Twitter: It’s time for patent trolls to bear the costs of frivolous lawsuits

Twitter is an engineering company, and engineers like to innovate. Twitter is also well known, and, as a result, we receive patent threats and lawsuits from time to time. Many of these are baseless, and our policy is to fight them with all our might. In fact, we have never agreed to pay to settle a patent suit.

Still, even meritless lawsuits cost us money in attorney fees, and force our engineers to spend time with lawyers rather than improving our product. For example, we recently won a case regarding U.S. Patent No. 6,408,309, entitled “Method and System for Creating an Interactive Virtual Community of Famous People.” After a trial before a jury, we managed to prove that we didn’t infringe and that the asserted claims from the patent were invalid. This patent was “invented” by a patent lawyer, Dinesh Agarwal. According to his own testimony at trial, Mr. Agarwal had no computer science or programming background, and he thought up the whole idea while he was shopping for groceries.

As Judge Posner recently observed in his article, “Why There Are Too Many Patents in America,” this patent is a perfect example of a patent issued by the Patent Office with a near-zero cost-of-invention. It cost Mr. Agarwal nothing to create his patent, and it cost him nothing to bring the lawsuit (the law firm of Friedman, Suder & Cooke took his case on contingency fee). When you hear engineers complaining that the patent system is broken, a system that last year issued a record-breaking 247,000 new patents, this is the type of thing they are talking about.

According to the American Intellectual Property Law Association (AIPLA)’s 2011 survey, an average patent lawsuit costs between $900,000 to $6,000,000 to defend. In the last month and a half alone, Twitter has received three new patent troll lawsuits. The law currently does not allow us to recover the millions of dollars in fees we spent to defend ourselves — nor does it compensate us for the time spent by many Twitter employees who worked on the case. The law only allows us to ask for certain types of minor fees, which is why the court was only able to order this particular patent troll to pay us $10,447.85.

There is a bill that was introduced in Congress several weeks ago, by Representatives Peter DeFazio and Jason Chaffetz, which would try to change that. The SHIELD Act would put the financial responsibility for these sorts of trivial patent lawsuits on the patent trolls themselves. We support efforts like the SHIELD Act to improve our current patent system.

Ben Lee is legal counsel at Twitter.