Tuesday March 13 08:21 pm
Yahoo Sues Facebook for Patent Infringement
Transcript by http //www.newsy.com
BY EVAN THOMAS
ANCHOR NATHAN BYRNE
This time around, it's not a mobile technology fight — Yahoo has gone through with its threat and sued Facebook in U.S. district court.
All Things Digital reports Yahoo is suing over 10 specific patents covering advertising, privacy, social networking and the like. It claims Facebook's entire social networking model is built on this intellectual property, or IP. On top of damages, it wants an injunction that will keep Facebook from using the patents in the future.
And the suit comes right as Facebook is preparing for its IPO. All Things Digital also says this is either going to go well for Yahoo, or change its image in Silicon Valley.
"Yahoo is shaking Facebook down for much more here and with much higher stakes for both companies. If successful, Yahoo could seriously damage Facebook's initial public offering; if not, Yahoo will cement its growing reputation as a company with nothing to lose, whose value is built not on its current business, but on non-operating assets."
PaidContent says if the latter's the case, Yahoo wouldn't be alone. This isn't the first time a company has looked to score points — and cash — with its IP.
"...the aggressive IP strategy may reflect weakness on Yahoo's part. In recent years, companies have turned to their patent portfolios as a white knight of sorts to rescue them when they are getting beat up in the market place."
But CNET points out — Yahoo's a pillar of old Silicon Valley. There's a lot of weight behind this IP.
"For any mature company such as Yahoo, a company's patent portfolio is going to have enormous value--even more so when the company mentioned in the complaint actually is guilty of infringement. Not that the claims against Facebook have merit, but it's not uncommon for companies to split the difference and get on with more important things."
And Bloomberg's Cory Johnson agrees. Yahoo has a decent case.
"There appears to be some important patents that have been around for a long time, predating Facebook, held by both Yahoo and by Amazon.... What really matters is who had the first patent, how applicable it is, and how many times those earlier patents were cited to sort of create a state of the art around those patents."
The Next Web got a statement from Facebook, which is disappointed that Yahoo basically went behind its back to open the suit.
"We're disappointed that Yahoo's effort to engage with us was limited to a few short phone calls and that we continue to learn of new developments about a long-time partner through the press. We will defend ourselves vigorously against these puzzling actions."
The court filing doesn't say exactly how much cash Yahoo wants out of Facebook, only that whatever damages should be tripled "in view of the willful and deliberate nature of the infringement."