You can look at Twitter’s move to their new invention assignment agreement (they are calling it an Innovator’s Patent Agreement, which has a fittingly unlegalese ring to it) from a number of different angles.
For one, it signals a growing movement in the technology space to do SOMETHING about software patents. To put it bluntly, many feel that things are out of control. You don’t have to pay too much attention to the industry to have heard about the battles between every major technology company. Patent holding companies are making a fortune off of licensing, and companies are abandoning their Business Plans! in favor of Patent Trolling!. Hell, companies are forming with business plans that consist of Step 1 Acquire Patent Step 2 Sue People. If you are into the efficient allocation of resources (and who isn’t, these days?), let’s put it this way: Nathan Myrvold is currently using his time to buy and license and sue over other people’s inventions. The patent problem is skewing incentives for the economy, luring our greatest minds from more productive innovation! Silicon Valley and it’s bevy of engineers knows something is wrong, and as the inventors of 90% of the problem patents in the country, Twitter is empowering them to do something about it. Or at least, Twitter is saying they will and taking a step towards that end.
On the other hand, think about Twitter from the business aspect. This is a company that is criticized for lacking a revenue plan. It’s the weakest “business” of the major social networks, and it’s seen many changes at the top over the past few years, plus it’s sat on the sidelines while Zynga, Groupon, LinkedIn, Yelp, Pandora, and soon Facebook have gone public. Twitter has some of the highest average salaries in the scene, and it’s a place engineers want to work, yet it has weak ad revenue compared to the company it will always be compared to in Facebook. With patents being so valuable, and social networks becoming so prevalent, and Twitter being a social network with a strong engineering team, one might think that a strong strategy for Twitter to boost revenue would be to start firing off licensing efforts of their own. Here’s the thing though: They only have one granted patent (though it’s a good one that probably reads on all mobile devices and many mobile apps). If a patent nuclear war started yesterday (oh, wait, it started months ago), they are the Melians to the Facebook/Yahoo!/Microsoft Athenians. Twitter is clearly at a bit of a competitive disadvantage in a world where patents are incredibly valuable.
So for Twitter to take this step of limiting the downstream value of their patents (ensuring that the Coase theorem dictates the patents remain with Twitter, though I’m torturing the Coase theorem a bit there [another shout-out to my resource efficiency homies!]), while also potentially cutting off current licensing revenue potential… well, it’s a tiny bit noble, but a whole lot more a Trojan horse for the rest of the patent-holding technology companies of the world. Very clever, really. Twitter is politely asking everybody to sign a non-proliferation treaty, and making a nice gesture by signing it first, but that would be like Switzerland looking to end World War II by being the first to sign a peace treaty. Twitter is hoping this international relations metaphor is a bit more Gramsci and a bit less Hobbes (If I haven’t shaken you yet with all these political theory references, then congratulations). They would love nothing more than for every company that has already invested millions of dollars in patents to sign the treaty for Twitter’s own protection as much as they would like them to for their edification. So Twitter makes this big PR gesture, they will be hailed as saviors by the anti-software patent crowd, engineers will claim this as a great reason to work for Twitter, and Twitter gets to step back and hope others give up more to gain less by doing the same.
So there you go. I’ve successfully told you why Twitter’s move today is great for software patents generally, pretty clever by Twitter itself, and not really a big loss for them in terms of what they had to give up to get some amazing PR and recruiting, all while hitting you with multiple resource efficiency, political science, and international relations references. Hopefully more entertaining than self-indulgent, but the blog does have my name at the top so maybe I can take that luxury every once in a while.
(Some other articles that helped form my thoughts for this article: 1. 2. )
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