European startups and US software patents: Threat or Opportunity?
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Why?
Sure, the US is a big place, so if you’re making general purpose software aimed at an English-speaking consumer market then you’d probably want to sell there. On the other hand, in the Internet age, the US is still only one potential market, and depending on your niche other markets might be far larger.
Moreover, the US legal and regulatory environment, including the intellectual property framework, doesn’t appear to be very welcoming. For some professional insurance policies and the like, I’ve even been asked whether my company did business in the US or simply been told outright that work in the US is excluded from cover.
I don’t want to overstate the case, but it would certainly be possible to run a successful global software business, based in Europe or otherwise, without having anything to do with the US at all.
How do you define "global"?
I haven’t really thought about where any firm dividing line would fall, and I’m not sure there’s any benefit to having one. I just took exception to the implication that those of us running businesses in Europe were somehow invalid on a global stage without the blessing of the US.
But I think it depends on your market. If you are selling a product or service that is relevant in the US, but you are not selling them in the US, you are ignoring a huge market and you would at least get an asterisk.
More importantly, if you're a global business but not addressing the US market, you're leaving a huge hole for someone else to fill, and global corps spend a lot of energy trying not to do that.
Do you think that, for a Chinese, hearing that software X is the most successful in the USA is the same as hearing that it is the most successful in the EU? I don't think so (whatever I could like to think).
And my point is that I don’t necessarily accept that premise. I think you’re overgeneralizing.
For example, I’m working on a start-up right now that provides an on-line training aid for ballroom dancers. Obviously that’s a niche market, and it turns out that this kind of dancing is insanely popular in some countries and almost unknown in others. Here’s the kicker in this case: there are two major variations of ballroom, which are known as “American style” and “International style”, for much the reasons you’d expect. If you’re looking for trends, you have to take that difference in the prevailing culture into account.
Of course most markets won’t have quite such an obvious and US-centric polarisation as we happen to have in our field. I’m just trying to illustrate that in any kind of specialist market, you have to look at the local culture in different places, not just the language they speak and the size of the population.
However, I didn't want to mean that it's impossible to become global without being validated in the US. Just that it's much (very much, imho) more difficult.
Sure. No-one said running a business with a global market was going to be easy. :-)
[1] http://en.wikipedia.org/wiki/Orange_(telecommunications)
(edit)The question is about web companies, located outside US but selling to us customers(software,web apps, ebooks ... - digital products).
In Germany for example there are insurances, that will cover your costs of lawsuits etc. when you accidentally infringe IP / patents. They will also cover if a client sues you for lost business because your product somehow failed in a bad way. Some of them will offer worldwide coverage, but every policy will exclude US lawsuits.
I once worked for a very small UK company which ran into a patent tussle with a rather larger US competitor, as the former didn't want to exclude such a large market for potential sales. Evidence of prior art was collected, with the outcome being the overturning of their patent - at which point, a nominally amicable resolution was found.
Software patents certainly pose challenges - even if the idea seems straightforward, if it's something fundamental to the design, you'll need to check for possible US patent conflicts if you want to enter the US market, or may in the future.
The main thing holding Europe back right now is language. With a unified language Europe would be an amazing market to aim for.
Unfortunately, while we have so far kept EU-level legislation legitimising software patents off the books, the price seems to be a continuing lack of consistency in patent rules across Europe. They may not be called software patents, but that doesn't mean there haven't been patents granted in some jurisdictions that you or I might describe in those terms.
Whether any such patents would be enforceable in practice is another question again, but now we’re back to whether you have the stomach to get into a lawsuit over it, and a largely unquantifiable threat to software businesses.
The main thing holding Europe back right now is language.
Well, that and the fact that it’s still relatively difficult to accept money from customers on-line. We’ve been looking into this lately, and in some ways the situation does seem to be improving. However, for whatever reason our payment services market here still seems to be lagging several years behind what is available in some other places, notably the US. To us, this is a far bigger practical problem than any theoretical concerns about software patents.