Yahoo Turns Patent Troll; Goes After Facebook

Yahoo, the yesteryear Goliath of the internet, has apparently turned into a patent troll. It is one of the most recent companies to have entered the patent wars, and is gunning for Facebook. It is trying to force Facebook to license 10 to 20 of its patents related to website personalization, social networking and messaging, according to a report by NYT. If Facebook fails to sign a licensing agreement with Yahoo and doesn’t agree to pay it for their use, Yahoo is threatening it with a lawsuit.

“Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property,” a Yahoo spokesman said in an e-mailed statement. “We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights.”

Facebook hasn’t yet decided its course of action, and is considering its options. According to a Facebook executive, they haven’t yet had the time to fully evaluate Yahoo’s claims.

Yahoo’s timing is perfect, as Facebook is expected to go public in a couple of months, and would like to steer clear of any legal hassles that could derail its IPO.

Yahoo has one of the most valuable patent portfolios related to internet technology, with more than 1000 patents. Facebook may possibly be forced to license its patents. Given the opportunistic timing, it’ll be interesting to see how much money Yahoo is able to force out of Facebook’s sizable cash reserves.

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