Last week, Twitter announced that it was creating a new Innovator’s Patent Agreement (IPA). According to the announcement posted on the company blog:
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 has set off a host of commentary in the blogosphere. I won’t even begin to try to get into all the details, but I would like to contrast two takes on Twitter’s action. The first is from Jon Low (The Low-Down — full disclosure, Jon is on the Athena Alliance Board) – “Twitter Promises to Behave. Patently.”:
In promising not to use patents or other forms of intellectual capital in an ‘offensive’ way, Twitter has taken a stand with two strategic benefits. First, they have demonstrated as an executive team that they are addressing variables they can manage, not embracing aspirational platitudes which sound arrogant, unrealistic and over which they have little in the way of leverage. That speaks to their sense of purpose and their focus. Secondly, this acknowledges that for web-based software, the interrelationships of discovery and development are often difficult to unravel. Identification of who owns what is a mug’s game won only by lawyers.
A contrasting view comes from Joff Wild (IAM Magazine — full disclosure, I have written articles for Joff) – “Twitter has decided that patents are not strategically important assets; good luck with that!”
Whatever the IPA means for the value of the patents the company owns, whatever it tells investors about Twitter’s commitment to differentiating innovation, has been deemed to be worth it. I find that extraordinary. For the sake of a few days of positive headlines and a bit of good karma among some programmers in Silicon Valley, Twitter has essentially thrown away any commitment to patenting and patent strategy beyond the accumulation of rights for defensive purposes.
That may look like an attractive option now, but how will it seem to those running the company in five years time when a potentially valuable invention they have patented is fair game for infringers? The likelihood of Twitter being able to develop a decent licensing revenue stream is now significantly reduced; while, as we saw yesterday, the chances of it ever selling patents for a meaningful sum has virtually been eliminated. Using patents to facilitate collaborative agreements or open innovation is now a forlorn hope, as third parties know they can pretty much use the company’s inventions with no comeback. And as for using patents as collateral in any financial transaction at any time: forget it.
Twitter clearly does not believe that patents are assets with any strategic value at all; they are just there to protect it from litigation. How very 20th century.
(See also Jack Ellis at the IAM Magazine blog – “Has Twitter just wiped millions off the value of its patents?”)
I’m not sure where I come down on this. As usual, the devil is in the details — in this case the details of what the IPA really means. Leonid Kravets has a raises a good question in his blog posting (The Twitter IPA: What Does “Defensive” Really Mean?) where he points out that the terms of the draft agreement are broad enough to allow a lot of leeway on “defensive” assertion. In addition, the agreement does not completely rule out “offensive” use of patents, but requires employee/inventor agreement with such actions. Thus, as Kravets notes:
While this initial draft appears to be an interesting first step to a new assignment system, I expect this draft to change significantly as Twitter begins implementation. It will be worth monitoring what effect this new agreement has other than giving Twitter some good press and a recruiting boost in the short-term.
In other words, this is an experiment: let the experiment and the debate begin!