Facebook, Yahoo close to burying patent hatchet?

The two companies are in advanced talks to resolve their patent-infringement claims against each other, sources tell All Things D.

Top executives at Facebook and Yahoo are in advanced talks to settle their patent fight, and an agreement could be announced in the next couple of weeks, sources tell All Things D.

Terms of the settlement, meant to resolve the patent infringement lawsuits each has filed against the other, could include cross-licensing of patents between the one-time partners and deeper integration of their respective tools, according to the report.

Yahoo declined to comment. CNET has contacted Facebook for comment and will update this report when we learn more.

Yahoo fired the first salvo in the battle in March when it filed a patent infringement lawsuit against Facebook that essentially accused the social-networking giant of misappropriating most of the technologies that helped turn it into a multibillion-dollar sensation. Yahoo's lawsuit was far-reaching, covering everything from placing ads on Web pages and customizing views for social users.

Yahoo's lawsuit came as it had grown increasingly dependent on Facebook for traffic. The two companies announced a new feature last September that integrates Yahoo News with Facebook so people can easily see what articles their friends are reading. Since integrating with Facebook, Yahoo News has seen its daily traffic more than triple, according to a Facebook developers blog.

Facebook responded in early April with a counter-suit against Yahoo that defended its own patents and claimed that the struggling Internet pioneer infringes on 10 of the social network's patents.

The patent claims came at a sensitive time for Facebook, which was preparing for its monster IPO. While the lawsuit caused much consternation in Silicon Valley, there was much speculation that Yahoo's lawsuit was motivated by a big payday related to the public offering. Indeed, less than two weeks before Google's IPO in 2004, the future Web behemoth settled a patent infringement dispute with Yahoo by agreeing to issue 2.7 million shares common stock to its one-time partner.

 

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