From Silicon Valley to Los Angeles, patents are a growing subject of legal actions as emerging technology changes the balance of tech corporate power. Embattled Yahoo has now sued Facebook for patent infringement in a dramatic move against the new "icon" in social networking.
The former king of search engines and social networking, Yahoo alleges that features on Facebook such as the news feed, advertising methods and privacy settings use Yahoo's intellectual property. Yahoo further claims that Facebook has been "free riding" and royalty payments "will not suffice" to settle this issue. They request to be paid triple damages, along with receiving an injunction prohibiting Facebook from using Yahoo's patents in the future.
Hoping to right their floundering ship, Yahoo has a new CEO and, apparently, a more aggressive approach to the market. This lawsuit involves 10 patents, regarding advertising, privacy, customization, messaging, and social networking. Some reports indicate that inter-company support for this game plan was not unanimous, as some senior technical officers opposed the filing. Although Yahoo advised the New York Times that it was evaluating this action plan, the days leading up to filing the lawsuit were shrouded in secrecy. Apparently, only the new CEO and chief legal counsel prepared the filing.
This is yet another example of the growing propensity for high tech companies to allege patent infringement, as they focus on gaining advantages over their competition. Yahoo and Facebook are not alone in this environment. Apple, Google and Microsoft (and others) are embroiled in intellectual property legal actions.
Facebook supporters "question" the timing and intent of the law suit, as the social networking giant has an upcoming IPO. Supporters and the media point to a similar Yahoo legal action right before Google's IPO that was settled only 10 days before Google went public. Curiously, Yahoo and Facebook have been long-term business partners.
Source: AllThingsD, "Yahoo Sues Facebook for Patent Infringement, Which Social Network Calls 'Puzzling' (Including Filing)," Kara Swisher, March 12, 2012
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