Yahoo Threatens Facebook with Patent Infringement Claims


In one of the first patent fights within the social media arena, Yahoo claims that 10-20 of its technology patents are currently being infringed by Facebook. The New York Times DealBook reports that Yahoo has alerted Facebook that it will be forced to engage in a patent infringement lawsuit unless Facebook agrees to enter a patent licensing agreement. The patents in question cover technologies relating to advertising, the personalization of Web sites, social networking and messaging.

The company may have lost its luster in comparison to its online peers like Google, Facebook, and Twitter, but Yahoo’s intellectual property may in fact be peerless. It appears that of the patents in question, some of them include one of the first patents ever awarded to Yahoo, and their patent portfolio isn’t one to just shrug off. According to IEEE Spectrum, a technology publication, it ranked Yahoo’s patent portfolio in 2011 as being the most valuable among those for communications and Internet services.

Not only does Yahoo have an impressive intellectual property catalogue but it appears that the company’s timing is equally as troublesome for Facebook, as their future IPO is hotly monitored. According to DealBook,

It is unclear when Yahoo and Facebook began discussions over possible infringement of the former’s intellectual property. But Yahoo’s saber-rattling happens to come at a delicate time for Facebook, which is preparing to go public this spring in one of the most anticipated market debuts in years.

Yahoo talked up the value of its more than 1,000 patents late last year, amid a strategic review that included potentially selling a stake to outside investors.

The patents at issue include some of the first awarded to Yahoo, people close to the company said. It also gained a trove of intellectual property from the 2003 purchase of Overture Services, a search-advertising company that sued companies like Google over patent issues.

In its statement, Yahoo said that other unspecified Web technology companies have already licensed some of the patents in question.

It will be interesting to see which will come first: an actual lawsuit/settlement between Yahoo and Facebook or Facebook’s initial public offering.

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