Facebook is no stranger to lawsuits, after all it is considered the most powerful social media platform. In a bold move, Yahoo! – now under the direction of a new CEO – has filed a 19 page lawsuit claiming that Facebook is violating not one, but 10 patents, effectively abusing the intellectual property of Yahoo!. This is not Yahoo!’s first lawsuit over patent infringement – the company successfully battled Google right before Google went public with their IPO. With Facebook’s IPO coming up in a matter of months, will the social media giant settle, or will they proceed with the aggressiveness they are known for?
The patents that Facebook is allegedly infringing upon include the social networking technology that Yahoo! has patented. Others that Yahoo! is claiming were violated include messaging, customization, privacy and advertising. In short, Yahoo! is claiming that Facebook is based on the success of Yahoo! and has been riding on its coattails for quite some time now. While Yahoo! is known for its research and development, there is no mistaking the fact that they have never used the patents in an offensive manner – they simply defend the technology by initiating lawsuits when it appears it will serve the company wonders – such as in times when other competitors will be willing to negotiate to save the company money. With Facebook’s IPO coming up, Yahoo! really stands to put a dent in the IPO offering and damage Facebook’s valuation.
You have to wonder, though, how will Facebook fight back? Undoubtedly, they are in great position to fight the lawsuit and can use the fact that Yahoo! has benefited from the social media platform. It has also been mentioned that Yahoo! might just be choosing this time frame to get Facebook to settle for millions of shares on top of damages – the same way it did with Google back in 2004. Is this a good strategy? Only time will tell.