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Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

Copyfight

« Ignoring the Real Anticompetitive Behavior in the E-Book Antitrust Suit | Main | JW on Big Companies, IP »

April 19, 2012

Twitter Tries to Break Patent Logjam

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Posted by Alan Wexelblat

Earlier this week, Adam Messinger, VP of Engineering at Twitter posted a notice on the Twitter blog, "Introducing the Innovator's Patent Agreement". If this works right - which is to say as intended - then it could potentially do a great deal to demilitarize the current worldwide patent war. Sadly, I think this is going to go the way of "Don't Be Evil" - a great idea that eroded to the perceived necessities of competitive business.

Start by reading the agreement as posted to Github. There's a lot of discussion around it, and the specific language will likely change, but the basic agreement is very short and readable. It is intended to replace the default blanket assignment that is used in most industries. In the default you give the company everything, and they can do anything with it. Your name still appears on the patent, but you assign all rights to your employer - usually as a consideration of employment, meaning you can't work (at tech, bio, pharma, or any other IP-using company) unless you agree to this.

The company then is free to use the patents however it wishes. You may recall that this was the topic of some outrage about a month ago, when Andy Baio complained bitterly in a WIRED piece about how Yahoo was using patents (not his, keep in mind, but he was upset anyway). This freedom is restricted under Twitter's proposed IPA, which specifically limits companies' ability to use assigned patents to what the IPA calls "Defensive Purposes."

In theory, a company with this agreement in place could use patents to defend itself, but not to initiate patent-enforcement action. That's a nice theory, but there are two problems I see with it. The first, and smaller problem, is that the way the language of the IPA currently stands, it permits IPA-covered patents to be asserted

against an Entity that has filed, maintained, or voluntarily participated in a patent infringement lawsuit against another in the past ten years

Which is to say, everybody. Really, if you can name a going tech/bio/pharma concern that hasn't been involved in patent litigation in the past 10 years I'll be shocked. It's probably not 100%, but it's certainly 80% and all the big players are in those 80%. So unless the IPA's language is changed, its effect will be nil.

But leave that aside for the moment, and consider what it means to be a publicly traded corporation. It means you are legally bound to do whatever increases shareholder value. Voluntarily disarming yourself in this way leaves you at a competitive disadvantage against other players in your marketplace who are free to infringe your patents, so long as they don't sue. Can you imagine trying to go before your biggest shareholders and say "Well, yes, I'm going to allow our competitors to continue infringing all these patents even though we think we have a good legal case."

You'd be fired in a heartbeat, and with very good justification. You'd be lucky if you didn't find yourself on the wrong end of a shareholder lawsuit. Private companies can get something of a pass on this kind of thing as they don't have the same legal obligations to shareholders. In addition, private companies can be much more easily molded to the personalities of the founders and controlling early stakeholders. But big public companies? The Apples, IBMs, HPs, GEs, Genzymes, Motorolas, Honeywells, etc? They're all going to continue to use patents offensively to protect their markets and products. I hear Google used to be a not-evil place, too.

The IPA is not an inherently bad idea. I applaud Messinger and Twitter for thinking innovatively and trying to get something new started. But I think that the press are being vastly overoptimistic about the likelihood of success here; for example, see Joe Brockmeier's piece.

He lists four reasons why companies should adopt the IPA, which come down to hoping a lot. #1 is that developers will prefer to work at an IPA-using company. I'm sorry but 99.999% of developers don't think about patents and certainly don't think about them during the hiring process. Developers go where the work is interesting and the pay is good. Developers go where they get to do stuff that's fun and looks good on their resumes.

Number 2 is that companies won't need incentive plans to convince developers to file patents. I take it from this that Brockmeier has never filed a patent. The process is BORING and TEDIOUS in the extreme, involving hours of meetings with lawyers who don't understand your work and who insist you do all sorts of annoying arcana. Incentive programs exist because companies realize that developers hate this stuff, but hey for five thousand bucks they can get a really cool new toy so sure, they'll put up with the annoyance. The future use of whatever comes out the lawyer's pen is not even part of the consideration.

Number 3 - it could reduce the number of trolls, but frankly trolls are an overblown annoyance. They're a pack of fleas on the ass of the bull that is rampaging in the tech china shop. The bull is composed of those very same big names (IBM, Apple, HP, Microsoft, etc) aided and abetted by a thoroughly broken patent system. I think Mark Cuban gets overheated at times, but I definitely understand his visceral desire to burn down the entire broken edifice that is software patenting right now. Patent trolls are a symptom, not the disease.

Number 4 - the IPA can be a poison pill. Which is to say that if you're someone like AOL or Yahoo and your company is collapsing then you can't even scrape a bit of value out of what little you have left. Boy, that's attractive! I'm about to default on my mortgage, so I'll set my car on fire, too! Seriously, who thinks like that?

The press needs to take a much more realistic look at this proposal and talk about the ways in which it can be made more workable. For example, I'm personally a fan of patent pools, in which companies contribute mutual value, take mutual value and have financial incentives to avoid hostile legal actions. IPA-like agreements and additional steps like compulsory licensing could play a big part in creating an environment where nobody gets everything, but everyone gets enough to be satisfied, without having to disarm themselves.

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