Social media companies are increasingly involved in patent lawsuits and frustration is setting in. Hoping to inspire change within the industry, a number of companies have adopted alternative patent policies. While these alternative models are based on the social good of sharing innovation with a promise to use patents only as a defensive shield and not as an offensive weapon, they may raise a host of unanswered questions.
Many social media and computer technology companies, as well as so called “patent trolls” or non-practicing entities, have large patent portfolios covering core aspects of social media and online user interactions. Companies monetize their patent portfolios by asserting patents offensively in litigation to restrict the activities of other companies and seek large damage awards. For example, Document Services Systems filed a patent infringement lawsuit against Facebook Inc. and LinkedIn Corporation based on patents for underlying architecture of social networks. Yahoo Inc. and Facebook Inc. settled a legal battle over social networking and advertising patents. Apple Inc. received a billion dollar judgement against Samsung Electronics Co. for infringing smart phone patents.
Social media companies tout serving social good, and some are attempting to apply that concept in their patent policies by promising to use patents only to defend against legal threats, not to start patent wars. Twitter announced an Innovator’s Patent Agreement (IPA) with a stated goal of making the patent system work better for companies, inventors and policymakers by using patents only defensively.
Typical patent assignment practice grants a company irrevocable ownership and full control of patents. The IPA is a new way to implement patent assignment that keeps control in the hands of engineers and designers who invented the patented technology.
It is a commitment from a company to its employees that patents can only be used for defensive purposes. This control attaches to the patents, so if the company sells the patents to others, the assignee can only use the patents defensively.
Twitter recently used the IPA on a patent that relates to a pull and refresh user interface interaction. U.S. Patent No. 8,448,084, entitled “User Interface Mechanics,” by Loren Brichter. Under the IPA, Twitter needs the inventor’s permission to assert the patent for anything other than a defensive purpose. Twitter plans to use the IPA on all of their issued patents. This development is significant, as Twitter was recently granted a patent directed to the core feature of one user following another user to receive updated messages. U.S. Patent No. 8,401,009, entitled “Device independent message distribution platform”, by Jack Dorsey, Christopher Isaac Stone
Twitter hopes other companies will adopt the IPA, and releases it under a Creative Commons license. Twitter co-founder Biz Stone plans to use the IPA for his new start-up, Jelly Industries, Inc., and Lift Worldwide, Inc. plans to use the IPA for its goal tracking application.
Google recently announced an Open Patent Non-Assertion (OPN) Pledge not to sue any user, distributor or developer of open-source software on specified patents, unless first attacked. The stated goal of the OPN Pledge is to encourage pro-competitive, defensive uses of patents to support open-source innovation. Google initially added 10 patents relating to processing large data sets, and recently added 79 patents relating to back-end cloud computing technology. Over time, Google hopes that the OPN Pledge will serve as a model for the industry and encourages other patent holders to adopt the pledge or a similar initiative.
These new defensive patent models may raise questions for companies that adopt them. The new models have yet to be reviewed by the courts, making the scope and interpretation of key clauses and terms uncertain, such as “defensive purpose.” Other questions may arise, such as: If control of the patent is with an employee inventor, what happens if the employee leaves the company, or unreasonably withholds consent, or otherwise does not cooperate with a company’s future patent objectives? Will limited ownership by the company dissuade future acquirers and prevent revenue generation from licensing fees, decreasing the value of the patent portfolio and company? Companies may wish to consult with experienced patent counsel before adopting a defensive patent model.
Maya Medeiros (maya.medeiros@nortonrosefulbright.com / +1 416.216.4823) a patent lawyer in Norton Rose Fulbright Toronto intellectual property practice.
