Yahoo threatens Facebook with patent lawsuit- could IPO be delayed?

28/02/2012

Yahoo has threatened Facebook with a legal war over "10 to 20" patents, according to a news report, in a move that could disrupt the social network's plans to go public this year. “Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property ... We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights,” a Yahoo spokesman told The New York Times in an e-mailed statement.

Such patents involve technologies that include advertising, the personalization of Web sites, social networking and messaging, NYT's DealBook quoted people briefed on the matter.

The NYT said the two companies spoke on Monday to discuss the issue, with Yahoo claiming Facebook is infringing on 10 to 20 patents.

On the other hand, it quoted Barry Schnitt, a spokesman for Facebook, as saying Yahoo contacted Facebook the same time they called the NYT.

"And so we haven’t had the opportunity to fully evaluate their claims,” he said.

NYT noted that while patent wars involving smartphones have hogged the headlines lately, intellectual property battles have yet to arise en masse among social networking players.

Patents at issue include some of the first awarded to Yahoo, citing people close to the company.

Also, it gained a trove of intellectual property from the 2003 purchase of Overture Services, a search-advertising company that sued companies like Google over patent issues.

Yahoo added other unspecified Web technology companies have already licensed some of the patents in question.

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