Yahoo! Inc. (YHOO) asked Facebook Inc. (FB) to license technologies covered by its intellectual property and threatened to take legal action if the companies don’t reach an agreement.
“We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights,” Sunnyvale, California- based Yahoo said yesterday in an e-mailed statement.
Yahoo, the largest U.S. Internet portal, is looking for ways to revive growth after losing ground to Facebook in the display-advertising market and trailing Google Inc. in Web searches. Yahoo said it has made “substantial” investments in innovation and that other companies have already agreed to license those technologies.
Yahoo’s statement was previously reported by the New York Times.
Facebook, the world’s largest social-networking service, hasn’t yet been able to “fully evaluate” Yahoo’s claims, said Larry Yu, a spokesman for the Menlo Park, California-based company.
“Yahoo contacted us at the same time they called the New York Times,” Yu said.
Facebook, which has grappled with lawsuits over intellectual property in the past, faces potential threats from other large companies that have patents on social-networking technologies. Amazon.com Inc. (AMZN), the world’s largest e-commerce company, owns certain social-networking patents that predate Facebook by seven years, according to M-Cam Inc., a patent advisory service.
Playing Hardball?
“As we’ve seen over the past few years in the mobile device field, patent assertion can ultimately lead to blocking the sale of a product, or, at the very least, an innovation tariff that drags down earnings,” according to a report by M- Cam. “That’s only if Amazon wants to play hardball.”
Mary Osako, a spokeswoman for Seattle-based Amazon, declined to comment.
Yahoo didn’t identify companies that license its technology or elaborate on what’s covered by its intellectual property.
To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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