twitter/innovators-patent-agreement

Innovators Patent Agreement (IPA)

Innovators Patent Agreement

The Innovators Patent Agreement (IPA) is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from a company to its employees that patents can only be used for defensive purposes. The company will not use the patents in offensive litigation without the permission of the inventors. This control flows with the patents, so if the company sells the patents to others, the assignee can only use the patents as the inventor intended.

Quick Start / Deployment

DISCLAIMER: The IPA and the supporting materials are available for informational purposes only and are NOT for the purpose of providing legal advice. You should contact a lawyer if you want to get advice with respect to any particular aspect of the IPA or if you want to implement it.

1. Modify your employee agreements.

You should have a standard employee agreement that deals with inventions and that includes a provision requiring that employees assign their inventions to the company. You can include the following sentence in your employee agreement dealing with invention assignments:

The Company and I agree, notwithstanding any other provision of this agreement, that any invention to be assigned by me to the Company under this agreement shall be assigned in accordance with the Innovator’s Patent Agreement (“IPA”) and, if a patent application is filed on any invention, that a copy of the executed IPA shall be recorded with the assignment branch of the patent office where the patent application is filed.

2. Use the IPA with any patents you file.

Whenever you file a patent application, it is typical to have the inventor sign a patent assignment agreement which specifically assigns the patent application to the company. Instead of using whatever form your patent agent uses, use the IPA instead.

The IPA should be signed by both the inventor and a corporate representative.

After the IPA is signed, you should make sure that the document is recorded with the assignment branch of the Patent Office. This puts the whole world on notice that this patent application has been assigned in accordance with the provisions of the IPA.

FAQ

For Companies | For Inventors/Engineers | For Investors

For Companies:

Q. How does the IPA work?

A. The IPA includes a commitment from your company to your employees that their patents will be used for defensive purposes and will not be used in offensive litigation without their permission. What’s more, this control flows with the patents, so if the patents were sold to others, they could only use them as the inventor intended.

Q: What does “defensive purposes” mean?

A: Defensive purposes means that you can defend yourself should another party try to initiate patent litigation against you or your customers or users. Under the IPA, it also means that you can use these patents against anyone who has sued others offensively in the past (up to ten years).

Q: How is this actually in the company’s best interest, given how litigious the patent area is?

A: The IPA strikes a balance here. Your company keeps the capability to use patents defensively if someone sues you, or you have the option of pursuing legal action if you have the consent of the inventor. You do not keep the capability to seek patent licensing fees from others who have not used patents offensively. Nor can you sell your patents to someone who will seek patent licensing fees from them.

Q: So then why bother obtaining patents at all, if you’re going to let anyone use your technology?

A: Under the IPA, the principal value of patents is defensive. Patents are still important because you are reserving the ability to defend yourself with them while empowering your engineers by giving them a greater stake in the patent process.

Q: Doesn’t the IPA destroy corporate value?

A: We recommend that you discuss the IPA with your board of directors to understand the impact of adopting the IPA on corporate value. Whether the IPA may be right for your organization depends on a lot of factors, including whether your business model is based on generating revenue from patent licensing fees or whether it is based on competing by innovating and providing the best product or service.

For Inventors/Engineers:

Q: What does this IPA mean for me, as an engineer/designer?

A: The IPA is a new way to do patent assignment that keeps some control in the hands of engineers and designers. When you assign a patent to an entity using the IPA, your patent can only be used for defensive purposes and will not be used in offensive litigation without your permission. With the IPA, you can be assured that your patents will be used only as a shield rather than as a weapon.

Q: What stops a company from simply going back on its promises to me under the IPA?

A: With the IPA, the inventors receive the ability to license anyone who has been improperly sued in violation of the IPA. So, even if the company changes its mind, you have the ability to hold them accountable under the IPA. Even if a patent monetizer purchases the patent and tries to argue that they are not bound by the restrictions of the IPA, you can protect anyone sued by the patent monetizers by licensing them in accordance with the IPA. We believe this license will survive any transfer of the patents.

Q: What if I work for a company that doesn’t use the IPA?

A: Is your company saying that it is filing the patent for defensive purposes? If it is, ask your company representative whether they are willing to put that in writing by using the IPA. If they are unwilling to do put their promise in writing, you may want to ask yourself why (and consider working someplace else #jointheflock).

Note that even if the company issues a pledge that the patent will not be asserted offensively, that pledge may not be enforceable if there is a change in management or if the company goes through bankruptcy. Even if you work at a company that promises you that they will not use patents offensively, this may not prevent the company from later being liquidated so that the patents end up in the hands of entities that seek to monetize them.

If your company is willing to use the IPA, even if only with you or only for specific inventions, please let us know at [email protected].

For Investors:

Q: Why should I encourage the startups that I invest in to use the IPA?

A: First, the IPA affords flexibility for a small startup. The IPA allows unrestricted use of the patents if the inventors consent. So, a small startup can still use its IPA patents offensively if the inventors (who are likely to be founders of the startup) agree that it is strategically necessary for the sake of the startup.

Second, the IPA limits the negative consequences if the startup fails. Without the IPA, when a startup fails, the patents survive to become fodder for patent monetizers. These patent monetizers never commercialize the inventions. Rather, they feed off of these patents and can create a patent thicket for future startups. The IPA restricts such patent monetizers. Patents under the IPA cannot be used offensively against future generations of startups.

Q: Doesn’t the IPA reduce the value of the startup?

A: We recommend that you discuss the IPA with your board of directors to understand the impact of adopting the IPA on your value. Whether the IPA may be right for your organization depends on a lot of factors, including whether your business model is based on generating revenue from patent licensing fees or whether it is based on competing by innovating and providing the best product or service. Depending on the nature of your business and your long term goals, the IPA can provide significant benefits for your company.

Issues and Contributing

Have a contribution idea or want to discuss something? Please create an issue here on GitHub.

https://github.com/twitter/innovators-patent-agreement/issues

Better yet, feel free to contribute a pull request if you have an improvement to the IPA.

License

This work is licensed under a Creative Commons Attribution 3.0 Unported License

For attribution requirements:

"Innovators Patent Agreement" © 2012 Twitter, Inc, used under a Creative Commons Attribution Unported license: http://creativecommons.org/licenses/by/3.0/

innovators-patent-agreement's Issues

Should inventor in "heirs of an inventor" sentence be capitalized?

This sentence switches between Inventors as a defined term and inventors as an undefined term (emphasis added):

This license to the Inventors is not assignable, although the license shall pass to the heirs of an inventor in the case that the inventor is deceased, and the inventors, individually or jointly, may appoint a representative who may act on their behalf in granting sublicenses under this section.

As far as I can see there is no reason for this not to be the defined term in each case, but you guys would probably know better.

I think the solution is elsewhere: treat ALL patents as RANDR by requirement of law.

The current patent law was made in a time where one could actually be an inventor just making crazy contraptions in his basement/garage/barn, and was designed to make sure the inventor would be able to profit instead of being ripped off.

In the current times, giant corporations are creating countless patents, and it has been shown time and again that the patent system is in many instances simply unable to verify the 'obviousness' or prior art which would make the patents invalid.

These treasure troves of patents are also used not only to wage war, but also to stifle innovation and attempt to monopolize the market.

I think that the solution is not on voluntary agreements, but on a pivotal change in the way the law deals with patents.
The solution, I believe, is that ALL patents should be RANDR by requirement of law. That would render much of the current block product from market shenanigans obsolete, and the discussion would move on to 'how much should be charged for it'.

I propose an arbitrary upper limit of 10% (could be any other value, but not too high) of the product value when leaving the hands of the manufacturer to be reserved to share amongst patent holders.

It would be the duty of the patent holder to set how much it wants for each patent or package. If all patents involved set the cost to less than the 10%, the better for the manufacturer. If the sum of the licensing costs are more than 10%, the licensing costs for each patent are used as a weight and the 10% are divided proportionally between all patent holders.

When a component (such as a microchip) uses licensed patents and patent exhaustion applies, these patents can still be used in the calculation of patent licensing costs, to reduce the amount to be paid, but the money does not need to exchange hands, since the component (microchip in the example) producer has already paid fully for them.

It would be the duty of a component seller to inform all patents in use by its product and their status (i.e. if exhaustion or other legalities apply) to the buyer.

A system like that would greatly simplify the matters of the current patent system, and would still protect the patent holders, while also would prevent behemoth patent holders and non-practicing entities i.e. "patent trolls" from abusing their dominant position, the latter being the real problem being faced right now, which this aims to solve.

Ambiguous what "promises" are referred to

Various points in the text refer to the "promises" of Sec. 2 and Sec. 4, but it is ambiguous exactly what promises are referred to.

This could be a significant redrafting effort, but it might be worth pulling the promises into independent sections so that they can be referred to with more specificity in the rest of the document.

Inventors, or inventors, their successors, assignees, etc?

The company is extended into the future, by the phrase, "Company, on behalf of itself and its successors, transferees, and assignees (collectively “Assignee”), agrees .... "

But the inventor cannot pass on the rights they obtain.

I don't know if that is on purpose or not.

Has this been past a patent lawyer?

I'm worried that this will just create a new playing field for lawyers:

• Companies suing/threatening inventors to withdraw their claim so they can sell the patent anyway
• Expensive law suits after a company filed bankruptcy and the "assets" are bought by a patent troll who just chooses ignores this contract (their business model is pushing the law, after all) so the inventor would have to sue them

So my question is: Has a patent lawyer had a look at this?

Also keep in mind that everything is well until the patent becomes a multi-billion dollar product at which time greed takes over. What are the other loop holes of this contract? How can it be abused?

ihiaalshar

Love

Clarify attribution requirement

The CC Attribution 3.0 Unported license requires that the end-user "must attribute the work in the manner specified by the author or licensor," but I don't see the attribution requirement specified anywhere in the current version.

2(b) defines "defensively" differently; should use the same definition

Section 2(b) allows a "Defensive Purpose" to include asserting a patent claim against any entity that has filed a patent lawsuit, with an exception for "so long as the Entity has not instituted the patent infringement lawsuit defensively in response to a patent litigation threat against the Entity". That defines "defensively" more narrowly than the rest of this agreement does, effectively to 2(a) rather than 2(b) or 2(c). In other words, given a company that adheres to this agreement, if that company files a defensive patent lawsuit based on 2(b) or 2(c), they open themselves up to patent lawsuits from other companies that adhere to this agreement. This seems like a bug: a patent lawsuit filed for a "Defensive Purpose" in accordance with this agreement should never open a company to lawsuits from other companies following this agreement.

I'd suggest changing 2(b) to explicitly re-use the definition of "Defensive Purpose" from this agreement.

What happens upon the death of inventor?

"If Assignee needs to assert any of the Patent claims against any entity for other than a Defensive Purpose, Assignees must obtain prior written permission from all of the Inventors without additional consideration or threat."

If the inventor is no longer around, does the company then have the ability to use this for offensive (not just defensive) tactics? If that's the case, the paranoid among us may think that for a high value patent this gives the company incentive to see to it that the inventor is no longer breathing. :)

Public Disclosure of License

Most current patent licensing agreements are never published (either due to lack of public interest or non-disclosure agreements). However, many of the IPA's benefits are only realized if there is public disclosure, including a competitor's incentive to avoid triggering the section 2 clauses.

In the case of Twitter's patents, we have that confirmation. In the blog post announcing IPA, Twitter said that all of their patents "past and present" would be licensed under IPA. This leaves an obvious question about Twitter's future patents or patents by other companies utilizing IPA.

So my question is, what is the best way to inform the public that a patent is IPA-licensed? For those unfamiliar with patent assignment, the USPTO does maintain an assignment database, but it is fairly cursory and probably not well-suited for this task. (example)

Does there need to be an IPA database to publish copies of signed documents? Is this GitHub repository well suited for that database? If not, should there be a centralized or per-company database? Thoughts?

Is Inventors (and heirs) right to sublicense necessary?

Relating to section 4 - While it may feel good for inventors to be able to sublicense, is this actually necessary? And more so, does it create potential legal problems for the Inventors and heirs?

Here's one possible scenario: Company A uses the IPA and many years later sues Company B. Company B finds the Inventor, requests and receives a sublicense, then claims it now has a license. Company A continues suit and now sues Inventor for granting a sublicense that they didn't have the right to grant because unbeknownst to Inventor, Company B had sued a supplier of Company A on another issue so Company A was suing for a Defensive Purpose. Add a layer of complexity if there is a question if the "Defensive Purpose" test was really met. And another layer of complexity if Inventor's heir is the one doing the assigning and has no idea what the patent is, what it relates to, or even what they were doing after being sweet talked by Company B's lawyers.

Two comments:

1. What if we modified section 2 to nullify the assignment if patent is used for other than a Defensive Purpose? So the company not only agrees not to sue, but the patent reverts back to the Inventor or maybe is in public domain (i.e. it is no longer assigned to the company) if the Company sues except for Defensive Purpose. That allows Company B to challenge Company A's suit on the grounds that the patent assignment is no longer valid due to Company A's actions. And both of their lawyers (and a court) will figure it out without involving the Inventor or worse, an heir, who may now want their own legal counsel and have to pay for it themselves since their interests are no longer concurrent with Company A or Company B.

2. Separate from Inventor sublicensing, is the heir clause necessary? For practical purposes with the software patents we are talking about, by the time most inventors die, the patent will have expired (I appreciate that in the case of an untimely death that is not true). Further, having the onus of tracking down an heir is difficult or impossible if the estate isn't settled in probate, the heir might not even know they inherited this right, and that heir is now put in a position that they probably don't want to be in. So are Inventors gaining anything from this? The alternative is to allow the assignment right to lapse with the Inventor's death. Given that many patents now have multiple Inventors, in practice that means the surviving Inventors can still sublicense it. If item 1 makes sense, then the entire section 4 becomes unnecessary.

I'll make a fork and edit if this seems like a good approach.

Fix Twitter's Standing to Sue

Under U.S. law, a party that wants to sue for patent infringement in its own name needs to own all substantial rights in the asserted patent. The current version of the IPA arguably fails to convey to Twitter all substantial rights in the assigned patents because it does not convey the right to sue non-defensively (a substantial right).

What this means in practical terms is that in order to sue (for a defensive or non-defensive purpose), Twitter will have to join one or more inventors as participants in any lawsuit that it files under the assigned patents. The current version of the IPA, especially Section 3, does not explicitly require inventors to take all steps necessary to effect his or her participation in suits that Twitter can pursue without the inventor's consent pursuant to Section 2. If Section 3 is interpreted in a manner that does not obligate the inventor to participate in lawsuits Twitter files for a Defensive Purpose, then Twitter will need to secure the inventor's participation at the time the lawsuit is filed. Otherwise, Twitter's suit will be dismissed for lack of standing.

To fix this, consider adding language to Section 3 that says that the inventor agrees, when requested and without further consideration, to take all steps necessary to effect his or her joinder as a party to any lawsuit brought by Twitter for a Defensive Purpose as set forth in Section 2, or two otherwise cure any defect in standing that may arise in a lawsuit brought for a Defensive Purpose. With this language in place, a court is likely to add the inventor as party to a lawsuit brought for a defensive purpose, even if the inventor, after signing the IPA, does not agree to participate in the lawsuit.

Fix Twitter

Resale of patent rights is neither forbidden nor protected

The Company could easily create an unrelated shell company, sell the patent rights for $1, and have that company use the patent offensively. Offering the Inventors right-of-refusal on sale of this right would prevent that.

Additionally, the Company could sell the patent rights (along with the rest of the company or alone) for a large sum. The Inventors would probably not have the means to execute their right-of-refusal, so a separate clause granting them 50% of the sale price (of the patent rights alone, or itemized if bundled) would disincentivize such a sale.

Section 2(a) unnecessarily uses term "intellectual property"

Section 2(a) in the IPA unnecessarily uses the term "intellectual property lawsuit" in a way that does not seem to add anything to the clearer statement "patent or copyright lawsuit".

Given that "intellectual property" doesn't provide any particular benefit in this statement, and that there are potential problems with the term, especially down the road as many people - of which it seems that Twitter is a part - push for reform in how copyrights and patents are handled in the US (see http://techliberation.com/2006/11/21/why-i-dont-say-intellectual-property-and-you-shouldnt-either/ for a non-Richard-Stallman argument against the term), it seems to me that that the agreement would be just as effective, clearer, and of more long-term benefit if section 2(a) listed the specific bodies of law under which defensive patent use is justified rather than the vague, catch-all term.

Updated status?

Curious if there is any updated status on this project? I'd be happy to work through issues with some folks to see if we can get to a good point to start using the IPA. Thanks.

Son (or Daughter) of Twitter

Am I missing something. Or have you effectively given Twitter employees the right to go down the street and create Son (or Daughter) of Twitter, at least with respect to patents. If that is the case, I can't imagine that your investors would be pleased with this development. Parenthetically, I note that there are other statutory laws that protect "know how" such as trade-secret laws and California's Inventor's Rights Law (California Labor Code Sections 2870-2872). But a lurking issue with respect to enforcement of such laws is whether the know-how at issue is general knowledge which cannot be protected or specific knowledge which can be protected. For further background on this point, see Gary Becker's economic treatise on human capital. Confidentiality and non-disclosure agreements must also address this lurking issue in some fashion. One of the nice things about patents is that they tend resolve such lurking issues.

Can we have clarification regarding what "Defensive" means?

I'm having trouble determining what might cause a "Defensive" action.

For instance, say I create a library that uses GPL. I discover that a IPA holder uses it, but fails to publish the code/include copyright statement/etc. If I sought correction, would that trigger a "Defensive" action of being sued for any patent related content my library (or other libraries I may have authored) may contain?

The above is just one potential non-patent related scenario that could trigger the defense mechanism. I can easily imagine others.

Patent Troll who copies to provoke patent infringement claim

I'm a Troll. I buy a company with a IPA-based patent portfolio. The company is on last fumes, but I keep it alive (just). I also pay the ongoing patent fees to keep their patents valid.

My goal of buying this company is to sue a much bigger company with huge valution and profits. So I copy the business of the bigger company and rub their faces in it in every way I can. I am provoking an infringement claim. I happily sell my infringing software to anyone who wants it, including the competitors of the bigger company. I indeminify my customers against patent infringement. Eventually the bigger company gets irritated and goes after someone. Eventually it's me because of the indemnification.

So now I pull out my IPA-based patents defensively. To defend against someone infringing my inventions.

Or am I missing something?

2(b)

Two quick thoughts.

1. Just some housekeeping - Shouldn't there be a "The" before Company at the start of section 2, or perhaps square bracket [Company] to indicate an insertion rather than internal reference?
2. Section 2(b) is so broad that it might undermine the remainder of the agreement - how many companies have not pursued their rights against any other company at all over the last 10 years? Are you implying that anyone who volunteers to defend their IPR is tainted by that fact and thus a "patent combatant"? Seems a little OTT no?