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March 22, 2012

Facebook snaps up IBM patents

Portfolio boost will help social network fight patent infringement claim launched by Yahoo

By Vinod

Facebook

Facebook has acquired 750 patents from IBM, in an attempt to bolster its defences in the increasingly bitter patent war that is raging across Silicon Valley.

According to Bloomberg, who cited a person "with knowledge of the transaction," the patents cover a broad range of technologies, including "software" and networking. Reuters added that search and semiconductor technology is also covered by the deal.

It is thought Facebook could have spent hundreds of millions on the patents.

The move is a direct response from Facebook to a recent suit filed by ailing search giant Yahoo. That suit claims that Facebook infringes on Yahoo’s patents that cover online advertising technology, privacy and information sharing.

As Reuters points out a common tactic in these patent wars is to launch a counter claim. However Yahoo’s patent portfolio far outweighs Facebook’s, which according to a recent filing with the US Securities and Exchange Commission contains just 56 patents with just over 500 more pending.

Facebook is currently prepping for an IPO that could value the social network site at $100bn. It has over 850 million users around the world. It IPO filing revealed that its revenue for 2011 was $3.71bn, up a massive 88% on 2010, while profit came in at $1bn, up from $606m in 2010.

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Early this year Google acquired a "large number" of patents from IBM, including one for a ‘computer phone,’ which will come in handy during its legal tussles with the likes of Oracle, Apple and Microsoft.

Apple is also involved an a few other patents battles with Samsung, over their phone and tablet portfolios.

Apple, RIM and Microsoft recently teamed up to acquire the patents of bankrupt Canadian network company Nortel. Google senior vice-president and chief legal officer David Drummond said the $4.5bn deal was struck simply to stop Google getting hold of the patents.

Google’s $12.5bn deal to acquire Motorola Mobility in August 2011 was primarily driven by its desire to boost its patent portfolio and defends its Android operating system against attacks from other mobile vendors.

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