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Yahoo Sues Facebook Over Patents

 & Chloe Albanesius Executive Editor, News

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Yahoo on Monday filed suit against Facebook over patents related to its ad network, privacy, customization, messaging, and social networking as a whole.

"Yahoo has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed," Yahoo said in a statement. "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. 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 Facebook spokesman, however, suggested that Yahoo made little effort to resolve the issue before resorting to litigation.

"We're disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation," the Facebook spokesman said. "Once again, we learned of Yahoo's decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions."

In its suit, filed in Northern California district court, "Facebook would not enjoy repeat visitors or substantial advertising revenue" without "Yahoo's achievement."

Yahoo said it has filed thousands of patent applications since 1997, but the Facebook suit focuses on about a dozen particular technologies.

Four patents focus on Yahoo's ad network, which allows website operators to "generate revenue even when offering services for free," Yahoo said.

Two additional patents relate to privacy, a hot-button issue for Facebook in recent years. "Yahoo recognized the importance of privacy on the World Wide Web, and developed technology that allows users to customize how information is shared," Yahoo said.

Yahoo also pointed to the customization options that are available on its network that Facebook is allegedly cribbing with its newsfeed. "For example, a user who is not interested in sports may not want to see sports information highlighted on a website," Yahoo said. "On the other hand, a user interested in sports may wish that information to be the first information they encounter."

Yahoo also took aim at social networking in general. "Yahoo recognized the importance of social interaction on the Internet and developed technology that allows users to customize information about themselves, join groups of others with the same interests as themselves, and share interesting information," the company said.

Finally, Yahoo pointed to communication patents like instant messaging, email, and other messaging communications. "Yahoo's innovators recognized the need for users of a website to communicate with others through different forms of messaging," Yahoo said.

The suit goes on to say that Facebook's growth "has been based in large part on Facebook's use of Yahoo's patented technology."

"For much of the technology upon which Facebook is based, Yahoo got there first," Yahoo said plainly. In fact, "Facebook's entire social network model ... is based on Yahoo's patented social network technology."

Before it adopted Yahoo's technology, Facebook was "considered one of the worst performing Internet sites for advertising," Yahoo alleged.

Yahoo is seeking damages and costs.

As the Facebook statement mentioned, Yahoo and Facebook have worked together for a number of years. Back in December, Yahoo expanded its Facebook social sharing feature to 26 more Yahoo sites around the world, meaning there were more options to automatically share the Yahoo stories you're reading with Facebook friends.

About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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