It’s Official: Yahoo Sues Facebook Over 10 Patents

Judge's gavelYahoo has carried through on its threat to file suit against Facebook, alleging infringement of 10 of its patents.

The suit, filed in a San Jose, Calif., court, accuses Facebook of infringing on Yahoo patents regarding the function of social networking sites.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” the company said in the suit. “Prior to adopting Yahoo’s patented social networking technology in 2008, Facebook was considered one of the worst performing internet sites for advertising.”

The suit alleges that Facebook features including the News Feed and video content advertisements are based on Yahoo patents for social networking and online advertising. Additionally, the suit alleges that Facebook is violating Yahoo patents preventing click fraud.

PaidContent offers a breakdown of the patents, with abstracts, here.

“Yahoo is harmed by Facebook’s use of Yahoo’s patented technologies in a way that cannot be compensated for by payment of a royalty alone,” the company said in the suit. “Facebook’s use of Yahoo’s patented technologies has increased Facebook’s revenue and market share because it does not have to recover the costs or time involved in the development of the technology.”

A Facebook spokesperson said the company was only made aware of the suit after early media reports surfaced.

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation,” the spokesperson said. “We will defend ourselves vigorously against these puzzling actions.”

The suit comes as Facebook is preparing to launch what has become the most anticipated initial public offering in years. The company is set to put itself on the stock market in a deal which could push its value as high as $100 billion.

If this seems a bit familiar, it may be because Yahoo and Google were in the midst of a patent fight over pay-per-click and bidding advertising patents Yahoo acquired when it bought Overture, eventually settling for 2.7 million shares of stock just days before Google went public in 2004.

Is this a desperate act by Yahoo, which has seen its search market share hit a new low in February and was passed by Facebook in display advertising last year? Let us know your thoughts in the comments.

This article was originally published on V3.

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