As expected, Yahoo is suing Facebook.
According to court documents obtained by AllThingsD, the legacy Internet giant claims Facebook has infringed on 10 of its patents that cover a wide range of social networking services, from messaging to advertising. The lawsuit reportedly comes after failed negotiations between the two Internet titans, and appears to be part of the cut-throat business strategy of Yahoo’s new CEO, Scott Thompson.
“To build a successful website, users need to have easy access to many functions and tasks such as messaging and privacy options,” writes Yahoo in the filing (see below). “The website owner needs revenue through functions such as advertising. All of these functions involve Yahoo!’s innovations. Without Yahoo!’s achievements, websites such as Facebook would not enjoy repeat visitors or substantial advertising revenue.”
While Yahoo says that it is “confident” that it “will prevail” in federal court, Facebook has vowed to fight back against Yahoo’s patent claims.
“We’re disappointed that Yahoo’s effort to engage with us was limited to a few short phone calls and that we continue to learn of new developments about a long-time partner through the press,” said Facebook in a statement to AllThingsD. “We will defend ourselves vigorously against these puzzling actions.”
Obviously, Yahoo is not the first company to flex its patent muscles, nor will it be the last. But the timing of the lawsuit is especially curious, for both companies. On the one side, Facebook is in a particularly vulnerable position, as the company recently filed for its IPO, which some say could value the preeminent social network at upwards of $100 billion. Yahoo, on the other hand, is a crumbling powerhouse. Its stocks have tumbled as of late, and its trove of patents apparently remains one of its most valuable assets.
As we’ve noted before, becoming a patent troll is far from the most noble path Yahoo could take — even if the law is on its side. After all, Yahoo has been sitting on these patents for years, and could have exercised its patent rights long ago. Instead, it chose to whip out its proverbial guns when Facebook had its hands tied due to regulations surrounding its IPO.
Regardless, Yahoo insists it’s doing right by its investors and employees.
“Yahoo! has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property,” said the company in a statement to Digital Trends. “We have invested substantial resources into these innovations.”
That it has. A reading through the court filing shows just how much hard labor Yahoo has put into building the functionalities of the Web. And when you hear just Yahoo’s side of the story (in the context of a lawsuit), it’s hard to deny that the company at least deserves something in exchange for its innovations.
Still, we have a hard time understanding how this strategy really helps Yahoo return to an age of online glory.
Read the full filing below:Yahoo v. Facebook