The first big battle in social media has kicked off between Facebook and Yahoo today with the latter suing Facebook for infringing as many as 10 patents that are currently being held by Yahoo, mostly on matters such as advertising on the internet. Patent litigation has been rampant in the tablet and smartphone market and has involved big names such as Motorola Mobility Holdings Inc, Microsoft Corp and Apple Inc. The current lawsuit was filed on Monday by Yahoo in the federal court of San Jose, California.
Jonathan Thaw, the spokesman for Facebook has said that the company has learnt about the move by Yahoo through the media. This lawsuit comes after Facebook made an announcement about its plans to go public that could shoot the value of the company to upwards of $100 billion. Thaw said that the two companies had been business partners for a long time and Yahoo has benefited substantially from this partnership. This current move by Yahoo has disappointed the company, he added.
A spokesperson for Yahoo said that they were fairly confident about their chances with the lawsuit. The company added that the have been forced to seek redress in a federal court as the issue with Facebook remains unsettled.
Carol Bartz was fired in September from the post of the chief executive of Yahoo following declining revenues and a replacement was found in Scott Thompson, the former PayPal President. The company has seen a sharp decline in its revenues in the past few years as companies such as Google and Facebook have managed to grab a major chunk of the market share. Late last month, Yahoo said that it would be attempting to seek fees from Facebook over licensing issues over patents which were held by Yahoo.
A professor at Santa Clara Law in Silicon Valley, Colleen Chien, said that most companies become especially susceptible to patent suits immediately after they announce their IPO. Chien said that most companies generally seek to avoid a major litigation fight around the time they decide to go public. Hence, it is speculated that there are high chances of Facebook reaching a settlement with Yahoo over the patent issue.
This is not the first time that Yahoo has resorted to similar measures. A settlement was reached between Google and Yahoo in 2004, nine days before the IPO by Google over patent issues.
