A couple weeks ago, Yahoo (NASDAQ:YHOO)�filed a patent lawsuit against Facebook, with an attempt to stall the social networking giant’s IPO. But Facebook has decided to not back down. Today it filed a countersuit.
Facebook alleges that Yahoo has violated 10 of its own patents that cover key areas like content optimization, photo sharing and display ads.
It�s a smart move. The outstanding litigation is likely to take a long time — perhaps more than a couple years. In the meantime, Facebook is likely to continue growing at a nice pace and continue taking away market share from the struggling Yahoo.
While the litigation is going to be a big question during Facebook�s roadshow, it probably won’t be a deal-killer. Patent litigation has become a normal part of the tech landscape, with companies like Apple (NASDAQ:AAPL) deeply involved. Besides, investors will also be reassured that Facebook is willing to fight hard. Plus, it has reportedly purchased 650 patents from IBM (NYSE:IBM) to bolster its intellectual property portfolio.
Accordingto Faceook General Counsel Ted Ullyot, �From the outset, we said we would defend ourselves vigorously against Yahoo�s lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook�s patents. 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.�
Tom Taulli runs the InvestorPlace blog�IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of��The Complete M&A Handbook”,��All About Short Selling��and��All About Commodities.��Follow him on Twitter at�@ttaulli�or reach him via�email. As of this writing, he did not own a position in any of the aforementioned securities.
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