VCs say it’s harder for startups to survive with patent trolls waiting in the wings to make a quick buck. startuppg The first comprehensive anti-patent-troll bill was introduced in Congress last week, with bipartisan support.

While far from perfect, it goes further than anyone could have guessed a year ago—for some large patent-holders, it actually goes too far.

The bill includes provisions for patent transparency, more fee-shifting in litigation, and an expanded way to review “business method” patents, including some software patents, at the Patent Office. That last provision, the Covered Business Method or CBM review program, is shaping up to be the most controversial part of the bill. Supporters of the bill are getting a big boost today, with some of the most prominent venture capitalists signing on with their public and vociferous support of the bill. Signatories include some of the bigger names in venture capital, including Mark Cuban, LinkedIn founder Reid Hoffman, reddit founder Alexis Ohanian, and Union Square Ventures’ Fred Wilson, who writes the popular A VC blog. The letter emphasizes the impact of patent trolls on the “young, high-tech companies” that employ 1.4 million people. It reads, in part: While big companies paid the lion’s share of the $29 billion of direct costs resulting from patent troll activities in 2011, the costs borne by small companies are a proportionately larger share of their revenues. In fact, the majority of companies targeted by patent trolls have less than $10 million in revenue. Our Founders did not intend to incentivize patent trolling in the Constitution; nor did Congress intend the Patent Act to promote this industry. Comprehensive legislation to reduce abusive patent litigation will make the patent troll business model less attractive, and will protect software, mobile, and information technology entrepreneurs. In turn, our digital economy will continue to grow and so will our national economy. “We kept seeing a story that patent reform isn’t about young companies; it’s really about large companies doing battle with each other,” said Josh Mendelsohn of the tech lobbying group Engine, who played a role in organizing the letter. “That’s just not the case. The trolls are looking for startups—they read VentureBeat or CrunchBase. When you’re a young company, you can’t take on expensive litigation. You’re forced to be extorted and pay the ransom. It’s a big deal.”     

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