Yahoo! v. Facebook: Clicking Through the Blogosphere Bias

Originally posted March 13.  Updated March 28, 2012.

On March 12^th, Yahoo! filed a patent infringement lawsuit in the Northern District of California alleging that Facebook infringes ten Yahoo! patents.  Immediate reaction has been widely critical of Yahoo!, from interpreting statements made in the filing as a claim by Yahoo! that it “patented the whole idea of Facebook” to characterizing Yahoo! as “relentlessly stagnating as Facebook innovated.”  Such is to be expected from the blogosphere with regard to the party asserting software or Internet-related patents.  However, if one really wants to weigh the merits of this lawsuit and the claims being made about it, there really is no substitute for digging into the subject matter of the patents that Yahoo! claims cover various aspects of how Facebook operates:

Yahoo!’s “Advertising Patents”

Yahoo! claims protection in systems and methods for advertising, placing advertisements on a web page in a manner according to click through rate and advertiser bid in order to maximize the revenue generated, and for identifying and preventing click fraud.  Yahoo! asserts that Facebook’s advertising platform, Facebook Ads, infringes these patents, which include the following:

U.S.Patent Nos. 6,907,566, 7,100,111, and 7,373,599, each entitled “Method and System for Optimum Placement of Advertisements on a Webpage”

The first independent claim of each of these patents is directed generally to displaying graphical objects, such as advertisements, on a webpage in an arrangement or order that is based on the relative likelihood of a user clicking on the object. If the claims are not found to be invalid, Yahoo! appears to hold relatively broad protection on the relative placement of ads on a webpage based on the likelihood of a user clicking on that ad.

U.S.Patent No. 7,668,861, entitled “System and Method to Determine the Validity of an Interaction on a Network”

The first independent claim of this patent is directed in part to classifying a user interaction on a network based on a value score generated from user interaction data.  In that regard, the patent describes the growing need for websites to be able to identify user interactions that are invalid or fraudulent.  For example, it is noted that a search engine should be able to distinguish between actual user queries and the queries of a script that is designed to search for the same term on a continuous basis in an effort to move up in the search engine’s rankings.  If the claims are not invalidated, Yahoo! appears to hold relatively broad protection on classifying user interactions on a network to identify invalid or fraudulent interactions.

Yahoo!’s “Privacy Patents”

Yahoo! claims IP protection in systems and methods for managing the display of social network user information so that users can preserve personal privacy.  Yahoo! asserts that Facebook’s privacy controls infringe these patents, which include the following:

U.S.Patent No. 7,269,590, entitled “Method and System for Customizing Views of Information Associated with a Social Network User”

A brief review of the first independent claim of this patent indicates that, if the claim is valid, Yahoo! appears to hold relatively broad protection on customizing the display of a basic profile of a social network user by combining, in response to a request to the view the user’s information by another user, the user’s basic profile with an activity profile in a manner that eliminates the presentation of redundant information.

U.S.Patent No. 7,599,935, entitled “Control for Enabling a User to Preview Display of Selected Content Based on Another User’s Authorization Level”

A brief review of the first independent claim of this patent indicates that, if the claim is valid, Yahoo! appears to hold relatively broad protection on providing a preview of content to a first user as it would appear to a second user that the first user is going to provide access to.

Yahoo!’s “Customization Patents”

Yahoo! claims IP protection in systems and methods for creating custom data streams and web pages for users based on community and user preferences.  Yahoo! asserts that Facebook’s News Feed and the Facebook Wall infringe these patents, which include the following:

U.S.Patent No. 7,454,509, entitled “Online Playback System with Community Bias”

A brief review of the first independent claim of this patent indicates that, if the claim is valid, Yahoo! appears to hold relatively broad protection on providing individual data streams for each of a group of users based on the preferences of a user community to which they belong.

U.S.Patent No. 5,983,227, entitled “Dynamic Page Generator”

A brief review of the second independent claim of this patent indicates that, if the claim is valid, Yahoo! appears to hold relatively broad protection on customizing a webpage, in response to a user request, using user preferences and retrieved real-time information.

Yahoo!’s “Social Networking Patent”

Yahoo! claims IP protection in systems and methods for using a world model containing entity  models for people and businesses.  Yahoo! asserts that Facebook Pages and the Facebook’s Groups infringe this patent, which is:

U.S.Patent No. 7,747,648, entitled “World Modeling Using a Relationship Network with Communication Channels to Entities”

A brief review of the first independent claim of this patent indicates that, while rather wordy, if the claim is valid, Yahoo! appears to hold relatively broad protection on providing social network profiles for people and businesses and serving those profiles up in response to a request.

Yahoo!’s “Messaging Patent”

Yahoo! claims IP protection in systems and methods for allowing an instant messenger user to exchange messages with an email user.  Yahoo! asserts that Facebook Messages infringes this patent, which is:

U.S.Patent No. 7,406,501, entitled “System and Method for Instant Messaging Using an E-Mail Protocol”

A brief review of the first independent claim of this patent indicates that, if the claim is valid, Yahoo! appears to hold relatively broad protection on providing communications between an instant messenger user and an email user.

Thus, it appears that much of the immediate negative reaction to this lawsuit is based on the blogosphere’s general distaste for software and Internet patents.  But it is clear from the Complaint in the suit that Yahoo! is not claiming to have patented “the whole idea of Facebook.”  Rather, Yahoo! has asserted variousU.S.patents that cover specific features presently implemented on Facebook.  Furthermore, the breadth of the protection granted suggests that, rather than “relentlessly stagnating,” Yahoo! could argue that it has been hard at work for over a decade developing and protecting several important innovations that have proven valuable in the social networking space.

Going forward, Facebook’s choices in defending this suit appear to be limited.  Given the breadth of the Yahoo! patents being asserted, Facebook may not be able to successfully claim it does not infringe Yahoo!’s patent rights.  Thus, speculating on Facebook’s options suggests either licensing the patented technology from Yahoo!, likely at great cost, entering a business alliance of some sort, or attempting to invalidate the Yahoo! patents in court or in a reexamination proceeding.  One thing is certain:  Facebook has already started a prior art search to bolster its defense.

Update: It appears that at least part of Facebook’s strategy in defending itself from the present Yahoo! lawsuit, as well as future patent infringement lawsuits, is to strengthen its own patent portfolio. To that end, on Friday, March 23rd, Facebook confirmed the purchase of a collection of patents from IBM. Facebook did not provide any details about the transaction, but it is believed that Facebook purchased around 750 software and networking patents from IBM. Further, it has been reported that at least some of the patents obtained from IBM were previously licensed to Yahoo! If, in fact, Yahoo! has previously licensed some of the patents, it is almost certain that both Yahoo! and Facebook are reviewing the terms of the associated license agreement(s) to see how the transfer in ownership from IBM to Facebook may have altered the relative bargaining positions of the two sides going forward.

About Joeseph R. Mencher

Joseph R. Mencher is an associate in the Austin, TX office of the law firm of Haynes and Boone, LLP. His practice is focused on intellectual property law, including patent and trademark law. He may be reached at joe.mencher@haynesboone.com or 512.867.8459. Add Joseph to your LinkedIn network.

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About Coauthor Greg Webb

Greg Webb is an attorney with Haynes and Boone, LLP. He concentrates his practice in the area of intellectual property law. In particular, he focuses on procuring, prosecuting, and enforcing intellectual property rights for clients with domestic and international portfolios. He can be reached at greg.webb@haynesboone.com or 972.739.8641.

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