Twitter's Revolutionary Agreement Lets Original Inventors Stop Patent Trolls
from the an-idea-whose-time-has-come dept
We've talked repeatedly in the past about how even if a company got patents for solely defensive reasons, down the road, those patents can end up in the hands of trolls, who abuse them to hinder real innovation. If you talk to engineers -- especially software engineers -- in Silicon Valley, this is one of the many things they absolutely hate about patents. But, because companies often feel the need to stockpile patents as a defensive means of warding off patent lawsuits, many engineers and companies do so out of a sense of obligation.However, it appears that Twitter is thinking differently about this, and has announced that it will be using its new Innovator's Patent Agreement to guarantee that any patents obtained by employees at Twitter (past or present) grant lifetime control to the actual inventors, to prevent the patents from being used offensively against others.
One of the great things about Twitter is working with so many talented folks who dream up and build incredible products day in and day out. Like many companies, we apply for patents on a bunch of these inventions. However, we also think a lot about how those patents may be used in the future; we sometimes worry that they may be used to impede the innovation of others. For that reason, we are publishing a draft of the Innovator’s Patent Agreement, which we informally call the “IPA”.As Twitter notes, this is "a significant departure" from how just about every other company handles patent assignments. Along those lines, it's planning to evangelize this idea to other tech firms as well -- and I wouldn't be surprised to see a bunch of others jump on board. The basic idea makes a lot of sense. Twitter has also posted the full agreement to Github and put it under a Creative Commons license.
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.
The method by which this works is pretty creative. Basically, if the actual patent holder tries to use the patent offensively without first obtaining the permission of the inventor, the agreement allows the inventor to issue a license to the entity being sued:
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 2Of course, how much do you want to bet that an agreement like this violates someone's patent somewhere?
Either way, kudos to the Twitter team for not just doing what everyone else does, despite the fact that everyone hates it. Companies that actually recognize that "standard operating procedures" are a problem are plentiful. Those that actually do something different because of it, are rare.
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Filed Under: invention, licensing, patent troll
Companies: twitter
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/sarc
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http://www.techdirt.com/articles/20120416/12020318506/copyright-maximalists-try-to-regro up-figure-out-how-to-fight-back-against-public.shtml#c1052
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Re: Puppeto!
/am-i-doing-it-right?
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the copyright still won't have expired
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Won't anybody copyright the children?!
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Also anyone else see this and think "Little late for an April fools joke".
Though i am glad it is true, and it would be nice to see more (if not all) of the big players use this same thing. By big players i am talking about the people who actually innovate, not patent hoarders ( I am looking at you Yahoo!,Microsoft,Apple, Every mobile manufacture....)
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Also, it's easy to miss the child porn if you're not looking for it.)
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What about existing patent law?
Also, it seems that an employee could still be strong armed into giving permission to Twitter to use a patent for offensive purposes or paid a healthy sum if they are no longer employed.
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Re: What about existing patent law?
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I agree. Perhaps there are loopholes which will cause it to fail, but at least it is a start. Trying to change the laws in DC will take forever, so companies that want to affect the patent system need to be doing something on their own.
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So to tie its own hands to prevent itself from suing someone aggressively--they are doing it by contractually giving a veto right to inventors, and assuming they would not want to do this. (Note also the agreement says the inventor will not be coerced or threatened into permitting it.) That also means that it runs with the patent if someone else ever acquires the patent from twitter.
Also, I think it protects the management/board of Twitter from complaints by shareholders--otherwise they might be sued for not acting in the shareholders' best interest if they refuse to sue someone they could extort a billion dollars from, for some "principle" that some managers prefer. This way they can say "well we have no contractual right to--we gave it up previously to the employee-inventors, for purpose of attracting better talent or getting more invention disclosures, a decision protected by the business judgment rule."
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So to tie its own hands to prevent itself from suing someone aggressively--they are doing it by contractually giving a veto right to inventors, and assuming they would not want to do this. (Note also the agreement says the inventor will not be coerced or threatened into permitting it.) That also means that it runs with the patent if someone else ever acquires the patent from twitter.
Also, I think it protects the management/board of Twitter from complaints by shareholders--otherwise they might be sued for not acting in the shareholders' best interest if they refuse to sue someone they could extort a billion dollars from, for some "principle" that some managers prefer. This way they can say "well we have no contractual right to--we gave it up previously to the employee-inventors, for purpose of attracting better talent or getting more invention disclosures, a decision protected by the business judgment rule."
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Not that these may prove to be legally foreclosed, but that assuming they pass legal muster is folly.
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Re: What about existing patent law?
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Great, next...
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What's the point?
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Re: What's the point?
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Further, the more companies that adopt this approach, the more their own patents become "poisoned" for future trolls, who often just buy their patents from other companies, e.g. those that go bankrupt. The patents from Twitter-type companies would never be able to be used by trolls.
Further, imagine a world where most companies do this. So then the ONLY lawsuits are those initiated BY trolls. In such a world, the injustice of the patent system would become far more visible and apparent, possibly making meaningful patent reform more viable.
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Perfect example of this is explained in VC Fred Wilson's post The Twitter "Patent Hack":
"Many years ago now, my prior venture capital firm, Flatiron Partners, invested in a company called Thinking Media. It was an early Internet company. They developed some browser based javascript tracking technology. The company ulimately failed but was sold in a fire sale including the patents. Those patents eventually made their way to an incumbent, the big marketing research company Nielsen. Fast forward ten years or so and Nielsen sued two of my portfolio companies, comScore and TACODA, and a bunch of other companies too, on the basis of the Thinking Media patents. So IP that was partially funded by our firm was used to sue other portfolio companies. It is so galling to have this kind of thing happen and it is one of the many reasons why I have come to believe that software and business method patents are an enemy of innovation in the tech sector.
If Thinking Media had the patent hack in their documents, the story I just told would not have happened. And thanks to Twitter's leadership, I hope that all future USV portfolio companies will have the patent hack in their documents and stories like that one will be a thing of the past."
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Follow the money
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Re: Follow the money
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1. Little Inventor doesn't like patents on principle and refuses the $1 million. Problem solved.
2. Little Inventor has no principles and sees a chance to cash in. Except $1 million is chump change compared to $100 milion, so instead of taking $1 million from Big Company for withholding a licence, unscrupulous Little Inventor offers Medium Company a licence for $2 million. It makes a lot more sense for both sides to compete for Little Inventor's loyalties than to risk much greater payouts in court. Big Company could probably outbid Medium Company for Little Inventor's loyalties, but the bidding war would in most cases drive the cost of that loyalty to the point that winning that bid is too costly compared to the size of the likely settlement. At that point, Big Company will conclude that its a useless endeavour and will break off negotiations. If he's lucky, Unscrupulous Little Inventor secured a deal with Medium Company before the court threat disappeared; if he's not lucky, he ends up with nothing. Problem still solved, because it turns patent wars into a fool's game.
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A better solution might be to set up some kind of Patent Defense League or Trust, an agency granted a contractual right, and has its mission dedicated to opposing patent aggression. I discuss such a possibility in links here: http://c4sif.org/2012/04/twitter-heroically-promises-not-to-use-patents-offensively/
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I must be missing those products. I haven't seen one incredible product.
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Won't change anything...
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Go here for some great discussion
I would also recommend that you routinely follow Fred Wilson's blog and the comments on whatever the topic. I'll hold it up as the best example I know of an excellent exchange between writer and readers.
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One rebuttal
Everybody's Gushing Over Twitter's Bogus Anti-Patent Pledge - Business Insider
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"As Michael Kanellos pointed out on Forbes yesterday, the agreement has holes.
For instance, Twitter's pledge doesn't apply to any company that's filed its own patent infringement suit in the last 10 years. So even if you're a real company making real products, and you filed a lawsuit to prevent somebody from blatantly ripping off your IP, Twitter reserves the right to sue you first."
So? The solution is to not be a patent aggressor. (Whether you are a troll or not is frankly irrelevant.)
"Another example: the pledge says that Twitter can use the patents offensively to "deter a patent litigation threat." So if Twitter feels threatened, it can sue."
So then don't threaten them with an offensive patent suit
"Twitter's pledge also gives employees -- the actual inventors -- an uncomfortable amount of power. Kanellos lays out a hypothetical situation in which a rip-off company clones Twitter, then bribes a key patent holder to withhold consent so Twitter can't sue."
This is a good point. As I mentioned in my other post, this is the reason that it might be better to grant the contractual right to an independent agency such as a Patent Defense Trust or League, whose core mission is to block offensive use of patents, and which would presumably be un-bribeable.
"Geekwire interviewed three IP experts who agreed that the pledge is full of loopholes. One of them called it "both dumb and disingenuous."
Among other problems: you can't use patents defensively against most trolls, because they don't make any product. By definition they can't possibly violate your patents."
Yes. This is a defect caused by the nature of patent law. Twitter cannot be blamed for this. In fact there is no way to defend against trolls.
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yeah, sure
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Pat litigation
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