Yahoo filed a patent suit against Facebook at the start of this week, contending that “almost everything Facebook does..is based on something that Yahoo did first,” says Forbes. The suit alleges that nothing less than “Facebook’s entire social network model, which allows users to create profile to connect with persons and businesses, is based on Yahoo’s patented social networking technology.” Facebook’s targeting of ads to users based on their interests was also something Yahoo did first, according to the suit. Yahoo is seeking triple damages for this, as well as an injunction against the patents.
Is this lawsuit “business as usual“? An older, pioneering tech company claiming its due from one that’s grown so big and powerful it has filed a $5 billion IPO offering? Or just a “crock of s—” that is also “dastardly, opportunistic, desperate, and frankly anti-Internet,” as Tech Crunch puts it?
According to Forbes, Facebook’s response was “a mix of hurt feelings” as well as puzzlement; Facebook says it will fight the suit and has strongly denied that Yahoo has a case at all. Many have noted that Yahoo’s suit, coming at this particular time in the history of Facebook, is no surprise and was even expected by Mark Zuckerberg and company.
Far from being frivolous or mean-spirited, Peter S. Vogel, a partner and patent expert at Gardere Wynne Sewell, tell Forbes that Yahoo has “every right to go after Facebook this way.” Yahoo has done what is best from the perspective of its shareholders, timing its suit to when Facebook is “most vulnerable” and therefore most likely to settle. The “strategic use of patents,” of intellectual property resources, has become another weapon in a tech company’s arsenal just as much as “crafty management of cash or judicious use of human resources.” It would not be surprising if Yahoo may have plans to assert its patent rights to other tech companies in the future.
Apple and Samsung are currently embroiled in a complicated patent battle (a German court just suspended a trial over slide-to-unlock technology pending the outcome of a second suit in March). According to Vogel, rather than going to trial, companies tend to favor settling by licensing the technology, or cross licensing. Whether or not Yahoo might win such remains to be seen. Most of the patents that Yahoo is suing Facebook over are “vague concepts that underly a wide variety of web services,” says Tech Crunch. One exception is Patent 7406501, which is for integrated communication between email and instant message users; this patent is “relatively specific,” “not widely used,” actually seems to have been infringed upon by Facebook and is non-essential to Facebook and social networking.
Does Yahoo have a case against Facebook? Or this a case of an older tech company having sour grapes with a younger one that is the current Internet darling?
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