Twitter gained 2.1% to $64.77 and IBM fell 0.6% to $176.53 in midday trading.
The sale comes with a cross-licensing agreement that will let IBM continue to use the technology outlined in the patents. The deal ends a dispute between the two companies over the patents that IBM believed Twitter was infringing.
"This acquisition of patents from IBM and licensing agreement provides us with greater intellectual property protection and gives us freedom of action to innovate on behalf of all those who use our service," Twitter legal director Ben Lee said in a statement.
The patent deal greatly increases the size of Twitter's patent portfolio. The social networker owned nine U.S. patents with 95 patents pending as of Sept. 30. With its Inventor's Patent Agreement, the company has promised it won't use patents its engineers and designers create for "offensive litigation" without the creators' consent.
IBM is consistently granted to most U.S. patents every year for the past 20 years.
TheStreet Ratings team rates INTL BUSINESS MACHINES CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTL BUSINESS MACHINES CORP (IBM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, good cash flow from operations, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."