Sloppy Research Halts Yahoo!’s Patent Suit Against Facebook

By Charley Moore | May 18, 2012

Yahoo stumbles yet again, jeopardizing their patent suit against newly-public Facebook

Between firing their CEO for resume fraud and this latest embarrassment, Yahoo is certainly having a hard time at the moment.

In this particularly bitter tech patent battle, Yahoo’s suit against Facebook for patent infringement took a turn for the worse when Facebook was all too easily able to poke a giant sinkhole in some of Yahoo’s allegations.

First, some background: Back in March, Yahoo filed a 19 page lawsuit alleging infringement of 1o patents that deal with social networking and customization. “Facebook’s entire social network model,” the suit suggests, “is based on Yahoo’s patented social networking technology.”

In other words, right after Facebook submitted its s-1 document, Yahoo claimed that they in fact own the entire Social Network model. Some patents relate to the “controlled distribution of user profiles over a network,” but the most important for Yahoo are the advertising patents (which, not coincidentally, is where the money comes from !)

But, contrary to Yahoo’s hopes, and some expectations, this suit did nothing to dampen the excitement over Facebook’s IPO; if anything, Yahoo’s credibility suffered with allegations of trolling.

Now, their reputation has taken another hit.

The new controversy is about two patents, bought by Facebook and filed in 2011 and 2011, Yahoo claim the patents were filed under false pretenses, but responding to these allegations of fraudulent filing, Facebook’s lawyers were able to prove not only that the patents in question were legitimate, but that Yahoo’s lawyers had actually failed to check the records at all.

According to Yahoo, the patents were only issued because of an “intentional deception” — Facebook’s “failure to name all inventors” by omitting the contributions of Joseph Liauw (included on a second patent). Facebook did some digging (not done by Yahoo) and uncovered a sworn statement from Liauw: ”I, Joseph Liauw hereby state that I was incorrectly named as an inventor in the above-referenced patent application, and that this error in inventorship occurred without deceptive intention on my part.”

In other words, this patent, acquired by Facebook can no longer be invalidated based on the arguments offered by Yahoo.

FOSS Patents’ Florian Mueller explains:

Yahoo’s lawyers alleged deception when they simply failed to do their job. Facebook obtained the record and provided it to the court, and in the process found out that nobody had even accessed (!) the record before.

Oops!

It comes as little surprise then that interim Yahoo chief executive Ross Levinsohn may be seeking to resolve the Facebook patent battle as soon as humanly possible. Despite these hiccups, Yahoo is still a multi-billion dollar company, (and one close to my heart, as one of their former lawyers), so I hope they will innovate and find something to do next that does not rely on patent trolling.