Feeds

IBM menaces Twitter IPO with patent infringement BOMBSHELL

Might Big Blue be a-hankerin' for some shares of the li'l blue birdie?

High performance access to file storage

In the same SEC filing in which Twitter announced that it will boost its IPO share-price range to $23 to $25, up from $17 to $20, it also revealed a bit of news that may worry potential investors: a patent contretemps launched by IBM.

"We recently received a letter from International Business Machines Corporation, or IBM, alleging that we infringe on at least three US patents held by IBM, and inviting us to negotiate a business resolution of the allegations," the amended filing, signed by Twitter CEO Richard "Dick" Costolo, states.

The protected tech IBM named in the letter are US Patents numbers 6,957,224, "Efficient retrieval of uniform resource locators"; 7,072,849, "Method for presenting advertising in an interactive service"; and 7,099,862, "Programmatic discovery of common contacts".

We can only imagine how long it took for IBM's patent-infringement legal team – undoubtedly well-staffed though it may be – to sift through Big Blue's stash of approximately eleventy-squillion patents to uncover those three potential weapons.

Twitter is putting up a brave front. "Based upon our preliminary review of these patents, we believe we have meritorious defenses to IBM's allegations," the filing states – but it then carefully hedges that confidence by continuing, "although there can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us."

In other words, it appears that Twitter is prepared to fight the allegations – maybe not in court, but at minimum in discussions with Big Blue. Interestingly, the letter from IBM was sent before Twitter's IPO homework was filed, which leads us to believe that some sort of stock deal might be part of the "business resolution" negotiations of which Twitter speaks.

It's not that Twitter was blindsided by IBM's move, however – although it's unknown if this specific claim by the corporate giant that last year was granted the most US patents for the 20th straight year was foreseen. As Twitter's filing notes, "We are currently, and expect to be in the future, party to intellectual property rights claims that are expensive and time consuming to defend, and, if resolved adversely, could have a significant impact on our business, financial condition or operating results."

As Twitter writes, "Companies in the internet, technology and media industries own large numbers of patents, copyrights, trademarks and trade secrets, and frequently enter into litigation based on allegations of infringement, misappropriation or other violations of intellectual property or other rights."

Twitter also warns potential investors in its IPO paperwork that it's not just legitimate companies with legitimate patents and legitimate cause for accusations of infringement that they need to worry about. "In addition," the filing states, "various 'non-practicing entities' that own patents and other intellectual property rights often attempt to aggressively assert claims in order to extract value from technology companies."

Yes, it's not just powerful patent-holding corporations such as IBM that Twitter needs to worry about. There are trolls in these parts, and more likely than not they'll force Twitter to cross their bridge when it comes to it. ®

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.