Facebook: Yahoo’s patent suit ‘puzzling’

March 13, 2012

Yahoo filed a lawsuit against social networking giant Facebook over patents on Monday. The Verge reports:

We knew that Yahoo was preparing to take "formal action" against Facebook for allegedly violating its social networking and online advertising patents, and AllThingsDis reporting that the company has pulled the trigger today, filing a lawsuit against the social networking giant. Yahoo is quoted with the following statement:

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.

The move comes after talks between the two companies broke down, with Yahoo reportedly hoping to secure some portion of Facebook's revenues moving forward.

A Facebook spokesperson provided us with the following response:

We're disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefitted from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo's decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.

It looks like Yahoo’s chief executive Scott Thompson has been pushing for this lawsuit. The Post’s Hayley Tsukayama reports:

All Things Digital’s Kara Swisher, the first to report the news, had also previously reported that Yahoo’s new chief executive, Scott Thompson, is behind the push to sue Facebook over the disputed patents.

Thompson took over as CEO in January. Since his appointment, Yahoo’s board has seen a shake-up, with co-founder Jerry Yang and chairman Roy Bostock announcing that they will leave the company along with three other members of the board as part of an attempt to revitalize the company.

The case has been filed in federal court in San Jose, Calif., in the Northern District of California.

Many major tech companies have been filing lawsuits against one another in recent months. In fact, patent analyst and blogger Florian Mueller pointed out on Twitter that Yahoo’s lead counsel, Charels Verhoeven of Quinn Emanuel, and his team also represent Samsung and HTC in their patent cases against Apple as well as Motorola in its suits against Apple and Microsoft.

VentureBeat.com takes a look at the 10 patents in question in the lawsuit.

With Facebook getting ready for its IPO, Yahoo has decided to sue over patent infringement. Yahoo used the same tactic against Google in the run up to their IPO, pocketing a helping of the search engine’s pre-IPO shares.

Yahoo’s new CEO, Scott Thompson, is reportedly the one driving this aggressive strategy, with many of the companies long time tech staff opposed to this aggressive use of Yahoo’s patent portfolio.

Prominent thought leaders in the tech world are also upset. Venture capitalist Fred Wilson wrote on his blog this morning, “The patents that Yahoo! is suing Facebook over are a crock of [expletive]. None of them represent unique and new ideas at the time of the filing. I suspect they all can be thrown out over prior art if Facebook takes the time and effort to do that.”

We’ve broken out the 10 patents at issue in the lawsuit below, along with our best efforts at a translation into plain English. Lawyers and IP folks, let us know in the comments if we’ve got anything wrong.

US Patent 7599935  Control for enabling a user to preview display of selected content based on another user’s authorization level (Filed 2005, Issued 2009)

Translation: A way to preview the stuff you will be sharing with friends.

Enabling a first user to preview content as it would be seen by a second user, if the second user had a selected user relationship with the first user. The selected user relationship may include a relationship degree, a relationship category, a relationship rating, and/or other form of relationship. In one embodiment, a user interface enables the first user to assign user relationships to portions of content and to other users. The first user selects a user relationship, which is used to access those portions of content that are associated with the first user and assigned the selected user relationship. The corresponding portions of content are used to generate a preview display for the first user, illustrating the portions of content that would be accessible to other users assigned the same user relationship or assigned a closer user relationship. Preview may be generated by a server or a local client.

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