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 that ensures continuing growth of young, high-tech companies employing 1.4 million people. Collectively, we have invested in companies such as Netflix, , , Dropbox, Palantir, , 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 . 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 David Lee Managing Director, DreamIt NY General Partner, SV Angel

Steve Anderson Greg Lee Founder, Venture Capitalist

Michael Arrington John Lee Founder, TechCrunch & Partner, CrunchFund Partner, SparkLabs Global Ventures

Jack Balletto Peter Lee Founder, Sunrise Capital Managing Partner, Baroda Ventures

Anamitra Banerji Mark Leslie Partner, Foundation Capital Managing Director, Leslie Ventures

Luke Beatty John Lilly Partner, Greylock Partners

Thatcher Bell Jessica Livingston Managing Partner, CoVenture Co-Founder, Y Combinator

Morgan Beller Joe Lonsdale Partner, Andreessen Horowitz Co-Founder, Palantir

Greg Bettinelli Trevor Loy Partner, Upfront Ventures Flywheel Ventures

Trevor Blackwell Ralph Mack Co-Founder and Partner, Y Combinator CEO, Mack Capital

John Malloy Zachary Bogue General Partner and Co-Founder, Managing Partner, Data Collective Blue Run Ventures

Brady Bohrmann Chris Marks General Partner, Avalon Ventures High Country Venture

David Bradbury Jim Marshall Vermont Center for Emerging Technologies Managing Director, SVB

Bill Brady Tom Mawhinney Vice Chairman, Credit Suisse General Partner, Icon Ventures

Mike Brown Jr. Matt McCall General Partner, Bowery Capital Pritzker Venture Capital Group

John Burbank Jay McCarthy Founder, Passport Capital Partner, SparkLabs Global Ventures Brad Burnham Jim McKelvey Partner, Union Square Ventures Cultivation Capital

John Buttrick Andrew McLaughlin Partner, Union Square Ventures BetaWorks and Digg

Kellan Carter Joe Medved Associate, Ignition Partners Partner, SoftBank Capital

Steve Case Frank Meehan Chairman and CEO, Revolution Partner, SparkLabs Global Ventures

Peter Chang Josh Mendelsohn Partner, SparkLabs Global Ventures Hattery

Jason Mendelson Lon Chow Co-Founder and Managing Director, General Partner, Apex Venture Partners Foundry Group

Dan Ciporin Matt Miller General Partner, Canaan Partners Managing Director, Walden Venture Capital

Jeff Clavier Jeb Miller SoftTechVC General Partner, Icon Ventures

Andrew Cleland Zachary Miller Managing Director, Comcast Ventures [A] Capital

Jeremy Conrad Bernard Moon Founding Partner, Lemnos Labs Partner, SparkLabs Global Ventures

Ron Conway Howard Morgan Founder and Managing Partner, SV Angel Partner, First Round Capital

Topher Conway Dave Morin General Partner, SV Angel Slow Ventures

Ronny Conway Bubba Murarka [A] Capital Partner, DFJ Venture

Jordan Cooper Michael Neril Founder, Wildcard & Partner, Lerer Hippeau Venture Capitalist Ventures

Rafael Corrales Kevin O'Connor Venture Capitalist Startup Founder & CEO/Angel Investor

Mark Cranney Charlie O'Donnell Partner, Andreessen Horowitz Brooklyn Bridge Ventures Mark Cuban Matt Ocko Investor in over 70 startups Managing Partner, Data Collective

Rob DeMillo Alexis Ohanian Partner, SparkLabs Global Ventures Co-Founder & Executive Chair of

Satish Dharmaraj Eric Paley Partner, Redpoint Ventures Managing Partner, Founder Collective

Chris Dixon Stephanie Palmeri General Partner, Andreessen Horowitz Principal, SoftTech VC

Peter Esperago Brian Pokorny Cultivation Capital General Partner, SV Angel

Brad Feld Shauntel Poulson Co-Founder and Managing Director, Principal, NewSchools Venture Fund Foundry Group

Josh Felser Megan Quinn Venture Capitalist Partner, Caufield & Byers

Peter Fenton Jeff Richards General Partner, Benchmark Managing Partner, GGV Capital

Chris Fralic James D. Robinson Partner, First Round Capital Managing Partner, RRE Ventures

Ross Fubini Brett Rochkind Partner, Canaan Partners Managing Director, General Atlantic

Brian Garrett Dan Rosen Co-Founder and Operating Partner, Partner, Commerce Ventures Crosscut Ventures

Will Gaybrick Gordon Rubenstein General Partner, Thrive Capital Managing Partner, Raine Ventures

Nicole Glaros Kevin Ryan Partner, Techstars Ventures Alleycorp

Randy Glein Chris Sacca Managing Director, DFJ Growth Lowercase Capital

David Gold David Samuel Access Venture Partners Co-Founder, Freestyle Capital

Kent Goldman Dave Shen Founder, Upside Partnership West Coast Director, LaunchCapital Greg Gottesman Todd Steele Madrona Venture Group Managing Partner, Simon Equity Partners

Matthew Greenfield Kevin Swan Managing Partner, Rethink Education Partner, iNovia Capital

Greg Gretsch Harj Taggar Managing Director, Sigma West Y Combinator

Devin Talbott Nick Grossman Managing Partner and Co-Founder, Investor, Union Square Ventures Enlightenment Capital

Bill Gurley Garry Tan Benchmark Capital Partner, Y Combinator

Dave Hanna Hemant Taneja Hanna Ventures Managing Director, General Catalyst Partners

David Hehman Brett Topche Co-Founder, Spartina MentorTech Ventures

Rick Heitzmann Jorge Torres Founder and Managing Director, Silas Capital FirstMark Capital

Eric Hippeau Tomasz Tunguz Managing Director, Lerer Hippeau Ventures Partner, Redpoint Ventures

David Hirsch John Underwood Co-Founder and General Partner, Managing Director, Goldman, Sachs, & Co. Metamorphic Ventures LLC

Kirk Holland Roland Van der Meer Access Venture Partners Managing Partner, Fuse Capital

Jim Hornthal Hunter Walk Chairman, M34 Capital Homebrew

Joe Horowitz Maynard Webb Managing General Partner, Icon Ventures Founder, Webb Investment Network

Net Jacobsson David E. Weekly Partner, SparkLabs Global Ventures drone.vc

Paul Weinstein Len Jordan Founding General Partner, Azure Capital Madrona Venture Group Partners

Sunny Kantha Andy Weissman Growth Equity/VC Investor Partner, Union Square Ventures

James Kim Albert Wenger Partner, SparkLabs Global Ventures Partner, Union Square Ventures

Maurice Werdegar Alan Knitowski Partner and CEO, Angel Investor Western Technology Investment

Jordan Kong Steve Westly Investor, Institutional Venture Partners Managing Partner, The Westly Group

Josh Kopelman Partner, First Round Partner, Union Square Ventures

Mo Koyfman Qasar Younis General Partner, Partner, Y Combinator

Paul La Londe Brad Zions Investor, SV Angel Structure Partners