Yahoo Threatens Patent Lawsuit Against Facebook

Yahoo has told social networking giant Facebook to pay licensing fees for using its patents or risk a court battle.

The 10 to 20 patents in question relate to advertising, site personalisation, messaging and social networking technologies, according to a report from the New York Times.

IP licensing

Executives from Yahoo and Facebook met on Monday to talk about the patent infringements, with the former asking the latter for appropriate licensing compensation, though no set figure has yet been clarified.

“Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property,” said a Yahoo spokesman in a statement sent to the New York Times. “We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights.”

Yahoo’s actions will be regarded as aggressive, especially considering the positive effect the social networking site has had in driving new users to the struggling search engine.

A Facebook spokesman, Barry Schnitt, said in a statement: “Yahoo contacted us the same time they called The New York Times and so we haven’t had the opportunity to fully evaluate their claims”.

Yahoo has been scrambling to revitalise itself and considering the recent departures of co-founder Jerry Yang and three other senior board members, including chairman Roy Bostock, sending an ultimatum to Facebook will likely be seen as a desperate tactic. The company’s timing also reflects this as it appears to capitalise on Facebook’s impending first public offering on the stock market.

Should Yahoo succeed in squeezing out a licensing deal with the social network, they could receive cash or, more preferably, pre-IPO stock. As Forbes suggests, Yahoo will look to make the most of their patents against Facebook in a way they could not do in 2004 against pre-IPO Google.

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