Three patents in question by IBM as Twitter gears up for IPO
IBM, one of the world's largest owners in tech patents has claimed in a letter to Twitter that the social network has violated three of their patents. This update comes in the latest SEC filing from Twitter on the way to their IPO. Right now the IPO estimate is around $24 a share and is likely to rise before the IPO opens. While it appears that IBM is seeking a payout or a stock deal, Twitter isn't about to just concede to the tech giant as they indicated in the S-1 filing. "We believe we have meritorious defenses to IBM’s allegations, 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."
Meanwhile, IBM is no stranger to claiming patent infringement by a social media company (and being proven correct). After all, with so many patents in their patent bank, it is no wonder that eventually some would be infringed upon. IBM has sold many patents to Facebook in the past, 750 of them to be exact, in order for Facebook to keep Yahoo at bay while they floated into their IPO. While the situation is different this time around, Twitter would be wise to appease the throne and throw IBM a bone. After all, it is only three patents.
The specific patents are: U.S. Patent No. 6,957,224: Efficient retrieval of uniform resource locators; U.S. Patent No. 7,072,849: Method for presenting advertising in an interactive service; and U.S. Patent No. 7,099,862: Programmatic discovery of common contacts. As Twitter becomes more of a player in the tech space, expanding their services beyond just a sounding board for soapbox enabled blowhards, they may find themselves in the middle of inevitable legal claims and IP claims.
While IBM has not filed this with the court system as of yet, there are many smaller companies out there that are salivating at the prospect of Twitter violating one of their patents as they expand. As to the question of why now and not earlier, IBM would not want to waste money going after a failing social media company for patent infringement. Now that Twitter is clearly successful, it's not only worth the money, but could be profitable. We'll see how this plays out as the IPO nears.