Yahoo has filed suit against Facebook in federal court in San Jose, California, alleging infringement of 10 of the company’s patents, including methods and systems for advertising on the Web, Reuters reports, citing a copy of the lawsuit.
Yahoo‘s suit
comes with Facebook in registration for an initial public offering that
reportedly could value the company at as much as $100 billion.
Yahoo said in a statement that it is confident it will prevail in the
suit. ”Unfortunately, the matter with Facebook remains unresolved and
we are compelled to seek redress in federal court,” Yahoo said in a
statement.
Facebook, according to CNBC,
responded with disappointment that Yahoo decided to sue. “We’re
disappointed that Yahoo’s effort to engage with us was limited to a few
short phone calls,” they said in a statement.
The Yahoo complaint asserts that Facebook’s growth “has been based in
large part on Facebook’s use of Yahoo’s use of patented technology.”
The company asserts that Facebook CEO Mark Zucerkberg “has conceded that
the design of Facebook is not novel and is based on the ideas of
others.”
Yahoo asserts that “for much of the technology upon which Facebook is
based, Yahoo got there first and was therefore granted patents by the
United States Patent Office to protect those innovations. Yahoo’s
patents relate to cutting edge innovations in online products, including
in messaging, news feed generation, social c0mmenting, advertising
display, preventing click fraud, and privacy controls.”
The company goes on to assert that “Facebook’s entire social network
model, which allows users to create profits for and connect with, among
other things, persons and businesses, is based on Yahoo’s patented
social networking technology.” Yahoo asserts that before Facebook
adopted Yahoo’s social networking technology, “Facebook was considered
one of the worst performing Internet sites for advertising.”
Among other claims, Yahoo asserts that Facebook’s news feed featuyre
is “directly linked” to infringement of Yahoo’s customization patents.
Yahoo in the suit says it is seeking unspecified monetary damages
and an injunction barring further infringement. What they are really
looking for is a major payday. What the suit for good reason does not
address is why Yahoo has a market valuation a fraction of that of
Facebook; if the technology is so valuable, why wasn’t Yahoo more
successful moving into the social networking sector?
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