Yahoo recently sued Facebook for patent infringement over some ridiculous patents which shouldn’t have been issued in the first place, and was apparently expecting Facebook to approach it for a settlement instead of duking it out in the courts during its quiet period before the IPO.
After Yahoo, Facebook was hit with lawsuits by a Canadian IT company – Mitel – and even AOL was speculated to be going after Facebook with a revised patent application.
However, instead of starting talks for a settlement, Facebook has gone on the offensive itself. It has bought around 750 patents from IBM for an undisclosed amount, presumably to defend itself from litigation by Yahoo and other patent trolls. Instead of licensing patents from them for a fee, it will now look to cross license its newly acquired patents to them.
Facebook now has over 800 patents – 56 of its own, and the 750 it acquired from IBM. It also has 503 pending patent applications. It is good to see Facebook fighting back against these bullies, but other startups who are not as deep-pocketed as Facebook may not be able to. That is precisely why the patent system in the U.S. needs to rebuilt from scratch.
Update: Apparently, Yahoo has a license to many of IBM’s 750 patents, but the exact terms of licensing are not known.