Twitter has received a letter from tech giant IBM claiming its social network infringes on at least three of Big Blue's patents, but the San Francisco company is confident that its imminent IPO will exceed expectations.
According to an update to Twitter's IPO filing with the Securities and Exchange Commission, IBM has invited Twitter to negotiate a "business resolution" to its patent allegations. In the meantime, Twitter has raised its IPO estimate from $17 to $20 per share to $23 to $25 per share. Reuters reports that the social networking company will close its IPO books a day early -- on Tuesday at 12:00 p.m. EST -- thanks to strong demand.
In its letter, IBM cites the three patents in question: U.S. Patent No. 6,957,224: Efficient retrieval of uniform resource locators; U.S. Patent No. 7,072,849: Method for presenting advertising in an interactive service; and U.S. Patent No. 7,099,862: Programmatic discovery of common contacts.
Twitter, which has previously pledged that it will use patents for definsive purposes only, acknowledges that this could make it more susceptible to lawsuits. "Many companies in these industries, including many of our competitors, have substantially larger patent and intellectual property portfolios than we do," reads Twitter's S-1 filing, "which could make us a target for litigation as we may not be able to assert counterclaims against parties that sue us for patent, or other intellectual property infringement."
But the company plays down this particular case. "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," the S-1 says.
One way or another, Twitter's patent pledge will likely to tested as the patent wars heat up. Last week, a company backed by Apple, Microsoft and Blackberry filed patent claims against Google, Samsung, and many more companies over the Android mobile operating system -- and it's now hinting that Facebook is the next target. Becoming a public company means answering to shareholders who may not subscribe to Twitter patent philosophy.
