In the lawsuit, Yahoo says Facebook was "one of the worst performing sites for advertising" before adapting Yahoo’s ideas.
The complaint, filed in the U.S. District Court in San Jose, California, says that the "patents-in-suit are a reflection of Yahoo’s research and development achievements." Yahoo was an innovator in methods of advertising, privacy controls, and social networking, according to the law suit document.
Yahoo claims that in terms of social networking "Yahoo! recognised the importance of social interaction on the internet and developed technology that allows users to customize information about themselves, join groups of others with the same interest as themselves, and share interesting information."
Yahoo says in the complaint that these terms are in what the company calls the "648 Patent" or the "Yahoo Social Networking Patent."
In the complaint Yahoo points out that Facebook was started 10 years after yahoo was founded and Yahoo claims this is largely attributed to Facebook using Yahoo’s patented technology. Features like the News Feed are being claimed as patents by Yahoo.
"For much of the technology upon which Facebook is based, Yahoo! got there first and was therefore granted patents by the United States Patent Office to protect those innovations," said Yahoo in the complaint.
The lawsuit for Facebook comes at a sensitive time for the social networking company as Facebook’s IPO is expected to launch in May to raise $5bn.
The suit follows closely after Facebook and Yahoo have been unsuccessful in negotationing an agreement over Facebook liscensing fees, according to a report in The New York Times.
In a statement Monday, Facebook said it was surprised by Yahoo’s action, only learning of the lawsuit at the same as the media.
"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," said Facebook. "Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions."
Yahoo’s decision to sue Facebook while the company is expected to launch an IPO is similar to when Yahoo decided to sue Google right before the company filed for its IPO as well.
Yahoo had sued Google claiming it had infringing patents as similar to the lawsuit against Facebook. Some say Google settled the argument so it would not be involved in any financially damaging legal action when it went public.
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