Facebook Owes Us Billions Claims Yahoo
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Facebook Owes Us Billions Claims Yahoo

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In an interesting twist, Yahoo has come out with a claim that Facebook is infringing on up to 20 different patents that they own, including advertising, the personalization of websites and social networking and messaging. This potentially is a huge windfall for Yahoo, and more importantly an enormous issue for Facebook.

So far, all that has occurred is that Yahoo sent Facebook a nasty note saying that Facebook might have an issue, that they own a bunch of patents and that Facebook needs to pay them licensing fees for those patents. At the same time, Yahoo called the New York Times and let them know of this potential show down.

The actual patents aren’t identified, but since Yahoo owns thousands and thousand of them, I’m sure Facebook is definitely worried.  The problem with the patent process is that it’s very open to interpretation and extremely expensive to defend. Many companies instead of fighting, will often license patents in order to prevent a long legal process and then risk losing and potentially having their business shutdown.

The value of these patents obviously isn’t known either, but looking at other cases recently including Google paying $12.5 billion in licensing fees, one can assume that this is a multi-billion dollar case also. In fact, with Yahoo loosing market share everywhere and making really bad business decisions, many people see that Yahoo’s huge patent database is perhaps their biggest value and they’ll grow into a licensing company, forcing most of the the internet to somehow negotiate with them on licensing things we take for granted including instant messaging, email within social networks and more.

There is currently a huge debate on software patents, since many of them are extremely vague and can be applied anywhere. Some people have called for software patents to be invalidated by the supreme court, because of this and other issues.

Written by Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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5 Comments

  • Wow. I do agree that the whole idea of patents on software is pretty illogical. Unless, of course, something is directly stolen and re-sold. Either way this is an interesting story I’ll keep my eye on.

  • Dave McGurk says:

    I agree with Josh and I’ll have to keep my eye on this one too. The McGurk family looks forward to receiving their $.75 cents if a class action suit is filed.

  • Me says:

    Ok, I am not a big fan of facebook at all (in fact I can’t stand their hatred for performance based marketing) but on this one, Yahoo is the looser. Wait until a company goes public and then slap them with a bunch of really broad bullshit claims. Sounds a lot like the turds of w/e the company is that is suing CPA networks and laying claim to affiliate marketing patents or w/e. Sigh, not that I ever use Yahoo for anything but Yahoo has lost any last bit of respect in my eyes with this one.

    The biggest culprit is of course the retarded legal system as briefly touched on by your last paragraph, but not like any politician will try to touch that anywhere soon… At least this is a battle between a giant and a former giant but the same thing can be done by a giant-bully vs. midsize and even small businesses and that’s pretty f*cked

  • Nice to know about this topic, to be honest I have no idea with this but when I read all the comment now I realized what this is all about..
    Fatima Hipolito recently posted..חג פסחMy Profile

  • Jesus Perez says:

    Invalidate all software patents? Insanity. Yahoo, believe it or not, was a real innovator back in their day. If they managed to secure these patents, then Facebook will lose millions. It’s time to buy some Yahoo stock!
    Jesus Perez recently posted..Kayako vs Zendesk: A No-Holds Barred ComparisonMy Profile

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