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3/13/2012
02:39 PM
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Yahoo, Facebook Patent Spat: History Repeats Itself?

"Yahoo got there first," the company says about methods of webpage customization, online ad placement, and content sharing. Some hear echoes of a Yahoo, Google patent fight.

Slideshow: Yahoo's Hadoop Implementation
Slideshow: Yahoo's Hadoop Implementation
(click for larger image and for full slideshow)
Yahoo on Monday filed a lawsuit against Facebook, claiming that the social network has infringed 10 of its patents.

In an emailed statement, Yahoo said that it aims to protect years of research and development work that has already been licensed to other companies. "These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built," the company said. "Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail."

A spokesperson for Facebook was not immediately available.

The complaint, filed in the Northern District of California, in San Jose, Calif., alleges that Facebook built its empire on Yahoo's innovation. It states that Facebook CEO Mark Zuckerberg "has conceded that the design of Facebok is not novel and is based on the ideas of others. ...In Mr. Zuckerberg's view, 'Getting there first is not what it's about.'"

[ Facebook isn't the only company headed to court. Read Apple Hit With Class Action Lawsuit Over Siri. ]

For Yahoo, getting there first is about just compensation. Feel free to read the word "just" as "fair" or as "only," as you see fit.

"For much of the technology on which Facebook is based, Yahoo got there first and was therefore granted patents by the Unites States Patent and Trademark Office to protect its innovations," the complaint says.

The technology that Yahoo claims as its own includes methods of webpage customization, online ad placement, content sharing, sending messages to friends, click fraud detection, and social photo display optimization.

Facebook last month filed with the Securities and Exchange Commission for an initial public offering, a long anticipated move that is expected to raise $5 billion for the company.

That might not be enough to satisfy Yahoo. The company argues that Facebook has done harm that is beyond the remedial value of royalties. The complaint states that Facebook, after paying a penalty, "would still enjoy a market share it has developed during its period of 'free riding' on Yahoo's intellectual property."

Yet the injunction Yahoo asks for will almost certainly never come to be. The two companies are likely to come to terms, perhaps even before Facebook actually goes public.

For Yahoo, the aggressive move against a company that ought to be an ally--by virtue of its ties to Yahoo partner Microsoft and its antagonism toward Google, Yahoo's chief rival a decade ago--marks a new chapter, one that reveals a recently rudderless company trying to recapture lost relevance and revenue under a new CEO.

Yahoo's complaint recalls a similar case against Google that the company inherited when it bought advertising provider Overture Services in 2003. Google ended up settling that case by giving Yahoo 2.7 million shares of stock in August 2004, just before Google went public. History has a funny way of repeating itself.

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