Yahoo files lawsuit against soon-to-be-public Facebook

By on March 13, 2012, 1:00 PM

Yahoo has filed a lawsuit against Facebook claiming that the company is infringing on 10 of its patents covering advertising, privacy controls, social networking, among other things. The timing is no coincidence, of course. The move comes shortly after Facebook announced plans for a record IPO that could value the company at about $100 billion. Facebook probably won't want a spotlight on their vulnerabilities as they go public and with plenty of cash at stake it may be more willing to cut a deal.

In a statement to Reuters, Facebook spokesman Jonathan Thaw said they learned of the lawsuit simultaneously with the media, adding that the social networking giant is "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."

Yahoo's new CEO, Scott Thompson, is reportedly the one driving the aggressive use of the company's patent portfolio. Many of Yahoo's long time tech staff reportedly opposed it, but while the move may cast the embattled company as desperate, its not the first time they've used litigation as a well-timed strategy.

In August 2004, less than two weeks before Google went public, Yahoo settled a patent dispute with the search giant over pay-per-click and bidding systems that give sites higher placement in Web results. Google agreed to give Yahoo 2.7 million shares of its stock and took a $201 million non-cash charge related to the transaction.

VentureBeat has broken out the 10 patents at issue in the lawsuit, along with their interpratation in plain english. Yahoo has not said whether it will bring these patent claims against other social networking companies.




User Comments: 6

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Somian said:

Patents on something as obvious as privacy settings?

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Yahoo suing for patent infringements, talk about a dark hall looking to be in the Spotlight once more.

Yahoo, do a little in-house cleanup and be worthy of the Spotlight once more. The majority of users do not care about the smut you allow in your chat rooms.

Trillionsin Trillionsin said:

cliffordcooley said:

Yahoo suing for patent infringements, talk about a dark hall looking to be in the Spotlight once more.

Yahoo, do a little in-house cleanup and be worthy of the Spotlight once more. The majority of users do not care about the smut you allow in your chat rooms.

Are you really complaining about Yahoo because of people in their chatrooms?

This seems like such an insignificant factor to base your statements on, or I could be misinterpreting what you wrote here...

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Meaning Yahoo needs to work on in-house rather than point a finger at someone else for their short comings. That was only one example of which I am personally disgusted with. It's not real people I'm complaining about.

TJGeezer said:

Yet more corporate lawfare in place of innovation. Corporate lawyers must rejoice at how their owned politicians have "fixed" the patent system. It's as big a mess as the entertainment industry's bought-and-paid-for copyright system. Lawfare - the legal specialty of the future. In the U.S., let's all thank the ex-prosecutors and future lobbyists who run Congress.

jackal2687 said:

For Yahoo, this may be perhaps the only thing keeping their heads above water as far as business goes.

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