Yahoo Sues Facebook Over Patents

by Jordan Richardson on March 13, 2012

Yahoo Inc. is suing Facebook Inc. over 10 patents that include advertising methods and systems.

The suit was filed in San Jose and is conveniently timed on the heels of Facebook’s recent announcement pertaining to its initial public filing. The lawsuit, 19 pages in length, pretty much puts Facebook on the hook for everything from its news feed to its privacy settings.

“Facebook’s entire social network model, which allows users to create profile for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” says Yahoo’s claim.

According to the suit, Facebook has been “free riding” in intellectual property belonging to Yahoo and it has gone past the point that simple royalties will suffice. Yahoo is out for blood and wants triple damages out of Facebook and it wants the social networking giant to stop using the goods.

The core of the suit essentially alleges that Yahoo “was there first” with respect to the various patents.

According to multiple sources, new Yahoo CEO Scott Thompson is the impetus behind this litigious charge. The aggressiveness of it could be termed a last grasp at the brass ring for Yahoo, a company that has seen its fortunes fade over the years while other companies have pushed onward and upward.

The move is akin to what Yahoo did when Google was filing its own IPO, in fact. Yahoo went after Google for allegedly infringing on search patents from the Overture acquisition. The case was settled 10 days before the Google IPO and Yahoo was blessed with several million more shares.

This time around, the stakes are higher. If Yahoo is successful in the suit, the aftermath could damage the IPO for Facebook significantly. What’s more, Yahoo could grab itself a nice healthy chunk of that pre-IPO stock and throw a monkey wrench in the proceedings. Yahoo may be viewed as a litigious worm of a company looking to solidify a reputation not as a tech innovator but as a Johnny-come-lately with a grudge, but if the shoe fits…

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions,” said Facebook in a statement.

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