Twitter is getting all sort of high-fives and hosanna’s from techland for its new patent policy. In essence, the company vowed to cede control of patents to the employees who created them and only to use them for defensive purposes. Though both of those policies turn out to be a bit squishier than at first glance.
Whatever happens in actual practice, this move is more symbolic than practical. Yes, it’s a wonderful gesture. And it’s a way of trying to make a statement that Silicon Valley’s patent wars have gotten completely out of hand. But beyond that it’s wishful thinking if you believe many companies are going to follow suit.
Simply put, any public company that made such a move would be crucified by its shareholders. Indeed, it’s quite likely that even a private company like Twitter probably shaved a bit off its valuation today. And should it ever get serious about an IPO, you can bet it will be grilled on this topic by institutional investors.
It’s not that I don’t applaud Twitter for doing what it did. The escalation of litigation surrounding patents among Silicon Valley companies is sickening. Whatever feelings we once attached to the word “patent” have now been completely obliterated. There’s no getting around the fact that patent is one of the dirtiest words in Silicon Valley.
It’s fashionable to blame patent trolls and the federal government for these problems. But the fact is that the problem is largely one created by our very largest and most successful tech companies. They have massively expanded their IP legal teams, and they now file a patent just about every time an engineer sneezes. In a sense, many of them are choking on the very types of wobbly patents they’ve been shoveling out the door.
Yes, the U.S. Patent and Trade Office approves questionable patents. But in fairness, you have to recognize that the office has been completely flooded by applications from companies for all sorts of inane items. Patents have become a casualty of a legal arms race, pure and simple. Yes, Steve Jobs was a genius. But do we really think he was worthy of 317 patents? Really?
As big companies have turned patents into weapons of mass destruction, their value has become massively inflated. We saw this in the bidding war for Nortel’s patents. And we saw it this month when Microsoft agreed to pay $1 billion for some of AOL’s patents.
Patents are now assets, plain and simple. And anyone who restricts their own patents in any way, or offers to unilaterally back down, is essentially reducing the value of those assets. And if you happen to be public, it’s quite likely that you’d open yourself to legal problems of another kind in the form of shareholder lawsuits.
I’m not saying that’s right, or fair. It’s sad and depressing to see what is best about the valley, innovation, twisted and bent for darker purposes like legal jousting with competitors.
Twitter made a nice gesture today, but one that will have no impact on the current patent wars. It’s an arena where the demands of business have left no room for ideals.