Will Bogus Patent Lawsuits Lead Entrepreneurs To Leave The US?

from the not-a-good-thing dept

At a time when we’re supposed to be looking to entrepreneurs to bring us out of today’s financial crisis, it’s too bad to hear that our draconian intellectual property laws are driving people elsewhere. You may have noticed that the original file sharing success stories were in the US — Napster, Grokster, Streamcast. But following the legal attacks, the more recent success stories have all been foreign: The Pirate Bay, Mininova, isoHunt. That’s not a coincidence.

Will the same thing start happening due to over-aggressive patent litigation, as well? We recently covered how enforcement of some very basic patents against tons of small photo hosting sites was threatening to put a bunch of small businesses out of business. Joe Mullin has now revisited the subject and noted that at least one of those companies is considering relocating outside of the United States because of all of this. This is a guy who came from Russia, because the US represented opportunity and freedom from crazy Russian bureaucracy and monopolies. And, here he finds himself in a similar mess — dealing with patent infringement lawsuits for things his company had on the market well before these patents were even filed. Yet, to defend against such an attack it so costly that it’s easier to just leave the country. Driving entrepreneurs out of the country isn’t exactly “promoting the progress” now, is it?

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Comments on “Will Bogus Patent Lawsuits Lead Entrepreneurs To Leave The US?”

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Anonymous Coward says:

They are considering relocating outside of the US for the same reasons that TPB isn’t in New York – because they don’t want to end up losing their asses.

Photo Hosting (especially those sites that regroup the material and offer it up in any other format than the original) run the risk of losing their island of safety as a host, because they aren’t acting only as a host. Rather than hang around the US and become the Jammie Thomas of hosting, they head off shore, to where they can infringe with impunity.

Anonymous Coward says:

“the original file sharing success stories were in the US — Napster, Grokster, Streamcast. But following the legal attacks, the more recent success stories have all been foreign: The Pirate Bay, Mininova, isoHunt. That’s not a coincidence. “

I re-read the post and almost LOL – “Success” in the Masnick world is mostly enabling others to violate copyright. WTG team!

Anonymous Coward says:

Re: Re: Re:

No, success is having a sustainable business model that has a future. It’s one of the reasons why for all the clamour about Twitter, it is yet to be a success. It is amazingly popular, but not a sucessful business.

Glorifying pirate sites isn’t exactly setting a great model – but it certainly does reveal a whole bunch more about where Mike’s affiliations lie.

whitz3nd says:

Re: Re: Re: Re:

I believe you will find Mike’s affiliations have nothing to do with any form of piracy. He is merely pointing out the business idea/model of what such sites have done, can point good legal businesses in a direction which can lead to something prosperous. These businesses, be it a P2P site, a photo sharing site, or anything someone designs which fills a need for others, needs to be taken off shore to dodge these damned “Corporate Patent Trolls” whose only way to make money is filing lawsuits.
Yeah that is a great way to build a great business here in the states, open a new business only to spend any and all earnings in court as some asshat decides you are infringing on an idea they like and patented but did nothing with or patented your idea after they found you did not.

CastorTroy-Libertarian says:

Re: Re: Re: Re:

Well when the new tech comes out, and the new business models come out and cash in on “those damn pirates” you’ll be the one yelling at the government “why didnt we do that” and how dare they invade, because it will be overseas first… Guess American innovation is dead thanks to Corporate shills that dont have a clue how new things come to pass… i myself am re-locating overseas, my partners and I do not wan the hassle of sue happy and Patent crazy people chasing us for doing something new that there is no patent for, so when it does come out, it will say made in CHINA, and Created in Ireland (lower corporate taxes, more incentive)… and that will hurt the US (even though we are all US citizens, and our employees’) but we are all moving for this exact reason… SO yes way to Go Progress Team, you have OFFICIALLY RUINED THE AMERICAN DREAM…

Someantimalwareguy says:

Re: Re: Re:2 Re:

While what you are saying is true to a certain extent, it is related more to where the actual innovation is taking place. Most of our development comes from Eastern Europe and China because that is where the development expertise is these days and not just because the resource costs are lower.

If the US spent more time encouraging and rewarding math and science education, we would be able to apply our work ethic and productivity gains to compete effectively. Getting reform on the IP side of things would then help grease the wheels as it were…


Flyfish says:

Re: Re:

“”Success” in the Masnick world is mostly enabling others to violate copyright. WTG team!”

indeed this is true, Mike is as bad as a anti-gay crusader explaining the slippery slope from gay to bestiality, yet another lame argument in favor of turfing intellectual property laws

Mike you’re a broken record.

Ryan says:

Re: Re: Re:

Your statement is similar to one a trasvestite pedophile who molests little children and lynches minorities would make.

Oh look, I can play the make-completely-unrelated-and-irrelevant-similes game, too!

He mentioned file sharing success. Those are most of the most popular–and hence successful–file sharing utilities. You don’t have to agree with his IP paradigm(only be ignorant) to agree that those are the “success” stories. Although, since Masnick believes that most current copyright law is overbearing and defeats its original purpose, then obviously there are a lot of beneficial activities that would be a violation of copyright as it exists today. Violating copyright is not in itself a harm.

mike42 (profile) says:

Easy answer to stupid problem

Here’s the simple solution: If you put something on the web, you are purposely sharing it with the public. It is therefore Public Domain. You renounce all copyright to that specific binary file, because you have placed it on a medium specifically made for copying.

I’m not talking about putting things that you do not own the copyright to. I’m talking about morons who upload high-def pics an then cry that someone copied it.

If you AC’s bother to reply to this, try to make a coherent argument. I’m sick of legislation fanboys.

SteveK3003 (profile) says:

Re: Easy answer to stupid problem

Gee, by that argument if I leave my keys in my car in a public place, it is now public domain and those who steal it aren’t breaking the law. Merely placing a hi def pic on the web doesn’t make it legally available for anyone to use for any purpose. The owner of the photo still retains the rights to the photo. Just as someone that writes an article and puts it on the web doesn’t give up his copyright for that work.

If you want to label people morons, perhaps you should know the definition.

Anonymous Howard, Cowering says:

Re: Re: Easy answer to stupid problem

Uh…no. Once again, the dimly lit bulbs are dazzled by the brilliance that is digital.

You have one car. If you leave your keys in a public place, and someone else takes the keys and subsequently drives off in the car, you have lost (1) a physical good – the car, and (2) the use of that physical good.

If you post a picture on the internet, and someone makes a digital copy, you have not lost anything. The picture/file/song is still there; it now may be found in more than one place.

At worst, you may not realize a possible future income from the “sale” of that file; but that possible income may not have been realized anyway – the person who is using the copy may not have valued the original sufficiently to have paid for it, if paying were the only option. Your assignment of “price” may not match his/her perception of “value.”

Anytime y’all can get together in sufficient wattage and come up with an example that does not involve equating finite physical items with infinitely copyable digital files, feel free to come on back and join the discussion. ‘Till then, stop stretching the analogy – it doesn’t deserve the mistreatment.

Anonymous Coward says:

Re: Re: Re: Easy answer to stupid problem

“If you post a picture on the internet, and someone makes a digital copy, you have not lost anything. The picture/file/song is still there; it now may be found in more than one place.”

it’s where you are wrong, you have lost plenty.

First off, your scarce good (the picture) just became two pictures. Second, and just as important, you have lost control of something that belongs to you.

Part of ownership is control. Part of the problem of “infinite infringing” is that people think they can take anything they want, with impunity. How long do you think it is before someone like Mike starts calling cars “infinite transport” and makes it mentally okay for people to infringe upon that owners rights? After all, we can easily produce and infinite number of cars, certainly more than is required for the public as a whole (which is why GM, Chrysler et al are in the crapper).

I suspect it will start with public transport – infinite transportation.

I’m personally looking forward to infinite beer and infinite sexy coeds. 😉

Ryan says:

Re: Re: Re:2 Easy answer to stupid problem

You must be legally retarded.

First off, your scarce good (the picture) just became two pictures. Second, and just as important, you have lost control of something that belongs to you.

How, by duplicating the picture, did you lose something? You still have the picture! Nothing changed in your copy. It is also not a scarce good since it can be copied infinite times at no cost to your own copy. Do you not understand the definition of scarce? Additionally, you lost no more control over your copy than you had before…

How long do you think it is before someone like Mike starts calling cars “infinite transport” and makes it mentally okay for people to infringe upon that owners rights? After all, we can easily produce and infinite number of cars, certainly more than is required for the public as a whole (which is why GM, Chrysler et al are in the crapper).

Do you not understand the definition of infinity? Have you taken a 5th grade math course? How exactly can we produce an infinite number of cars? There is a limited number of resources, producers, and space. More importantly, the marginal cost is not zero. It is not even remotely zero. The marginal cost of copying a digital artifact is zero! What about this concept do you not understand?



Anonymous Coward says:

Re: Easy answer to stupid problem

There are ways to do it, but it isn’t very easy to renounce all rights. Without getting into a legislation discussion, it gets very hard. Let’s say you produce something, say “take it, it’s free”. 1 million people download it. You die, and your wife / mother / son inherits your rights. They look at this something you made, and decide to sue everyone using it for violating copyright. Are they wrong? Nope, because the law is written that way.

It’s important too because by nature, you have built in protection against the use of your image / likeness / product in an advertising campaign you might not approve of. It is hard to extract a certain right and leave all the other ones intact.

It sort of comes down to the standard problem: If you look at an icecube size part of an iceberg, you are missing the overall point.

JRosen (profile) says:

RE: Easy answer


Great point, and there ARE ways to do it. If you go to pro-artist sites (good ones that are set up properly) there are quite commonly VERY hard to edit-out watermarks or the like that make it obvious who did the initial work, etc.

However, yes, a large part of the problem is also the lawsuit-happy nature of corporate and private companies and PEOPLE who don’t have enough common sense to fill a thimble.

angry dude says:

mikey is a tool

such a touching story about troubled american dream

Yeah, all patents are bad by extension in Mikey’s world

But for each story like this there is another story about an independent inventor or small startup founder struggling for decades to get fair compensation for stolen inventions from corporate America – with valid patents in hand.

Many of these ripped-off inventors come from other countries including Russia, attracted by the opportunities afforded by the US patent system among other things.
Guess Joe Mullin, being a paid corporate shill, never wants to cover one of those stories

from the article: “To me, the whole idea of America is people come here, and invent something really awesome, and then they do it—they don’t just put it on paper and get their lawyers to submit it to the patent office.”

Sorry to dissapoint Igor Shoifot, but if you invent something really important e.g. new semiconductor chip, all you can do is properly describe it in your patent application and hope that you can reach a favorable licensing deal with large manufacturer

fotki.com “promoting the progress” ?
What a f****** joke

mike42 (profile) says:

Re: My God, angry dude GOT IT RIGHT!

Major corporations use patents to rip off the little guy. Little guys get patents, and then get ripped off by the corporation anyway. WHY ARE WE CALLING THE PATENT SYSTEM VALID??? It doesn’t work. It can’t do anything but stifle innovation and productivity. When the little guy is worried about stopping the big company instead of competing with it, he loses because he can’t pay the lawyers. When the little guy can’t compete because of a bogus (or valid) patent, he loses because he can’t pay the lawyers. They only guys who win are the lawyers.

Overcast (profile) says:

Re: Re: My God, angry dude GOT IT RIGHT!

They only guys who win are the lawyers

Yes and innovation suffers. I’ve had a number of ‘good ideas’ – but I don’t bother… Patents are too expensive. Maybe not all would be ‘great’ ideas – one would all but eliminate the need for grocery bags and made getting groceries home a piece of cake.

But I can’t afford to patent it. So oh well.

Anonymous Coward says:

Re: Re: Re: My God, angry dude GOT IT RIGHT!

Patents are too expensive? As compared to what? They are cheap compared to a BMW driven by an “innovator.” They are cheap compared to swimming pools. They are expensive compared to a trip to the grocery store. You need to define “expensive.” A patent for a small entity, like a sole inventor, that covers a relatively uncomplicated invention, should cost $3k to $6k, depending on where you get drawings done. I know people who spend that much per year on cigarettes and booze or on gasoline. Use the bus and stop smoking and drinking and you will have enough money, if you idea is truly inventive.

Anonymous Coward says:

Re: Re: Re:3 My God, angry dude GOT IT RIGHT!

Wait a moment, if you get the patent where is the litigation? Take the darn thing to a big business with the resources to capitalize on your great invention. Let them deal with any litigation.

Plan B: Bicycle, or motorcycle. At least, you can reduce your costs.

angry dude says:

Re: Re: Re:4 My God, angry dude GOT IT RIGHT!

“Wait a moment, if you get the patent where is the litigation? Take the darn thing to a big business with the resources to capitalize on your great invention. Let them deal with any litigation.”

Have you ever tried, punky ?

I did…

Bob Kearns did

watch the movie “flash of genious” – it’s all in the movie

Igor Shoifot (user link) says:

Re: mikey is a tool

Dear anonymous “angry dude” 🙂
1. What are you angry about?
2. Please don’t feel like you are disappointing me :))) but are you saying that we should have patented photo-sharing? 😀 and “hope that you can reach a favorable licensing deal with large manufacturer” (umm, and you call someone else “a corporate shill”)? 🙂
3. Do you have a real name so that maybe we can meet and have a more civilized discussion than throwing around a bunch of big words like “corporate shill” or calling my company a f. joke?
Have a good weekend, angry dude :))))

Rekrul says:

Driving entrepreneurs out of the country isn’t exactly “promoting the progress” now, is it?

Sure it is. It’s promoting the progress of large corporations, which are the only businesses that matter to politicians, because they’re the only ones who can donate huge sums of money to campaign funds. See how that works?

Reluctant Foreign Business Owner says:

We moved our business to China

After a attack by a much larger company claiming that we “stole” their technology. (No patents involved and we did have different and better technology) The cost to relocate to China was much less than the cost to fight the legal battle here. Now our Chinese company is competing against them in the world market and approaching #1 in market share. They tried to go after us in China but it was thrown out immediately.

I hated to move to another country; we have much less control than we would have if it were here. We have 52 workers in China now and outsource sheet metal, circuit boards and buy components from companies in China. Only our core module comes from the US. We would have had at least 23 people employed here in Oregon, paid property and income taxes and had sheet metal and Circuit Boards done here.
Overall our per unit cost is slightly below what we could have built it in the US for, I’m not happy with the quality and reliability and the lead time and shipping/travel adds tremendously to the cost. We would have had to spend over $1M to fight them, been tied up in court for years and given the best case scenario and we won, we still would not been producing product. I didn’t want the company to leave the US and truly, does any foreigner really own anything in China? It was the only way we could survive the legal attack.

Another business owner says:

Re: We moved our business to China

This is precisely the reason why I’m looking to relocate my business offshore. Because we primarily invent products, it’s not a matter of if we get sued, it’s when… and considering that as a small business, our corporate purse is tiny, there is no possible way that we will stay afloat with the legal fees incurred.

CastorTroy-Libertarian says:


I have finally caught on to what is happening here, before we used to debate the merits of the story and some days it spun out to other ideas… now we see Corporate Shills and paid for trolls come in to get people mad to the point the arguments do not make sense. – and now i see. The Progressives and lawyers are scared of this site and the others out there that preach the truth of common sense, free markets, and innovation. It scares the big boys (politians and ppl like the RIAA) so now they are trying to get people to shut up and drink the Kool-aid, unfortunately for them their best arguments are name calling and trying to associate us with “pirates” and “nazis”… SO THEY SCARED…

GOOD JOB MIKE, keep it up, the truth will be set free as long as you and the rest of us keep spreading it.

Rebel Freek (profile) says:

Re: Re: Understanding

Again with the Lemming-punk comment… Lets just hope it doesn’t bring back the Furry comments…

I like to read Mikes version of things, he seems to have a decent head on his shoulder and makes some good points. Does this mean I will only take his word on things? Hell no. I generally go research things myself and make my own decisions.

That being said, what proof do you have you are not a corporate shill or patent troll? Your comments never seem to indicate you aren’t, since they are so poorly written and lame…

CastorTroy-Libertarian says:

Re: Re: Understanding

Thank you Angry dude, for offering proof of point, no reasonable debate, just name calling and trying to move me to a lemming, well if lemmings like honest debate on key concepts well i guess so.

Oh and lay off the fiber granp’s its obviously causing you large amounts of pain.

Anonymous Coward says:

Okay I am going to try to bring some rational thought to this argument. First off innovation does not mean you will make oodles of money. Most innovative ideas fall flat on their face, but they may be a good idea at some point in the future. If the creator of a patent is dead or no longer using a patent, as in the company has folded and the idea abandoned, the idea should fall into the public domain. This could easily be 40 years is the maximum length ANY patent or copyright should exist, with refiling for said copyrights and patents every 10 years. This ENSURES that progress is being made and that there is some reasonable point where ideas fall into public domain. Any time limit longer than my proposed length is glut plain and simple. If your idea is still popular after that length of time it is of obvious use to the public and in the best interest of the public to disseminate it.

Shawn says:

Re: Re: Re:

and an F- for you punky!

If you are going to be an ass at least be factual.

From US patent office website:

For applications filed on or after June 8, 1995, utility and plant patents are granted for a term which begins with the date of the grant and usually ends 20 years from the date you first applied for the patent subject to the payment of appropriate maintenance fees. Design patents last 14 years from the date you are granted the patent. Note: Patents in force on June 8 and patents issued thereafter on applications filed prior to June 8, 1995 automatically have a term that is the greater of the twenty year term discussed above or seventeen years from the patent grant.

Tuli (profile) says:

Re: Re:

I am new here and found this forum while searching for some answers regarding intellectual properties, stolen ideas, etc. I would really appreciate some insight into my issue, even though I am pretty sure what the answer will be….however, I’m hoping I’m wrong in this case. Here is my issue:

My ex-fiancee is a German Citizen, I am a US citizen — He has a company in Germany and was in partnership with another company here in the US during the time we were together — we broke up later on, but were still friends at the time the idea occurred — at any rate, he is an engineer, an entrepreneur, and while he isn’t actually a physicists, studying energy, how to harness, how to manipulate it, etc. is his hobby.

During our entire relationship he was always trying to invent one thing or another in relation to energy, etc. and of course, would discuss his findings/road blocks, ponderings, etc. with me — hence I developed a pretty thorough understanding of the different theories on energy.

Since his company develops imaging software, cameras, etc., he was also always discussing information regarding roadblocks, etc. he stumbled on within that area as well.

While I am not in any way shape, form or fashion a physicist, I do have an extremely high understanding of the mechanics of things — not necessarily in fixing a toaster, but in understanding and visualizing mechanical concepts/theories (this may not be exactly the correct wording, but it’s the best I can come up with at 1am) So, once I have a basic understanding of how something works, I can see it in my head, and generally — via common sense, an uncanny insight into the working of things and whatever weird thing that happens in my brain to make me suddenly simplify the most complex thoughts — I can come up with solutions. He was always calling me the most brilliant woman he ever met and dumb ole me pretty much thought he was just trying to make me feel good, but in hindsight, I think a resolved a lot more issues than I realized (call me idiot savant if you wish, lol) — which was why he would bring me into his lab so much only to pound me with ?’s about what did I think he should do.

In regards to this particular incident, his issue was with an astronomy camera he was developing for mfg worldwide that he could not get the radiation levels down low enough to pass worldwide radiation laws (by the way, the camera is on the market and has made great strides on viewing stars, planets, etc. within the astronomy community) — anyways, he explained to me his issue and asked me how I thought he might resolve it. Since I was used to this type of conversation, and knew all about the new camera, etc., it wasn’t hard for me to come up with an idea that ended up not only resolving his issue with the radiation, but one that he has expanded to something so huge it is scary……..but scary good for the world if it works out the way I believe it will.

So, finally, here is my question, do you think there is any way I can get credit for my part of this invention or even have a right to try to?

He has just recently patented it (I stumbled on the new patent) and the premises is based solely on my idea — however, he had to do quite a bit of work to get the idea from just that to what it is today; yet, had I not shared my ideas with him — he would not have anything to patent at this time……..nor would his camera be working so well if at all — so I do believe I should at least get credit; however, once I gave him this idea, and within a couple of months afterwards he abruptly ended his partnership with the other US company, left his employees high and dry (the partner company ended up having to absorb them, and did not have a clue as to why he severed ties so abruptly) – then went on to tell his children (both in college) they would be disinherited if they approached me (which was extremely extreme and very unnecessary I thought at the time)– but all makes weird sense when you consider the potentially world changing nature of this invention.

Thanks in advance to anyone who takes the time to read this note, and thanks especially to anyone who might share some insight — like I said before, I may be royally screwed, but I feel I deserve recognition of some type. BTW, I am currently unemployed so no $$ in the coffers to hire a lawyer at this time to look into this matter.

Thanks again and sorry this is so long!

Vic says:

Have not seen so many stupid comments at once!

One accuses Mike of siding with TPB (well, I guess he just stumbled upon this blog and have not read anything yet);
Another one wants a techdirt.com domain (I do not know how exactly he is going to use it since the dude has obviously never heard of DNS);

It all DOES seem like a so-so organized attack of we-know-which-exactly-industry trolls actually!

Lawrence D'Oliveiro says:

Re: Re: Angry dud

And I know how to use techdirt.com domain – i’m gonna sell it to the highest bidder

What exactly will you be selling—the right to deny others the use of the domain? I thought you wanted a free-for-all on the techdirt.com domain—isn’t that what you asked for earlier?

angry dude says:

Re: Re: Re: Angry dud


a domain name like techdirt.com has certain commercial value because there aren’t many recognizable word combinations you can pick for your site or online blog

Mikey took it early for himself thus denying the rest of us the benefits of using or selling it

Why do you think it is any better than patenting some idea and keeping it for oneself ?
it is actualluy much worse becasue patents do expire and domain names do not..

Mikey is just your regular run-of-the-mill hypocrite
We have a bunch of those in US Congress

staff1 (profile) says:

“But following the legal attacks, the more recent success stories have all been foreign: The Pirate Bay, Mininova, isoHunt. That’s not a coincidence. “

of course. those foreign jurisdictions have no property rights. why do you think they call it “Pirate Bay”?

patent reform is a fraud on America…
please see http://truereform.piausa.org/ for a different/opposing view on patent reform

Anonymous Coward says:

One of the reasons the U.S. advanced so quickly was because it had fewer restrictions and gave the free market the freedom to innovate. Now that intellectual property and government regulation is getting in the way of this innovation in the U.S. has fallen behind. We have fell significantly as far as broadband Internet and our cable television is expensive and in the stone age. More examples of how government regulation to maintain monopolies is harming our society.

angry dude says:

Re: Re:


perhaps your should know that US Patent System is 200 years old

Contrary to what you might be reading on shitty blogs like this US patent system was instrumental in making USA the most powerful country in the world

Pretty much all of the significant technological advances and inventions originated in US, owing to working patent system here

“… the very first official thing I did, in my administration–and it was on the very first day of it, too–was to start a patent office; for I knew that a country without a patent office and good patent laws was just a crab, and couldn’t travel any way but sideways or backways” (Twain 46).


Now go back to eating yout oatmeal, you mindless and patentless lemming-punk creature

Gareth Evans says:

Couldn’t agree more… we’re a US branch of foreign company. Overseas we have some great products (which we developed for ourselves at great cost, zero plaigarism) but we can’t launch them in the US because of patents held in some cases by dumbasses who can’t even use them.

So here we want to build a business, create US jobs, and add real value to US companies and we can’t because someone with a patent on “I have an idea to start a business” will sue us for starting a business. Way to shoot your innovation economy in the foot… China here i come

mlgreen8753 says:

Adapt Don't Run!

I’m sure some people will leave, but I doubt that there will be some drastic exodus to foreign countries. There are too many opportunities here to run from something like that. I do a lot of video marketing on sites like Adwido and video marketers seem to be running into the same issues, but it’s not worth leaving the country over. True entrepreneurs are known for adapting to obstacles not running from them.

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