On Twitter’s corporate blog yesterday, the company’s engineering infrastructure VP Adam Messinger wrote that Twitter intends to implement an “Innovator’s Patent Agreement,” or “IPA,” which he characterizes as “a new way to do patent assignment that keeps control in the hands of engineers and designers.”
The way Messinger explains it, Twitter is giving to the inventors it employs the power to decide whether the patents issued on their inventions may be used to sue other companies.
He writes, “It is a commitment from Twitter to our employees that patents can only be used for defensive purposes. We will not use the patents from employees’ inventions in offensive litigation without their permission. What’s more, this control flows with the patents, so if we sold them to others, they could only use them as the inventor intended.”
Very heady stuff.
But let’s stress test Twitter’s claim (that’s a patent pun, by the way) that it won’t wield patents “in offensive litigation.”
Almost everyone in the web space seems disgusted both by patent trolls and the escalating use companies make of patents to sue one another. But could Twitter’s innovative employee patent assignment really be more about employee morale (and good PR) than substance?
I asked three patent experts to look at Twitter’s “Innovator’s Patent Agreement,” and to share their initial reactions for this post. First let’s walk through the most pertinent language in the IPA:
“Company, on behalf of itself and its successors, transferees, and assignees (collectively ‘Assignee’), agrees not to assert any claims of any Patents which may be granted on any of the above applications unless asserted for a Defensive Purpose. . . . If Assignee needs to assert any of the Patent claims against any entity for other than a Defensive Purpose, Assignees must obtain prior written permission from all of the Inventors without additional consideration or threat. . . . Assignee acknowledges and agrees that the above promises are intended to run with the Patents and are binding on any future owner, assignee or exclusive licensee who has been given the right to enforce any claims of the Patents against third parties. . . .”
As you can imagine, “Defensive Purpose” and the other capitalized terms have specific meanings that are spelled out in the contract. You can find a complete copy of Twitter’s “Innovator’s Patent Agreement” on github – and you may want to have the entire contract on a second screen as you read the critiques below.
Let’s get now to what the patent attorneys and patent experts think of Twitter’s new “Innovator’s Patent Agreement.”
Micah Stolowitz, a patent attorney based in Portland, Ore., wrote this:
“I do not expect that this type of agreement will be widely emulated. A purely defensive approach would be to simply publish the innovation, asap. That costs nothing, and prevents anyone else from patenting it. Under the new AIA [America Invents Act, a recent, significant reform of US patent law], publication is an immediate bar to patentability by others, under amended Section 102(b).”
In other words, Twitter has the power to make the invention public, so that no one can patent it. In other other words, if you really want to settle the patent wars, put everything in the public domain!
Louis Carbonneau, an IP lawyer and patent strategist, wrote this:
“I think this move is both dumb and disingenuous and is in large part pandering to those who believe software patents are evil or that patent litigation is out of hand.
“Dumb: This ‘pledge’ amounts to a self-imposed encumbrance on the patents that Twitter would be entitled to own outright by virtue of the employer employee relationship. So it is not that smart to voluntary remove any teeth that come associated with what is essentially a right to exclude. Google had the same discourse until they saw that their Android ecosystem was being pilloried left and right by patent law suits. They have now done a 180 turn and have bought over 15 billion dollars’ worth of patents in the past year only… If I am a Twitter investor or acquirer, I see this as decreasing the value of the company as it tied its own hands as to what it can do with its own patents.
“Disingenuous: If you look closely, there are so many carve outs that you would be hard pressed not to find a single company in the high tech business who would not qualify as an ‘Entity’. Who hasn’t been involved in a patent law suit (even as a Plaintiff) in the past ten years?! Also, the test is very subjective (see: (c) otherwise to deter a patent litigation threat…) and Twitter could decide any time that it would feel threatened and thus invoke that exception. Finally, the process for changing their mind simply requires them to go back to their employees and tell them: ‘We now need to use these patents. Sign here.’ Current employees would be unlikely to refuse for obvious reasons.
“Since a patent is essentially a negative right and they would be of no use against any NPEs, it would be a lot cheaper for Twitter to NOT file any software patents if they really believed what they said. Many smaller companies actually take that stance. It’s risky, but at least it’s honest.
“So I think this is primarily posturing and, in some circumstances, it could actually make Twitter’s life more difficult in some scenarios, including If its tried to build a licensing program when potential licensees know that it cannot easily assert the patents.
“Wait until they had to go through a few trials. They will want all the edge patents can provide them.”
When you scrutinize the IPA definition of “Defensive Purpose,” you can clearly see Louis’ point about the carve outs.
For example, one of the uses that counts as a “Defensive Purpose” is an assertion of claims under the patent “to deter a patent litigation threat against Assignee or Assignee’s users, affiliates, customers, suppliers, or distributors.” What’s that sports truism about what makes the best offense?
Former Microsoft developer and current patent lawyer Mason Boswell wrote this:
“My main reaction is that this sounds like a great way to make your patent portfolio valueless. Although it is a common misunderstanding that patents provide defense, that is not their purpose under the law. A patent’s purpose is most correctly stated as a right to exclude others from practicing the invention that is the subject of the patent. As such, a patent is by nature an offensive tool to go out and stop those that would copy the invention. This agreement explicitly limits patents covered by it to a defensive purpose. In recent history, patents have been useful as a countersuit tool where two entities operating in a similar field both held patents. If one sued with its patents then the other could countersue with their own. While called defensive, this is really just a counteroffensive action.
“However, in current times this use is less common, as the person sitting across from you in a lawsuit is most likely to be a non-practicing entity (NPE), or patent troll as some like to call them. Thus, the value of patents as a counteroffensive tool is diminishing, and the agreement below takes away their primary valuable use, which is to deter copycats. Secondarily, patents often become useful assets for a company to later sell to recoup some money. A company may pursue technologies A, B, and C, and 10 years later that company is mainly focused on C. Other companies may have focused on A and B during that time, and those patents become valuable assets that the company can sell. Look recently, for example, at how the new CEO of Real Networks was able to reap substantial value for the company’s continued operations by selling some patents that were no longer relevant to the company’s core business. The agreement takes away or at least devalues this use of patents covered by it, because the buyer would be saddled with the same limitations of defense-only use.
“This agreement was clearly commissioned by someone that hates patents and does not understand their proper purpose. I and everyone that works around patents understand their downsides, but I think this agreement does more to make patents have less value than it does to correct any of the problems with them. If they are going to completely grind down the teeth of their patents, then why file for them in the first place? They should just save their money and focus it on development. A different and perhaps better choice made by some companies with this point of view is to simply publish more of their work to create prior art. More prior art means fewer other parties obtain patents on related technology or that any patents they obtain are much more narrow in scope. If you have no plans to use patents for offense, then this is a perfectly good defensive strategy and it saves you all of the costs and headaches of obtaining patents. This still has the flaw I point out above of providing you no assets to potentially sell, but that doesn’t seem like their primary concern anyway. They could also spend their money finding bad patents in their field, searching for prior art, and throwing them into reexamination at the Patent Office. This would do much more to defend them from what they seem most worried about as it would get those patents either invalidated or severely limited in claim scope. IBM has done some work in this area, creating a better prior art database for example, and working to crowd source the identification of prior art to take out specific patents.”
Although Micah, Louis and Mason all have different points of emphasis and different examples to cite, we have a patent expert consensus here: the most “defensive” stance would be to publicly publish the innovations and add them to the prior art.
Pictured: drawing from US Patent Application number 12/756,574.
Attorney William Carleton is a member of McNaul Ebel Nawrot & Helgren PLLC, a Seattle law firm. He works with startups and emerging tech companies, their founders and investors. He posts regularly about tech-related legal issues on his blog.
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