Facebook and Yahoo May Be Burying the Patent Hatchet

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Several outlets and multiple sources have cited meetings between Yahoo and Facebook as negotiations to make a deal to resolve patent disputes that have been litigating ferociously for some time.  A settlement is expected by many to come in the next few weeks as lawsuits and counterclaims get shelved and the healing process between former partners begins.

According to All Things D, terms being discussed include cross-licensing for patents and deeper integration of Facebook into Yahoo and Yahoo into Facebook.

The news of resolution would be good for Yahoo, which has come to rely heavily on Facebook for traffic and which could stand to lose that should litigation continue and Facebook cut them off.  Last September’s announcement of the integration of Yahoo News into Facebook seemed fortuitous and many wondered at the wisdom of the patent infringement filings against the social giant that Yahoo filed just a few months later.  After all, when your traffic triples thanks to a single source, you don’t then turn around and sue that source without really thinking it over first.  When Facebook countered with its own allegations of infringement, the fight was on.

Some sources, like VentureBeat, blame the questionable attack on Yahoo’s former CEO Scott Thompson.  Now that he’s out, they say, moves to resolve, forgive and forget are underway.

The timing of the patent claims were interesting as well, coming just as Facebook prepared its initial public offering (IPO).  Steven Musil at CNET summed up the probable tactic Thompson may have been employing:

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.

Whatever the ill-fated reasoning, a resolution seems to be underway and may be forthcoming very soon.


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