grellas

1. It gently mocks the investors who proclaim "bubble" as a way to bitch and moan over being caught in a price squeeze.

2. It lampoons the alarmist press accounts of the same "bubble" as a sort of guilt-ridden desire to atone for having so idiotically missed the real bubble of 2000.

3. It deprecates its own author in two splendid ways (swimming in the bubble froth of holding a worthless vp biz dev position while on the ascendancy and swimming in booze in the aftermath as the illusory fortune took wing and flew away).

4. It offers some sharp and pithy contrasts between what is in fact happening today (some over-excitement in select tech areas) and what happened in 2000 (spend, spend, spend and to hell with fundamentals), all of which in fact draws a sharp contrast between what was indisputably a bubble back then with what is (likely) not really one today.

5. And it does all the above with tongue heavily in cheek, right down to the very title ("blubble").

You can love or hate Mr. Arrington, and he is undoubtedly one who provokes strong reactions from others, but his work is anything but routine and, at times, it even soars.

I started working in Big Law in 1980, right when large law firms were at the tail end of using centralized mini-computers with dumb terminals spread throughout the firm. Every few days, we would receive memos (hand-carried by an in-house messenger - there was no form of email or instant messaging then) asking us to fill out a form telling the IT staff which of our computer documents no longer needed to be stored on the central system. The firm had to continually delete old documents to free up storage space. I imagine that it could have added storage capacity but the cost at the time was very high. On the software side, there was no mass market software available and the software we used was a proprietary system of very limited functionality that came with the Wang system.

This piece (which is extremely well-written, by the way) reminded me of how we used to do redlining of legal documents in that era. No software was available to do this automatically or in any kind of expedited fashion. Therefore, to show, e.g., what changes had been made to a contract from the last cycle, attorneys would line up printed versions of the contracts side-by-side, with the old draft on the left and the new on the right. With a ruler in hand, they would go down the left side line-by-line while manually comparing it to the contract on the right. If they came upon a deletion, they would use a pen to cross out the relevant language as a way of showing that deletion in the new draft. For an insertion, they would hand-write the insertion in the margin or at the bottom of the new draft and hand-draw a line/arrow from the point of insertion to the added text (of the text were too long, the new text would be separately typed out, marked as "Insert A" (or whatever was next in sequence), and the contract itself would be marked with an insertion point instructing the reader to "See Insert A." This process would take many hours to do with a lengthy contract and would need to be double- and triple-checked for an important document to avoid the errors that would inevitably mark such a painstakingly detailed process. When the document came back from the other side, this same manual, time-consuming process would be repeated. And so the iterations would continue until the final, execution versions were prepared and signed. Clients were charged for every minute of attorney/paralegal time involved. The results were first-class but hugely expensive to clients. This sort of legal work was done almost exclusively for large, institutional clients. No small business could afford it, as it easily added large legal costs to a negotiation process.

Times have changed indeed. If you just imagine what it would be like to work with no email, no text messaging, no cell phones, no quality software, no internet, no personal computing (other than with "toy" computers) and the like, you will be thankful for the marvelous tools we have today. Among other things, legal services will never be the same.

Beyond that, perception tends to be affected by one's age. When I was young (e.g., in my 20s), all the possibilities of the world seemed open to me and it was just going to be a question of what I would do first - I put everything else into the category "I'll get to that when I have time." I had done a lot to develop my talents and knowledge base, and in a range of areas to boot. But my reading of the "great works" trailed off following college. Time was too limited to get to most of them. But, some day, yes, I would do so. I had never learned to play an instrument. But, when I had time, I would learn piano. I had limited time to do non-business travel, but some day I would make it up.

Of course, "some day" one day comes and you quickly realize that many unrealized hopes and dreams would never in fact be realized. And that includes becoming cultivated in a range of areas. When this fact first strikes you, it truly is depressing. For me, it was the first time in my life that I started to feel "old" (feeling old is not so much chronological as it is a state of mind). You become overwhelmed with the fact that you will never keep up with all the new trends and you will never have the time to fill all the holes in your knowledge base or to do all the things you dreamed of doing.

In time, though, I came to make peace with this sense of restlessness. Life is too short to do everything but life is more than ample enough to do important things, things that count beyond the mundane routines of daily existence. This life is but a breath or, as my 100-year-old grandmother said shortly before she passed on, everything that she had experienced to that point was "but a blink." When you can get to that stage and say, "no regrets" for a life well-led, you can have peace with your finite capacities and your finite existence in this world. There is much that is beautiful to do in this life. You don't need to do it all. You just need to do it well.

To be able to sue legitimately for copyright infringement, Righthaven must have had some substantial right under copyright assigned to it - that is, something beyond the bare right to sue (Silvers v. Sony Pictures).

Here, the agreement truly provides for a sham form of assignment: (1) Righthaven is expressly said to have no rights to exploit any of the copyrights purportedly assigned and all such rights are reserved to Stephens; (2) Stephens can block Righthaven from suing any particular party; (3) Stephens can demand the copyright back at any time; (4) Stephens gets a 50% cut of any recovery in any lawsuit filed; and (5) a Stephens-controlled representative is required to be part of Righthaven's key team. Given these terms and conditions, Righthaven is basically a puppet and Stephens is what the law calls the "real party in interest" in these lawsuits. Since no true assignment took place, the current lawsuits filed pursuant to this agreement are in deep trouble. And, just in case the Righthaven lawyers missed it, the judge who is responsible for handling these cases is hopping mad at them.

The bad news: if such assignments are done as true assignments, the Righthaven model still works, or at least is not undone be a congenital defect that can't be overcome in future cases.

Kudos to EFF for splendid work in pounding through the fake exterior of these cases and sending them to perdition, for that is surely where they will land after this revelation.

This particular debate - that is, whether a society should confer monopoly rights for the benefit of inventors and authors - happens to be several centuries old.

An extremely articulate proponent for the anti-monopoly view was none other than Thomas Jefferson. Here is what he wrote to Isaac McPherson in 1813:

"That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from any body." (see the full text of the letter, which is well worth reading in its entirety, here: http://www.temple.edu/lawschool/dpost/mcphersonletter.html)

This is a philosophical argument against the idea of patents generally, beautifully expressed.

In his day, Jefferson lost this argument and the framers of the U.S. Constitution added Article I, section 8, clause 8, which provides that the Congress shall have the power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." This was followed by enactment of the first U.S. Patent Act in 1790 and by an unbroken body of law ever since upholding patents with a vigor that is quite remarkable.

Today, patent and copyright laws are once again being re-examined from a philosophical perspective. Is it really true that monopoly grants of this type add value to a society by fostering creative activity? Do such laws truly benefit deserving persons or do they mainly promote the interests of faceless corporations and opportunistic trolls? Is it honest to call it "intellectual property" if this merely begs the important underlying question whether intangible rights (really, exclusive-right or monopoly grants) of this type should even be recognized by law?

These are legitimate questions and the debate is a serious one. But there is also a very legitimate argument on the other side of this debate, what might be called the overwhelming majority position of the past two centuries that has favored patents and copyrights. That argument was certainly not lost on the nearly 7,000 authors, professors, and other persons of all non-lawyer ranks in society who filed such strong objections to the proposed Google book settlement based on threats to their copyright interests as to cause the judge to reject it. Nor is it lost on the major technology companies who continue to file patents in great number even as they advocate against frivolous patents (see, e.g., the "Latest Patents" site, which duly notes a large number of patent filings by Google made with great frequency: http://www.latestpatents.com/google-patent-applications-publ...).

While there is obviously an aspect to this debate that involves lawyers, lobbying, and circular logic, those issues are in my view at the fringes of the debate, and it hardly promotes careful analysis to bring them front and center and to say that this is all that is involved in the fight. A superficial attack of this type is really no more defensible as a way of advocating a position than is the use of circular logic that is being criticized in the piece itself. Much more depth is needed to get to the most important issues at stake.

Microsoft likely fashioned its petition along these lines owing to a dictum in KSR v. Teleflex that said as much and also to try to appeal to the incremental jurisprudential approach of the current Supreme Court (decide only what is absolutely necessary for a given case and leave it to future cases to do more). The irony of this is that Chief Justice Roberts, who seems to specialize in incremental jurisprudence, has recused himself from the case and will not participate in the decision.

I believe the half-way argument is weak and will not hold sway. If the Court goes for reform, there is no reason it should not go all the way on this issue. This is particularly true given that nothing in the statutory language limits the Court's power to set an appropriate standard. Unlike Bilski, where it faced a challenge to business method patents in a context where Congress had expressly said you could have them, there is nothing here that stands in the way of the Court's making a coherent ruling based entirely on what is appropriate for the case. I am hopeful, therefore, that this case will help bring some sanity to this troubled area of the law.

1. This is a sleeper case (i4i v. Microsoft) that has drawn relatively little attention in the public's eye. In reality, the stakes associated with it are huge and the interest it has drawn from key players in the tech industry is commensurate with those stakes.

2. The reason it is not a particularly exciting case from a headline standpoint is that it deals with what appears to be a specialist technical issue of patent law, that is, what is the proper "standard of proof" to be applied when a patent is challenged as being invalid? Should it be a "clear and convincing" standard or a "preponderance of evidence" standard?

3. In fact, the practical effect of this case on patents will be far greater than that of, say, Bilski, which dealt with the question of what constitutes patentable subject matter. Bilski covered business method patents only. The i4i case affects basically every case pending in the courts in which the validity of a patent is being challenged.

4. Among those in the tech world, just about everybody who is anybody has weighed in with a "friend-of-the-court" (amicus) brief asking the Supreme Court to throw out the clear-and-convincing standard in favor of a preponderance standard. The parade includes Google, Apple, Facebook, Intuit, Yahoo, Intel, Dell, HP, and others. A group of 36 law professors specializing in IP have also asked that the standard be changed, as has EFF. A superbly informative summation of the amicus briefs seeking to undo the clear-and-convincing standard is found here: http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202472695453&.... A good discussion also appears here: http://www.patentlyo.com/patent/2010/09/challenging-the-clea....

5. By the way, the other side of the argument is well-articulated here: http://ipwatchdog.com/2011/03/13/supreme-court-patent-watch-....

6. So why is this so important and why do some companies (such as Apple) that frequently rely on patents to protect their competitive positions side with Microsoft in wanting to make it easier to find patents invalid? The simple answer: trolls. In essence, when a patent's validity is challenged and a jury is instructed to uphold it unless it finds "clear and convincing" evidence that it is not valid (owing to whatever ground, whether it be obviousness or existence of prior art or any other recognized ground for declaring a patent invalid), the challenge will almost certainly fail in the average case. The jury is basically told that the patent is presumed valid unless they can clearly find compelling evidence to invalidate. Since, in most cases, what is offered is conflicting evidence of varying types, jurors (typically not wanting to sort through a maze of technical evidence) will simply shrug their shoulders and say that the patent stands. If, on the other hand, the jurors are instructed that they are to determine the issue based on which way the preponderance of evidence tips, then they are to give no deference to the findings of the USPTO in upholding the patent but are to look at it fresh to decide whether the evidence shows that it is more likely than not that a patent is invalid. Thus, under current standards, trolls come into court heavily armed with law that says, in effect, uphold what the USPTO did unless you find a hellava reason not to. Microsoft, and the other tech companies, want this changed so that trolls have no built-in advantage when it comes to a litigated dispute over patent validity, i.e., they want a "level playing field" once the fight is on.

7. On the technical issue, patents laws are governed by statutes enacted by Congress but no existing statute requires that a clear-and-convincing standard be applied to this issue. The parties dispute the issue but Microsoft's position is that no such standard had been applied by federal courts (at least not with any consistency) before Congress created the Federal Circuit court to oversee patent disputes. Microsoft argues that the Federal Circuit has skewed patent litigation by arbitrarily making it more difficult to invalidate patents than Congress had intended. This was the same court, by the way, that had adopted the State Street test that led to a wild proliferation of business-method patents and that was struck down in Bilski. The Supreme Court is now being asked to bring a bit more sanity to the related area of standards for determining patent invalidity.

It is hard to say which way this one will go. The patent bar is in an uproar that issued patents might not be deemed presumptively valid when challenged but might be much more vulnerable to challenge going forward, and so too are the trolls. Pretty much everybody else favors reform, including most of the tech industry heavyweights. My own sense is that this one is going to tip toward Microsoft and that we will get some measure of reform here. This would be a significant and very practical step toward undercutting a good measure of the power currently held by the trolls.

A few observations:

1. Founders are much more aware of 83(b) elections today than they were in 2003 when this piece was done and failure to file these on time is much less a problem today than it was then.

2. The biggest problem by far among early-stage founders that is not mentioned here is failure to assign IP into the company at the time of formation when shares are issued. This is commonly overlooked when founders take a do-it-yourself approach. Normally, it is easily cleaned up but, in cases where disputes have arisen, it is a painful and expensive problem to deal with.

3. I would add as well trying to "do it yourself" without even consulting with a good lawyer to get strategic guidance. This can lead to problems that are easily avoided at small cost by consulting up-front with a lawyer, even if you intend to defer hiring a firm in the earliest stages (see, e.g., for an example of what can go wrong as a founder candidly discusses why "incorporating my startup [in Delaware] was my worst mistake": http://news.ycombinator.com/item?id=2399139).

As a point of comparison, here is a link to a similar list (equally good) done by Scott Walker and posted on HN a while back: http://news.ycombinator.com/item?id=1418300 (as to which I made a detailed comment touching on LLCs, Delaware, vesting, and tax).

In general, founders are much more savvy about legal startup issues today than when this piece was written but it is always helpful to review the major issues as a double-check when starting.

Original complaint: Cast primarily as a claim against Facebook seeking a court declaration and judgment that Ceglia was the 80% owner of FB. Claim founded on a breach of contract. In essence, a claim by an independent contractor that, for breach of a $1K contract, he is entitled to claim half of what a young kid promised to give him forever after relating to the subject matter of that contract. Result: an inherently flaky claim that can readily be ridiculed as opportunistic and defeated on a variety of legal grounds.

Amended complaint: Cast as a series of claims against Mark Zuckerberg only (the sole claim against FB as a company is a technical one that seeks to bind it concerning any judgment declaring that Ceglia has a 50% stake in anything granted or promised to Mr. Zuckerberg). Claim founded on the idea of a general partnership as an association of two or more persons to carry on business as co-owners for profit, with the theme being that one partner misappropriated for his own use and profit assets belonging to the partnership and must now account to the wronged partner for 50% of those assets, both as originally constituted and as enhanced over time. Result: a claim that may or may not be valid, depending on how the evidence eventually plays out, but which is potentially credible if the evidence of a true partnership sticks.

In switching the claim from one primarily against FB as a company to one against Mr. Zuckerberg alone, DLA Piper has put it on much firmer ground and has created possible winning chances for its client. How it will likely play out will no longer be determined by one knock-out punch from FB but, instead, in the trenches, with hand-to-hand fighting over every piece of evidence and every fine legal point. That is a decidedly bad turn for Mr. Zuckerberg.

The case remains problematic at several levels, not the least of which may be statutes of limitations grounds on the new theories (New York lawyers can assess this).

Before we cheer too loudly for Mr. Ceglia, I would note that I have seen many, many situations over the years in which a less-than-attractive "money guy" does indeed exploit founders at the formative stage and the contract here appears to fit within that mode - in essence, a lifetime claim against a founder concerning the subject matter of an engagement in exchange for a token money contribution. Whatever one may think of Mr. Zuckerberg, this is utterly repulsive and will serve as a drag on Mr. Ceglia's case throughout.

In this context, the "substantial risk of forfeiture" analysis is not relevant. The idea of "risk of forfeiture" applies only when someone already owns stock and can lose it. Here, the Winklevoss brothers never owned the FB stock (nor were they receiving it in exchange for any services they were performing and so neither 83(a) nor 83(b) applies).

In fact, the securities-fraud claim was merely some legal legerdemain by which the Winklevoss brothers sought to set aside the $65 million settlement they had struck with Facebook in their quest to obtain more. It is basically absurd to say that a party settling a legal case must comply with the disclosure laws for making a private placement in offering a stock component as part of a settlement package in a mediation context.

The Ninth Circuit panel here obviously agreed, and the writing was on the wall on this issue even after the oral argument held three months ago (see my comment here: http://news.ycombinator.com/item?id=2096370).

The case is not necessarily dead, at least in theory, since the Winklevoss brothers might petition to have it reconsidered en banc by the full Ninth Circuit and can file for a writ to the Supreme Court. At this stage, though, such options are long-shot options at best.

I note one irony in passing. The ratio of the stock value to cash payment that made up the original settlement was not coincidental. The $65 million value consisted of 1.2 million Facebook shares originally valued at $45 million plus $20 million in cash. Receipt of such stock is a taxable transaction and, indeed, would constitute ordinary income to the Winklevoss brothers. Thus, they were to have received $65 million in taxable income, including $20 million in cash to help cover the tax. But that was then. Having chosen to fight the issue, they would not have realized any form of taxable income on this deal until they actually received the stock. As a result, when they now receive the cash/stock package, they will realize an estimated $170 million in taxable income (the cash plus FB stock worth $150 million), with only $20 million to help defray taxes. That stock will not be immediately marketable, even on the secondary exchanges and will require FB's permission to be sold there. The net result, unless I mis-analyze, is that the Winklevoss brothers have by their choosing to fight managed to convert over $100 million in stock value from what would have been a long-term capital gain into ordinary income, will have to pay much higher taxes accordingly, and will (I would assume) be faced with a serious logistical problem in the form of a short-term cash squeeze in raising funds to cover the taxes. I am not a tax specialist and may be wrong on this, but I don't think so.

FB dodged a bullet on this one. Had the settlement been set aside, the liability overhang would very likely have messed up its IPO, among other serious consequences. That was the gamble apparently made by the Winklevoss brothers - that they would be able to exact a much larger settlement as a result of their leverage obtained from having the issues re-opened. It appears, though, that they gambled and lost and not without detriment to themselves. For its part, FB now seems to be in the clear.

Here is what EFF says:

"We’re wholly in favor of net neutrality in practice, but a finding of ancillary jurisdiction here would give the FCC pretty much boundless authority to regulate the Internet for whatever it sees fit. And that kind of unrestrained authority makes us nervous about follow-on initiatives like broadcast flags and indecency campaigns. In general, we think arguments that regulating the Internet is 'ancillary' to some other regulatory authority that the FCC has been granted just don’t have sufficient limitations to stop bad FCC behavior in the future and create the 'Trojan horse' risk we have long warned about." (https://www.eff.org/deeplinks/2011/02/part-i-fcc-ancillary-a...)

I have chimed in on this in a previous HN thread:

"The FCC is way out of its league on this one. Basically, it is a creature of statute. It can do whatever Congress has authorized it to and no more. Nothing in its authorizing statute expressly permits it to impose the rules now known as net neutrality. Therefore, it sought to justify its ability to do so under the doctrine of so-called 'ancillary jurisdiction,' meaning that it had an implied power to do so in aid of its expressly granted powers. Unfortunately, a definitive federal appeals court ruling held that no such ancillary jurisdiction existed, leaving the matter for Congress to decide. Rather than deferring to Congress, the FCC chose to adopt a new rationale for its assertion of this authority. Congress overwhelmingly balked at the idea of any broad assertion of such authority and, in the back and forth, the FCC came up with the toe-in-the water approach just adopted to the satisfaction of almost no one. Even this assertion of jurisdiction will certainly be challenged in the courts in cases that will take years to decide, leaving this whole issue in a pathetic state of uncertainty for all concerned. Nothing good will come of this except for lots of employment for the lawyers who will be litigating whether this or that action is 'reasonable' and whether the internet is really like a public utility or not. All in all, a royal mess." (http://news.ycombinator.com/item?id=2033261)

A short-hand way of summing up the issue: do you want, in the name of a short-term goal such as net neutrality, to cede to unaccountable government regulators a broad, unchecked power to control what happens on the internet? I think this should give pause to all of us, no matter what we think of the net-neutrality issue.

This sounds dubious to me. It is not only unethical for a senior Twitter employee to be leaking such information but it is plainly illegal. An employee owes a fiduciary duty to his employer to perform his duties strictly for the benefit of that employer. Such an employee also has obligations not to disclose or misuse any trade secret information belonging to that employer. Both of these are pretty serious legal obligations, the violation of which would subject not only the direct malefactor to major liabilities but also anyone conspiring with him to commit the wrongs.

This story, then, assumes that Google is effectively engaged in knowing illegal acts of the most serious kind. While that in theory might be true, it assumes that (1) Google has a company ethic that would tolerate such willful misconduct, and (2) Google would be stupid enough to engage in a course of conduct that could pretty readily be exposed, much to its injury in law and in reputation.

This doesn't ring true for me.

In addition, grants of conventional restricted stock are in fact sales of stock to a recipient. That means someone has to pay for them. Assuming the Google stock here is being sold at fair value, that is one hefty price tag for an employee to pay. Of course, a board of directors might authorize payment by a loan to the employee but that loan would need to be full-recourse in order not to create inordinate tax problems for the company. This means that the employee would borrow, in one case, $100 million, and, in the other, $50 million, on terms for which he can be personally sued for failure to pay. And what would the employee get for his $100- or $50-million price tag? Well, in the normal course, stock worth just that. So where is the bargain for the employee? Even with a discounted price, the risk to the employee would be enormous because the deal would effectively be a bet that Google's stock will increase significantly in value before the stock vests and the payment comes due. Again, this doesn't really make sense. CEOs take such bets with restricted stock on occasion when a company is still fairly young (e.g., Meg Whitman with Ebay), but this is unheard of for an engineer employee, even a high-level one.

A deal of this type could be structured with stock options that would not need to be paid for up front and would not result in a tax hit or payment obligation to the employee upon grant. But this piece specifically uses the term "restricted stock." Perhaps this is not really restricted stock proper but some sort of restricted units that mimic stock but really constitute contingent employee bonuses. But the piece is suspect in its confident assertion that "restricted stock" was used.

Finally, there are the public company implications. Whenever a company incurs a material event, it must be publicly reported in fairly short order in SEC filings. A $150 million outlay? That would seem material even for Google.

Then there is the question of board of director responsibility. Directors have fiduciary duties to adhere to in making stock grants. How would the Google board justify these grants? And how could they justify them based on illegal "tips" received from a Twitter employee.

I may be missing some nuances here, as my firm does not often get deeply into fine points of public-company law. On its face, though, this one does not add up when the legal factors of which I know are taken into account.

But do not adhere to them as rigid rules or you will suffer in your ability to express yourself. Passive voice exists for a reason. Long words can add variety, rhythm, and color to your prose. Elongated sentences can help give your writing a flow that a mere parade of short sentences can never hope to achieve, not even after a thousand rewrites. Or not. All such items can be misused as well, and the books are replete with bloated forms of expression used by lawyers, politicians, educators, administrators, and the like who would not know a simple word or sentence even if it stood before them doing somersaults. The key is to know sound principles for clear and concise writing and then to apply them with a rhythmic ear for balance in your forms of expression. That means, yes, use passive voice, long words, and flowing sentences as needed to add grace to your prose but always with the baseline in mind: that is, to communicate in ways that are clear and concise and that people will readily understand for your stated purpose (formal style for formal settings, casual for casual, and whatever fits for anything in between).

I note all this because, years ago, I consciously and diligently set about to attempt to master writing and stumbled upon the rock of "simplicity" during such stretches in my learning process where I had assumed that all one could do was follow such rules. Any attempt to apply such rules one-dimensionally is a mistake, and you will regret trying it. Follow sound principles, by all means, but not dogmatically.

The other major keys to good writing are depth of language skills and extensive reading. No one will read your work unless you have something helpful to say. You get this by working hard to develop your skills, and lots of writing (and reading) is vital to this process.

Yes, if you define "defensive" to mean that they want to guard their proprietary forms of innovation against others who might seek to use them during the period of the temporary monopoly they hold on them. But not defensive in the sense of having been obtained in anticipation primarily of being used in litigation defense when others sue Google (which, I think, is how "defensive" is normally used on this topic).

I am no special authority on Google's thinking in this area. Its public actions and comments, though, suggest that it is a company that dislikes and even despises low-quality patents used primarily to foment litigation while supporting the types of patents (like PageRank) that reward innovation. That is pretty much how I read this piece. By the way, I also have an antipathy to flaky patents and strongly believe that the patent system needs reform, but I am not opposed to IP generally, nor to patents (when done properly) in particular.

1. Google is definitely not "anti-patent," either philosophically or otherwise. At the heart of its business is the PageRank patent, which is assigned to Stanford with exclusive license to Google. Even within the last month, Google got a patent for its "Systems and methods for enticing users to access a web site," i.e., its "Google Doodle" (see http://ipwatchdog.com/2011/03/25/google-patents-the-google-d... for an overview on this). And, of course, the blog post involved here very carefully delineates and distinguishes patents that foster innovation (presumably good) and others that are primarily gained to foment litigation, in particular "low-quality software patents."

2. Of course, Google is involved in a current, major fight involving Oracle's assertion of both copyright and patent Java-related claims against its Android technology. Google is a powerful adversary to take on, and it is blasting away quite skillfully seeking to invalidate the Oracle patents in that suit on Bilski grounds that they constitute "abstract ideas" and not bona fide patentable subject matter (see http://news.ycombinator.com/item?id=1899156 for a summary of relevant issues in that case). But no powerful litigant ever bets solely on how a court might interpret some nebulous body of law such as what constitutes patentable subject matter. As matters now stand, should Google lose on that issue, it has very little in the way of defense against such claims. Perhaps the patents upon which it is bidding will give it a practical way to attack Oracle so as to bolster its defense but, again, I don't know about the immediate portfolio or whether it even relates to the Java-related claims. That said, however, I am certain that the Oracle litigation, at a minimum, has spurred Google to consider this issue very carefully and to determine that it needs these tools very badly so as not to be exposed in the future to patent broadsides to which it has no answer other than to point out how weak the relevant patents are - which may be no answer at all in the real world of patent litigation. Hence, this patent portfolio bid has either an immediate aim in mind (Oracle litigation) or a long-term aim with the same strategic view in mind (cover yourself against flim-flam patent claims that might hinder Google's future ability to innovate).

3. The FTC recently issued a comprehensive report on the need for patent reform, and one of its main points concerned so-called "non-practicing entities" or what it has chosen to call "patent-assertion entites" (PAEs) or what is commonly known as "trolls" (see HN discussion here: http://news.ycombinator.com/item?id=2303980). These are patent holders who do not use their patents to produce things but rather use them solely for licensing and the concomitant litigation that inevitably follows against those who decline the licensing "offer." In reality, the PAE idea is much more complex than merely that of a shakedown racket. All sorts of large tech companies routinely gather up all sorts of patents for which they have no plans to innovate but which are vital to their business strategies, either to be used to attack rivals or to defend against them and whether for good or for bad motives. In making this bid, Google is basically acknowledging that it needs to arm itself in this department. This is neither inherently good or bad and could be used strictly for protecting Google's ability to innovate or it could be abused down the road, all depending on future choices to be made by the company's management. It is certainly a double-edged issue.

Groklaw recently ran a piece answering the question "what's blocking innovation in America" and answered it with "IP laws" - this in turn led to some sparks flying here at HN as some, like me, defended IP in general while saying that it needs to be reformed and (many) others taking the more radical view that IP laws generally are to be castigated (http://news.ycombinator.com/item?id=2210469). In my view, the case for IP laws generally is made by companies such as Google, which uses such laws effectively and powerfully but which, at least to date, has not abused them. In this sense, Google has been an exemplary company on this issue. What the future may bring on this front, of course, remains to be seen.

As a lawyer, I would have to say that you should do it by the book and dissolve the entity. I have, however, had a variety of clients over the years who left a Delaware corporation to die without dissolving it and they have not had trailing personal liabilities as a result of the accrued corporate franchise taxes (of course, it is a different matter if the corporation earned a net profit and has an obligation to file income taxes - in that case, failure to file can cause serious problems for the corporation and for its management).

The $89K tax bill is typical of any Delaware corporation that has large numbers of authorized shares, even with a low par value. This often proves a shock to unsuspecting founders who file a do-it-yourself entity without understanding the issues. However, in almost all cases involving an early stage startup, you can deal with this easily by using the alternative valuation method tied to value of assets in the company. Use of the alternative method usually reduces the franchise tax to a very low level. It is easy to find out how to use the alternative method (forms and instructions are available online through the Delaware Secretary of State).

It seems that you needed to set up the entity in order to try to manage the issues with your co-founder and so the choice to set up a corporation was not really a mistake. The choice to set it up in Delaware for a simple situation can be a mistake, in my judgment, but I am probably in the minority among startup lawyers on this issue in believing that a home-state incorporation in the interests of keeping things simple can be and often is the best choice for founders (see http://grellas.com/faq_business_startup_002.html). It is no disgrace for a Silicon Valley startup to incorporate in California, even for a public company (no less than Apple itself is a California corporation). Had you done a home-state incorporation, you would have avoided the hassles with the $89K tax bill, as most states besides Delaware states have a fixed, low amount that you pay every year as a minimum franchise tax (in California, $800).

Incorporation is definitely not for everyone. When and if to incorporate can be tricky questions. I also have outlined a few of the factors to guide that decision as well (http://grellas.com/faq_business_startup_007.html).

There are a good number of early-stage startups that really can't easily afford professional fees and so the answer is not to use a lawyer in all cases to incorporate. But, even if you can't afford a lawyer, it is always worth consulting with one for strategic advice on incorporating before you do so. Such a first consultation is dirt cheap in most cases, and sometimes free. The modest amount paid is well worth it just to be alerted to the main issues and pitfalls involved in setting up an entity. Thus, while it was probably not a mistake in itself to set up your corporation, it likely was a big mistake to do so without some guidance of this type (I had made this comment in connection with your original piece as well - http://news.ycombinator.com/item?id=1924719).

Sorry to hear about the business failure. I know the HN community often stresses what a valuable learning experience this can be but there is no denying that it is a very painful affair by any measure.

It concerns an attorney who had hired a forensic firm to support his litigation matter and who felt they had overbilled and/or churned the matter. He asked a one-sentence question on a listserv forum about whether anyone else had had a bad experience with the firm. One person forwarded the question to his spouse and the spouse forwarded it to the firm whose services were being questioned. The lawyer then went to the U.S. Copyright Office and, believe it or not, registered his one-sentence inquiry as a copyright and then sued the parties who had forwarded it for infringement!

For those interested (and I realize this is not a matter of general interest):

1. The case documents the absurd lengths to which some people, and especially a certain type of lawyer, will go to bully and intimidate through litigation.

2. The opinion itself is beautifully analyzed and written and contains a very informative discussion of what sort of short phrase is or is not copyrightable and of what the standards are for fair use (it is legal technical stuff but quite understandable).

3. The judge has some priceless jabs in the decision, e.g., footnote 7, where she considered the lawyer's point whether a one-sentence line from Shakespeare ("to be or not to be", from Hamlet) might have been copyrightable and retorted that the better inquiry here might have been about Much Ado About Nothing.

The patient will be well rewarded in reading through this one (you can skip or skim past parts that are not of general interest, e.g., the legal standard for summary judgment).

Bottom line: after 2 years of very expensive litigation, the offending lawyer is about to get socked with a massive attorney fee award that the judge already decided he will pay "for pursuing such folderol," leaving only the amount to be determined.

For what it is worth, this judge does have an impressive background and is eminently qualified to serve on the federal bench.