Yahoo and Facebook settled a patent dispute case on Friday, an anticlimactic ending to a suit that raised eyebrows but mostly generated a few shrugs when it was announced in March. Yahoo had claimed that social networking technology it had first patented was the basis for Facebook’s entire social networking model; Facebook had responded by countersuing Yahoo in early April.
To sum up, in an attempt to simplify the dispute:
10 then 12: Number of patents Yahoo sued Facebook for.
10: Number of patents (acquired from AOL) Facebook countersued Yahoo for.
750: Number of patents Facebook bought from IBM to strengthen its own intellectual property portfolio, in anticipation of a protracted court case.
$0: Amount of money that has changed hands as a result of the settlement.
4: Number of CEOs Yahoo has had since 2008: In May, CEO Scott Thompson, who had initiated the patent dispute, resigned “in disgrace over his resumé.”
As of Friday, Yahoo and Facebook announced that they are, in effect, putting litigation aside and entering an expanded advertising and content partnership that goes farther than the content partnership they had in place before the lawsuit. The settlement includes a cross-license agreement that will enable the two companies to “work together to bring advertisers ways to promote their products across Yahoo and Facebook’s websites.” Yahoo will also bring its “large media event coverage” to Facebook users via “social integrations,” according to a statement issued by both companies with quotes from Yahoo’s interim CEO Ross Levinsohn (who may now be the CEO), and Facebook’s COO Sheryl Sandberg.
Due to the timing of Yahoo’s suit, just before Facebook’s much vaunted and disappointing IPO, many speculated that the suit was a way for Yahoo (i.e., older, struggling tech company) trying to gain itself some negotiating power (on the coattails of a very dominant, younger tech company).
Neither company has yet filed a request to have the case dismissed, says Bloomberg.
Sandberg described the patent dispute as simply a “weird anomaly” in the history of the two companies, commenting that “Yahoo and Facebook had a very good relationship and what happened was not in keeping with that relationship.”
Was a lawsuit even necessary to get to this point?
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Photo by V. Sharma