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Out-Law News 1 min. read

Twitter buys IBM patents following infringement claims

Twitter has purchased more than 900 patents held by IBM and has entered into a separate cross-licensing agreement with the computing giant, the two businesses have announced.

Last year the social media company confirmed, in a document submitted to US regulator the Securities and Exchange Commission (SEC), that IBM had accused it of infringing three of its patents. In its filing, Twitter said that IBM had, however, invited it to "negotiate a business resolution of the allegations".

The two companies have now reached a patent agreement, although the financial terms of the deal has not been disclosed.

"This acquisition of patents from IBM and licensing agreement provides us with greater intellectual property protection and gives us freedom of action to innovate on behalf of all those who use our service," Ben Lee, Twitter's legal director, said in a statement.

Ken King, general manager of intellectual property for IBM, added: "We are pleased to reach this agreement with Twitter because it illustrates the value of patented IBM inventions and demonstrates our commitment to licensing access to our broad patent portfolio. We look forward to a productive relationship with Twitter in the future."

Intellectual property law expert Deborah Bould of Pinsent Masons, the law firm behind Out-Law.com, said that the deal appears to make sense for both Twitter and IBM.

"In the fast-moving world of technology it has become increasingly important for market innovators to own, or have access to, a large portfolio of patents," Bould said. "Significant patent holdings help tech companies control how their inventions are commercialised.  Patent infringement assertions can also be used aggressively, as leverage in disputes with rivals.”

"IBM has an extensive patent portfolio. As it seeks to refocus its business on core strengths, IBM will be happy to realise some value from patented technology that it was perhaps no longer using, as well as making savings on the administrative costs of maintaining those patents. On the other side, Twitter will also be pleased to have added significant bulk to its own small patent portfolio. Twitter identified the potential for significant cost and disruption to its business as a result of adverse intellectual property rights infringement claims in an SEC filing made before its IPO,” she said.

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