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Yahoo Sues Facebook Over Patents

Source: NY Times

Posted on 13 Mar 2012

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Yahoo stepped up its new feud with Facebook on Monday, suing the social-networking giant and accusing it of infringing on 10 patents tied to an array of web technologies.

According to the lawsuit, filed in Federal District Court in San Jose, Calif., Yahoo contended that Facebook had knowingly and improperly violated some of the company’s core intellectual properties. The patents, which were issued from 1999 to 2010, cover advertising, privacy, customization, social networking and messaging.

Last month, Yahoo warned Facebook that it may file suit over the patents.

Patent fights are nothing new in Silicon Valley, with the realm of smartphones having become the most visible backdrop for such battles. Google paid $12.5 billion for Motorola Mobility last year largely to get access to the phone maker’s intellectual property.

But the social-networking world has largely been spared such fights, at least until now.

In its complaint, Yahoo seeks to use even the words of Facebook cofounder Mark Zuckerberg against his company. It argues that Mr. Zuckerberg has conceded that Facebook isn’t novel, but rather built on predecessors’ innovations.
From the complaint:

He has stated, “The thing that’s been really surprising about the evolution of Facebook is — I think then and I think now — that if we didn’t do this someone else would have done it.” In Mr. Zuckerberg’s view, “Getting there first is not what it’s all about.”

Yahoo’s fight comes amid a difficult time for the Web pioneer, which appointed a new chief executive only two months ago. The company has been beset on a number of fronts, including struggles to improve its advertising revenue and to beat back competition from the likes of Google and, yes, Facebook.

Yahoo has shared a number of important business bonds with Facebook, including by integrating the social network’s popular news activity feature, into its own sites. The net effect had been to bolster Yahoo’s traffic from Facebook users by about 300 percent from September to December alone, Yahoo has said previously.

Yet such ties are likely to fray in a prolonged court battle. Yahoo appears to be aiming at Facebook at a particularly delicate point, given that its upstart rival is seeking to go public in one of the most anticipated stock sales of the last decade.

“Yahoo has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed,” a Yahoo spokesman said in a statement. “Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

Yahoo is seeking an unspecified amount of damages, and further requests that any such amount be tripled “in view of the willful and deliberate nature of the infringement.”

A Facebook spokesman said in a statement: “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.”