One of the common "defenses" of patents that we often hear is that "investors require them." That's simply not true. There are, certainly, some short-sighted investors who require patents, but more and more of the most respected investors have spoken out against the patent system, acknowledging that it does more harm than good. The latest example of this comes from Rob Pegoraro, who spoke to a bunch of startups presenting at a "Demo Day" and asked each of them about their patent strategy.

While some of them are filing for their own patents, a key point was that their investors definitely didn't require it or push them in that direction.

None said their investors had pushed them to file for patents.

Even more to the point, investors seem to recognize that patents can take a big chunk of money out of early investment if startups file for a patent. Fortify Ventures managing director Jonathon Perrelli pointed out:

“When they’re raising $50,000 to pay for ramen and hosting services and their desks, $15,000 doesn’t have to go to intellectual property.”

The article also asked the startups if they were worried about patent trolls, and, unfortunately, many of the startups seemed fairly naive about the whole thing, suggesting that they're okay since they're not copying anything. That's not how patent law works, of course. Patent trolls pop out of the woodwork claiming you violate some tiny thing all the time. The one company that Pegoraro spoke to that insisted it was impossible that they violated a patent is likely in for a big surprise if it ever gets big enough to attract patent troll attention.

The good folks over at the EFF have posted a letter from a group of startups and innovators to Congress seeking reform of the CFAA (Computer Fraud and Abuse Act), which has been abused for years, most notably and recently, in the case against Aaron Swartz (full disclosure: I helped review the initial letter and helped the EFF get some of the signatures on the letter). This is important, because, as we have noted, plenty of innovators and entrepreneurs could have been charged under this law for some of their random hacking experiments, some of which directly led them to create amazing innovations.

Many people have thought that the tech industry isn't as interested in CFAA reform, since it supposedly protects them in cases where they have been hacked, but that's not the case. Through out the startup community, I've heard many people who were horrified to learn about the charges against Aaron Swartz, as they quickly realized how easy it would be for a Justice Department official to spin what they themselves were doing into something nefarious sounding. That does not help innovation.

No one is in favor of having no rules at all, but clearly the CFAA is outdated, broken and widely abused. Fixing the law to focus on actual malicious and nefarious attacks would be a huge step forward, not just for the public, but for innovators and entrepreneurs who often build great things by starting with a simple hack.

The federal government has been paying lip service to the idea that it wants to encourage new businesses and startups in the US. And this is truly important to the economy, as studies have shown that almost all of the net job growth in this country is coming from internet startups. Thankfully some politicians recognize this, but the federal government seems to be going in the other direction. With the JotForm situation unfolding, where the US government shut down an entire website with no notice or explanation, people are beginning to recognize that the US is not safe for internet startups.

Lots of folks have been passing around this rather reasonable list of activities for US-based websites:

Today's sysadmin todo list:

0. Get corporate membership with EFF.

1. Identify all applications with user-generated content.

2. Move all associated domains to a non-US based registrar.

3. Migrate DNS, web serving and other critical services to non-US based servers.

4. Migrate yourself to a non-US controlled country.

I'm sorry for US sites and users. Your government is hell-bent on turning the internet into a read-only device like TV, easily regulated and controlled. The population will be required to sit quietly and keep their eyes glued on the screen so they don't miss the ads, with any infringers deemed terrorists and pedophiles and thus deserving of summary punishment by DHS squads.

Hopefully the internet will route around the damaged segment, and the rest of us can continue to enjoy the amazing interactivity it has brought our society.

What's amazing is the "what's the big deal?" attitude the government has taken to all of this. For most of us, this situation is shocking. The US government should never be able to flat out shut down a business with no notice or explanation, only to say "sorry" a couple days later. It's done this in the past and insisted that it would be more careful in the future. So far, it doesn't appear to be living up to that promise. While these may be "mistakes," the wider impact should be frightening to federal officials. They're now actively scaring startups away from US businesses at a time when they should be doing exactly the opposite.