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Comment by mistercow | Hacker News Reader

The problem I see with this is that it doesn't (and, I think, can't) really account for the future. Suppose you see that Twitter has a patent on buttons that you have to quadruple click, and you think they'll only use it defensively, so you make a free jQuery plugin called t4p, which implements quadruple clickable buttons.

Three years pass and now a new service, Blithr (like Twitter but messages are limited to 18 characters and all caps) has stolen Twitter's thunder and Twitter is facing bankruptcy. They are forced to sell off their assets, including their patents, and those end up in the hands of a patent troll.

And suddenly, people who used your plugin are having to defend themselves in the US District Court for the Eastern District of Texas.

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No, patents are sold encumbered by their previous licenses. Another entity may acquire the patents, but the portfolio would still be subject to this agreement.

The issue is the ambiguity of "defensive" action gives the assignee of the patent relatively broad license to act without the consent of the inventor - and the inventor can be suborned later, too. (Trust me, that happens.)

No, patents are sold encumbered by their previous licenses.

Do you really believe that will happen? When investors are asking why some pinhead inventor is holding up their profits? You can't force everyone involved in a company to think this is a good idea, and therefore, it isn't.

Edit: (For some added color, imagine Kevin O'leary of Shark Tank fame sitting on the board of a company with some of these patents).

If its part of the license agreement, they would have no choice (clearly, IANAL).

Why do you expect investors to be stupid?

The article we're commenting on is an investor excited that software patents will stop holding up profits.

A very specific kind of investor - a career-long early stage VC. But even there, there is much room for disagreement without labeling people as "stupid".

I expect investors to be rational - and to seek profits where they are available given the information that is currently on the table. In some cases, that means they will say, "you know what? Screw that doc - we're selling these puppies."

Your earlier comment sounded like you were saying that a company adopting this patent hack would be hard to sell to other investors. Isn't selling companies to other investors what an early stage VC does?

If I were investing in a company that had these things, I would be concerned that the patents were now no longer licensable - that their value had been decreased by waiving some of the rights granted by the patents.

In certain situations, I could see investors trying to undo this agreement so they could unlock that value. If the value is great enough, they will try really hard (and given how vague this agreement is, I bet they'll succeed). That's all I'm saying.

In the end though, I don't see how this agreement is anything more than twitter saying "we won't sue people over patents, and we won't sell them to people who will". I don't see that as particularly significant. Just that twitter isn't pursuing licensing revenue as a strategy.

rational investors care about their reputation because that is what gets them into the good deals. maximizing profits over a career may require different actions than you think

Investors lose more money to patent trolls than they make from licensing patents or suing people. If they can do things to fix the system overall they'll win in the long run.

Umm, yes I do. Shark Tank notwithstanding, I am a patent lawyer, and I see these deals all the time.

But this agreement, that essentially makes the patent worthless for licensing? If you say so, I'll believe it, but I'm shocked that anyone would buy such a thing.

OK, I think I see what you're saying. In other words, if a patent troll someone buys out Twitter, they will have to renegotiate their terms with the inventor before they can start shaking people down. I guess that's at least some reassurance.

They don't own the patents for use in offensive actions so the patents would serve no use to a patent troll. It would take the originator's consent.

Ah, and there's the rub. All it takes is a nod from the inventor, and the patents can be used offensively. If I'm a troll and putting together a portfolio to go after a "big fish", I probably already have the resources to offer the inventor a sizeable cut or up front payment sufficient to acquire that consent.

Offering the inventor a cut or upfront payment would violate the terms of the IPA.

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