Facebook Sued for Patent Infringement; Yahoo Seeks Injunction, Treble Damages

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Most of the popular features that have made Facebook Inc. a successful social network are attributable to the company's unlicensed use of numerous Yahoo! Inc. patents, Yahoo alleged in an infringement lawsuit filed in the U.S. District Court for the Northern District of California March 12 Yahoo! Inc. v. Facebook Inc., N.D. Calif., No. 12-01212, complaint filed, 3/12/12)

The complaint asserted ten claims of infringement based on Yahoo patents directed to advertising, privacy, customization, networking, and messaging. Yahoo seeks an injunction and treble damages under 35 § U.S.C. §284 because it alleges that the infringement is “willful and deliberate.”

Yahoo Claims It ‘Got There First.'

In its complaint Yahoo quoted Facebook CEO Mark Zuckerberg's statement that “Getting there first is not what it is all about.”

The problem, according to the complaint, is that much of Facebook's infrastructure was in fact developed by Yahoo. Indeed, “Yahoo! got there first and was therefore granted patents by the United States Patent and Trade Office to protect those innovations,” the complaint stated.

In particular, Yahoo alleged that Facebook is infringing four patents directed to advertising (6,907,566; 7,100,111; 7,373,599; 7,668,861); two patents directed to privacy (7,269,590; 7,599,935); two customization patents (7,454,509; 5,983,227); a networking patent (7,747,648); and a messaging patent (7,406,501).

The advertising patents have allowed Facebook to monetize the traffic that its website attracts, the complaint said, while the other patents have helped Facebook create a unique user experience. The complaint alleged that Facebook's popular News Feed feature uses Yahoo's customization patents, and that other services offered by the social network are also dependent on Yahoo patents.

The complaint stated that Yahoo notified Facebook in February that its patents were being infringed

Royalties Not Adequate

“Yahoo! is harmed by Facebook's use of Yahoo!'s patented technologies in a way that cannot be compensated by payment of royalty alone,” the complaint said. Facebook's unlicensed use of the patents has helped it to gain market share by allowing it to profit of the research and development that Yahoo invested in the patents, the complaint said. Accordingly, Yahoo said that even if Facebook were to pay for its previous use of the technology, that would be an inadequate remedy because it would not address Facebook's market share.

Yahoo therefore asked the court to temporarily and permanently enjoin Facebook from using Yahoo's patents.

Yahoo is represented by Charles K. Verhoeven of Quinn Emanuel Urquhart & Sullivan, San Francisco.

For More Information

The complaint is available at http://pub.bna.com/ptcj/121212March1212.pdf