Startup Investors Nationwide Support Broad Patent Reform 17 March 2015 Dear Congress: Each year, we invest hundreds of millions of dollars in software and information technology businesses and other emerging technologies. Together with other investors, we commit more than $1 billion annually in angel and venture capital that ensures continuing growth of young, high-tech companies employing 1.4 million people. Collectively, we have invested in companies such as Netflix, Twitter, Facebook, Dropbox, Palantir, Kickstarter, and countless other technologies that power American businesses everywhere. This investment has spurred a startup ecosystem that has created world-changing technologies, and is responsible for all net new job growth in the United States. Despite this, we find our portfolio companies facing a dangerous patent troll problem. When a troll sues, or even threatens, a small startup, the results can be disastrous. Many of us have seen young companies fail in the face of such threats. In fact, a recent survey found that 70% of VCs have portfolio companies that have received patent demands, the majority of which come from so-called patent trolls. This is not sustainable. To promote continuing growth in our startup economy, we need comprehensive patent reform legislation that will provide small companies the tools to fight back against patent trolls and will curb the worst behavior of the most egregious actors. Specifically, legislation should: ● ● ● ● Increase transparency by requiring patent trolls to specify, in complaints and demand letters, which patent and what claims are infringed, specifically how the offending product or technology infringes, and who is the real owner of the patent(s) at issue. Limit the scope of expensive litigation discovery, which pushes companies to pay unjustified settlements priced cheaper than defending against spurious claims. Allow courts to use their discretion to require patent trolls to pay legal fees and other costs incurred by prevailing defendants. Protect end users of technology (e.g., wi-fi, printers and scanners, and APIs) from being liable for infringements by technology providers. Many of our companies own patents, and we believe in a robust patent system. We do not want to undermine legitimate enforcement of properly-issued patents by responsible patent owners. Moreover, we are encouraged by recent changes to the system. However, tens of thousands of patents are still issued every year in the high-tech space alone, many of which will end up being exploited by trolls during their 20 years of life. Litigation by non-practice entities has increased tenfold in the last decade and only comprehensive legislation will effectively reverse that trend. Our Constitution favored a patent system to incentivize innovation and benefit all Americans. Unfortunately that system has been hijacked by some intent on exploiting Patent Office weakness, and all too frequently it now hinders innovation and chills investment, harming the new companies it was designed to foster and imposing a patent troll tax on new technologies. We urge Congress to immediately pass comprehensive patent reform legislation that will restore balance to the system. The undersigned: Andrew Ackerman Managing Director, DreamIt NY David Lee General Partner, SV Angel Steve Anderson Founder, Baseline Ventures Greg Lee Venture Capitalist Michael Arrington Founder, TechCrunch & Partner, CrunchFund John Lee Partner, SparkLabs Global Ventures Jack Balletto Founder, Sunrise Capital Peter Lee Managing Partner, Baroda Ventures Anamitra Banerji Partner, Foundation Capital Mark Leslie Managing Director, Leslie Ventures Luke Beatty Angel Investor John Lilly Partner, Greylock Partners Thatcher Bell Managing Partner, CoVenture Jessica Livingston Co-Founder, Y Combinator Morgan Beller Partner, Andreessen Horowitz Joe Lonsdale Co-Founder, Palantir Greg Bettinelli Partner, Upfront Ventures Trevor Loy Flywheel Ventures Trevor Blackwell Co-Founder and Partner, Y Combinator Ralph Mack CEO, Mack Capital Zachary Bogue Managing Partner, Data Collective John Malloy General Partner and Co-Founder, Blue Run Ventures Brady Bohrmann General Partner, Avalon Ventures Chris Marks High Country Venture David Bradbury Vermont Center for Emerging Technologies Jim Marshall Managing Director, SVB Bill Brady Vice Chairman, Credit Suisse Tom Mawhinney General Partner, Icon Ventures Mike Brown Jr. General Partner, Bowery Capital Matt McCall Pritzker Venture Capital Group John Burbank Founder, Passport Capital Jay McCarthy Partner, SparkLabs Global Ventures Brad Burnham Partner, Union Square Ventures Jim McKelvey Cultivation Capital John Buttrick Partner, Union Square Ventures Andrew McLaughlin BetaWorks and Digg Kellan Carter Associate, Ignition Partners Joe Medved Partner, SoftBank Capital Steve Case Chairman and CEO, Revolution Frank Meehan Partner, SparkLabs Global Ventures Peter Chang Partner, SparkLabs Global Ventures Josh Mendelsohn Hattery Lon Chow General Partner, Apex Venture Partners Jason Mendelson Co-Founder and Managing Director, Foundry Group Dan Ciporin General Partner, Canaan Partners Matt Miller Managing Director, Walden Venture Capital Jeff Clavier SoftTechVC Jeb Miller General Partner, Icon Ventures Andrew Cleland Managing Director, Comcast Ventures Zachary Miller [A] Capital Jeremy Conrad Founding Partner, Lemnos Labs Bernard Moon Partner, SparkLabs Global Ventures Ron Conway Founder and Managing Partner, SV Angel Howard Morgan Partner, First Round Capital Topher Conway General Partner, SV Angel Dave Morin Slow Ventures Ronny Conway [A] Capital Bubba Murarka Partner, DFJ Venture Jordan Cooper Founder, Wildcard & Partner, Lerer Hippeau Ventures Michael Neril Venture Capitalist Rafael Corrales Venture Capitalist Kevin O'Connor Startup Founder & CEO/Angel Investor Mark Cranney Partner, Andreessen Horowitz Charlie O'Donnell Brooklyn Bridge Ventures Mark Cuban Investor in over 70 startups Matt Ocko Managing Partner, Data Collective Rob DeMillo Partner, SparkLabs Global Ventures Alexis Ohanian Co-Founder & Executive Chair of reddit Satish Dharmaraj Partner, Redpoint Ventures Eric Paley Managing Partner, Founder Collective Chris Dixon General Partner, Andreessen Horowitz Stephanie Palmeri Principal, SoftTech VC Peter Esperago Cultivation Capital Brian Pokorny General Partner, SV Angel Brad Feld Co-Founder and Managing Director, Foundry Group Shauntel Poulson Principal, NewSchools Venture Fund Josh Felser Venture Capitalist Megan Quinn Partner, Kleiner Perkins Caufield & Byers Peter Fenton General Partner, Benchmark Jeff Richards Managing Partner, GGV Capital Chris Fralic Partner, First Round Capital James D. Robinson Managing Partner, RRE Ventures Ross Fubini Partner, Canaan Partners Brett Rochkind Managing Director, General Atlantic Brian Garrett Co-Founder and Operating Partner, Crosscut Ventures Dan Rosen Partner, Commerce Ventures Will Gaybrick General Partner, Thrive Capital Gordon Rubenstein Managing Partner, Raine Ventures Nicole Glaros Partner, Techstars Ventures Kevin Ryan Alleycorp Randy Glein Managing Director, DFJ Growth Chris Sacca Lowercase Capital David Gold Access Venture Partners David Samuel Co-Founder, Freestyle Capital Kent Goldman Founder, Upside Partnership Dave Shen West Coast Director, LaunchCapital Greg Gottesman Madrona Venture Group Todd Steele Managing Partner, Simon Equity Partners Matthew Greenfield Managing Partner, Rethink Education Kevin Swan Partner, iNovia Capital Greg Gretsch Managing Director, Sigma West Harj Taggar Y Combinator Nick Grossman Investor, Union Square Ventures Devin Talbott Managing Partner and Co-Founder, Enlightenment Capital Bill Gurley Benchmark Capital Garry Tan Partner, Y Combinator Dave Hanna Hanna Ventures Hemant Taneja Managing Director, General Catalyst Partners David Hehman Co-Founder, Spartina Brett Topche MentorTech Ventures Rick Heitzmann Founder and Managing Director, FirstMark Capital Jorge Torres Silas Capital Eric Hippeau Managing Director, Lerer Hippeau Ventures Tomasz Tunguz Partner, Redpoint Ventures David Hirsch Co-Founder and General Partner, Metamorphic Ventures LLC John Underwood Managing Director, Goldman, Sachs, & Co. Kirk Holland Access Venture Partners Roland Van der Meer Managing Partner, Fuse Capital Jim Hornthal Chairman, M34 Capital Hunter Walk Homebrew Joe Horowitz Managing General Partner, Icon Ventures Maynard Webb Founder, Webb Investment Network Net Jacobsson Partner, SparkLabs Global Ventures David E. Weekly drone.vc Len Jordan Madrona Venture Group Paul Weinstein Founding General Partner, Azure Capital Partners Sunny Kantha Growth Equity/VC Investor Andy Weissman Partner, Union Square Ventures James Kim Partner, SparkLabs Global Ventures Albert Wenger Partner, Union Square Ventures Alan Knitowski Angel Investor Maurice Werdegar Partner and CEO, Western Technology Investment Jordan Kong Investor, Institutional Venture Partners Steve Westly Managing Partner, The Westly Group Josh Kopelman Partner, First Round Fred Wilson Partner, Union Square Ventures Mo Koyfman General Partner, Spark Capital Qasar Younis Partner, Y Combinator Paul La Londe Investor, SV Angel Brad Zions Structure Partners