Twitter SEC Filing Reveals Issues Faced by all High-Tech Companies

Twitter SEC Filing Reveals Issues Faced by all High-Tech Companies



Twitter’s SEC filing for their initial public offering
(IPO) were recently released. Within the filing there are several interesting
issues related to their intellectual property that were identified by Twitter as
potentially reducing the value of their products, services and brand (and
ultimately the value of their shares). The two issues we will focus on are with
respect to their trademarks and their patents.



With respect to trademarks Twitter identifies the concern
that their trade-marks may become generic  – especially with respect to the term ‘Tweet’.
In the SEC filing Twitter notes that:

there is a risk that the word “Tweet” could become so commonly used
that it becomes synonymous with any short comment posted publicly on the
Internet, and if this happens, we could lose protection of this trademark.


This concern arises since Twitter would have significant
difficulty restricting the use of the word ‘tweet’ from being used outside of its
original context on Twitter.



It seems unlikely that the word ‘Tweet’ would become
synonymous with any short comment posted online. Presently people make a
distinction between what they post online in similar forums such as Facebook.
At the same time genericide – which occurs when a trademark is used synonymously
with the wares/services with which it is associated- is a constant concern for
trademark owners  especially when the
trademarks are associated with very successful brands. Examples of genericization
include ESCALATOR and LINOLEUM – former trademarks which are now everyday terms
for escalating devices and floor coverings.



The filing notes that, as of June 30, 2013 Twitter holds
6 issued US patents and approximately 80 patent applications in the US and
abroad. The filing also notes that Twitter has entered into what they refer to
as the Innovator’s
Patent Agreement (IPA)
which limits their ability to prevent infringement
of their patents. This limitation is only to the extent that they can only
assert their patents defensively.


The filing also notes that they are currently involved in
intellectual property litigation and that they expect to be involved in patent
litigation in the future. As a successful high profile technology company they
acknowledge that they are a target for claims. For example Twitter
faces a lawsuit from IBM Corp.
for infringement of three of its patents.
The IBM lawsuit identifies three US patents – 6,957,224, 7,072,849 and


US Patent 6,957,224 is for ‘Efficient Retrieval of
Uniform Resource Locators’ with claim 1 appearing as:

1. A method of providing links to remotely located information in a
network of remotely connected computers, said method comprising:

a) associating a shorthand link to each of a plurality of uniform
resource locators (URLs) by

i) requesting registration of a URL;

ii) selecting an unused key; and

iii) pairing said selected key with said URL as a shorthand link;

b) logging associated shorthand links in a registry database;

c) searching said registry database for a shorthand link associated
with an URL responsive to selection of said shorthand link; and

d) for each found said shorthand link, fetching said associated URL.


US Patent 7,072,849 is a patent for a ‘Method for
preserving advertising in an interactive service’. Claim 1 reads:

1. A method for presenting advertising obtained from a computer
network, the network including a multiplicity of user reception systems at
which respective users can request applications, from the network, that include
interactive services, the respective reception systems including a monitor at
which at least the visual portion of the applications can be presented as one
or more screens of display, the method comprising the steps of:

a. structuring applications so that they may be presented, through the
network, at a first portion of one or more screens of display; and

b. structuring advertising in a manner compatible to that of the
applications so that it may be presented, through the network, at a second
portion of one or more screens of display concurrently with applications,
wherein structuring the advertising includes configuring the advertising as
objects that include advertising data and;

c. selectively storing advertising objects at a store established at
the reception system.


US Patent 7,099,862 is a patent for ‘Programmatic discovery
of common contacts’. Claim 1 of the patent reads:

1. A computerized method of generating a list of common contacts,
comprising the steps of:

exchanging at least two contact lists over a physical communications
link, wherein each contact list is stored in a distinct database and defines a
distinct set different from the other and corresponds to a different user;

comparing contacts in said exchanged contact lists to identify matching
contacts; and,

generating and storing in a common contacts database a contact list
defining yet another distinct set and containing said matched contacts.




The IBM filing appears timed to extract a quick
settlement from Twitter in order to avoid any potential financial impact for
their IPO. While it is unclear specifically how Twitter is infringing the
patents it will be interesting to see if the fight makes its way to court or
whether IBM’s apparent strategy to extract a quick settlement is successful.


Twitter has a unique patent strategy that they have
implemented via their IPA agreement with all employees. In this agreement
Twitter has promised employees that their work will never be used in offensive
litigation but only from a defensive perspective. The employee retains a moral
right in their patent so that they may only be used as the inventor
It will be interesting to see whether the implementation of an
IPA causes reluctance on the part of investors.