Report: More startups facing patent lawsuits

It's not easy to be a entrepreneur. A report featured in the Wall Street Journal last year showed that three-quarters of the new firms that accept venture capital don't deliver expected returns. In order to be among the few that succeed, startup founders require business savvy and excellent risk management skills

They also increasingly need expert legal help from small business attorneys.

More and more startups are facing patent lawsuits, according to the Wall Street Journal. The article cites a 2012 study by Colleen Chien, assistant professor at Santa Clara University School of Law, which found that 66 percent of defendants in patent lawsuits were companies making less than $100 million in annual revenue. In addition, 55 percent of the defendants earned less than $10 million per year.

"As tech becomes pervasive, the building blocks of commerce are being patented and are the subject of major patent campaigns," Chien said.

For many such companies, who are already under pressure to find their footing in the market, defending against these lawsuits is an immense task. The Wall Street Journal cites Ditto Technologies Inc., a San Mateo-based company that sells designer eyewear online. The company is engaged in a legal battle over the patent for 3-D technology that allows customers to virtually "try on" glasses.

"We're doing everything we can to survive this," said co-founder Kate Endress, adding that she has turned to crowdfunding sites to help defray the cost of the legal bill worth "multimillion dollars over multi years."

Local startups in Arizona who want to protect themselves from patent lawsuits should consult with a business law attorney in Phoenix to develop the best strategies.

Categorised in: Starting a Business in Arizona

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