Yahoo Plays the Troll, Blindsides Facebook in Patent Spat

Illustration for article titled Yahoo Plays the Troll, Blindsides Facebook in Patent Spat

Yahoo and Facebook used to be BFFs, with the social network driving a significant amount of traffic to both Yahoo's Flickr and email client. So why is Yahoo suddenly accusing Facebook of as many as twenty patent infringements just ahead of its IPO?


Yahoo made the announcement today via the New York Times. Facebook was reportedly informed at the same time as the paper. "Yahoo contacted us at the same time they called the New York Times, so we haven't had the opportunity to fully evaluate their claims," a Facebook spokesman told TechCrunch. Yahoo has not specified which patents the 10-20 supposed infringements occurred upon but has asked for a licensing agreement for the infringing technology from the social network. It's promised to sue if the licensing demands are not met. "We must insist that Facebook either enter into a licensing agreement," an unnamed Yahoo source told the NYT, "or we will be compelled to move forward unilaterally to protect our rights."

The timing of this complaint is highly suspicious, arriving just as Facebook is set to go public. Facebook could be made to pay in pre-IPO stock which is trading at levels much lower than the public offering is expected to bring were it to settle or agree to the licensing terms. And this isn't the first time Yahoo's brought patent litigation against a company in the run-up to its IPO. Yahoo coerced 2.7 million shares from Google in 2004 to settle a similar patent suit.[NYT via TechCrunch]



So how is Yahoo "playing the troll" if their patents are valid?