Yahoo sues Facebook over 10 patents

Yahoo's talks with Facebook have fallen apart, and the online giant has sued the social networking for patent infringement. Yahoo is attacking Facebook with 10 patents.
Written by Emil Protalinski, Contributor

As expected, Yahoo today filed a patent infringement lawsuit against Facebook. The online giant is claiming the social networking giant infringes on 10 of its patents. Yahoo is hoping to secure some portion of Facebook's revenues moving forward. "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 spokesperson told AllThingsD. "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. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail." Here are the 10 patents in question, courtesy of my colleague Zack Whittaker:

  • U.S. Patent No. 6907566, 7100111, 7373599 — "Method and system for optimum placement of advertisements on a webpage"
  • U.S. Patent No. 7668861 — "System and method to determine the validity of an interaction on a network"
  • U.S. Patent No. 7269590 — "Method and system for customizing views of information associated with a social network user"
  • U.S. Patent No. 7599935 — "Control for enabling a user to preview display of selected content based on another user's authorisation level"
  • U.S. Patent No. 7454509 — "Online playback system with community bias"
  • U.S. Patent No. 5983227 — "Dynamic page generator"
  • U.S. Patent No. 7747648 — "World modeling using a relationship network with communication channels to entities"
  • U.S. Patent No. 7406501 — "System and method for instant messaging using an e-mail protocol"

Last month, Yahoo became a patent troll by threatening Facebook with patent war. Yahoo CEO Scott Thompson is rumored to be the one to blame, in addition to the massive layoffs he's planning for the company. Now it seems that talks with Facebook have fallen apart, meaning Thompson's first big move is the filing of a massive lawsuit. Last week, Facebook updated its IPO filing, and briefly mentioned its potential legal battle with Yahoo. Menlo Park says it received a letter from Yahoo, claiming that Facebook infringes on 13 of Yahoo's patents, but today's lawsuit shows that Yahoo has reduced the number to 10. At the time, Facebook, which is investigating the claims, said Yahoo had not begun any legal action. More generally, Facebook said it expects the number of lawsuits against it to increase. Here's the relevant excerpt from today's IPO filing update:

We presently are involved in a number of lawsuits, and as we face increasing competition and gain an increasingly high profile, including in connection with our initial public offering, we expect the number of patent and other intellectual property claims against us to grow. For example, on February 27, 2012, we received a letter from Yahoo! Inc. that alleged that a number of our products infringe the claims of 13 of Yahoo's patents. We are still in the process of investigating the allegations contained in the letter. To date, Yahoo has not commenced any legal action against us, but it may do so in the future.

The United States Patent and Trademark Office (USPTO) shows just how vulnerable a new technology company can be at the hands of an old company when it comes to a patent war. Yahoo has thousands of patents while Facebook has 62, though it's hard to say if Facebook will argue Yahoo infringes on any of them. Some have said Facebook should just buy Yahoo. I have contacted Facebook and will update you if I hear back. Update at 4:45 PM PST: "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," a Facebook spokesperson said in a statement. "Once again, we learned of Yahoo's decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions." See also:

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