NOTE: GrowthBeat -- VentureBeat's provocative new marketing-tech event -- is next week! We've gathered the best and brightest to explore the data, apps, and science of successful marketing. Get the full scoop here, and grab your tickets while they last.
Let the shakedown begin. Yahoo filed suit in a San Jose court Monday against Facebook, alleging the social networking company is guilty of past and ongoing patent infringement.
The lawsuit (seen below), which cites ten different Yahoo patents, claims that without “Yahoo’s achievements, websites such as Facebook would not enjoy repeat visitors or substantial advertising revenue.”
Facebook is not taking the challenge lying down.
“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation,” a Facebook spokesperson told VentureBeat. “Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”
Yahoo alleges Facebook is infringing on four advertising patents, two privacy patents, two customization patents, one social networking patent, and one messaging patent.
“For much of the technology upon which Facebook is based, Yahoo got there first and was therefore granted patents by the United States Patent Office to protect those innovations,” the suit reads. “Prior to adopting Yahoo’s patented social networking technology in 2008, Facebook was considered one of the worst performing Internet sites for advertising.”
According to eMarketer, Facebook’s share of overall U.S. display advertising revenue grew to 14 percent in 2011, while Yahoo’s share slid to 10.8 percent. Back in 2008, that pivotal year Yahoo cited in its suit against Facebook, Yahoo’s share of U.S. display revenue was at 18.4 percent and Facebook had just 2.9 percent share.
Just last week, Facebook amended its S-1 filing with the SEC to reveal that it had expanded its credit facility to $5 billion. The strategic move could give the social network enough financial runway to defend or settle the patent dispute prior to its public debut later this year.
“Yahoo has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed,” a spokesperson said in an email statement to VentureBeat. “These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”
This post was updated with a statement from Yahoo.
Photo credit: microwavedboy/Flickr
We're studying digital marketing compensation: how much companies pay CMOs, CDOs, VPs of marketing, and more
, with ChiefDigitalOfficer. Help us out by filling out the survey
, and we'll share the results with you.