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Twitter paid $36 million to avoid patent lawsuit with IBM

Twitter paid $36 million to avoid a patent infringement suit with IBM, according to SEC documents made publicly available on Thursday


Last month, the two companies announced they had reached an agreement that settled a 2013 claim by IBM that the microblogging site infringed on three of its patents. But the financial terms of the deal were not disclosed.

The cost of the transaction was revealed last week when the SEC published Twitter’s Form 10-K, an annual disclosure of a company’s financial performance. The document also revealed that Twitter now owns 956 patents and has another 100 patent applications pending. Before it filed its IPO in November, Twitter owned just nine patents.

The dispute first became public in October last year, when Twitter revealed in its S-1 filing that IBM had invited it to "to negotiate a business resolution of the allegations.”

In the filing, Twitter wrote: “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 patents at issue were US Patent No 6,957,224, relating to the efficient retrieval of uniform resource locators; No 7,072,849, relating to a method for presenting advertising in an interactive service; and No 7,099,862, relating to programmatic discovery of common contacts.

Under the deal announced in February, Twitter agreed to purchase more than 900 patents from IBM. The two companies also reached a cross-licensing agreement.

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