Patents Rethought: Khan Academy Did the Right Thing

To recap what’s happened so far:

• Audrey Watters called our attention to a patent filing by Khan Academy.
• I expressed my concerns about the continuing patent problem that we have in educational technology.
• Carl Straumsheim explained the defensive use of patents in more detail and in the process motivated me to take a look at the specifics of the patent agreement that Khan Academy signed.
• I took an initial look at said agreement, known as the Innovator’s Agreement, and concluded that it was a step in the right direction but that I still had concerns.

Since then, I had a little more time to look at the actual legal language of the agreement and reflect on the larger edupatent problem. And I’ve come to the conclusion that Khan Academy did the right thing by adopting the agreement. We should feel good about what they’ve done. And given the realities that software patents exist and defensive patents are therefore a necessary evil, we should encourage other educational patent holders to do as Khan has done and adopt the same agreement.

The Innovator’s Agreement is actually quite clever. To recap the basic idea, companies that adopt the agreement give the inventors who are named on the patent application veto power over the patent’s assertion, except in cases where the company is acting in self-defense in response to legal action against it. More than just a pledge, it is a legally binding document. (Text of the agreement is here.)

The agreement travels with the patent, so if the company sells it then the new owner will still be bound by the agreement:

Assignee acknowledges and agrees that the above promises are intended to run with the Patents and are binding on any future owner, assignee or exclusive licensee who has been given the right to enforce any claims of the Patents against third parties. Assignee covenants with Inventors that any assignment or transfer of its right, title, or interest herein will be conveyed with the promises herein as an encumbrance.

The inventors do get to pass along assertion veto rights to their heirs:

[T]he license shall pass to the heirs of an inventor in the case that the inventor is deceased[…]

But if I’m reading the whole passage on those rights correctly, they can’t pass it along in a way that would damage the original intent (like selling it to a patent troll, for example), and there is a poison pill that basically says any protection from patent assertion that the inventor has a right to confer is invalid if it is granted under duress (for example, as a settlement payment in a threatened lawsuit):

Any sublicense granted by the Inventors under this section must be without threat or additional consideration; otherwise, the sublicense will be considered void ab initio. This license to the Inventors is not assignable, although the license shall pass to the heirs of an inventor in the case that the inventor is deceased, and the inventors, individually or jointly, may appoint a representative who may act on their behalf in granting sublicenses under this section. Assignee acknowledges and agrees that the promises in section 2 and 4 are intended to benefit third parties, except in the case of an assertion of claims of the Patents authorized under section 2.

There’s even a provision that says the company that holds the patent can assert in defense of third parties that are getting sued for patent infringement:

[The Company can assert the patent] against an Entity that has filed, maintained, or voluntarily participated in a patent infringement lawsuit against another in the past ten years, so long as the Entity has not instituted the patent infringement lawsuit defensively in response to a patent litigation threat against the Entity.

Overall, the Innovator’s Agreement is a pretty potent tool for deterring patent assertion. And while I would prefer that the power granted by the agreement be in the hands of a trusted third party, the protection of this agreement is still a big step forward, particularly if it is adopted widely enough that there are many parties holding such rights to different patents. The biggest thing that is missing is a strong motivation for the patent holders to assert their patents in the defense of a third party. For example, would Big LMS Company Patent Holder assert a patent in defense of Little Ed Tech Startup if the latter were being sued by Big Textbook Company that happened to also be a major business partner of Big LMS Company Patent Holder? I doubt it. In fact, I doubt that the third-party defense is likely to ever be invoked, for a variety of reasons. Secondarily, I’m not sure that the engineers named on the patents are always the best appointed defenders of education against patent assertion.

On the other hand, the Innovator’s Agreement has several virtues that my proposal does not. First, it already exists and has been vetted by Twitter’s undoubtedly super-expensive lawyers. Second, nobody would have to create a trust, fund it, and convince various patent holders to put their faith in it.

Under the circumstances, I think Khan Academy did the right thing by adopting the Innovator’s Agreement, and I think we should all encourage other holders of education-relevant patents to do the same. And by “encourage,” I mean both praise those that do adopt it and pressure those that don’t. Schools could even go so far as to make institution of the agreement a contractual requirement. Creation of a trust is always a possibility later down the line, using the Innovator’s Agreement as a template. (Twitter was kind enough to release the text of the agreement under a Creative Commons license.)