With the Twitter IPO just round the corner, the company has updated its S-1 with quite an astonishing revelation. It seems that IBM has sent a letter claiming that the social media company has infringed on at least three of its pre-existing patents. The patents in question are 6,957,224 (“Efficient retrieval of uniform resource locators”), 7,072,849 (“Method for presenting advertising in an interactive service”), and 7,099,862 (“Programmatic discover of common contacts”).
Whilst the timing of the letter is unknown it appears that IBM is looking to negotiate a business resolution of the allegations, whilst Twitter is ready to defend its corner – this proven in the raise of its IPO estimate from $17-20 to $23-25. At the same time, Twitter’s stance is neutral. “Based on our preliminary review of these patents, we believe we have meritorious defenses to IBM’s allegations, although there can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us.” writes Twitter CEO Dick Costolo in the amended S-1 filing.
Whether this will result in a minor settlement or a big courtroom battle it is hard to tell. IBM has a long history of selling off its multiple patents – most recently, to Facebook. We will have to wait and see when the Twitter IPO rolls about this week.