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Yahoo Slams Facebook with Major Lawsuit PDF Print E-mail
Wednesday, 14 March 2012 13:32

Yahoo is suing Facebook, accusing the social media giant of building its business using technology covered by Yahoo's social media patents. Yahoo has filed a patent infringement lawsuit covering ten patents, and is seeking triple damages and an injunction on Facebook operating the allegedly infringing services. In the suit, Yahoo claims that Facebook's entire social network model is based on social networking technology patented by Yahoo. A successful injunction, however unlikely, could thus require Facebook to effectively shut up shop. The suit also comes at a time Facebook is preparing for an IPO worth as much as $100 billion, and could potentially be a problem for this process.

Facebook spokesman Jonathan Thaw said Facebook learned of the lawsuit through the media. "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," he said.

In an emailed statement, Yahoo said it is confident it will prevail. "Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court," the company said in a statement.

Yahoo, one of the Web's pioneering companies, has seen its revenues decline in recent years at a time when rivals such as Facebook and Google have thrived. In January, Yahoo appointed former PayPal President Scott Thompson as its new chief executive, replacing Carol Bartz, who was fired in September.

Yahoo said late last month it was seeking licensing fees from Facebook over its patents and that other companies have already agreed to such licensing deals.

A number of Yahoo employees are opposed on the grounds that it violates the company's usual strategy of using patents only defensively. Yahoo first threatened to sue Facebook in late February, unless Facebook agreed to license Yahoo's social networking patents.