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Summary:

Sometimes it’s not the obvious things that create the biggest problems. In this case one of the hidden job killers in our economy today is…

League of Legends screenshot; Riot Games

Sometimes it’s not the obvious things that create the biggest problems. In this case one of the hidden job killers in our economy today is the explosion of patent litigation.

Every technology company I have is getting hit by patent lawsuits that are the biggest bunch of bullshit ever. Every week it seems like a new one comes up. Between having to pay our lawyers a lot of money to review each, to increasing insurance rates and settlement costs because we can’t afford to pay to fight the nonsense, it’s an enormous expense. So much so that money that would have gone to new hires to improve and sell the product has to be saved to pay to deal with this bullshit.

I’m not talking about a new company that had an idea that someone beat us to. No sir. I’m talking about companies that have been doing business the same way for years that are getting hit by patent trolls. These aren’t operating companies that are trying to protect their business. These are companies that aggregate patents and raise capital for the sole purpose of suing companies and extorting money from them.

It’s bad for my little companies. It’s horrific for bigger companies. It’s so bad that major tech companies are buying big collections of patents not because they want to own the intellectual property but rather because they want the ability to respond to patent lawsuits with a lawsuit of their own. It’s like playing a game of thermo nuclear war. If all sides have “nuclear patents” they can respond to patent litigation with equal force. Another words, if you have enough “nuclear patents” no one will sue you for patent infringement because you have enough power to respond in kind. Its crazy and costing this country jobs.

Google (NSDQ: GOOG) just spent $900mm buying a patent collection. Other big companies are spending the same way. That is money that for many companies would have gone to job creation.

We need to face the facts, patent law is killing job creation. If the current administration wants to improve job creation, change patent law and watch jobs among small technology companies develop instantly. I know I have at least 1 company that would hire instantly.

Mark Cuban, owner of the Dallas Mavericks and cofounder of HDNet, offers running commentary on Blog Maverick and allows us to publish it here, as is, when the subject fits.

  1. Yes, I agree that patent law cost costing companies millions and is killing job creation. As a government IT contractor, I see it all the time.

    Than Nguyen
    GSA IT Schedule 70
    http://www.insourcegroupfederal.com

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