Facebook hits back at Yahoo

Facebook has fired the latest salvo in the ongoing patent saga between Facebook and Yahoo. The social networking site has accused Yahoo of infringing on 10 of its patents, according to a court filing. The decision comes close on the heels of Yahoo taking Facebook to court over patent infringement last month.

The move only sheds more light on the dark side of technology, where competitors continue to file claim after claim against each other for patent infringement. The patent wars have already rocked the Smartphone and Tablet space with companies such as Apple Inc, Microsoft Corp and Motorola Mobility Holdings Inc. embroiled in legal battles.

The other important aspect of Facebook’s move is the timing; the company is all set for an unprecedented initial public offering, valuing the company at up to $100 billion. People following the tech space say companies are more vulnerable to patent suits, when they coincide with IPO’s, investors analyze and think twice before investing. Having said that about Facebook, Yahoo has its own fair share of problems to deal with, the Internet giant is battling against dwindling revenue, while it’s CEO Scott Thompson is facing ire from activist hedge fund Third Point.

Yahoo spokesman Eric Berman said Facebook’s counterclaim is “nothing more than a cynical attempt to distract from the weakness of its defense.”

As many as five patents in the filing relate to Yahoo’s advertising business, which Facebook believes was the source of 80% of Yahoo’s 2011 revenue. Yahoo’s Flickr photo sharing service appears to be the main culprit with multiple features coming under the scanner for patent infringement. The features include the ability of users to connect with other, tag faces of people they know with names and generating personalized news feeds. A specific feature that Facebook affirms as it’s own is the method for tagging digital media — lists its chief executive, Mark Zuckerberg, as one of the inventors, according to a U.S. government database.

Facebook General Counsel Ted Ullyot has made the company’s intentions clear of not backing down and fighting till the end. “While we are asserting patent claims of our own, we do so in response to Yahoo’s short-sighted decision to attack one of its partners and prioritize litigation over innovation,” Ullyot said in a statement.

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