Leading Venture Capitalists Call on Congress to Stop Patent Trolls

Washington, D.C. (November 6, 2013) – Many of America’s leading startup investors sent a letter today urging Congress to enact broad patent reform. The letter, signed by 39 tech investors including early investors in Netflix, Twitter, Facebook, Dropbox, Palantir, and Kickstarter, and delivered by the App Developers Alliance, Engine Advocacy, and the Electronic Frontier Foundation, calls on Congress to support reforms including making it easier to efficiently review patents at the PTO and increasing demand letter transparency.

“Comprehensive legislation to reduce abusive patent litigation will make the patent troll business model less attractive, and will protect software, mobile and information technology entrepreneurs. In turn, our digital economy will continue to grow and so will our national economy,” the letter states.

Signatory Mark Cuban, who has invested in more than 70 startups, said, "We have a significant patent troll problem in this country. Trolls are killing startups, killing jobs, and killing innovation.  Consumers and the economy suffer. Congress needs to act immediately.”

The VCs outline that patent reform legislation should:

·         Make it easier to efficiently review patents at the Patent Office, as an alternative to litigation.

·         Increase transparency by requiring patent trolls to specify, in complaints and demand letters, which patent and what claims are infringed, and specifically how the offending product or technology infringes.

·         Limit the scope of expensive litigation discovery.

·         Require patent trolls to pay legal fees and other costs incurred by prevailing defendants.

·         Protect end users of technology (e.g., wi-fi, printers and scanners, and APIs) from being liable for infringements by technology providers. 

The patent reform legislation introduced by Chairman Bob Goodlatte (D-VA) last month would achieve many of these goals.

The 39 investors signing the letter include Steve Case, Ron Conway, Mark Cuban, Reid Hoffman, Fred Wilson, Brad Feld, and Jason Mendelson. They are representatives of Y Combinator, TechStars, Union Square, Greylock, and Foundry Group, among others.

About the Application Developers Alliance

The Application Developers Alliance is an industry association dedicated to meeting the unique needs of application developers as creators, innovators, and entrepreneurs. Alliance members include more than 25,000 individual application developers and more than 135 companies in the apps ecosystem.

About EFF

EFF is a non-profit civil liberties organization that has worked for more than 20 years to protect consumer interests, innovation, and free expression in the digital world. Founded in 1990, EFF represents more than 24,000 active members. Through litigation, the legislative process, and administrative advocacy, EFF seeks to represent those members’ interests and promote a fair and workable patent system.

About Engine

Engine is a research and education foundation that supports the growth of technology entrepreneurship through economic research, policy analysis, and advocacy on local and national issues. Engine's work is supported by hundreds of startups and their investors, across the United States.