Patent Counterattack: Facebook Files Its Own Suit Against Yahoo!

Facebook fired back on Tuesday in its legal battle with Yahoo by accusing the Web pioneer of infringing 10 of Facebook’s patents.

Facebook is stepping up its patent dispute with Yahoo by filing its own lawsuit against the struggling Internet icon. Photo: Eston Bond/Flickr

The Facebook-Yahoo grudge match continues. In response to Yahoo’s lawsuit last month accusing Facebook of violating 10 patents, the social networking giant on Tuesday argued that Yahoo itself had committed transgressions of its own, reports The New York Times.

Facebook’s counter-claim, filed Tuesday, denies Yahoo’s statements that many of Facebook’s tools and features on the site stem from developments made by Yahoo. Facebook requests that any triable issues be taken to court, tells Mashable.

“While we are asserting patent claims of our own, we do so in response to Yahoo’s short-sighted decision to attack one of its partners and prioritize litigation over innovation,” Ted Ullyot, Facebook’s general counsel, said in a statement.

“From the outset, we said we would defend ourselves vigorously against Yahoo’s lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook’s patents,” he said.

According to the court filing, Facebook argues that Yahoo has violated patents that cover some 80 percent of the Web pioneer’s revenue last year, amounting to more than $4 billion.

Among the parts of Yahoo’s business that are covered are display advertising, content personalization and photo sharing.

Yahoo spokesman Eric Berman said Facebook’s counterclaim is “nothing more than a cynical attempt to distract from the weakness of its defense.”

“As we have made clear from the outset, the unauthorized use of our patented technology is unacceptable and must be resolved appropriately,” Yahoo said in its statement. “Other leading companies license these technologies, and Facebook must do the same or change the way it operates.”

Reuters writes that Yahoo’s lawsuit against Facebook came at a delicate time, while the world’s largest Internet social networking service is preparing for an initial public offering that could value the company at up to $100 billion.

Yahoo formally went after Facebook in March, claiming the company violated 10 of its patents.

Yahoo announced that it had “a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property.”

According to USA Today, Facebook recently acquired 750 patents from IBM that cover technologies dealing with software and networking.

At the end of 2011, Facebook had just 56 U.S. patents, a relatively small number compared with other big tech companies. At the same time Yahoo owns more than 1,000 patents.

Erin-Michael Gill, the chief intellectual property office for MDB Capital, an investment bank that specializes in analyzing and valuing IP, said that Facebook’s countersuit shrewdly goes after a broad swatch of technology, reports CNet.

“This is dead-on, exactly what Facebook is supposed to do,” said Gill, who became deeply familiar with Yahoo’s patent portfolio after assessing it for hedge fund manager Daniel Loeb last November.

“They’re responded really aggressively by filing a diversified complaint that covers a whole host of product and features. Facebook is not coming back with 10 patents around one technology — it’s 10 patents around a number of technologies,” he said.

Patent fights have taken on increasing prominence in the technology sector, with Apple,Microsoft and the BlackBerry maker Research in Motion among the many combatants in scores of courtroom battles.

But feuds between Web companies have generally been few and far between, most observing an unwritten code that patents should only be used defensively.

The Facebook-Yahoo battle comes about two months after the arrival of Yahoo’s new chief executive, Scott Thompson, who has been charged with bolstering Yahoo’s sagging performance.

Some years ago, Yahoo inherited a patent lawsuit against Google when it acquired Overture, another Web services company. Yahoo eventually settled the legal fight in 2004, gaining 2.7 million shares in the search engine operator before it went public.

Facebook, which is based in Menlo Park, Calif., filed the lawsuit in federal court in San Francisco. It is seeking a jury trial and unspecified damages, and for Yahoo’s suit to be dismissed.

Share this article

We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Coinspeaker Ltd.