The business partnership between Yahoo and Facebook is kaput. Yahoo sued Facebook in the first major patent lawsuit in the social networking technology field earlier this month. Yahoo alleged that the growth experienced by Facebook “has been based in large part on Facebook’s use of Yahoo’s patented technology.” The case involved allegations related to ten patents and seeks injunctive relief and treble damages.
In an interesting turn, Facebook purchased 750 patents from IBM that related to software and networking. How this purchase will affect the lawsuit is still unknown. It may forge a settlement. Has anyone heard of any recent instances where patents have been purchased to settle or avoid a lawsuit?
I recently read an article in Forbes magazine about a company that purchases patents as investments. The company is called Intellectual Ventures—or IV for short. It was founded by former Microsoft Chief Technology Officer Nathan Myhrvold. The company has filed lawsuits against big companies alleging patent infringement based on the purchased patents. These actions, according to Forbes magazine, have resulted in “a few pricey licensing deals.” Ironically, it has been rumored that IV was initially set up at the behest of Bill Gates to help defend Microsoft against patent trolls. It remains to be seen if the company could also be a place where parties in disputes could come to purchase patents to avoid lawsuits.