
The Twitter "Patent Hack" - Straubiz
http://www.avc.com/a_vc/2012/04/the-twitter-patent-hack.html
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3pt14159
The question I have that I really, really, really want the answer to be "yes"
for is this:

I've created a couple things that are "patentable" (not that I would want them
to be, but they are) so can I email someone at Twitter and essentially say the
following:

"Hey, I want these things patented, but I have no money. Can you patent them
for me, giving you the defensive rights and me the licensing rights? I will
never allow them to be used offensively"

Because that would be balls-to-the-wall-hella-fucking-awesome.

~~~
phillmv
I would doubt it.

For starters, how would you enforce licensing? You'd have to… sue other people
for patent infringement. I thought we were all agreeing that software patents
are mostly unadulterated bullshit.

Secondly, if they put up the patent lawyer cost why wouldn't they also keep
any potential licensing fees ;)?

In the end the Right Thing To Do™ would be to publish your work and try to
establish it as prior art so people can't abuse it.

~~~
3pt14159
Hey Phil, long time no see :)

The reason would be so that would have more ammo in their arsenal and would be
untouchable by any real company (they would still be touchable by patent
trolls, but that is a different issue).

As for licensing enforcement, simple I wouldn't enforce it! :) I would just
enter as an ally with any unfortunate company that is getting sued by an
aggressive company.

Furthermore, there are real benefits for being a patent originator, special
visas, research grants, etc. But the fees are pretty hefty, especially if you
want to do it world wide.

Twitter could morph into a patent shield for hire and split the defense fees
with the originators.

~~~
larrys
"Twitter could morph into a patent shield for hire"

That's not their business model and no matter how noble the idea I can't
imagine them going down that road. Even if it in some way benefits them.

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VanL
I celebrate the impulse that gives rise to this, but I am skeptical that it
will work in the long run. The reason why is that these sort of documents are
social contracts just as much as they are legal contracts - this is Twitter
saying publicly that they won't be evil with their patents.

The problem is that this document has enough loopholes that it only slightly
ties the hands of the patent assignee (Twitter, in this case). I understand
perfectly why those loopholes are there, but I think that this will backfire
at some point in the future when there is a "defensive" use that, at least
from the outside, doesn't appear defensive. It could be because there is a
perceived threat, it could be because the inventor agrees, it doesn't matter.
At that point, the legal agreement will be kept, but the social agreement
broken, and that will be devastating.

The most clever bit here is that this agreement is designed to run with the
patent so that it makes the patents less likely to be asserted when they are
sold. That is a good thing.

As it is, though, my favorite tool for this sort of thing is the Apache
license. That allows everyone who is playing nicely in the sandbox to do so -
but it also allows the patents to be cross-licensed effectively and
defensively asserted against existing litigation.

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mistercow
The problem I see with this is that it doesn't (and, I think, can't) really
account for the future. Suppose you see that Twitter has a patent on buttons
that you have to quadruple click, and you think they'll only use it
defensively, so you make a free jQuery plugin called t4p, which implements
quadruple clickable buttons.

Three years pass and now a new service, Blithr (like Twitter but messages are
limited to 18 characters and all caps) has stolen Twitter's thunder and
Twitter is facing bankruptcy. They are forced to sell off their assets,
including their patents, and those end up in the hands of a patent troll.

And suddenly, people who used your plugin are having to defend themselves in
the US District Court for the Eastern District of Texas.

~~~
VanL
No, patents are sold encumbered by their previous licenses. Another entity may
acquire the patents, but the portfolio would still be subject to this
agreement.

The issue is the ambiguity of "defensive" action gives the assignee of the
patent relatively broad license to act without the consent of the inventor -
and the inventor can be suborned later, too. (Trust me, that happens.)

~~~
damoncali
_No, patents are sold encumbered by their previous licenses._

Do you _really_ believe that will happen? When investors are asking why some
pinhead inventor is holding up their profits? You can't force everyone
involved in a company to think this is a good idea, and therefore, it isn't.

Edit: (For some added color, imagine Kevin O'leary of Shark Tank fame sitting
on the board of a company with some of these patents).

~~~
brlewis
Why do you expect investors to be stupid?

The article we're commenting on is an _investor_ excited that software patents
will stop holding up profits.

~~~
damoncali
A very specific kind of investor - a career-long early stage VC. But even
there, there is much room for disagreement without labeling people as
"stupid".

I expect investors to be rational - and to seek profits where they are
available given the information that is currently on the table. In some cases,
that means they will say, "you know what? Screw that doc - we're selling these
puppies."

~~~
brlewis
Your earlier comment sounded like you were saying that a company adopting this
patent hack would be hard to sell to other investors. Isn't selling companies
to other investors what an early stage VC does?

~~~
damoncali
If I were investing in a company that had these things, I would be concerned
that the patents were now no longer licensable - that their value had been
decreased by waiving some of the rights granted by the patents.

In certain situations, I could see investors trying to undo this agreement so
they could unlock that value. If the value is great enough, they will try
really hard (and given how vague this agreement is, I bet they'll succeed).
That's all I'm saying.

In the end though, I don't see how this agreement is anything more than
twitter saying "we won't sue people over patents, and we won't sell them to
people who will". I don't see that as particularly significant. Just that
twitter isn't pursuing licensing revenue as a strategy.

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jonmc12
Adoption by ventures is interesting, but I think the real power here falls in
the ability of inventors themselves to 'unionize' in a sense. Say a movement
began where a significant portion of the top patent producers took a pledge to
one another to only work for companies under the Twitter Patent agreement.

Sometime, in less than 17 yrs from today, the balance of 'defense only'
patents to normal patents would make offensive patent litigation prohibitively
expensive.

Suddenly, there is a group of people on this planet - not lobbyists, not
politicians, not investors - actual IP producers who can change a broken
system for the better. To me, this is the most exciting potential of the
Twitter Patent Hack.

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drcube
What's with the "inventor gets to change his mind" clause? That's like having
a clause in the GPL that says at any given time, the author can revoke the GPL
and sell the copyright to Microsoft. It appears like they're not taking this
seriously.

~~~
wickedchicken
> That's like having a clause in the GPL that says at any given time, the
> author can revoke the GPL and sell the copyright to Microsoft.

Which, unless the author has specifically assigned copyright to someone else,
you can totally do. A similar situation arises with dual-licensed software. Of
course, older versions of the software still 'live on' under the GPL, the
author is implicitly making a fork.

This is one of the reasons the FSF wants you to assign it copyright to stuff:
<http://www.gnu.org/licenses/gpl-faq.html#AssignCopyright>

~~~
drcube
>Of course, older versions of the software still 'live on' under the GPL, the
author is implicitly making a fork.

That's what I'm talking about, though. You can't say "Everybody that has
previously used or is currently using this software under the terms of the GPL
now owes me a crapload of money -- and by the way, the GPL is revoked and you
must abide by the Microsoft EULA".

But that seems, to my untrained eye, to be exactly what this Twitter patent
promotes. It's basically saying "We won't sue you _now_ , but we reserve the
right to do so at any time in the future. _So keep your grubby mitts off our
IP_." Really, it's no different than the status quo.

~~~
PotatoEngineer
No, the point is that all of the current & older versions of software would
still be GPL. Only the author's next release (possibly released today) would
be under different licensing terms. You can't revoke the GPL.

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huhtenberg
> _If Thinking Media had the patent hack in their documents, the story I just
> told would not have happened._

I wouldn't be so sure of that.

1\. Nielsen could've offered a small pile of cash (and/or a commission) to the
patent holders to get them participate in the lawsuit.

2\. Nielsen could've pressured the company it bought the patents from to
pressure the authors to remove the clause from the patent (I'm sure it's
doable, one way or another).

This "patent hack" basically assumes that individuals are more ethical than
companies, and I think this assumption is flawed. Companies don't have
mortgages.

~~~
vibrunazo
Either would break the agreement.

> Assignees must obtain prior written permission from all of the Inventors
> without additional consideration or threat.

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bluedevil2k
Reading Fred's story, maybe we should re-examine whether patents are
transferable like other assets. Maybe some modification that says the original
inventor gets a 20-year monopoly, but any assigned parties only get a 5-year
monopoly from file date. That would greatly reduce the incentive to buy other
companies' patents, and thereby reduce the overall value of a company's patent
"portfolio, while at the same time protecting the original inventor's rights.

~~~
fredwilson
that's not too far from where twitter is going with its IPA

~~~
VanL
Have you considered the reduction in cross-license value that this causes to
the patents? Cross-licenses may be ugly, but they are much better than
litigation because they allow companies to get back to actually doing
productive stuff.

Most of the companies I know would be much less likely to give full weight to
a portfolio burdened with this sort of agreement, simply because litigation is
the stick that brings companies to the negotiating table. If one party to a
proposed cross-license has preemptively given up the ability to act
offensively, that makes cross-license agreements either harder to get or more
expensive.

I recognize that in a negotiation, a company could use clause three to
"defensively" assert against a company that is also making assertions with an
eye to a cross license, but then you get into the situation I described in
another comment, where you keep the legal contract but break the social one.

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bluelu
I think Twitter they should go one step further and form a pool of companies
which bring in all their patents and: 1) If you join, you are not allowed to
bring any other patent lawsuits against other companies. 2) If you get sued,
you are able to attack the sueing company with all the patents in the pool.

Or even add: If you are licencing a patent to another company, the licencing
is void if that company attacks another company.

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raldi
Can't the acquiring company simply pay off the inventor(s) to get their
permission to use the patents offensively? Say, a 50 / 50 split?

~~~
jrockway
Won't the breach-of-contract damages be a lot less than the awards from using
the patent offensively?

It just seems to me that if some evil company buys the patents, they're not
going to respect the agreement the inventors and Twitter signed. For the
agreement to cause financial damage, the inventors would have to sue the evil
company that obviously has a ton of lawyers. Can _you_ afford to sue
Microsoft? I can't.

~~~
Kliment
Well, the inventors have the leverage in this case, because they can license
the patents to whoever is being sued. The whole point of the patent hack is
that the inventors continue holding limited rights to the patents, that is,
the acquiring company does not fully control them. They can breach contract
all they want, but their offense can be neutralized by the inventors by simply
licensing to the victim.

~~~
scromar
Edit: I was wrong here, see the reply below.

No, the inventors don't have the right to license the patents to whomever is
being sued. The twitter agreement gives all rights in the patent to the
assignee, just like any other assignment, but it adds on the clause that the
assignee agrees to get permission from the inventor if they want to sue
offensively with the patent. In the future, if the assignee (whoever it is at
that time) decides to sue offensively without the permission of the inventor,
the assignee can (and indeed they have the right to). The inventor would then
have a cause of action for breach of contract against the assignee, but who
knows what that would amount to.

~~~
shasta
Did you actually read the agreement? Kliment is correct. The inventors are
granted an irrevocable license to sub license the patent to any target of
offensive use of the patent. IANAL, but presumably existing licenses on a
patent are attached to the patent and are not just a contractual matter
between the licensee and original patent owner.

~~~
scromar
You are right. The fourth paragraph does give some teeth to the agreement.
However, the broad language of the second paragraph still gives the assignee a
lot of wiggle room to argue that they are not breaking any promises made.

~~~
raldi
I don't see the nature of the teeth you refer to, unless everyone's making the
assumption that all patent inventors are noble and cannot be convinced, at any
price, to license their patents for evil purposes.

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damoncali
Guess what will be the first thing to go upon sale of the patent? As soon as
there is a modicum of financial pressure to unload some patents saddled with
this albatross, the buyers will have the power to strip this out.

Call me cynical, but this will never work. Frankly, I'm not sure I think it
should work. It smells of throwing the baby out with the bath water.

