Twitter Vs. Patent Trolls

This story is interesting.  Twitter took an unusual step.  They put an unusual clause in their employee agreement.  That clause guarantees that none of Twitter’s patents can ever be used by a patent troll, even if Twitter goes bankrupt and sells them.

The correct answer is “Intellectual property is not property.”  Patent lawsuits have become a huge drain on the productive sector of the economy.  Almost any successful business will be ion the receiving end of a patent lawsuit.

A patent troll has a call option on any successful business.  If the business fails, the patent troll won’t bother suing.  If the business is successful, then the patent troll files a lawsuit.  The “justice” system is unable to distinguish valid claims from frivolous ones.  If you have a vague patent that might apply, go ahead and sue.  Maybe you’ll win the lottery.  Maybe the victim will settle instead of paying legal fees and risking losing.

Another problem is the way patent damages are calculated.  The formula is “% of total sales” and not “% of total sales, adjusted for the importance of that feature”.  If a feature is only 0.00001% of my product, I can face 10%-25%+ damages in a patent lawsuit.

A pro-State troll says “IP belongs to the inventor.  It can be bought and sold just like any other property.”  The fallacy is that it takes a lot of money to get a patent.  In practice, all patents are owned by large corporations.  Most employment contracts say “Anything you invent while working here belongs to us.”

How do patent trolls wind up with patents?  Sometimes, the patent troll pays people to file for patents.  One example is “Intellectual Ventures”.  Failed startups sell their patents to patent trolls.

Here is an example,  When a VC funds a startup, he gets “liquidation preference”.  That means “If the startup is liquidated at a loss, the VC gets paid first before anyone else.”  Suppose a startup has a patent, but fails.  The VC has a practically worthless shell.  The VC sells the shell and “worthless” patents to a patent troll, for $25k.  The VC figures that getting $25k back is better than $0.  The patent troll buys of a lot of “worthless” patents cheaply.  After some clever lawyering, some of them are converted to patent lawsuits.

One VC funded startup X, which failed, and he sold the patent to a patent troll.  That patent troll then sued startup Y, where Y was also funded by the same VC!  Doh!

The patent troll files the lawsuit from a shell corporation, owning nothing but the single patent.  Even if the defendant wins and is awarded legal fees, there’s no assets to seize except the patent.

Twitter’s clever idea is that the employee patent assignment isn’t absolute.  The inventor retains the right to license the patent, even though Twitter owns the right to use the patent defensively.  This guarantees that the patent can never be used by a patent troll.  (However, the employee could sell that licensing right later.)

The patent office clerk is overworked.  His performance review is based on “# of patents reviewed per hour”.  If the patent clerk rejects a patent, the applicant will probably appeal, which is more work for the patent clerk.  If the patent clerk improperly approves a patent, nobody complains.  The patent office clerk thinks “If this patent was improperly approved, the legal system will throw it out later.”  The judge thinks “This patent must be valid.  Otherwise, the patent office would not have approved it.”

That’s a common State trick for shirking responsibility for evil.  Each State actor assumes that, if he makes a mistake, someone else will correct him.  Each State actor assumes that other people did their jobs properly, so that decisions of others are not carefully reviewed.  “Checks and balances” degenerates into “Don’t bother, because other people are checking.”

The patent lawsuits are decided by non-experts.  During “jury selection” in a software patent troll lawsuit, any juror who worked as a software engineer would be automatically disqualified.


The patent system is one big mess.  It’s a huge tax on the productive sector of the economy.  The “justice” system lacks the ability to tell the difference between a serious invention, and an obvious idea wrapped in a lot of fancy legal arguments.  Most software patents are obvious ideas to any good software engineer.  Unfortunately, judges are technically illiterate.

11 Responses to Twitter Vs. Patent Trolls

  1. From my small experience of using Twitter, I don’t think Twitter has done anything of great intellectual merit. Sure lots of people use Twitter. Sure Twitter spotted a hole in the market. Sure Twitter can be useful. Sure Twitter have done well.

    But there is nothing of great intellectual merit about the software powering Twitter.

    Did Twitter create a new sorting algorithm? Did Twitter create a new kind of database? Did Twitter create a new type of central processing unit? No.

    • Patents have nothing to do with intellectual merit. Patents are about abusing the legal system and legal extortion.

      Twitter needs patents, as a defense if sued. Otherwise, a patent troll would have an easier time shaking down Twitter.

      An “obvious software idea” plus some fancy legal arguments equals a patent and a patent lawsuit and a potential loss of millions of dollars.

      • That is needed only due to other flaws in Twitter’s design. For example (userid, seq_id) would be a better system to uniquely identify messages.

  2. I looked up your snowflake URL.

    You have got to be kidding me! Bull****.

    Any software developer could do that in his/her sleep.

    Obviously you don’t come from a real difficult technology background such as writing compilers or parsers.

    • Another “unique id” that would work is (user_id, timestamp) or (user_id, timestamp, message hash).

      Due to stupid system design, Twitter has a “requirement” that each message has a unique ID, and IDs are not assigned sequentially due to massive parallelism.

      Twitter at one point was using “Ruby on Rails”.

    • Well aside from the fact that I’ve written sparc assemblers and others, the problem snowflake solves is not as simple as you make it sound. Non coordinated id generation that is roughly time ordered that is horizontally scalable? I’m not convinced I could do that while dreaming. Keep in mind this isn’t a hash, its a unique id. I guess you could argue their 64bit limit is self imposed and a bad idea.

      • That was my point. Why does each twitter message need a unique 64 bit integer id? They made a stupid design decision in one place, and came up with the snowflake algorithm to work around it.

  3. Putting aside the fact that there is no such thing as ‘intellectual property’…

    Actually it is not that expensive to file a patent. You can do it yourself (if you are neat and smart) for a few hundred dollars, or with an idiot lawyer for a few thousand FRNs and a few frustrating months (if you are good at explaining your idea to a complete moron, a skill you should develop if you want to be an inventor).

    The expensive part comes after you have a patent. If someone blatantly steps on your patent, it will cost you about a million FRNs to defend it in court, every time. Assuming your business pulls $10,000,000 per year or more from that patent alone, 10% overhead is another tax. If you are like most wannabees, you are a fool to play this game.

    Once again, this is a tool for corporations to keep the little guy out of the game. Don’t even think about it. Think small and fast, and when a big corporation steals your idea (you should be so lucky – MOYIAS – most of your ideas are sh*t), have another business ready to deploy.

    • There is one common misconception. By itself, an idea is practically worthless. What matters is execution.

      I saw an amusing Craigslist ad today. It said “We have a brilliant idea for a business. We’re looking for a programmer to implement our idea. We demand you sign a NDA before we tell you anything about it. We want you to work for us for equity-only (i.e. for free) and be a minority shareholder. Once our business starts generating cashflow, we might decide to start paying you, and then you’ll be rich!” There are a couple of huge mistakes. If you have a brilliant idea for a business, it’s worth nothing if you don’t have technical ability. If you don’t have technical ability, it’s likely that your idea is stupid. If you make someone sign an NDA for an interview, right away that puts you in the “clueless twit” category. I once saw an NDA that contained a broad non-compete agreement, before they even told me any details of the business! Working for equity-only is stupid. As a minority shareholder, there’s too many ways to get cheated.

      I can imagine signing their NDA, not working with them, and then getting sued 5 years later when I do something vaguely related to their stupid idea.

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