Yahoo Sues Facebook For Patent Infringement

Yahoo! Inc.has filed a lawsuit against social networking giant sued Facebook Inc.in federal court over accusations it infringed patents related to Internet advertising and information sharing.

In a complaint which was filed today in federal court in San Jose, California, Yahoo seeks a court order barring Facebook from infringing 10 patents plus triple damages for financial losses already incurred by the patent violation.

Yahoo, owner of the most popular U.S. Internet portal,had said back in February that if Facebook wanted to remain in violation of Yahoo’s patents it would have to work out a licensing agreement just like other companies who infringe. Yahoo 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 in an e-mailed statement on February 27th,

“We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights,”

Yahoo lost its No. 1 spot to Facebook last year in the U.S. market for display advertising, which includes video and graphically-based marketing messages, according to EMarketer Inc.Yahoo, while remaining profitable has been under performing in revenue forecasts for the last few years.

Facebook is looking to file an IPO later this year. The Social Networking site has seen huge growth in its advertising revenues over the last few years.

Larry Yu, spokesman for Facebook, didn’t immediately return a phone message seeking comment.

Do you think that Yahoo filing a lawsuit is going to hurt Facebook in the long run?