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Mr WebTV skewers US patent bill

Startups in danger?

The man who invented WebTV thinks the US patent system is on the verge of ruin.

Last month, after a heavy lobby from big-name tech companies like Apple, Google, Intel, and Microsoft, the House of Representatives approved a bipartisan bill that seeks to reinvent patent litigation, and Steve Perlman is adamant this Patent Reform Act would put a stranglehold on the country's traditionally vibrant startup culture.

"You know how they tend to name bills in ways that seem positive but don't really represent what the bill is all about?" Perlman told The Reg. "This isn't patent reform. This is patent repeal."

According to Perlman, the Silicon Valley entrepreneur and inventor best known for his work on WebTV and the original color Macintosh, the Patent Reform Act has been pushed through by tech behemoths who either don't understand patents or don't need them for success in the marketplace.

These companies are simply interested in protecting themselves from expensive litigation, Perlman says, and in doing so, they're curbing the hopes of the country's entrepreneurs, whose livelihood depends so heavily on patent law. "Patents protect small companies. They help them grow into large companies."

Many in the press have painted the bill as a battle between high-tech businesses and pharmaceutical businesses, which generate so much revenue from patent licenses. But in Perlman's eyes, it's a fight between large tech companies and everyone else, including small tech companies.

"This is isn't pharm versus high-tech," he said. "This is people who need patents versus people who don't need patents."

In essence, he argues, the bill devalues patents, and that helps no one but the Intels and the Microsofts and the Googles of the world. "They just don't need patents to maintain their market position, so - on the balance - it's better for them if no one has patents to assert against them," said Perlman, who has over 70 patents to his name. "Intel isn't concerned with suing little companies. They're only concerned with little companies suing them."

And, yes, he includes Apple with the Intels and the Microsofts. "If somebody cloned the iPhone or the iPod - and certainly people have tried - would it make much of a difference?"

I believe in America

The Patent Reform Act of 2007 - which the Senate has yet to vote on - seeks to harmonize the US patent system with systems used in the rest of the world. But it's also an effort to bury so-called "patent trolls," businesses who use their patents solely as a means of siphoning money from other businesses.

Currently, the US is the only country where the patent goes to the person who first invented a technology - not the person who first filed a patent application. If passed into law, the Patent Reform Act would switch the country to a first-to-file system. This would simplify patent disputes, but according Perlman, it would also stifle innovation.

"It would be nice if the world had a unified patent system," he said. "But when it comes to technology, I like our economy better than the economies in the rest of the world. I don't envy other countries for their startup economies. Why do we want to change ourselves to be like them?"

Filing a patent is expensive, he points out, and with a first-to-file rule in place, startups don't have the dough to cover all their bases. "In a first-to-invent country, if you have 25 ideas on a whiteboard, you don't have to file 25 patents. You don't even file when you whittle it down to 12. You file when you're down to five really good ideas."

"In a first-to-file company, you can't do it that," he continued. "You have to file all 25 ideas, just in case one of those turns out be the right idea." And each patent costs you $10,000. "The cost of invention is less in a first-to-invent country."

The biggest problem with this switch, he adds, is that it would kick in as soon as the bill becomes law. Startups who've carefully planned their patent strategies will be caught with their pants down. "We need warning on this," Perlman said.

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