The last few days have been abuzz with the revelation of Twitter’s soon to be implemented “Innovator’s Patent Agreement” (IPA). Supposedly, the IPA places Twitter in a primarily defensive posture with respect to patent litigation because the IPA requires each inventor’s approval before an offensive use of the patent. However, for all the hype about the “new era” that Twitter’s IPA may bring to the contentious environment in Silicon Valley, it is more likely that Twitter’s IPA is just a PR stunt.
Why won’t the IPA change the world? Taking a look at the exemplary IPA provided by Twitter answers this question. First, if this is the assignment that inventors at Twitter are being asked to sign, it is ineffective. The USPTO states that “[i]n order for an assignment to take place, the transfer to another must include the entirety of the bundle of rights that is associated with the ownership interest, i.e., all of the bundle of rights that are inherent in the right, title and interest in the patent or patent application.” MPEP 301. As Twitter’s IPA explicitly reserves some of the rights to the patent, i.e., the ability to prevent others from infringement, with the inventor(s), it has failed to effectuate an assignment with its IPA. Twitter has, at best, procured a license from its inventors, but even that is suspect because the terms of the IPA do not include standard provisions that would entitle it to a license. It is entirely possible that Twitter will have no ownership interest at all in the patents. Thus, this IPA would be far too risky to become a standard contract.
Second, it’s impossible to predict how courts in various jurisdictions around the world would interpret this agreement. But, if Twitter is listed as the applicant on foreign applications and ever had to prove ownership, they may be up a creek without a paddle.
Third, as a practical matter, the IPA leaves many open questions. What if the inventor himself decides to compete with Twitter using the technology he invented? What prevents this inventor from asserting her patent rights against Twitter when it is opportune to do so? How long until a terminated employee refuses to give authorization for a lawsuit that Twitter needs to initiate? Since a Twitter employee still has an interest in the patent, she can convey it to another entity—what if a Twitter employee conveys its “authorization to sue” interest to a company who has the technology that would infringe the patent the employee has rights to?
Moreover, what is a potential investor supposed to make of this new agreement? Sure, it sounds good, but will it stop a Google, Microsoft, Apple, Facebook, or RIM from taking down Twitter? What value does Twitter have if it does not own the exclusive rights to its intellectual property and cannot protect its assets?
It is important to recognize that Twitter neither currently owns nor is assigned the rights to ANY issued patents. Thus, Twitter’s current tactics with patent rights are akin to many emerging economies, which fail to enforce intellectual property rights until their population acquires significant intellectual property rights of its own. I have written on this topic in regards to the current conundrum in China, which while having a patent system, continues to underperform in its ability to allow for effective enforcement of patent rights. China’s recalcitrance is likely both cultural and practical, with the practical recalcitrance being related to its understanding that it gains more from allowing infringement than it does from enforcing intellectual property rights.
Twitter’s IPA is no different— Twitter has no intellectual property to protect and thus it has no disincentive to attempt to remain above the fray and HOPE that other companies do the same. If Twitter can get other companies, especially major players, to sign onto the “defensive use only” philosophy, Twitter may be able to infringe a myriad of patents while it continues to invent. Then, when it is convenient, prudent, or necessary for it to do so, Twitter will likely renege on its promise. I’m fairly sure that Facebook was attempting a similar strategy until it found that it could no longer wait for the fight to come to them – there is simply too much at stake for a tech company to stand on the sidelines.
What the IPA has accomplished is to create a lot of Internet buzz about Twitter, but then that is what Twitter is really about – isn’t it? Certainly it’s not about the proper use of intellectual property.