Facebook has acquired a total of 750 patents from IBM Corp. This will add to the portfolio of the social networking enterprise in order to counter allegations pertaining to patent infringements. The acquired patents are assumed to cover areas of software and networking, but the exact details are still unknown as the deal hasn’t been made public. This addition will increase Facebook’s portfolio which currently stands at 56 issued patents and 503 patents awaiting approval (patent applications).
Facebook, the world’s most used social networking website, is strengthening its own legal defences to prevent patent infringement lawsuits by competing companies. The decision to expand its portfolio seems to have been taken after Yahoo sued Facebook, accusing the company of several patent violations pertaining to critical website functions. Hence, Facebook is shedding millions of dollars in purchasing a sea of patents from IBM. Erin-Michael Gill, Managing Director at MDB group, termed these developments as a crucial aspect for Facebook. He further added that even though the strength of these patents is still unknown, Facebook is finally where it’s supposed to be. Yahoo sued Facebook over patents which covered internet privacy, sharing information and advertising. Yahoo requested an order that barred Facebook from infringing on 10 such patents and also seeking triple the damages.
This is not the first attempt made by Facebook to acquire patents. Facebook has already acquired a number of patents from Hewlett Packard Co. and Friendster, an old social networking site. According to MDB, Google, Yahoo and Microsoft have more than 1000 patents each in their portfolios. The deal signed with IBM could help Facebook make up for the intellectual property it lacks. In an announcement made earlier this month, Facebook said that it would set up a new credit line of $5 billion, which will replace the $2.5 billion revolving line. Facebook managed to generate revenue of $4 billion last year, which will also help in covering the legal costs involved in the patent infringement lawsuit by Yahoo.
Facebook has 33 corresponding patents in its arsenal, and 149 international filings towards the end of last year. This data was published in their IPO filing, through which the website plans to raise $5 billion more in revenue. Facebook’s popularity is likely to invite many such lawsuits in the future. In fact, the company is ranked 28th on the list of companies that are frequently targeted by patent cases last year. A total of 22 patent lawsuits were filed against the company last year.
