Yahoo! joins the patent wars, sets its sights on Facebook

Yahoo! claims that Facebook is infringing on between 10 and 20 of its patents — and if the social networking site doesn’t pay licensing fees, it will pursue legal action.

According to a report by the New York Times, Yahoo! accused Facebook of using its patented technology without paying license fees in areas such as advertising, messaging, social networking and personalised webpages. Some of the technology is reportedly used in Facebook’s news feed and privacy settings.

“Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property,” said a Yahoo! spokesman told the New York Times. “We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights.”

It’s unclear as to exactly which patents Yahoo! is referring to — and the company reportedly owns the rights to over 1100 patents in the USA and has filed for 2 661 more. It is estimated that the number of international patents Yahoo! owns could be more than three times that amount.

The timing of the move has aroused suspicion, as Facebook filed for its IPO earlier this month. It’s possible that Yahoo! could walk away with some Facebook stock as payment for the patent violations if the companies can settle the dispute out of court. Some are calling it a smart (and brave) move by Yahoo! to defend its intellectual property.

Yahoo! settled a patent dispute with Google in a similar manner before Google went public in 2004. Overture sued Google over a search advertising patent that it claimed the search giant was violating with its Google Adwords service. When Yahoo! purchased Overture, it continued the suit and settled for 2.7 million shares in Google, which it promptly sold after the IPO.