IBM has issued a letter to Twitter, which could go public by the end of the week, claiming it has infringed on three patents held by IBM in the United States.
According to TechCrunch, in the letter IBM asks the social media giant to negotiate a business resolution of the allegations.
Twitter has however written saying it intends to put up a defence against this claims as IBM seeks a settlement.
“We believe we have meritorious defences 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,” Twitter writes.
IBM cites the following patents in its letter: 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 admits many of its competitors have a larger patent and intellectual property portfolio, making it a target for related litigation.
“In addition, various ‘non-practicing entities’ that own patents and other intellectual property rights often attempt to aggressively assert claims in order to extract value from technology companies,” Twitter said.
Experts however pour cold water on IBM’s allegations, saying it is unlikely the giant multinational would file a suit.
Meanwhile Twitter has raised its IPO estimates to US$23-US$25 per share, up from the previous US$17-US$20 as the company expects a strong turnout when it lists its 70 million shares.
With the new price, this means Twitter could hit US$2 billion if an overallotment option of 10.5 million shares is used.
Reuters quotes sources involved in the IPO who say the strong demand from institutional investors could affect the final price with a higher share price than the new range announced today.
HumanIPO reported the IPO is more likely to be oversubscribed with a majority of investors willing to hold on to the equities for the long run rather than for snatch quick returns.
