IBM and Twitter announced that in December Twitter acquired more than 900 patents from IBM and that the companies entered into a patent cross-license agreement.
Financial terms of the agreement were not disclosed. However, the agreement demonstrates that IBM's vast portfolio of more than 41,000 U.S. patents has value for its clients, partners and other companies—including Facebook and Google—that have turned to IBM for access to patented inventions that will enable them to innovate and freely conduct their businesses.
"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," said Ben Lee, legal director for Twitter, in a statement.
Patents are a critical link between enabling innovation and furthering IBM's ability to serve clients and strike patent and licensing deals with companies like Twitter. Investing in R&D and patents demonstrates and delivers a measurable return to IBM's business and shareholders. The patent agreement with Twitter is consistent with IBM's commitment to licensing access to its patents and intellectual property to other companies in order to encourage and enable innovation across many areas, such as semiconductors, software, systems and more. IBM's commitment to investing around $6 billion in R&D annually produces thousands of patented inventions each year. IBM received a record 6,809 U.S. patents in 2013.
"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," Ken King, general manager of intellectual property for IBM, said in a statement.
Over past 5 years (2009-2013), IBM generated more than $5 billion in intellectual property income—a fundamental part of the company's strategy and one of the financial benefits of its consistent investment in R&D.
For instance, in July 2011, Google acquired more than 1,000 patents from IBM in a move to bolster its patent portfolio as the search giant girds for battle over Android. The SEO by the Sea blog initially reported that Google recorded the assignment of 1,029 granted patents from IBM covering a range of topics, including relational databases, object-oriented programming and business processes. The patents also cover a range of things, from "the fabrication and architecture of memory and microprocessing chips, to other areas of computer architecture, including servers and routers as well," said Bill Slawski, author of the SEO by the Sea blog.