Twitter’s Twist on Patents

Last month, Twitter introduced a draft of a radical employee patent assignment plan that the company hopes will play a part in a world “that fosters innovation, rather than dampening it.” The popular social media platform hopes that this initiative will affect how companies use their patents, which according to Twitter, sometimes impedes the innovation of others.

Twitter’s “Innovator’s Patent Agreement” (“IPA”) is an employee patent assignment agreement, or transfer of patent ownership from an inventor to a company, where the inventor retains control over how the patent is used. That is, under the IPA, Twitter agrees not to assert a patent against others unless acting defensively, or if the employee-inventor(s) give the company permission to do so. The assignment is “intended to run with the [p]atents” and purports to be binding on all subsequent owners for the life of the patent. Thus, the Twitter approach flips the typical paradigm: most companies have employment policies that require employees to assign any and all rights in their inventions to the company so that the company retains exclusive ownership and decision making control over its use, offensively and defensively.

The Twitter IPA is consistent with an open-source approach to computer software. But for some companies, patents are viewed as a valuable, intangible asset, and indeed, a new exchange for patent monetization, the IPXI is set to debut later this summer or in early fall to monetize such assets.

A recent Wall Street Journal article on Twitter’s plan cited the “buzz” Twitter has started among principals at some tech start-ups, along with their insights on the present patent system, and the costs and inefficiencies inherent there. The article described that the IPA is viewed by some as a positive initiative to stem the chilling effect patent litigation has on innovation. Critics of Twitter’s move, the article reported, describe it as a public relations ploy, a “P.R.-and-pray strategy,” to discourage suits being brought against it. The impact of this development will be closely watched.

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