Twitter has drafted up what they’re calling the Innovator’s Patent Agreement (IPA). With it, the company is promising to only use their patents as the actual inventor intended — read: defensively, not offensively.

More specifically:

The IPA is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from Twitter to our employees that patents can only be used for defensive purposes. We will not use the patents from employees’ inventions in offensive litigation without their permission. What’s more, this control flows with the patents, so if we sold them to others, they could only use them as the inventor intended.

Excellent news. Twitter is promising to implement the IPA later this year and says that it will apply to all their patents past and present. Yes, this means things like Loren Brichter’s pull-to-refresh (which he’s excited about).

Hopefully other startups large and small will follow Twitter’s lead here. It would be really excellent if larger companies (*cough* Yahoo *cough*) did as well, but it’s hard to see that happening given the current state of things. This is a movement that will have to start from the ground up.

Big time kudos to Twitter for this.

Dan Levine for Reuters:

For future damages, Google proposed paying Oracle 0.5 percent of Android revenue on one patent until it expires this December and 0.015 percent on a second patent until it expires in April 2018.

Oracle rejected the offer for being too low, but it’s interesting that Google (if found to be infringing on Oracle’s patents) was willing to pay a percentage of all the revenue they make from Android. This would have continued the trend of the mobile OS being a nice little business for everyone not named Google. 

For Google itself? It sure looks like a pretty poor little business given the resources they pour into it. 

Yahoo should buy them to bolster their bullshit lawsuit against Facebook. There’s probably some patent in there about the use of the color blue within online systems. 

lilly:

I’ve been thinking about the situation with Yahoo suing Facebook regarding some older patents, and observing the reactions online in blogs and on Twitter. I’ve been struck by how unanimous it’s been, and the emerging narrative that Yahoo has somehow crossed a line, that Internet companies don’t…

A smart take on the Yahoo/Facebook patent situation by John Lilly. I think he’s right, there’s more fueling the outpouring of hatred directed at Yahoo than just their patent maneuvers. BUT, I also think their maneuvers are particularly bullshit in this case. Look at what it is they’re suing Facebook over. It’s things that nearly all social services use. It’s obvious things. Things that existed before Yahoo patented them. 

Lilly is right that many other patent lawsuits are bullshit as well — particularly in software. But Yahoo is being unreasonably evil and stupid here. Why didn’t they sue, say, 5 years ago? Why aren’t they suing 200 other companies “infringing” their silly patents? 

It’s because, like Kodak, they’re dying. And these are the actions that a dying company resorts to. With Kodak, it’s obvious — they’re bankrupt. And people feel sort of sorry for them as a result. Yahoo is not bankrupt, so it’s not-so-obvious. But they are still very much dying. And they clearly know it, hence, the lawsuit.

Maybe we should feel bad for Yahoo here too. But we don’t yet. But we will someday in the not-too-distant future. The saddest thing now is that they probably really think this lawsuit will help save them. It won’t.

Fred Wilson:

I am not writing this in defense of Facebook. They can and will defend themselves. I am wrting this in outrage at Yahoo! I used to care about that company for some reason. No more. They are dead to me. Dead and gone. I hate them now.

I have yet to read anyone not in agreement that Yahoo’s move here is total bullshit. They’ve really, truly (and probably irreversibly) fucked their reputation in the tech community here. That will be fatal. 

Just remember this when they’re chopped up and sold for parts in a few years. Or — more poetically — when Facebook buys them just to turn out the lights.

This Motorola deal continues its downward spiral. It’s already a bad — some might say awful — deal from a pure business perspective. But now the seemingly lone bright spot of the deal for Google — the patents — are turning into a headache as well. 

Bloomberg only mildly touches on some of this, Daniel Eran Dilger of AppleInsider and Florian Mueller of FOSS Patents go deeper. Of note: if Google is committed to staying the course with Motorola’s patent licensing strategy (which they say they are), they’re going to find themselves enforcing patents related to H.264, the video codec that Google itself is trying to kill with WebM. 

They also may find themselves suing Apple over patents and demanding a royalty for each iPhone sold. 

The problem Google is likely to face is that if they aren’t agressive with the patents in the way that Motorola has been, how can they possibly hope to license them in the way they say they will? Who would license something when they don’t have to? This is a slippery slope. 

Bigger picture: after going on and on about the dubious patent tactics by rivals like Apple and Microsoft (and rightfully so in most cases), Google may find themselves in the same position thanks to this Motorola deal.

Charles Arthur of The Guardian makes the case for why Google will have to get aggressive with their patents, lest the Motorola deal look like one of the worst purchases in recent years — maybe ever.

Writes Arthur:

The really profitable bit of the business is the “Home” division, which makes set-top boxes, but has been bumping along at around $900m revenues for the past year. It actually makes money - only around $60m per quarter, but at least it’s profit, compared to the consistent losses in the mobile business, which has only made a profit in two of the past nine quarters. Even so, it would take 75 years for the Home business’s profit to make back the money Google paid for the business.

In other words, in purely financial terms, MMI is a dog.

On the face of it, the Motorola deal is such a bad one for Google that it makes absolutely no sense. But one level deeper, when you consider how badly Google was getting screwed in the patent bidding wars, it actually almost seems like they had to do this deal — and that Motorola chief Sanjay Jha knew it.

The problem Google faces is that this reality doesn’t translate easily to shareholders. They’ll see Motorola dragging down Google’s numbers and wonder what the hell they were thinking with the buy? 

Even if Google spins out Motorola, it will look bad. 

That’s why Arthur’s argument isn’t totally crazy here. I still doubt Google will become a patent pusher — though you could have said the same about Microsoft a couple decades ago — but I think that’s the most obvious way to show what they got out of the Motorola deal. 

Peter Burrows’ Bloomberg report points out something that’s largely been overlooked the past several months: the opposite approaches that Microsoft and Apple are taking with Android.

Microsoft is aggressively going after Android partners with the intention of forcing them to license Microsoft’s patents. Right or wrong, this effectively destroys the Android “free” proposition. 

But Apple is going after the Android partners to stop them from selling their devices. They’re not interested in licensing their patents. They want these rival devices destroyed. Period.

But given the success Microsoft has had with forcing others to license their patents, what if Apple decides to do the same thing? Kevin Rivette of 3LP Advisors argues that this is the prudent thing to do from a business perspective. 

Steve Jobs clearly didn’t care about that perspective. He wanted Android destroyed because he felt like Google copied most of their Android innovation from Apple. But Tim Cook could alter Apple’s strategy. After all, forcing Android partners to pay both Microsoft and Apple for each device sold may be a huge deterrent for many of them. 

Most speculate that Microsoft is getting about $5 from each Android device sold by partners now licensing their patents. Rivette believes Apple could get $10. The end result would be billion of dollars or, again, Android partners second-guessing going with Android. 

Also, with such deals, Apple could possibly dictate other terms for using the patents (something like: you can only use them 6 months after we do).

A dick move? Very much so. It would also be a big break in strategy by Apple. But Burrows and co. do a good job laying out why it may be inevitable. The patent-based injunctions are temporary at best — rivals figure out little tweaks to work around them. But they spend millions in court in the process, so it may be worth it to them to simply license patents from Apple. This is exactly why Microsoft is getting these royalties. 

At the very least, this is certainly fascinating to think about.