Business World

Monday 20 January 2020

Yahoo to sue Facebook for patent infringement

Peter Flanagan

YAHOO is to sue Facebook, accusing the social network of infringing patents relating to internet search and advertising.

The search firm, for so long in Google's shadow, has applied for a court order barring Facebook from infringing the 10 patents and for "triple damages" -- a legal move used only when a company is accused of wilfully injuring the complainant.

The patents cover tasks required to "build a successful website", such as information customisation, social networking and messaging, Yahoo said.

The two companies, which have a substantial presence in Ireland, have been at loggerheads for some time. In February Yahoo said Facebook would have to license its technology, and claimed many other firms already did this.

"For much of the technology upon which Facebook is based, Yahoo got there first," the company argued in its complaint.

"Facebook's entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo's patented social networking technology," Yahoo said.

Facebook, however, rejected Yahoo's claims. In a statement, the firm said it was "disappointed" with the action.

"We're disappointed that Yahoo, a long-time business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation.

"Once again, we learned of Yahoo's decision simultaneously with the media," Facebook said. The company said it would defend itself against what it called "these puzzling actions".

Facebook's position at the top of the current craze for internet stocks contrasts sharply with Yahoo's current position.

Flotation

While Facebook prepares for a flotation that will value the firm at up to $100bn (€78bn), Yahoo has been beset by issues as it struggles to reclaim its position in the top echelon of web-based stocks.

"Even technology companies who acquire their patents for purely defensive purposes may change their mind as they do less well in the marketplace," Mark Lemley, a Stanford Law School professor who isn't involved in the case, said.

"Yahoo isn't a patent troll, but it is the latest example of a company that sues for patent infringement in hopes of supplementing a failing revenue base," he added.

Yahoo lost its No 1 spot to Menlo Park, California-based Facebook last year in the US market for display advertising, which includes video and graphically-based marketing messages, according to EMarketer.

In January, Yahoo, based in Sunnyvale, California, reported fourth-quarter revenue of $1.17bn, excluding sales passed on to partner sites. That fell short of analysts' estimates of $1.19bn.

Yahoo fired its chief executive in September, eventually hiring a replacement in January. The stock has fallen 16pc in the last year. (Bloomberg)

Irish Independent

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