Facebook Purchases 750 Patents from IBM in Wake of Yahoo Lawsuit

By David Gitonga March 23, 2012

Facebook has acquired 750 patents from IBM in an effort to ensure that a lawsuit with Yahoo! is successful.

Patents are expected to boost Facebook’s intellectual property portfolio and comprise a list of technology patents including semiconductors and search. According to a U.S. government database, Yahoo possesses over 3,300 patents, far more than those of Facebook, and earlier this month claimed the social network infringed on 10 of its patents on e-marketing.

As of December 31, Facebook had 503 applications and issued 56 patents with the U.S. Securities and Exchange Commission.

Facebook is preparing for an Initial Public Offering (IPO) that could valuate the firm at $100 billion. Although it is not clear how much Facebook paid for the patents, tech companies are known to over-price intellectual property prices to build their portfolio. Last summer, Google purchased Motorola Mobility along with its patents for $12.5 billion just after Nortel networks Corp sold its 6,000 patents for $4.5 billion to an Apple Inc-led group of customers. Google bowed out of the deal.

The Yahoo! suit is a classic defense case, as it is not uncommon among tech companies to file patent infringement suits, most of which offer their own patents as a countersuit. The fact that Facebook owns a relatively small number of patents makes it particularly vulnerable. Having been involved in other privacy controls and social networking issues, Yahoo’s lawsuits, according to Facebook, were puzzling. The supposed infringements also include a few privacy concerns.

“We're disappointed that Yahoo!, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation,” Facebook said as it planned to defend itself vigorously.

Edited by Braden Becker

TechZone360 Contributing Writer

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