
kmavm
Just as you saw Google suing startups for naming themselves "<X>oo<Y>le" when
they were search-related in any way. And as you see every competently run
company, everywhere defend its trademarks.

Trademarks and patents are very different things.

[http://www.searchenginejournal.com/google-tells-booble-to-
ce...](http://www.searchenginejournal.com/google-tells-booble-to-cease-and-
desist/222/)

------
idonthack
That's cute.

