In an interesting twist, Yahoo has come out with a claim that Facebook is infringing on up to 20 different patents that they own, including advertising, the personalization of websites and social networking and messaging. This potentially is a huge windfall for Yahoo, and more importantly an enormous issue for Facebook.
So far, all that has occurred is that Yahoo sent Facebook a nasty note saying that Facebook might have an issue, that they own a bunch of patents and that Facebook needs to pay them licensing fees for those patents. At the same time, Yahoo called the New York Times and let them know of this potential show down.
The actual patents aren’t identified, but since Yahoo owns thousands and thousand of them, I’m sure Facebook is definitely worried. The problem with the patent process is that it’s very open to interpretation and extremely expensive to defend. Many companies instead of fighting, will often license patents in order to prevent a long legal process and then risk losing and potentially having their business shutdown.
The value of these patents obviously isn’t known either, but looking at other cases recently including Google paying $12.5 billion in licensing fees, one can assume that this is a multi-billion dollar case also. In fact, with Yahoo loosing market share everywhere and making really bad business decisions, many people see that Yahoo’s huge patent database is perhaps their biggest value and they’ll grow into a licensing company, forcing most of the the internet to somehow negotiate with them on licensing things we take for granted including instant messaging, email within social networks and more.
There is currently a huge debate on software patents, since many of them are extremely vague and can be applied anywhere. Some people have called for software patents to be invalidated by the supreme court, because of this and other issues.