Twitter Fleshes Out Its Patent Portfolio
Twitter (NYSE:TWTR) on Friday announced that it purchased 900 patents from International Business Machines (NYSE:IBM) in December and entered into a cross-licensing agreement with the company, which has consistently accumulated the greatest number of patents of any U.S. tech company for the past 21 years. Financial terms of the deal were not disclosed.
“This acquisition of patents from IBM and licensing agreement provides us with greater intellectual property protection and gives us freedom of action to innovate on behalf of all those who use our service,” said Ben Lee, legal director of Twitter.
The patents will give Twitter access to new technologies and will help protect the company from future patent litigation. In the convoluted world of tech patents, the more patents a company owns, the better protected it is against being sued for patent infringement. The more patents that Twitter owns, the more likely it is that anyone who wants to sue the company is also infringing on one of Twitter’s patents.
According to a report from Bloomberg, before Twitter’s November initial public offering, the company held just nine patents and had 95 pending applications. Having so few patents left the microblogging site highly vulnerable to patent litigation from rival companies. The agreement also solves a complaint that IBM filed last year, claiming that Twitter violated three of its patents. Because IBM owns so many patents, the company has patent agreements with almost every major tech company.
“As Twitter expands and starts delivering video, they need to increase their intellectual property portfolio,” said Richard Doherty, research director of New York-based tech consulting firm Envisioneering Group, to Bloomberg. “We believe some know-how is going along with the patent transfer, not just patent numbers.”