Twitter's Revolutionary Agreement Lets Original Inventors Stop Patent Trolls

from the an-idea-whose-time-has-come dept

Tue, Apr 17th 2012 11:01am — Mike Masnick

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”.

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.

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 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 2

Of 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

41 Comments

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Baldaur Regis (profile), 17 Apr 2012 @ 11:43am

Leave it to those freetarding Silicon Valley bastards to mess up a perfectly good extortion scheme. Fucking engineers, always coming up with logical solutions.

/sarc
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Lowestofthekeys (profile), 17 Apr 2012 @ 11:49am

Re:
Shhhh, you are going to ruin Bob's concentration. He is carefully skimming over this to find some way to tie this into an insult towards Masnick.
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Baldaur Regis (profile), 17 Apr 2012 @ 11:54am

10 bucks says his reply will contain something about Google brainwashing Twitter into this. Or blackmailing. Or something equally baffling.
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:Lobo Santo (profile), 17 Apr 2012 @ 11:55am

Re: Puppeto!
No, he'll claim Twitter is a fully controlled puppet of Google, and they're just trying to assert the false-image of non-evilness to brainwash everybody into thinking 'Big Search' is nothing to fear!

/am-i-doing-it-right?
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Keii (profile), 17 Apr 2012 @ 11:57am

Re:
Twitter pirated this illegally from Google using file hosting sites that contain illegal movies and music costing millions of Hollywood jobs.
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rubberpants, 17 Apr 2012 @ 12:01pm

Re:
Look, we all know that Twitter is nothing but a haven for terrorists to illegally steal copyright-protected child pornography.
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:Lobo Santo (profile), 17 Apr 2012 @ 12:11pm

Re: Re:
What about the children?

Won't anybody copyright the children?!
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Anonymous Coward, 17 Apr 2012 @ 12:15pm

Re: Re: Re:
How did you miss child pornography?

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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Anonymous Coward, 17 Apr 2012 @ 12:16pm

Re: Re:
And dont forget about em there mash destruction thingy me jicks!
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Anonymous Coward, 17 Apr 2012 @ 12:17pm

No, he'll claim twitter needs 'educating'
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Another AC, 17 Apr 2012 @ 12:19pm

What about existing patent law?
Just because someone dreams up a super duper contract, it doesn't make it legal if it is at odds with existing law. Don't get me wrong, it sounds good, but would it hold up?

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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:Lobo Santo (profile), 17 Apr 2012 @ 12:20pm

Re: Re: Re: Re:
(You missed the joke... Also, it's easy to miss the child porn if you're not looking for it.)
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Anonymous Coward, 17 Apr 2012 @ 12:24pm

Re: What about existing patent law?
Well, we can only hope that enough of the inventors actually care about reducing patent trolling to not do that.
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Anonymous Coward, 17 Apr 2012 @ 12:29pm

Great, next...
Now, if we can just get the same thing applied in Copyright for Media.
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TheStupidOne, 17 Apr 2012 @ 12:39pm

Re: What about existing patent law?
The excerpt from the contract is pretty clear ... the inventor gets "a perpetual, worldwide, non-exclusive, royalty-free, no-charge, irrevocable license" along with the right to sub-license if a specific set of conditions are met. It is most definitely legal to grant a license. It is also legal to grant the right to sub-license a patent. The only point at which there may be a fight over it is if the conditions are actually met.
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Stephan (profile), 17 Apr 2012 @ 12:41pm

What's the point?
Sorry, but I pretty much fail to see why Twitters' idea should stop any patent trolls. I mean, there are already enough companies that act like patent trolls with patents they already own. And nothing that Twiter may do in the future will make them stop, as far as I can see. Plus, it seems that a lot of them already made crazy amounts of money, so what would stop them to just go on buying patents from Twitter and just break the conctract (and maybe pay some fine, if that is even legal). Am I missing something?
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Watchit (profile), 17 Apr 2012 @ 12:46pm

Re: What about existing patent law?
we can only hope that it works out as planned :(
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Watchit (profile), 17 Apr 2012 @ 12:50pm

Re: What's the point?
if it works out as they make it seem like it's supposed to work, theoretically the inventor of the patent would have a say in how his/her patent is used in court. At least that's what it sounds like to me. But your right, for all we know this is just a PR stunt and twitter might just force their employees to allow it to happen anyway. Though, if the inventors really do get to keep control of the patent even after leaving employment at twitter, that might be helpful.
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Baldaur Regis (profile), 17 Apr 2012 @ 1:11pm

Re: What's the point?
All disruptions, be they technological, societal or political, begin with somebody asking "What if...". Even if the IPA proves to be contractually non-binding, Twitter is taking the astonishing position that something - anything - is above the corporate good.
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Anonymous Coward, 17 Apr 2012 @ 1:34pm

Re: Re:
Unfortunately, Twitter used Twitter to effect the download, so at 140 characters/tweet the download will take 2X10^16 years to complete, at which time....ah, fuck it.
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Anonymous Coward, 17 Apr 2012 @ 1:36pm

Re: Re:
Maybe he's off studying up to apply to become a shill...

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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Antone Johnson (profile), 17 Apr 2012 @ 2:08pm

Re: Re: What about existing patent law?
Yes, the brilliance of this approach is that it takes existing basic concepts of patent law and points them in a different direction � one that serves the public good. A single company doing this once won't have an impact, but if it catches on as an industry-wide practice in the way that open source and Creative Commons licenses have, for example, it could have a major cumulative impact over time.
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Michael Kay, 17 Apr 2012 @ 2:21pm

Follow the money
OK, I'm an engineer at Twitter and I come up with a brilliant patentable idea, something that no-one has ever patented before, like word wrap. Twitter is bought by Big Green Monster, and BGM starts suing everyone who does word wrap. So I say, hey that's not fair, and I start offering word wrap licenses. Now, patent suits are worth billions of dollars, so someone is going to offer me a million or two to either license them or not license them. But I'm a good guy, I value freedom of intellectual property much more than I value a few million dollars. So I turn all offers down, and tell my wife we could have had a private yacht but virtue is its own reward. Next week's fairy tale is Sleeping Beauty.
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jackn2, 17 Apr 2012 @ 2:38pm

"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"

I must be missing those products. I haven't seen one incredible product.
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Indy, 17 Apr 2012 @ 3:05pm

Re:
I was going to say. My random clicked link into twitter is usually followed by a very very quick Control+F4 of the tab. I actually prefer screenshots of "insightful" tweets than the service itself.
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PRMan, 17 Apr 2012 @ 4:45pm

Re: Follow the money
Perhaps, but better that the inventor get rich for his invention than some patent troll getting rich instead.
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Anonymous Coward, 17 Apr 2012 @ 5:28pm

Re: Re: Re:
will take 2X10^16 years to complete, at which time....

the copyright still won't have expired
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Anonymous Coward, 17 Apr 2012 @ 8:55pm

Re: Re: What about existing patent law?
I have not researched all the potential issues associated with this alternate approach, but quite a few come to minds. Restraint on alienation, assuming that an assignment, which is for all intents and purposes a sale, is capable of a burden of the type contemplated, a "defensive purpose" limitation that in actually is largely meaningless given its definition, impled warranties of title, etc.

Not that these may prove to be legally foreclosed, but that assuming they pass legal muster is folly.
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Suzanne Lainson (profile), 17 Apr 2012 @ 9:19pm

Re: Re: Re: What about existing patent law?
Yes, the brilliance of this approach is that it takes existing basic concepts of patent law and points them in a different direction � one that serves the public good. A single company doing this once won't have an impact, but if it catches on as an industry-wide practice in the way that open source and Creative Commons licenses have, for example, it could have a major cumulative impact over time.

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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F!, 18 Apr 2012 @ 4:19am

Won't change anything...
Some (many?) companies are pressured into filing lawsuits by their lawyers. All this accomplishes is adding one more person for the lawyers to convince. Nothing will change.
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Laroquod (profile), 18 Apr 2012 @ 6:24am

Re: Follow the money
Here's what will really happen. Twitter gives its Little Inventor the right to grant licences on its Big Patent. Big Company buys Big Patent from Twitter, offers Little Inventor $1 million not to exercise his right to grant licences so it can sue Medium Company for $100 million. From this point forward one of two thins will happen.

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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Stephan Kinsella (profile), 18 Apr 2012 @ 1:56pm

Re: Re: Re: Re: What about existing patent law?
I think this is a brilliant approach. It is not perfect, but here is what I think is going on. If they just issue a policy statement that they will never use them defensively, they can change their minds later (just like legislatures cannot do this-they have parliamentary or legislative sovereignty and can repeal earlier laws). They can't tie their own hands. So they have to give a right to someone else in some way. The inventor is the safest best. Short of forming some trust or other organization (which might be a better solution, but it's more complicated and not as easily replicable by other companies; this one just requires you modify your standard inventor assignment agreement).

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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Stephan Kinsella (profile), 18 Apr 2012 @ 1:57pm

Re: Re: Re: Re: What about existing patent law?
I think this is a brilliant approach. It is not perfect, but here is what I think is going on. If they just issue a policy statement that they will never use them defensively, they can change their minds later (just like legislatures cannot do this-they have parliamentary or legislative sovereignty and can repeal earlier laws). They can't tie their own hands. So they have to give a right to someone else in some way. The inventor is the safest best. Short of forming some trust or other organization (which might be a better solution, but it's more complicated and not as easily replicable by other companies; this one just requires you modify your standard inventor assignment agreement).

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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Stephan Kinsella (profile), 18 Apr 2012 @ 2:02pm

Re: What's the point?
I think it won't stop trolls. But with X patents, Twitter is as able to defend itself against competitors suing it (or even trolls suing it) with the X patents, with or without this agreement. So they are no worse off. And they might even get X+Y patents, i.e. extra patents disclosed by a more motivated workforce.

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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Stephan Kinsella (profile), 18 Apr 2012 @ 2:05pm

Re: Follow the money
Fair point, but often there are multiple inventors, increasing the likelihood of a single holdout.

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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Suzanne Lainson (profile), 19 Apr 2012 @ 2:03am

Go here for some great discussion
A VC: The Twitter "Patent Hack"

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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Suzanne Lainson (profile), 19 Apr 2012 @ 4:00am

One rebuttal
I'm still on the side of applauding Twitter for trying to do something, and if nothing else, advancing the conversation. But here's someone who isn't buying it.

Everybody's Gushing Over Twitter's Bogus Anti-Patent Pledge - Business Insider
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Stephan Kinsella (profile), 19 Apr 2012 @ 5:13am

Re: Re: What's the point?
I noted above: "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."

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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Stephan Kinsella (profile), 19 Apr 2012 @ 5:26am

Re: One rebuttal
This guy's criticism is largely flawed. Let's take his four criticisms:

"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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patent litigation, 27 Apr 2012 @ 5:27am

yeah, sure
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.
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Tony Grady, 11 Oct 2012 @ 11:53am

Pat litigation
Hope othe social sites will follow Twitter's example.
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