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Yahoo Unfriends Facebook With Aggressive Patent Demands

Posted by timothy on from the press-1-to-pay-press-2-to-be-sued dept.

theodp writes "'Hate to see something happen to that multi-billion IPO of yours,' is essentially the IPO-threatening message Yahoo sent to Mark Zuckerberg and Facebook investors on the eve of the social networking giant's IPO. Yahoo, unlike the Sopranos, is using IP as its muscle to collect its IPO-protection money: 'We must insist that Facebook either enter into a licensing agreement [for 10-20 Yahoo-owned patents] or we will be compelled to move forward unilaterally to protect our rights,' Yahoo explained in a statement alerting the NY Times to its demand. Yahoo issued a similar last-minute threat to Google on the eve of its 2004 IPO, prompting Google to pony up 2.7 million shares to settle Yahoo's patent lawsuit. BTW, should Facebook also be concerned that Amazon has been beefing up its PlanetAll social networking patents from the '90s, including the one issued Tuesday covering a Social Networking System Capable of Notifying Users of Profile Updates Made by Their Contacts?"

59 comments

  1. Who should I hate? by MickyTheIdiot · · Score: 5, Interesting

    Hmmm... I don't like Yahoo or Facebook.

    I think I'll hate the patents themselves. Another ridiculous patent suit wasting the time and money of the courts.

    1. Re:Who should I hate? by WrongSizeGlass · · Score: 1

      Hmmm... I don't like Yahoo or Facebook.

      I think I'll hate the patents themselves. Another ridiculous patent suit wasting the time and money of the courts.

      Both. There's enough contempt and disdain to go around.

    2. Re:Who should I hate? by Tharsman · · Score: 3, Insightful

      I would say Yahoo. In any argument where someone bring patents into bullying with some crazy timing (like IPO timing... for stuff they pursued others years ago...) the bully loses.

      Also, although I personally dislike Facebook and their disregard for privacy settings, and obsession with tracking, at least there is a bit I admire from them and it's their independence. They are only pursuing the IPO because they are forced to, but Zuckerberg has attempted to keep things indie (huge indie but still indie) all this time.

      Their issue was in granting some... not sure how you call it... profit share? Ownership share? â¦to many early employees that sold all or part of them. As soon as too many people own shares, you must legally do an IPO and go public. So for that at least Zuck has my support even if I refuse to use the services he provides.

      Yahoo is just trying to make it look bad for investors that they are getting into patent trouble. If Zuck refuses to settle and decides to take it to the court, and counter sues for any potential damages, he will get bonus points in my book.

    3. Re:Who should I hate? by surgen · · Score: 1

      at least there is a bit I admire from them and it's their independence. They are only pursuing the IPO because they are forced to, but Zuckerberg has attempted to keep things indie (huge indie but still indie) all this time.

      Facebook stopped being indie years and years ago (issuing shares, taking VC cash). Since then its all been carefully managed image and branding. He was never forced to IPO, its just his chickens coming home to roost.

    4. Re:Who should I hate? by ackthpt · · Score: 1

      Hmmm... I don't like Yahoo or Facebook.

      I think I'll hate the patents themselves. Another ridiculous patent suit wasting the time and money of the courts.

      I find both to be a pain, too. Perhaps that's where they patents lay -- inducing pain and suffering upon users.

      --

      A feeling of having made the same mistake before: Deja Foobar
    5. Re:Who should I hate? by Theophany · · Score: 2

      to many early employees that sold all or part of them. As soon as too many people own shares, you must legally do an IPO and go public

      No, you must legally disclose your corporate financials. If you're going to be forced to divulge that level of information, it only makes sense to have an IPO and raise some capital for investment. Unless of course you are hell bent on controlling the company. You cannot force a company to IPO, only to go public with its books.

    6. Re:Who should I hate? by Sir_Sri · · Score: 1

      interestingly their refusal to go public this long is something that has made me like them a lot less. Now that they're going public, and Zuck is going to keep 60% of the control makes me hate them even more. Even Bill Gates only kept 49% of the control.

      If you're that big of an outfit and not going public you're either denying the people who built the company a piece of the pie, or trying to be a control freak (or I suppose, both). If I had money to be a shareholder I wouldn't want to be into an outfit like facebook, because if Zuckerberg does something outright crazy he's got 60% of the control, which means you can't get it back from him, and your money might be worthless. He could, essentially, vote to sell the entire assets of the corporation to himself for 1 dollar for example, and fuck over the people who have the other 75% of the ownership (but not voting rights). That's an extreme contrived (and probably illegal) example but I'm trying to be illustrative of the problem. In practice that 'crazy' is more likely to be trying to build a revenue stream that will clash with various privacy rules around the world, or trying to acquire businesses that might not actually be good buys.

      And ya, they have to go public because they were using stock as compensation for employees. That's perfectly normal and reasonable, but they even got a deferment to delay their IPO when they exceeded the maximum number of shareholders before needing to be public. That is (legally) attempting to delay owners of the company their fair say in how that company is run.

      Yahoo is being somewhat sleezy. But that's also part of the way the game is played. You hold patents, and bring them out when there's money to be made, either a competitor is big enough, or when someone is coming after you. If Yahoo had demanded licencing fees or royalties years ago they might be stuck with a pittance. Now they get to demand shares, and as the articles point out, this worked for them in 2004 with google to the tune of 2.4 million shares (1.4 billion dollars worth as of todays google stock price). That might be a good strategy with facebook too. Demand 0.5% of their business (which could justifiably rely on Yahoo patents), and see what the stock price does.

    7. Re:Who should I hate? by Anonymous Coward · · Score: 0

      Not sure why you dislike Yahoo. While they have the top news, sports and finance sites, there are plenty of good alternatives. While lots of people use Yahoo mail, there are also lots of alternatives. On the other hand, if you have friends who use facebook, there's a lot of peer pressure to use it as well. Also, there are the facebook buttons and scripts all over the web that spy on you.

    8. Re:Who should I hate? by Anonymous Coward · · Score: 0

      Invent something, or in this case, spend hundreds of millions of dollars to get the rights to someone else's invention, and then just sit back and let others make billions on it.... for free... I DARE YOU!

      Here's how I see it. Yahoo! has grown progressive in its patent dealings.
      I'm sure they knew violations were happening, and I'm sure FB did to.
      So, do they just squash FB before they amount to anything? Or do just ask for fair and reasonable compensation when they can withstand to pay what they rightfully should? Basically, they bootstrapped the company by allowing use of their IP.

      Of course we'll see how this ultimately plays out, but it seems like based on many past reports questioning why Y! did not try to get money for it's patents, it seems pretty plausible that there is patent violations taking place.

    9. Re:Who should I hate? by TaoPhoenix · · Score: 1

      Hmm. I'm not sure I agree with this.

      Once you reach a certain size, your Hugeness Precedes you.

      Facebook has scared me off with its ulbiquity combined with privacy problems.

      So then "Also Ran" Yahoo (of all folks, not the other 8 companies with a patent or three?) decides to show up in news?

      Yahoo: Not Facebook. Not an Interlinked Service subject to Google's New (Anti) "privacy" (sales) policy.

      Bonus: I have been on Yahoo Mail for some 8 years. Suddenly that's the Underdog Rebel choice to win.

      So if they can make it stick, sure, let Facebook pay them some survival cash.

      --
      My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
  2. Clash of the Titans by G3ckoG33k · · Score: 1

    or just a measly David against Goliath?

    Hard to tell these days. Daily form on the stock market doesn't really tell you everything.

    1. Re:Clash of the Titans by SJHillman · · Score: 1

      It's a little more like making the biathlon a Special Olympics event, with rockets instead of rifles.

    2. Re:Clash of the Titans by SuricouRaven · · Score: 1

      Facebook is a Goliath. Yahoo used to be a Goliath, until old age set in. Now Yahoo is the giant who sits in the corner of the pub bombarding anyone who comes too close with stories about the Great Portal War of the nineties.

    3. Re:Clash of the Titans by Anne_Nonymous · · Score: 5, Funny

      Note to reality TV producers: Hillman is onto something here.

  3. Why Choose? by Greyfox · · Score: 4, Funny
    People often act like there's only one choice in situations like this. Don't you have enough hate in your heart for both? Here, let me show you how it's done:

    I for one hope they destroy each other in an all out mutual-assured-destruction patent war. Then all die of anal warts. I realize that anal warts are not usually life threatening, but we can dream!

    See? That wasn't so hard, was it?

    --

    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

    1. Re:Why Choose? by tobiasly · · Score: 2

      I realize that anal warts are not usually life threatening, but we can dream!

      They would be life threatening if they were so massive as to render the victim unable to perform a BM.

    2. Re:Why Choose? by Anonymous Coward · · Score: 0

      Or perhaps they were so bad they couldn't pull their own head out.

    3. Re:Why Choose? by AliasMarlowe · · Score: 1

      Then all die of anal warts. I realize that anal warts are not usually life threatening, but we can dream!

      You left out the bit about getting those anal warts on the penis and tongue. Probably a fate worse than death, and which should suit both of them just dandy. And their legions of bloodsuckers^Wlawyers, too.

      --
      Those who can make you believe absurdities can make you commit atrocities. - Voltaire
  4. I have a dream.... by Nyder · · Score: 4, Insightful

    ... that one day congress/senate will come to their senses and invalidate all software patents, so I can laugh at the money these companies spend on each other over threats of court.

    In other words, the only winners here are the lawyers, which makes the current laws scum laws.

    Laws written by ex-lawyers that really only benefit lawyers. That is what is really going on.

    --
    Be seeing you...
    1. Re:I have a dream.... by SuricouRaven · · Score: 2

      Or they'll realise that the US isn't very good at manufacturing any more because they don't have the cheap peasant labor and total disregard for safety and the environment to be found in China, so intellectual property and services are all they have left to export.

    2. Re:I have a dream.... by Anonymous Coward · · Score: 0

      This coming from someone who doesn't know the difference between "roll" and "role".

    3. Re:I have a dream.... by Anonymous Coward · · Score: 0

      Patents of any form are like nuclear weapons. They are only good for two things, threatening mutual destruction on others and helping to ensure that nobody who doesn't have them will ever get them.

      Patents destroy innovation, and close entire industries.

    4. Re:I have a dream.... by Riceballsan · · Score: 2

      Well there are trade secretes and all. The problem with software pattents is it is only comparing the end result or goal being similar. It is like the first person who invented apple pie, claiming anyone who makes any kind of pie after him as breaking his invention. Perhaps they can find a way to rewrite software patents from scratch, but the bottom line is what we have now is far worse than nothing, it protects no-one and is used as a sword against those who try to innovate. So yeah IMO they should abolish software patents in the mean time, and start working on a replacement system.

    5. Re:I have a dream.... by TheReaperD · · Score: 4, Insightful

      Protection for innovative software is a good thing. That's why it's protected by copyright, just like books and any other documents. Software is not a solid object and thus shouldn't be protected by patents. Though there are issues with current copyright law as well, it is the correct category for software protection.

      --
      "Be particularly skeptical when presented with evidence confirming what you already believe." -
    6. Re:I have a dream.... by TheReaperD · · Score: 1

      Why do you think the government is so easily going along with this crazy set of "intellectual property" laws? You nailed it on the head.

      (Now, all that money going to politician election/reelection campaigns and fact finding missions to the Bahamas doesn't hurt either.)

      --
      "Be particularly skeptical when presented with evidence confirming what you already believe." -
    7. Re:I have a dream.... by Qzukk · · Score: 2

      The problem with software pattents is it is only comparing the end result or goal being similar.

      Bingo. There are a million ways to achieve a result on a computer, but software patent holders routinely insist that their patent covers every possible way of doing something. That's not patenting an invention, that's patenting an idea and it should be completely invalid.

      --
      If I have been able to see further than others, it is because I bought a pair of binoculars.
    8. Re:I have a dream.... by SuricouRaven · · Score: 1

      It also explains why the US has pressured other countries so hard to pass equally tough copyright laws, with ACTA just being the latest example. It's one industry where the US exports a great deal.

    9. Re:I have a dream.... by w_dragon · · Score: 1

      The US is still very good at manufacturing, it's just that robots do a much better job than humans ever did for a lot of manufacturing.

    10. Re:I have a dream.... by Anonymous Coward · · Score: 0

      Would it be a good middle-step to simply change the law so software patents expire after 7 years of being patented? Maybe I shouldn't call them software patents. Maybe they should be called idea patents. Software patents sounds like protecting code, which should be done to a reasonable extent (plagiarism issues).

      I think there's a difference between protecting one's code one types up versus protecting an idea on how to do something on the Internet. If someone figures out a way to code an idea entirely on their own without stealing someone else's code, why shouldn't it be allowed?

      Can we patent different ways to tie our shoes? Seriously. What if someone invents a new way to tie one's shoes?

  5. Time for the pirate party by Anonymous Coward · · Score: 3, Insightful

    The idea that the world will end if we don't let people sue other people over ideas is coming to an end. There are no new ideas, just different applications of the same ideas or a synthesis of several ideas together. The amount of wasted time and money that doesn't create anything new or anything useful is annoying and stupid. There's a phrase "If you created Facebook you would have created Facebook." Put up or shut up. Having a great idea is no longer enough, you have to produce great results. This will not squeeze out the little guy, but it will require that people reward the right people. If you have an idea and you can't scale it up to mass production, you'll loose out. Sorry. If you can take a floundering idea and make it flourish, you deserve to be rewarded. We have to switch from the worker mentality to the owner mentality. If a company is doing well, you should not only buy from them, but invest in them. That way, when they do well, you do well too. I want a great product at a great price. I'm willing to support individuals that produce, but I'm not willing to support individuals that have a great idea but don't produce. That's all this suing ever does. Reward people who don't produce or can't produce. Many of these patents are stupid and obvious. They will not stand much longer. People are going to revolt and demand that this silly crap stops. The pendulum will swing too far, as it always does. Time for the pirate party to end patents and copyright both.

  6. Uh Oh by Anonymous Coward · · Score: 0

    Money, Lawyers, IP Litigation ... Oh My.

  7. Holy Submarine Patent, Batman! by Qzukk · · Score: 5, Informative

    Amazon's social networking patent was filed in 2011 but

    This application is a continuation of U.S. application Ser. No. 12/506,115, filed Jul. 20, 2009 now U.S. Pat. No. 8,041,595, which is a division of U.S. application Ser. No. 12/127,495, filed May 27, 2008 now U.S. Pat. No. 7,739,139, which is a continuation of U.S. application Ser. No. 11/022,089, filed Dec. 22, 2004 now U.S. Pat. No. 7,386,464, which is a division of U.S. patent application Ser. No. 10/780,486, filed Feb. 17, 2004 (now U.S. Pat. No. 7,194,419), which is a continuation of U.S. patent application Ser. No. 09/348,355, filed Jul. 7, 1999 (now U.S. Pat. No. 6,714,916), which is a continuation of U.S. application Ser. No. 08/962,997, filed Nov. 2, 1997 (now U.S. Pat. No. 6,269,369).

    That patent filed back in 1997 was for a networked personal contact manager. Good luck finding prior art!

    --
    If I have been able to see further than others, it is because I bought a pair of binoculars.
    1. Re:Holy Submarine Patent, Batman! by Pitawg · · Score: 1

      Email lists started prior to '97 in my world.

    2. Re:Holy Submarine Patent, Batman! by Anonymous Coward · · Score: 0

      Finger protocol 1971?

    3. Re:Holy Submarine Patent, Batman! by houghi · · Score: 1

      Ah, they used the magical word "networked". Does that predates the words "Over internet protocol"?

      --
      Don't fight for your country, if your country does not fight for you.
  8. It'd Be Easier If It Was an Open Source License by RobotRunAmok · · Score: 0

    See, if Facebook had sneaked around a GPL agreement to make a fortune off of some other developers' software, rather than sneaking around patent laws to make a fortune off some other developers' software, the hivemind would easily concur that Facebook is e-e-e-e-vil.

    Now, it's complicated...

    1. Re:It'd Be Easier If It Was an Open Source License by D-Cypell · · Score: 1

      If Facebook had included third party code I would expect them to abide by the terms of the license, commercial or otherwise.

      I find it slightly harder to get all 'wavy fist' when they build something that someone else merely claims to have thought of first.

    2. Re:It'd Be Easier If It Was an Open Source License by ZeroSumHappiness · · Score: 2

      Let's say I make a product and give it a GPL license. If someone modifies and redistributes my code outside of that license then they've done something I don't like /with something I created/.

      Let's say I get a software patent. If someone infringes on that patent then they've done something that doesn't financially benefit me /with something similar to what I thought up/.

      I feel there's a strong distinction there. I made it and only want it used in accordance with my wishes. I thought up a possible result (neither created the result nor created a process to that result) and want financial compensation for that. Yeah, no, not the same.

      (Process patents are fine, to me. An algorithm is not a process. "Ooh, ooh, what if you could buy that thing /with one click/" is not a process nor an invention.)

  9. Terrible by Anonymous Coward · · Score: 0

    But not so terrible that 1 in 3 US University majors is a law degree egh ?

    What did you think lawyers do all day, divorce ? house sales ?, nah, they usually sit in room devizing schemes to fuck up the other side, truth be dammed.

    you love the fighting, thats why you do it.
    so patents, trademarks, copyright, will continue until you vote with your chosen lives/careers and choose something else to do with your time.

  10. Why Contain It? by Anonymous Coward · · Score: 0

    Let it spill over schools and churches, let the bodies pile up in the streets! In the end they'll beg us to save them.

    Here, ftfy.

  11. Rare instance of patents being useful? by Anonymous Coward · · Score: 0

    Anything that helps destroy Facebook has to be a good thing.

    Oh who am I kidding. This is just a corporate shakedown.

  12. Your Hatred, It FEEDS ME or "Pub/Sub Flub" by eldavojohn · · Score: 5, Insightful

    I think I'll hate the patents themselves. Another ridiculous patent suit wasting the time and money of the courts.

    Here, let me help you hate.

    Take, just for a quick example, Patent 5133075 (filed in 1988 granted on July 21, 1992) that is cited from the Amazon patent mentioned at the end of the summary (filed in 2011 granted on February 28, 2012). As a lowly software developer, Patent 5133075 reads like a now commonly used pub/sub paradigm. It's basically the opposite of polling. Where, for the longest time, the bulk of software projects would continually ask a central authority (like a database) for updates. So every five seconds you say "Do you have anything new for me yet? No? Okay, I'm asking again in five seconds" ad infinitum. Now, with one client, this is probably not a big problem. But as your number of clients increases this becomes impossible (usually on the network end of things, you DDOS yourself). So the idea becomes for that central authority to allow clients to register somewhere these updates should be shipped and whenever anything changes or something new comes in, you simply send it to everyone who's subscribed to that. It's a publish and subscribe method and we call it pub/sub. Undergrad (probably high school now) concept.

    So with that in mind, Amazon's patent in the summary reads with this final sentence: "The system may also automatically notify users of personal information updates made by their respective contacts." Oh, okay, so you took a now commonly used paradigm and applied it to social networking. Congratulations. Surely Twitter and Facebook were doing this before 2011 but what idiot allows a company to include any language like this in a patent? That's not an invention, it's not even really a derivative of an old invention. It's taking an old solution and applying it the same way we've been using it for almost twenty years. And now this new piece of shit is dated February 2012 and we have to deal with this unadulterated human feces for another twenty years? *head explode*

    --
    My work here is dung.
    1. Re:Your Hatred, It FEEDS ME or "Pub/Sub Flub" by Anonymous Coward · · Score: 0

      That's the whole problem with software patents. Tech development moves so fast, and applying old computer science concepts in new technologies is obvious, yet these patents are granted anyway. Ten years ago, it was 'on the Internet' patents, where it took something everyone knew how to do, tacked on 'on the Internet' and somehow it was a new invention worthy of patent production. Today it is 'on a mobile phone' and 'on a social network.' The problem is that these are still computing environments, and it is still obvious to implement known computer science and business concepts on them. Yet our patent system issues the patents anyway. It's absurd.

    2. Re:Your Hatred, It FEEDS ME or "Pub/Sub Flub" by JasterBobaMereel · · Score: 2

      Software patents are mostly of the blindingly obvious or "...on a mobile device" "...on a website" kind

      This is the main problem with them, and why so many people are against software patents, lawyers think they are novel ideas, programmers don't, and so everyone ends up with the ability to sue everyone else ...

      An idea that is so un-novel that everyone is already using it should not be patentable ...

      --
      Puteulanus fenestra mortis
    3. Re:Your Hatred, It FEEDS ME or "Pub/Sub Flub" by zlives · · Score: 1

      after the head explosion.. all i see are CLOUDs and my green screen

    4. Re:Your Hatred, It FEEDS ME or "Pub/Sub Flub" by Anonymous Coward · · Score: 0

      The patent linked to in the summary has a "filing" date of May 2011, but arguably has a "priority" date that goes back to 1997. That means the statutory requirements for a patent are judged as of 1997. That was prior to Facebook (2004) and prior to MySpace (2003).

      Was it obvious to use push data transformations on social networking sites as of 1997 when social networking sites were not ubiquotous (as they are now)? I'm not saying it was or was not, but you haven't proven anything based on your "arguments."

      You can't use common notions of what is obvious NOW. Rather you have to consider what WAS obvious at the correct legal point in time (e.g., the priority date).

      Oh and the patent isn't going to expire 20 years from now, it expires 20 years from 1997 - so in 2017 - 5 years from now.

  13. Really? by Anonymous Coward · · Score: 0

    Acronym on the summary really? Would it burn your finger to type By the way instead of BTW? This place is getting crappier each day...

  14. Is there any doubt... by forkfail · · Score: 3, Insightful

    ... that the patent system is about division of wealth, and not about creating products that lead to wealth these days?

    This thread will probably turn into a flame war about the relative merits of Yahoo/ABC and Facebook. But the true story here is, that like all the other big patent battles going on these days, this is about divvying up the internet between a few players, who will profit forevermore from it. Now it's all about who gets what slice of the pie - a pie that will keep on giving forever.

    --
    Check your premises.
  15. The Lifecycle of a Tech Company by Cid+Highwind · · Score: 5, Insightful

    Startup > Rising Star > Established Player > Unstoppable Juggernaut > Clueless Dinosaur > Patent Troll > "Hey, remember Unisys? Whatever happened to them?"

    Welcome to phase VI, Yahoo! See you at the bankruptcy liquidation auction.

    --
    0 1 - just my two bits
  16. How to make money by StoutFiles · · Score: 2

    1. Patent anything and everything. 2. Knowingly let companies use your patented works. 3. Wait till they get rich. 4. Sue their brains out.

  17. Battle of the Diaphanous Patents! by kawabago · · Score: 1

    Watch as patented ideas battle over who has eligible subject matter!

  18. Sad point in Yahoo's lifetime by flimflammer · · Score: 1

    It's a little sad to see Yahoo so unable to innovate and adapt to the changes in the industry that they've apparently got no choice but to stab their friends in the back for a little loose change.

  19. If you cant innovate... by L3370 · · Score: 1

    ...litigate.

  20. Patents aren't software. by microbox · · Score: 1

    a fortune off some other developers' software,

    Patents aren't software. Do you even write code, or are you just a corporate shill?

    IDIOT

    --

    Like all pain, suffering is a signal that something isn't right
  21. What are the Yahoo patents about? by walterbyrd · · Score: 1

    Anybody know what these patents cover?

  22. Re:Sad point in Apple's lifetime? by walterbyrd · · Score: 1

    Apple is doing the same thing, only 100X more aggressively. I guess Apple has not been able to adapt to changing technologies?

  23. Does it matter? by Anonymous Coward · · Score: 0

    I interact with human beings without a computer in between us. These patents don't matter to me, as I am not a user of any of these "services" and never will be. They all suck ass, and only sad, pathetic people use them. Get off the computer, and go make REAL friends, not fake, eFriends or iFriends or whatever. I use the computer to buy things occasionally, to bank from home, and to read the news, or watch TV without the irksome interruptions of idiotic commercials (thank you adblock!) but these companies whose bread and butter is a nonservice like Facebutt and Yuhoo, etc., could disappear tomorrow and that would not bother me at all. Not one little bit. I might laugh, at all the wasted cumulative man-centuries, but I myself would not lose a second's sleep over it. Die, all social networking bullshit websites, die!