

Yahoo Sues Facebook for Patent Infringement - knappster
http://allthingsd.com/20120312/breaking-yahoo-sues-facebook-for-patent-infringement/

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harryh
Do you work at a company that tells its employees that "patents will only be
used defensively"? If so pay attention to this because it is your future.

Do you work for a company that gives bonuses for filing patents? Do you use
the "only for defensive purposes" assurances as a way to soothe your troubled
soul when you take the money? If so, pay attention to this times two.

~~~
SamHo
I think filing patents defensively makes sense. I witnessed this firsthand at
Google on the Android team as the patent wars started and because most
Googlers are anti-patent, Google was at a severe disadvantage to MSFT, Apple,
etc.

Ideally, we would just reform patent law to mitigate this but outside of that,
I think it makes sense for companies to incentivize their workers to file
patents "defensively".

~~~
harryh
When I said "pay attention to this because it is your future" I was
specifically thinking about Google. I basically guarantee that somewhere down
the road Google will abandon their "only for defensive purposes" stance.

~~~
noibl
> I basically guarantee that somewhere down the road Google will abandon their
> "only for defensive purposes" stance.

I basically guarantee that that statement carries no weight at all.

~~~
suresk
What makes you think this won't happen with Google?

They have a very valuable patent portfolio, and there is a very high
likelihood that Google will at some point experience problems similar to
Yahoo, Microsoft, Kodak, etc.

Once that happens, shareholders will be clamoring for that asset to be put to
use - if management hasn't already done so to prop earnings up.

And that's why it's so pervasive - the only practical defense to patent
lawsuits is building up your own portfolio of patents for defensive purposes.
But, since it is highly likely that your company will face situations that
require you to utilize that portfolio in an offensive way, your previously
defensive patents will require other companies to acquire their own
'defensive' patents. Ad infinitum.

~~~
fpgeek
Google sometimes attaches patent licenses for non-aggressors for code they've
open-sourced (see: WebM). That ties the hands of a future management: the
relevant patents are only useful defensively. Anyone not suing Google (or a
downstream user of Google's code) for patent infringement related to that code
can take advantage of the freely available patent license.

Of course, they're not doing that for everything (e.g. PageRank patents), but
to the extent that they do this for the patents they intend to use
defensively, they might avoid this problem.

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amattn
It is very, very common to wait until just before an IPO to sue. The strategy
is that the defendant will be more willing to settle just to get the lawsuit
off the books before the IPO. It usually works against smaller companies.

Google was the recipient of borderline frivolous legal action just before the
IPO, but Google didn't bite. In the case of Facebook, I don't expect anything
to be resolved pre-IPO, as Facebook has the momentum to deflect nearly
anything at this point.

~~~
MobWalk
What's really irritating is that it was Yahoo who sued Google before their
IPO. Fool me once, shame on you. Fool me twice, shame on me.

I don't think Facebook is going to stand for this. Obviously, I don't have
access to Yahoo's patent portfolios, but it just seems frivolous. If they
actually had a case it seems they would've sued a long time ago.

And Google did bite. I read they gave up some 2.7 million shares to Yahoo. It
worked once for them, so it looks like they're trying it again.

~~~
dodedo
No, this is not accurate.

Overture sued Google in 2002. Yahoo bought Overture in 2003, at which point
Google settled. Google's IPO was in 2004.

Yahoo did not initiate the lawsuit against Google, and it was two years prior
to their IPO.

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sriramk
As an ex-employee of Yahoo, I find this sad and disappointing. Also -
unnecessary. Yahoo still has great people, great userbase and great tech. No
good can come out of this long term.

~~~
XcodeNoob
What do you think is going on in the minds of its current employees?

Do you think employees are making plans for an exodus?

Also, as I recall, wasn't there a senior exec that left recently upon
Thompson's new appointment as CEO. Perhaps he saw this coming and thought
similarly?

~~~
sriramk
Several execs have left. I think people at Yahoo have made peace with the
situation or have a strong reason for staying there. I know some people who
are there because they feel that the tech/scale they work on won't be possible
at any other company. Others because they just like the team/people they hang
out with, etc.

So no, I don't expect an exodus because of this. I do think that this will
cause major hiring issues, even more than before. Not because employees have a
moral stance against patents but this move signals desperation. Folks can
'smell' that this is different than when Apple uses patents offensively and
that this isn't something a healthy company should do.

~~~
jbarham
> I think people at Yahoo have made peace with the situation or have a strong
> reason for staying there.

I've said it before, but I'll say it again: The ones with a "strong reason" to
stay at Yahoo would be those on H1B work visas in the green card sponsorship
queue. Because if they find a job elsewhere, the whole process restarts. A
strong reason, sure, but IMO not a _good_ reason to stay.

~~~
drgath
Current Yahoo here. I love working for Yahoo. Fun & unique challenges to
solve, compensated well, and is a nice environment.

Think what you will, but there are plenty more that are like me. My current
team is full of some of the best people in the industry at what they do and
the average tenure of them at Y! is ~6 years. So, there's plenty of very
talented people left at Yahoo who are here because they want to be.

------
jrockway
The last act of a dying company.

~~~
dredmorbius
That was my first thought.

Though I'd argue that Apple is bucking that trend. And by your logic, IBM's
been dying for decades.

OK, for a few decades, they really _were_ dying. But they got better. Or
turned into a newt.

~~~
harshreality
Jobs's biography makes clear that Jobs wanted to burn Android to the ground.
Most of the recent Apple lawsuits seem to stem from that. That's very
different motivation than...

    
    
      "We're a weak company.  What can we do?"
      "Let's use our patents to sue people."
    

I'm not saying that Apple isn't weak. I think they are, with Jobs gone.
However, even if it's as bad as I think, the flailing lawsuits will take a
while to materialize. First the stock has to tank. Right now shareholders are
salivating over potential dividends.

~~~
dredmorbius
I pretty much agree with you.

One of the signs of a tech company's last gasp is "leveraging its patent
portfolio", a/k/a, suing everyone in sight.

From what I understand of the Apple/Android instance, Jobs felt personally
betrayed by Eric Schmidt, who was apparently privy to advance information
about the iPhone when Google began its Android pursuits.

Given the iPhone release in June, 2007, and Google's acquisition of Android in
August, 2005, the timing might be indicative. Then again, the first release of
the iPhone was in 1993 (the Newton). I still remember encountering my first
one of those and wondering why I'd ever want one.... By 2005-6, the time of
the mobile+PDA had truly come, IMO. Not that Schmidt couldn't have picked up
some tips from Apple. Much as Apple once did from Xerox....

[http://www.businessweek.com/technology/content/aug2005/tc200...](http://www.businessweek.com/technology/content/aug2005/tc20050817_0949_tc024.htm)

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XcodeNoob
What if instead of suing Facebook, Yahoo proposed to Facebook a greater
partnership and deeper integration of its products with the social layer?

What if Yahoo Mail and Yahoo News now had an advanced social layer that
managed contacts autonomously (like GMail) and becomes official curator of
news on a social level? (Not like, here's a lot of news, and then a commentary
section. I'm talking a brief abstract with link of rest of article and just a
ton of commentary)

That would actually make me consider leaving GMail (Really). And for once I
would give a dang about the things being posted in my feed, rather than
filtering out the majority of my contacts and likes.

~~~
samstave
Dear god kill it with fire!

The last thing I would be interested in is the husk of Yahoo imbued with
facbook/social anything powered by bing search.

I've been here a long time - and I havent visited a yahoo site/page for
probably 6 or 7 years.

I let my @yahoo.com mail die years ago and never went back.

Sorry for anyone who still likes Yahoo - I just find them completely
irrelevant.

I stated several times on HN that if they had any wisdom - they would go on an
investment spree in the valley. However, they are taking the opposite approach
and going trolling.

:(

~~~
bgilroy26
Hadoop was developed by Doug Cutting while he was working at Yahoo. I think it
skews the reality of the situation to focus solely on the public facing pieces
of Yahoo (as a home page, as an email service), which kicked the bucket a long
time ago. On that front Yahoo has been irrelevant for > 6 years, but their
advertising business and their software engineering R&D department continued
on after that.

~~~
aaronblohowiak
trying to advertise on yahoo's display network was, for me, an exercise in
frustration, contempt and (ultimately) resignation

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shmerl
Definitely a sign that Yahoo stopped getting profit from doing anything
useful, since they fell so low as to use software patents litigations for
their income.

~~~
kloncks
I get what you're trying to say but I disagree that you can conclude that from
this story.

Apple, Google, Samsung, Microsoft and many others who _are_ "getting profit
from doing anything useful" sue each other every other month.

~~~
shmerl
Apple and Microsoft are notorious software patent aggressors who consider
patent protection racket an acceptable "business practice". Google on the
other hand tries to avoid anything of that sort, and uses patents only for
defense against patent aggressors. At least Google used to up until latest
Motorola acquisition which mixed their policy up. Didn't really look into what
Samsung is doing in detail, but they usually just fight back (for example to
Apple) as defense, and don't act as aggressors.

Yahoo didn't engage in software patent aggression before. So whatever the
case, acting as a software patent aggressor shows deterioration of company
ethics and usually signals that they can't compete on merit.

------
cletus
I couldn't disagree more with the linkage some have between companies only
using patents "defensively" and/or financially rewarding employees to file
patents. The two are unrelated.

Yahoo is dying. It has been for some time, arguably the better part of a
decade. At some point all such companies end up in hands of management and/or
a board who simply want to extract every last dime. Much like how some dying
stars go supernova, large dying companies often explode in a conflagration of
litigation. We saw it with SCO. Now it's Yahoo's turn (apparently).

But to argue that this is a product of acquiring patents is ridiculous. Not
doing so will do nothing but hasten your demise. Software patents are
ridiculous and should be declared invalid (wholesale) but until that happens,
that's the system we live in.

If anything, the more ridiculous patent lawsuits we have, the more it hastens
the onset of commonsense and (hopefully meaningful) patent reform.

~~~
valuegram
You're wrong about yahoo "dying". They've increased revenue by about 800% and
earnings by 1000% in that decade of death you're referring to.

As for "Yahoo the search engine" - that certainly seems to be a lost cause,
but Yahoo has built a substantial business over the course of the last decade.
Assets such as their Fantasy Sports, Yahoo Finance, and Flickr are thriving -
not to mention their stake in Alibaba.

~~~
shingen
Yahoo is currently hitting a $5 billion per year sales rate.

Sales for fiscal 2005 were $5.3 billion.

Yes, they're obviously a rocket ship of growth.

They're rotting. Worse than their 7 years of stagnation (let's not even
inflation adjust for the comparison), is that their leadership is completely
non-existent; they have no category killers that are banging out the growth
and profits; they no longer produce big innovative products; their core as a
portal is eroding; their dominance in display advertising has been eclipsed.

~~~
valuegram
"A rocket ship of growth" and dying are two very different things.

...and I agree on the leadership issues.

I'm not saying they're perfect, I'm not even saying I agree with their actions
in this case - I definitely don't. What I am saying is maintaining/growing
(depending on your sample range) revenues and increasing earnings through a
global recession isn't dying.

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tmarthal
Royalty payments? Can someone chime in here on the difference between the
royalties Facebook is paying Yahoo versus what fees they want recompensed the
lawsuit?

From the article "The company adds that Facebook has been “free riding” on
Yahoo’s intellectual property and that royalty payments alone will not
suffice."

Isn't there a contract drawn up for a company to pay another company money
(i.e. royalties) so that they can't litigate against one another? It just
sounds like Yahoo had undervalued or misconstrued how Facebook was going to
use their patent tech.

------
freejack
What a disappointing step for Y!'s new CEO to take.

Yahoo! is a media company, Facebook is a networking/platform company. They
should be looking for ways to work together and build value instead of
attacking each other and destroying it.

To me, this just looks like a complete waste of Yahoo's time and an incredibly
silly way for Yahoo's new CEO to be investing his resources - they have so
many problems on so many fronts and the last thing they need to do is draw
themselves into another battle.

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beedogs
This seems like it may be the worst patent lawsuit in history. Why the hell
did Yahoo think this was a good idea?

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tathagatadg
I think they mistimed this ... by 19 days!

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robomartin
Isn't Apple alive today partly because of a patent lawsuit with MS that they
were going to loose? A I understand the story, in a twist of things, Jobs
convinced Gates to invest over a hundred million in Apple, thereby saving the
company.

~~~
RandallBrown
I believe that Jobs told Gates that Apple would likely win the lawsuit, but it
would probably completely destroy Apple and seriously damage Microsoft. That's
how I understood the story in the Steve Jobs biography anway.

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nirvana
Maybe I'm off my rocker here, but this sounds like "suing your way into being
acquired".

Is Facebook buying Yahoo not something Yahoo probably wants at this point?

Yes, I'm sure there's lots of reasons this might be a bad match- I didn't say
I thought yahoo thought it was a good match. Yahoo might be really expensive
(even today) for FB to buy. But it just smells that way to me.

~~~
magicalist
You're definitely off your rocker :)

Facebook usually does the acquire/hire thing, often without purchasing the
companies' actual products, which means they're integrating the acquired devs.
Yahoo has 4x the number of employees of facebook (where would they go?) and a
number of products that would be totally new for Facebook. They would probably
have to be run as they are now, by mostly the same org structure, which isn't
at all like the more organic growth that Facebook has chosen so far.

~~~
aaronblohowiak
>Yahoo has 4x the number of employees of facebook

Yahoo also manages a lot of content and editorial work, which is not in
business units that would matter to facebook, and would be ripe for
disinvestment.

>They would probably have to be run as they are now, by mostly the same org
structure, which isn't at all like the more organic growth that Facebook has
chosen so far.

Spun off and sold.

------
hastur
So Yahoo is in such a bad condition, that it decided to turn into a patent
troll?

R.I.P. Yahoo

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sgonyea
SOMEBODY wants to get acquired! ;- _

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Porter_423
over 700 million monthly unique visitors!That's impressive

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boxein
The patent system is broken, but at least this time it is a company that
deserves litigation instead of some poor indie app dev. IMO Facebook is pretty
high up on the list of companies with horrible policies, it's bittersweet to
see such stupid litigiousness with them as the target.

