Policy

Facebook countersues Yahoo with patent acquired after being sued by Yahoo

Patents recently purchased by Facebook form the core of an infringement …

Jon Brodkin – Apr 3, 2012 6:30 pm | 51

Facebook CEO Mark Zuckerberg is fighting back against Yahoo with one patent of his own, and many others bought and paid for Credit: Photograph by Niall Kennedy

The 10 patents Facebook is asserting against Yahoo in a counterclaim accusing Yahoo of ripping off Facebook-owned technology shows that Facebook’s recent push to acquire more patents is moving along at breakneck speed. In at least one case, and perhaps several, the patents asserted today were acquired after Yahoo provoked Facebook by accusing the company of patent infringement.

Facebook is also claiming that it has “implied” licenses to the very patents Yahoo is using to sue Facebook, perhaps because of a technology partnership that the companies had before they started suing each other.

Yahoo’s March 12 lawsuit, claiming that “Facebook’s entire social network model … is based on Yahoo!’s patented social networking technology,” took advantage of a Facebook weakness—a shortage of patents relative to its competitors. But Facebook has been ramping up its patent acquiring spree, both by filing for new patents and buying them from other companies.

Two of the 10 patents asserted by Facebook do originate with the company, including one obtained by none other than founder Mark Zuckerberg. But one of the patents asserted by Facebook was acquired on March 30, 2012, two others were acquired on Feb. 1, 2012, and two were acquired on Dec. 8, 2011. That leaves three other patents asserted by Facebook—and all three are still recorded by the US Patent and Trademark Office as being owned by New York University. In all likelihood, Facebook has acquired those patents from NYU so recently that it hasn’t yet recorded the transfer with the patent office.

The assignment of a patent from one entity to another must be recorded with the USPTO within three months. Facebook has taken up to seven weeks to record transfers, although in the case of the March 30 patent it was recorded the same day as the transfer. We’ve asked Facebook and NYU for details on the transfer, but Facebook declined to comment, and we haven’t heard from NYU yet.

UPDATE: After we posted this story, Facebook recorded the patent transfers from NYU with the PTO. These three transfers also took place March 30, meaning four of the 10 patents Facebook is using to countersue Yahoo were acquired after the initial suit Yahoo filed against Facebook.

The two patents acquired by Facebook in February cover a “system for controlled distribution of user profiles over a network,” and were granted to a person named Chris Cheah in August 2011 and April 2012. Cheah originally assigned the patents to his own company, Cheah IP, which doesn’t appear to sell any technology of its own but has used other patents to sue the likes of Plaxo and Comcast.

Facebook claims it has “implied” licenses to Yahoo patents

Facebook’s answer to Yahoo’s lawsuit, filed today in US District Court in Northern California, contains another interesting nugget: Facebook will argue that it actually has a license to the very same patents Yahoo is asserting against it.

“Yahoo!’s claims are barred, in whole or in part, because Facebook has an express and/or implied license under one of (sic) more of the patents-in-suit,” Facebook says, in one of numerous defenses presented in opposition to Yahoo’s claims. Facebook also claims that all 10 patents asserted by Yahoo “are invalid for failure to satisfy the conditions of patentability.”

How can Facebook claim to have express or implied licenses to the very same patents Yahoo says Facebook is infringing? Facebook doesn’t get into those details in its counterclaim.

Before this lawsuit, Facebook and Yahoo were occasional partners. As a result, even though Facebook almost certainly doesn’t have a written (or express) licensing agreement granting it rights to the Yahoo patents, it could claim that actions or statements made in the past by Yahoo implicitly granted Facebook the rights to Yahoo’s patented technology. Facebook could argue that “Yahoo either acted in a way or said something that made Facebook believe it had the right to do something with respect to the patents,” IP attorney Patrick Patras of Hinshaw & Culbertson LLP in Chicago told Ars.

As for why Facebook doesn’t specify which patents it has licensing rights to, Patras said that Facebook will “probably point to some relatively vague conduct that they’ll want to apply as broadly as they can.”

Facebook declined Ars’ request for more information on which patents Facebook believes it has an implied license to.

You might have noticed that Facebook claims Yahoo infringes exactly 10 patents, the same number Yahoo asserted against Facebook. Patras said that is unlikely to be a coincidence.

“I think they’re trying to convey a simplistic message to the world, that ‘we have a case that is every bit as strong as Yahoo’s,’” Patras said.

Yahoo’s alleged infringement stems from a dozen products

The two patents that have always been controlled by Facebook cover a system and method for “generating a feed of stories personalized for members of a social network,” and a method of tagging digital media, such as photos. Applications for these patents were filed for in 2006 and granted in 2010 and 2011, respectively. Facebook claims that the Yahoo-owned Flickr photo sharing service violates both of these patents.

The rest of the patent allegations cover a large number of Yahoo products including the Yahoo home page, Yahoo’s Content Optimization and Relevance Engine, and advertisements displayed throughout Yahoo sites such as My Yahoo, Yahoo Finance, Sports, News, Games, Movies, Shopping, Travel, and Autos.

Some of the other patents in the case illustrate just how frequently a patent can be moved from one entity to another. The patent Facebook acquired on March 30 of this year, for a “headline posting algorithm” was initially filed for in 1999, and transferred in September 2011 and again in November 2011. The two patents Facebook acquired in December 2011 from a company called IPG Electronics were previously acquired by IPG in 2009 and 2011.

The NYU patents that Facebook claims to own and alleges Yahoo infringed upon cover “architectures, systems, apparatus, methods, and computer-readable medium for providing recommendations to users and applications using multidimensional data,” a “system and method for dynamic profiling of users in one-to-one applications,” and a “system and method for dynamic profiling of users in one-to-one applications and for validating user rules.”

Now that Facebook and Yahoo are each demanding trials over alleged patent infringements, several things could happen. There could be separate trials to determine if either company violates the other’s intellectual property. While Yahoo was possibly hoping Facebook would cave and pay a large settlement to avoid investor concern in advance of its IPO, Facebook showed today that it plans to fight this out. However, now that the companies are on more equal footing, a settlement leading to a patent cross-licensing deal instead of a huge ransom could theoretically end the litigation.

While Facebook didn’t answer most of our specific questions, we did get statements from both Facebook and Yahoo about today’s filing.

Here’s Facebook’s statement, attributed to general counsel Ted Ullyot: “From the outset, we said we would defend ourselves vigorously against Yahoo’s lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook’s patents. While we are asserting patent claims of our own, we do so in response to Yahoo’s short-sighted decision to attack one of its partners and prioritize litigation over innovation.”

And here is Yahoo’s statement: ‘We have only just received Facebook’s answer and counterclaims, but on their face we believe they are without merit and nothing more than a cynical attempt to distract from the weakness of its defense. As we have made clear from the outset, the unauthorized use of our patented technology is unacceptable and must be resolved appropriately. Other leading companies license these technologies, and Facebook must do the same or change the way it operates. We have proposed that Facebook join us in discussions to resolve the matter, but our overtures have been rejected. As a result, we are prepared to continue to seek redress through the courts.”

Listing image: Photograph by Niall Kennedy

Jon Brodkin Senior IT Reporter

Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.

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