Yahoo was licensing patents Facebook bought from IBM (rumor)

Yahoo was licensing patents Facebook bought from IBM (rumor)

Summary: Some of the 750 patents Facebook acquired from IBM were reportedly being licensed by Yahoo. If true, it means Facebook may have a new bargaining chip in its patent battle with Yahoo.

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Here's an interesting twist to the story. Facebook recently acquired some 750 patents from IBM (this started as a rumor that was later confirmed by Facebook itself). The patents cover various technologies such as software and networking, or so the rumor goes. Another rumor, however, suggests that the patents were purchased by Facebook not just to bolster its own portfolio, but because Yahoo was licensing some of them from IBM, according to a source cited by Law360.

Here's what I wrote in my previous article: "It's not clear how much Facebook paid for the patents, but I wouldn't be surprised if it was several hundreds of millions of dollars. The intellectual property may significantly help Menlo Park counter recent allegations of patent infringement. To get the help it needs, the social networking giant went straight to the source: IBM has topped the list of U.S. patent recipients for 19 straight years."

Now I'm thinking Facebook may have paid even more, because this clearly gives it a position of power over Yahoo, assuming the online giant still needs to license the IBM patents to keep its business running. As such, Facebook may be able to leverage this new bargaining chip to get Yahoo to drop its patent infringement suit, or at least the two will figure out a way to settle. This will largely depend on what type of license agreement Yahoo had with IBM, when it expires, and so on. Either way though, this appears to be a bold move by Facebook.

Last month, Yahoo threatened Facebook with patent war. Last week, the online giant sued the social networking giant over 10 patents and the technology industry made sure to criticize Yahoo like never before.

Some say Facebook should just buy Yahoo. Others think Microsoft should come to Facebook's rescue. A recent rumor, however, points to Facebook fighting back by itself, and this is looking more and more likely.

Yahoo has thousands of patents while Facebook has 62, according to the United States Patent and Trademark Office (USPTO). Those are the ones that have been filed in each of the companies' names; both firms have more patents each, but either way Yahoo has significantly more than Facebook.

In fact, Facebook now has over 800 patents in total (in addition to the ones from IBM, it has also purchased patents from Friendster and from HP). While that's still a far cry from Yahoo (remember, the Web giant has several thousand including those it has acquired over the years), Facebook now has enough patents, and possibly key ones, that it doesn't have to just surrender everything to Yahoo.

See also:

Topics: Legal, IBM, Social Enterprise

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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5 comments
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  • Patents are now pawns in litigation chess.

    My lawyers with my patents can challenge your lawyers and your patents, and the only ones who win are the attorneys.
    matthew_maurice
  • Here is some common sense info

    If Yahoo licensed the patents from IBM already, it means that they already paid for the right to use the technology.

    What does that mean? It means that the new owner CAN'T use the patents in question as a defense against other patents.

    In other words .... this rumor is just plain ignorantly stupid.
    wackoae
    • Not entirely true

      it does depend on the time frame of the licenising, or even the wording in contracts itself.

      If Yahoo signed an agreement with IBM that would last three years, in which they renegoiated the terms with IBM every three years at renewal time, Facebook can now set the price, or even the length of the license.

      Nothing is set in stone, as it depends on what deal Yahoo signed with IBM.
      Tim Cook
      • Still unuable as a defense

        You completely ignored the fact that even if it is a timed license, the patent will not be any good as a defense for an infrangement on another license.

        Since Company A already LEGALLY licensing the patent, any attempt to use that patent in any way as a defense would be seen by the courts as an attempt for extortion and not an actual defense.
        wackoae
      • It all depends on the terms of the license.

        @wackoae unless you've read the License Agreement, [i]any[/i] conclusion is [b]mere speculation[/b], and just because something is in a License Agreement doesn't mean it's enforceable. It's all about what the lawyers can, or cannot, convince a jury and/or judge of.
        matthew_maurice