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Yahoo! and Facebook settle patent dispute and commit to further collaboration

Out-Law News | 09 Jul 2012 | 3:45 pm | 1 min. read

Yahoo! and Facebook have agreed to license each other's patents as part of a commercial package that settles their patent dispute.

Yahoo! had sued Facebook in March claiming that Facebook's "entire social network model" was based on its "patented social networking technology," according to media reports. Facebook countersued claiming Yahoo! infringed 10 patents it owned.

However, in a joint statement the companies said they have forged new "definitive agreements" on advertising, distribution and patent licensing.

"Under the agreements, which include a patent portfolio cross-license, the parties will work together to bring consumers and advertisers premium media experiences promoted and distributed across both Yahoo! and Facebook," the statement said. "Yahoo! and Facebook will also work together to bring Yahoo!'s large media event coverage to Facebook users by collaborating on social integrations on the Yahoo! site."

In March Yahoo!, under the leadership of former chief executive Scott Thompson, filed a complaint with a US district court in California claiming that Facebook infringed patents it owned relating to advertising and personalisation technologies, among other things.

Facebook at the time had registered very few patents with the US Patent and Trade Mark Office compared to thousands registered to Yahoo! After being sued Facebook bought 750 patents from IBM and countersued Yahoo! claiming that the news and search company had infringed its patent rights. It then further boosted its patent portfolio by purchasing 650 patents from Microsoft in a deal worth $550m.

However, in settling their dispute and announcing a new commitment to collaboration in mixing news coverage with social network sharing, the two firms said their agreements would provide benefits to both users and advertisers.

"We are looking forward to building on the success we have already seen to provide innovative new products and experiences for both consumers and sponsors," Ross Levinsohn, interim chief executive of Yahoo!, said in a statement. "Combining the premium content and reach of Yahoo! as the world's leading digital media company with Facebook provides branded advertisers with unmatched opportunity."

Sheryl Sandberg, Facebook's chief operating officer, said: "I'm pleased that we were able to resolve this in a positive manner."

"Yahoo!'s new leaders are driven by a renewed focus on innovation and providing great products to users. Together, we can provide users with engaging social experiences while creating value for marketers," she added.