Facebook and Yahoo to duke it out in court

Yahoo on Monday night filed a lawsuit in a California court accusing Facebook of infringing 10 patents held by the internet pioneer, opening the first major social media court battle among the world’s best known companies.

The lawsuit by Yahoo has come just after Facebook announced plans for an initial public offering that could value the company at about $100 billion (£63.90 billion). Yahoo’s court filing claims that “Facebook’s entire social network model” was based on patented Yahoo technology. The lawsuit also covers the Facebook news feed, advertising methods, messaging tools and even its privacy settings.

Last month Yahoo said it was seeking licensing fees from Facebook over its patents and that other companies have already agreed to licensing deals. “Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court,” said Yahoo in a statement.

Yahoo, the web pioneer, is struggling due to revenues decline in recent years, while its rivals Google and Facebook are prospering. In January, Yahoo appointed former PayPal President Scott Thompson as its new chief executive.

Facebook has responded to the lawsuit saying “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.”
“Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions,” said Facebook in a statement.

It’s not the first time that Yahoo has filled lawsuit against its rival; the company did similar with Google, which too was preparing for an IPO. The battle was settled out of court, with Google giving Yahoo $230 million (£146.97 million) worth of shares.