Money Matters - Simplified

Yahoo Sues Facebook Over Patent Infringements

Yahoo appears to be turning to patent licensing to revitalize its fortunes and bring its mojo back.

In what can be termed as a rare social media court battle, Yahoo is suing Facebook over patents.

Just when Facebook is moving through its IPO phase, the Internet giant has accused the social networking mammoth of violating its patents.

Last month, Yahoo had threatened stringent action, insisting the social networking giant to enter into a licensing agreement with it.

19 page lawsuit filed
In a 19-page lawsuit filed in San Jose District Court, Yahoo has alleged that Facebook is infringing 10 of its patents covering technical mechanisms that support advertising, privacy controls, news feeds and messaging services.

The Internet pioneer is seeking a ban on the use of its patents and an assessment of unspecified damages.

In a statement, California-based company said, "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.

"These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built.

The company added, "Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail."

Facebook disappointed by action
The lawsuit comes at a sensitive time for Facebook when it is just about to go public. The last thing they would have wanted at this juncture was to be dragged in a litigation battle.

Social networking innovator is disappointed by Yahoo’s move and has vowed to defend itself.

Facebook spokesman Jonathan Thaw stated, "We're disappointed that Yahoo, a long time 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."

Desperate tactics
The Web pioneer appears to be turning to patent licensing to revitalize its fortunes and bring its mojo back.

In recent years, Yahoo has endured fractious shareholders, resignation of its co-founder Jerry Yang and the departure of three other senior board members and is constantly plagued with rumors of trying to sell itself off.

Also, the company has struggled to keep pace with the faster-growing Facebook and Google.

The patent lawsuit is likely to be viewed as a desperate measure. It appears that Yahoo is trying to capitalize on Facebook’s impending first public offering on the stock market.

Yahoo had made millions of dollars from a patent settlement that it reached with Google Inc.just before the Internet search leader went public in 2004.