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Twitter’s IPA: does it live up to the hype?

April 17, 2012

Twitter is being lauded for its “revolutionary” Innovator’s Patent Agreement (IPA), on the basis that it purports to “put ownership of patents back in the hands of the inventors”.  But what does it actually do?

Twitter posted the IPA recently here and invited comments.  Quick commentary in the Twittersphere (suitably) was wholly favourable and lauded the company for allowing innovators to “stop patent trolls”.  This is a gross mischaracterization.

If you read the IPA, you’ll find it reads much like a standard patent assignment from employees to employer, in that the inventors agree to sell, assign, and transfer to Twitter “the entire worldwide right, title, and interest in and to the following patent applications…”  The clause that is different from the standard employee assignment agreement is clause 2, which provides that Twitter, and any of its assignees (i.e. anyone that buys the patents from Twitter), agree not to sue anyone without the inventors’ permission, unless asserted for a “Defensive Purpose”.

So Twitter can sue without inventor approval if the suit is for a Defensive Purpose.  What is a Defensive Purpose?  The IPA defines it as a claim:

(a) against an entity that has filed maintained, threatened, or voluntarily participated in an IP suit against Twitter or any of Twitter’s affilliates, customer, suppliers or distributors;

(b) against an entity that has filed, maintained, threatened, or voluntarily participated in a patent infringement lawsuit against another in the past ten years, so long as the entity did not institute the lawsuit defensively in reponse to a patent litigation threat; or

(c) otherwise to deter a patent litigation threat against Twitter or Twitter’s users, affilliates, customers, suppliers or distributors.

In other words, Twitter can still sue to enforce patent rights, without inventor approval, if it goes after someone that sued or threatened to sue Twitter or any of its customers,  etc., or even just to “deter” the possibility of a patent litigation threat.  It would seem that no threat need actually have materialized.  In addition, it can sue anyone that has been involved in patent litigation in the last ten years, unless their involvement was solely as a defendent.

While the inventor-approval clause in the IPA is a stark break from the “company takes all” standard form assignment, it is not quite what some are making it out to be.  It does nothing to deter patent trolls.  The significant potential effect is that Twitter (and anyone that buys the patents from Twitter) would not be able to go after a company that has no patents.  They also could not go after a company that has patents but has never asserted a patent against another except in defence, unless that company can be characterized as a potential patent litigation threat.  In the end, under the IPA Twitter is still free to get embroiled in the escalating patent wars in the mobile and social media space.