Services & Software

Yahoo tells Facebook of 16 more patents it could lump into suit

Yahoo wrote a letter to Facebook last week saying it holds 16 patents that "may be relevant" to the cases between the companies.

Yahoo and Facebook are officially on the outs. But things could get worse before they get better, according to a document Facebook filed yesterday with the Securities and Exchange Commission.

Facebook filed an amended S-1 registration statement with the SEC, noting that Yahoo late last month sent the social network a letter informing it that it holds 16 patents related to open-source technology that could become another pawn in the companies' ongoing legal struggle.

"We received a letter dated April 23, 2012 from Yahoo indicating that they believe 16 patents they claim to hold 'may be relevant' to open source technology they allege is being used in our data centers and servers," Facebook wrote in its amended S-1. "Yahoo has not threatened or initiated litigation with respect to matters described in this letter but it may do so in the future."

CNET sister site ZDNet obtained a copy of the letter, which asked Facebook to discuss the matter with Yahoo on or before April 26. It's not clear if the companies ever met to discuss the patents, though Facebook did tell ZDNet in a statement yesterday that if new patent claims are brought against it, the social network will defend itself.

"Yahoo's letter takes aim not just at Facebook but at open-source and energy-efficient green technologies developed and employed by countless innovative, forward-thinking companies and engineers," a Facebook spokesperson told ZDNet. "We're defending vigorously against Yahoo's current lawsuit, and would likewise do so against any new assertions."

Yahoo initiated the legal battle between the companies in March when it sued Facebook for allegedly infringing 10 patents it holds. Facebook quickly responded with a lawsuit of its own, saying that Yahoo was violating 10 of its patents. Not to be outdone, Yahoo recently added two more patents to its complaint.

"Yahoo is harmed by Facebook's use of Yahoo's patented technologies in a a way that cannot be compensated for by payment of a royalty alone," Yahoo's lawsuit claims. "Facebook's use of Yahoo's patented technologies has increased Facebook's revenue and market share because it does not have to recover the costs or time involved in the development of the technology. Yahoo, in turn, must bear the costs of the development of the technology."

For its part, Facebook has criticized Yahoo for making a "short-sighted decision to attack one of its partners and prioritize litigation over innovation," adding that it will defend itself "vigorously" against the patent claims.

As Facebook considers its future litigation against Yahoo, the company is also eyeing an initial public offering. Facebook yesterday announced that it plans to raise as much as $13.6 billion in the sale, and price its shares between $28 and $35.