Beware Twitter's New Patent Agreement Scheme - IPWatchdog.com

Earlier today on the Twitter blog the company announced that later this year it will implement what they are calling the “Innovators Patent Agreement,” which they claim will ensure that patents are only used for defensive purposes. Without any evidence Twitter claims that software patents impede innovation. Those familiar with the anti-patent software community well know that their claims that patents impede innovation are always without any evidence. All of the objective evidence points directly to the opposite conclusion, but anti-patent forces can’t be troubled with facts and reality. But that isn’t the worst part! Twitter seems to be attempting to mislead patentees into donating patent rights that can at Twitter’s discretion be used offensively if Twitter feels threatened.

Before moving forward to address the Twitter Patent Scheme, allow me to dispense with the nonsense that patents of any kind impede innovation. For those who do concern themselves with facts and reality I invite you to read:

Of course, the existence of patents hasn’t kept Apple from innovating, and why exactly would companies want to copy the business model of other companies that fail? Apple is a great company to model yourself after and they invent, patent and repeat. At the same time open source companies that turn their backs on patents struggle mightily to stay in business. Sun Microsystems embrace of open source turned it into a multi-million dollar company, which would be great if they hadn’t started out as a multi-billion dollar company. See Open Source Race to Zero.

In fact, it is the embracing of open source solutions that stalls the march of innovation. See Open Source Stalls Innovation. This, of course, is not something that open source and anti-patent activists ever have any real hope of understanding because they make the critical mistake of equating a different product or offering with innovation. Innovation is about advancing, not about copying. Open source is all about copying the work of others. If all you do is copy you are not innovating. If copying is allowed then innovation stalls because there is no incentive to invent around and advance. It is precisely the fragile nature of the exclusive patent right that promotes innovation. If you find a different way to do it than I have in my claims you aren’t infringing. So designing around the claims in issued patents forces innovation forward, NOT the mindless copying that is systematic in an open source environment.

In any event, the Twitter announcement explains the Innovators Patent Agreement as being the result of their concern about how patents impede innovation and how patents acquired might be used in the future. So they are willing take ownership of your patents, which you donate to them, for the betterment of society. Right! if you believe that I have a bridge to sell you. When was the last time any corporation acted in a benevolent and altruistic manner? This is not meant to be an indictment of corporations, just a recognition that like individuals they are out for their own advantage. If you think donating your patents to a corporation for FREE is a wise move you really need help!

The Twitter announcement explains its benevolence this way:

The IPA is a new way to do patent assignment that keeps control in the hands of engineers and designers. 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.

This is a significant departure from the current state of affairs in the industry. Typically, engineers and designers sign an agreement with their company that irrevocably gives that company any patents filed related to the employee’s work. The company then has control over the patents and can use them however they want, which may include selling them to others who can also use them however they want. With the IPA, employees can be assured that their patents will be used only as a shield rather than as a weapon.

Not surprisingly, the benevolence of the Twitter announcement does not actually match up with the actual agreement. The announcement is all about giving employees assurances that the patents that are acquired by Twitter as the result of work done while working for Twitter will not be used for offensive purposes. The agreement, however, is not limited to employees. In fact, the word “employee” never appears in the IPA. Instead, the agreement seems to be for the purpose of getting anyone to donate patents to Twitter. Talk about funny!

Twitter has never really been very serious about protecting its technology, and as such for a company with a value as high as Twitter’s they have remarkably few patent assets. This has to be alarming to investors for many reasons, but particularly since Twitter struggles to figure out how to actually make money. Furthermore, Twitter is really nothing. If others could simply replicate Twitter where would Twitter be? Nowhere and the investments made would evaporate. Just ask America Online (or Time Warner) what happens when the industry passes you and there are no patents that can be used to stave off competition.

I am always skeptical when an announcement does not actually match up with the underlying documentation being announced. It seems to me that Twitter is looking to get those altruistic individuals who believe in open source to donate their patents to Twitter so that if and when Twitter is sued they have the ability to counter-sue. Yes, the “for defensive purposes only” doesn’t prevent Twitter for suing for patent infringement and presumably collecting a lot of money. You see, the IPA says:

[Twitter]… 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. An assertion of claims of the Patents shall be considered for a “Defensive Purpose” if the claims are asserted:

(a) against an Entity that has filed, maintained, threatened, or voluntarily participated in an intellectual property lawsuit against Assignee or any of Assignee’s users, affiliates, customers, suppliers, or distributors;

(b) against an Entity that has filed, maintained, or voluntarily participated in a patent infringement lawsuit against another in the past ten years, so long as the Entity has not instituted the patent infringement lawsuit defensively in response to a patent litigation threat against the Entity; or

(c) otherwise to deter a patent litigation threat against Assignee or Assignee’s users, affiliates, customers, suppliers, or distributors.

So Twitter can use the donated patents “defensively” to initiate a lawsuit if they feel threatened? If they deem it is otherwise necessary to deter a patent litigation? So Twitter can be the aggressor with the donated patents, and it seems like it is their sole discretion whether the threat or “otherwise” caveat are activated such as to allow them to go on the offensive.

Incidentally, and interestingly, Twitter will have “all rights to recover damages for infringement…”

Simply stated, anyone that gives over their patents to Twitter is out of their minds! This is a one-sided contract that is calculated to bolster the pathetic Twitter patent portfolio free of cost. If they want your patent they should purchase it!

Beware the Twitter Innovators Patent Agreement! It benefits Twitter, not you!

Gene Quinn Gene Quinn is a patent attorney and a leading commentator on patent law and innovation policy. Mr. Quinn has twice been named one of the top 50 most influential people [...see more]

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

Join the Discussion

15 comments so far.

Gene Quinn
September 11, 2012 01:27 pm
Tom-

On IPWatchdog.com people are not generally allowed to make conclusory comments without support. You say: “of course patents impede innovation, that is stating the obvious…”

You provide no support whatsoever for your view, which is completely false. ALL of the available evidence demonstrates that patents promote innovation, not otherwise. Those who are blocked by patents only seek to copy what someone else has already done. They do not seek to innovate themselves. That is what is obvious. Furthermore, if you look at the so-called patent thickets that universally result in more innovation, not less.

Your naive views of the world are welcome here, but only if you attempt to back them up with facts so that I and others can easily debunk the mythology you wish to present. Conclusory statements are only allowed when they are correct. Incorrect conclusory statements are unacceptable because they do not forward debate or offer learning opportunities. If you choose to comment here in the future you with provide evidence and appropriate argumentation to back up your position. Otherwise you will be banned.

-Gene
Gene Quinn
September 11, 2012 01:23 pm
Ehud-

Thanks for reading IPWatchdog.com. My only regret is that it seems you have left in the same ignorant state that you arrived.

Cheers.

-Gene
Ehud Gavron
September 10, 2012 10:03 pm
What do you call a part of society that creates rules without which it would fail… coin terms without which its livelihood would be meaningless, lobbies the government(s) to create laws so that everyone (not just them) can pretend these words are real, and then goes after everyone else to pay for the effort?

The “Intellectual Property” supporters. You see, in US law there are Copyrights, Trademarks, Patents, Trade Secrets, and other “tangible” protected items. “IP” is not a legal terms. And yet… for years… those who want to pretend it exists have been lobbying strongly for it.

Because you see, all those things — Copyrights, Patents, etc. — are all well defined and laws exist both on the books and in case precedent. But for the smorgasbord of “anything we want to call IP” it’s much easier to pretend that someone “stole” my IP, “misused” my IP, “used my IP without fairly compensating me” or any number of other hoaxes being perpetuated on the world by the so-called IP community.

The IP community likes to astroturf. This opinion piece is a perfect example. It calls out everyone else for lying about e.g. “patents don’t stifle innovation” but shows no evidence to either refute THAT claim, or to evidence the other side of the claim. It does so under the guise of a watchdog — the lowest of the dogs that can’t be trusted with people so it’s chained up to growl and bark and show teeth… but really it’s tied to a doghouse.

Your piece of marklar is marklar, young marklar. Don’t worry. I know facts and evidence can’t go against the monies paid you by your masters, let alone the raw beef. However, time will prove me right and you, the marklar speaker. It’s September 2012. By September 2022 you will be a forgotten lobbyist for an obsolete concept that didn’t quite pass legal muster known as IP.

Sleep well, “IP watchdog.” Here’s a bone for you.

Ehud
Tucson AZ
Tom Mclernon
September 10, 2012 08:46 pm
What kind of garbage is that, or in the words of a judge “are you on crack”? Of course patents impede innovation , that is stating the obvious, obvious to anyone except a patent lawyer of course. That is like the old saying “guns don’t kill people, people kill people”. But still the country with the MOST GUNS, (good old USA) has the highest gun crime and murder rate.

Guns can be used for recreation, or they can be locked up in safe boxes, or they can be used for war. And in the words of someone we all know patents can be used for war too, “thermo nuclear war”! But of course that does not prevent innovation, if you are talking about legal maneuver innovation, but technical innovation YES.
patent litigation
April 27, 2012 01:33 am
Ever since Intellectual Ventures entered wholeheartedly into the patent litigation wars, I completely disbelieve any company claiming that it is acquiring patents “for defensive purposes only.” Although it’s refreshing to see that Twitter — unlike its social media counterpart Facebook — has so far avoided getting bogged down in wasteful patent litigation, you have to wonder how long it will last.
http://www.aminn.org/patent-legislation
Mark Nowotarski
April 22, 2012 06:48 pm
It seems to me that in order for this strategy to be effective, Twitter is going to have to encourage widespread infringement of their patents. Otherwise, they won’t have any defensive value.

In order to encourage infringement, they are going to have to disclose some pretty valuable and non-obvious information in their patent applications. Twitter’s first patent application just published. US 20120089681 “Prioritizing Messages Within a Message Network “ http://www.freepatentsonline.com/y2012/0089681.htm

It describes a way to insert promoted messages in a Twitter stream based on how your followers respond to your tweets. It discloses experimental results which show how the expected number of retweets + favorites varies with the number of followers you have.

That seems like pretty valuable information and well worth copying, if you could be confident that Twitter won’t sue.
Gene Quinn
April 22, 2012 04:03 pm
Jamie-

Of course… I did not miss any point whatsoever. There is quite clearly more than meets the eye going on here because Twitter already owns the invention rights of their employees, so this is either a publicity stunt without any meaning whatsoever or there is something else at play.

The agreement is horribly drafted. If this were for employees any attorney worth their weight in salt would have made that clear, and would have referenced the underlying employer-employee agreement, which is not the case. So there is something else at play or Twitter is the most incompetent of businesses.

Finally, allow me to point out protocol here on IPWatchdog.com. You are allowed to disagree, but you are not allowed to provide naked statements that do not forward the discussion. Your comment offers nothing substantive. Without any rationale you pretend that I don’t understand the issues, which of course I do. So in the future if you want to participate here on IPWatchdog.com your comments must be substantive in nature. For example, why do you think I missed the point? You see, without you offering your thoughts, opinions or analysis all you are left with is a comment that criticizes without any justification. That type of comment is allowed many places on the Internet. Not here though.

-Gene
Jamie Duncan
April 20, 2012 10:37 pm
I’m so sorry that you’ve missed the point and purpose of FLOSS so badly.

Please don’t purport your mis-informed opinions as facts.
Mark Nowotarski
April 19, 2012 06:04 pm
The right of inventors to grant sublicenses is interesting:

4. Company hereby grants a perpetual, worldwide, non-exclusive, royalty-free, no-charge, irrevocable license under the Patents to the Inventors, along with the right to sublicense as further described herein, solely so as to enforce the promises made by Assignee in paragraph 2. The Inventors’ right to sublicense is explicitly limited herein to those rights necessary to enforce the promises made by Assignee in paragraph 2. Accordingly, if Assignee asserts any of the Patent claims against any entity in a manner that breaks the promises of paragraph 2, the Inventors, individually or jointly, may grant a patent sublicense to the entity under the Patents, the scope of the sublicense being limited herein to those rights necessary to enforce the promises made in paragraph 2. Any sublicense granted by the Inventors under this paragraph must be without additional consideration or threat; otherwise, the sublicense will be considered void ab initio. This license to the Inventors is not assignable but may pass to the heirs of an inventor in the case that the inventor is deceased.
Another Inventor
April 18, 2012 08:36 pm
Enjoyed the article. After reading your excerpts from the Twitter Innovator’s Patent Agreement, I was halfway expecting that the Twitter posting-date was on April fools day. But it shows April 17.
Gene Quinn
April 18, 2012 06:14 pm
Kyllo-

That is exactly it… the announcement says that it is intended to relate to employees but when you read the agreement the word “employee” is never found. It reads like a transfer agreement from a non-employee.

Furthermore, Twitter would already own the patent rights for inventions made by employees that are directly or indirectly related to what Twitter does or what they may do in the future. Unless Twitter is the most incompetent corporation in the world they already have ownership of employee innovations, making an agreement like this wholly unnecessary.

This is at best a PR stunt and at worse there is something else at play. It reads to me like they are going to try and put together a patent pool for the benefit of Twitter and have anyone sign over patent rights that is naive enough to think that the agreement only allows defensive use of patents.

-Gene
Kyllo
April 18, 2012 01:36 pm
I agree it seems unlikely that agreement would have the affect Twitter claims to be hoping for, but what part of that announcement or agreement implies they want inventors to donate their patents? I don’t see anything even remotely implying that.
Jodi
April 18, 2012 01:26 pm
Gene – excellent written article, reading the press release I basically drew many of same conclusions you do.

I suspect this arose from 2 congruent forces:
1) investors forcing twitter to get some patents
2) the current religious ideology of silicon valley towards software pats

So I suspect the external donators was added in as an additional afterthought. Some additional thoughts concern some employee edge cases:
1) what happens when an employee leaves (voluntarily or involuntarily)
2) what happens to this agreement through a bankruptcy. I suspect it’s obliterated – but the patents won’t be.

I have neither the time nor motivation to read the actual agreement. But I suspect investors are covered and employee’s aren’t.

Additionally, I suspect employee’s can be incentivized to allow the company to use their patents for offensive purposes. For example, “we’re going to have to close this department unless inventor/engineer signs this” …or “sign this or else you’ll be transferred/fired”.
And, if worse comes to worse, twitter goes bankrupt, patents transferred or purchased by someone else, and investors are re-imbursed.
Engineers are susceptible to seeing the world as straight forward and clear cut, corporations do what they can to make money for their shareholders.

One last thing, I found this paragraph was very succinct and really sums up a lot:

—–
“In fact, it is the embracing of open source solutions that stalls the march of innovation. See Open Source Stalls Innovation. This, of course, is not something that open source and anti-patent activists ever have any real hope of understanding because they make the critical mistake of equating a different product or offering with innovation. Innovation is about advancing, not about copying. Open source is all about copying the work of others. If all you do is copy you are not innovating. If copying is allowed then innovation stalls because there is no incentive to invent around and advance. It is precisely the fragile nature of the exclusive patent right that promotes innovation. If you find a different way to do it than I have in my claims you aren’t infringing. So designing around the claims in issued patents forces innovation forward, NOT the mindless copying that is systematic in an open source environment.”
—–

However, when I read it a 2nd time I noticed it’s really 2 distinct points:
1) nature of open source generally means copying
2) exclusive license that patents bring typically force competitors to find a *DIFFERENT* way to do something similar

The chaining of the last 3 sentences together to make point #2 is beautiful. However, point #1 I think may not be adequately supported. I suspect their argument would be something like “… but open source allows you to build using others work …” or “open source allows one to stand on the shoulders of giants”. The fact that they don’t see the value in securing a return on their investment (e.g. for writing+debugging+support+etc..) is their business decision/flaw – but what I’m getting at is – how do you counter this argument?
Art
April 18, 2012 08:55 am
This site (http://www.tinaja.com/patnt01.shtml) says that one should NOT patent a million dollar invention! – unbelievable! These people need to be educated about patents.
Art
April 17, 2012 05:38 pm
Hello Gene, can you please cite some example papers or studies that show that software patents do not impede innovation and actually encourage innovation. I’m putting together my own library of articles that show the benefits of patenting. I’m sick and tired of the patent naysayers and I just want to stop them cold in their tracks.