Yahoo threatens Facebook with patent wars

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Yahoo Inc. has demanded licensing fees from social networking giant Facebook for using its technology, triggering fears of prolonged patent battles and lawsuits already raging across much of the technology world.

According to the sources, Yahoo claimed that Facebook has included its technical mechanisms in ads, privacy controls, news feeds and messaging services.

A source close to both Yahoo and Facebook said representatives from the two companies met on Monday to hold talks on 10 to 20 of Yahoo’s patents adding it is not clear what specific dollar demands Yahoo may have made for licenses.

The company said: “Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property.” It also said that other companies have already licensed some of the technologies at issue, and it would act unilaterally if Facebook refuses to pay for patent license.

Meeting of two companies news was first reported by the New York Times.

Facebook spokesperson said: “Yahoo contacted us at the same time they called the New York Times and so we haven’t had the opportunity to fully evaluate their claims.”

This will be the first major legal battle among technology giants in the social media sphere if Yahoo ends up suing Facebook. Last week Microsoft Corporation made a formal complaint to the European Union against Motorola Mobility and Google, arguing that aggressive enforcement of patent rights from Motorola against its rivals break the ongoing competition rule.

This patent row between Yahoo and Facebook is similar to earlier complaints made by Apple Inc. against Motorola. Meanwhile, Microsoft is concerned that Google will continue Motorola’s tight control over its key patents. Motorola is under the process of being taken over by Google for a sum of $12.5 billion.

Facebook has recently announced its plans for IPO that could value the company at around $100 billion.

Yahoo did not elaborate details of its meeting with Facebook but has indicated it would go ahead to take the social network to the court over patent row.

Large tech companies like Yahoo have not filed any lawsuits so far as most of the lawsuits have been filed by patent aggregators that buy up intellectual property to squeeze value from it via licensing deals.

Sources: Reuters, MSN, Foxnews

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