Yes, you did read the headline correctly – Facebook is being sued by Yahoo! for infringing 10 of its patents covering advertising, privacy controls and social networking.
On Monday, Yahoo! filed a complaint to the courts of Northern District of California in San Jose alleging also that Facebook built its empire on Yahoo’s innovation, the innovations for which Yahoo had to invest substantial resources in research and development over the years. which has resulted in numerous patented inventions of technology that other companies have licensed.
Here’s the official statement from Yahoo!:
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. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.
While it is the biggest player in the social networking space, Facebook is still considered a newcomer when it comes to owning patents with just 56 US patents when you compared to other big tech companies like Yahoo which owns more than 1,000 patents.
History suggests that Yahoo! has a pretty good chance at winning this case, the company made hundreds of millions of dollars from a patent settlement that it reached with Google just before the internet search leader went public back in 2004.
Mentioned in the lawsuit is the fact that without Yahoo!’s innovations, Facebook and other websites would not enjoy “repeat visitors or substantial advertising revenue” and Yahoo!’s patents cover basic social networking ideas such as customizing website users’ experiences to their needs and interests. And it says that Yahoo!’s advertising patents cover ways of generating ads that relate to individual users, increasing revenue for website operators.
Facebook has vowed to defend itself vigorously against what it called “puzzling actions” by Yahoo! as seen in the following statement:
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.
Could this simply be a matter of Yahoo! trying hard to extract money from the soon-to-be-public Facebook?