5 ms·

Facebook Buys 750 IBM Patents To Defend Against Yahoo

30 points by mrkmcknz 15y ago

togasystems 15y ago
It seems that the winners of the Patent Troll wars are the older technology companies.
- kareemm 15y ago
  It's certainly not users. Imagine the resources being devoted to battling lawsuits that could be spent creating a better customer experience.
  - vicngtor 15y ago
    Spot on.
  - deleted 15y ago
    [deleted]
  - tatsuke95 15y ago
    Billions. It's obscene. And the worst part is no layman outside of the tech circles knows it's happening. >It only had 56 issued and 503 filed patents in the US. And Facebook is considered to have a light patent portfolio. 500+ in the works? Really? And they're victims? Craziness.
- nknight 15y ago
  I'm not sure IBM is adding much to its bottom line with these sales. I don't think profit is their only, or perhaps even primary, motive here.
iamandrus 15y ago
So Facebook is going to fight fire with fire? This is not the way to handle it.
- philip1209 15y ago
  Considering: - the relative net worths of the companies - the respective user sizes and incomes - the huge investors backing Facebook for its IPO Facebook is totally correct to fight fire with fire. Because they have more fire.
- NathanKP 15y ago
  It's common for companies who both patented technologies each other need to use to make an agreement where they exchange rights to use each others patents. It is strategic and keeps them both moving forward while still keeping the little guy down.
- drucken 15y ago
  It is not the ideal way, but would you rather they made a gamble and failed against the legal framework (their opponent is not really Yahoo after all), or spend some upfront capital now to protect both their customers, employees, shareholders and even end-users. If it helps, you can think of software patents like a tax on business, especially the larger you become. If you were Facebook, would you take the risk of not paying your taxes, particularly on your public share offering? At least, protecting themselves now gives them the option to fight however they think is most effective. Without it, they are just legal easy prey.
donaldc 15y ago
None of this patent fight between facebook and yahoo will "promote the Progress of Science and useful Arts". It's a giant waste of time and resources. Software patents should be invalidated. (Quote from the Copyright and Patent Clause of the U.S. Constitution.)
- AgentConundrum 15y ago
  It's been said on HN that, for a while now, all the big tech companies have been engaging in a form of Mutually Assured Destruction, stockpiling nuclear patents. Patents are being used as a deterrent beyond their intended purpose. Now, with the ongoing Oracle v. Google and Yahoo v. Facebook battles, the patent cold war is turning into an outright patent war. With IBM selling these patents for legal reasons rather than for technological progress (in fact, arguably for technological hindrance), patent holders could now be becoming a sort of arms dealer.
- fossuser 15y ago
  I agree - I wrote a bit about copyright [here](http://zacharyalberico.com/day/2012/01/24 http://zacharyalberico.com/day/2012/01/24) that relates somewhat. Patents are in a much better place as far as the the limited time part goes (only 20 years), but they don't make sense and shouldn't apply to software - where they clearly don't work. The goal behind patents is to encourage companies to publicly reveal their designs in exchange for a guaranteed monopoly of 20 years. The monopoly is a necessary evil in order for the public to benefit from advancements that might otherwise remain perpetual trade secrets. In the case of software, the monopoly drastically outweighs any public benefit of being public and seems instead to be used to stifle the innovation of others.
  - mc32 15y ago
    If they don't invalidate SW patents, maybe an option would be to limit the protection to say, 3 years? This would allow for some patents to be relevant, if companies thought it was worth their while. But, given the limited (time of) protection, most would probably decide it was not a great business strategy --such that it would specially make SW Patent Trolls unviable.
relaunched 15y ago
Given the projected market cap of Facebook, relative to Yahoo, the settlement could be worth 1/2 of Yahoo's market cap or more. Given Yahoo's revenues and they way patent infringement is punitively calculated, the infringement on Facebook's newly accounted patents would have to be worth a huge portion of Yahoo's revenue to matter. Otherwise, Yahoo could just close down the infringing services, settle on the back stuff, and continue suing Facebook. If IBM's patents were core to how Yahoo made money, IBM would have already sued and / or licensed them to Yahoo. The fact that they didn't, leads me to believe that a lot of attorneys, on Facebook's behalf, are going to be billing tons of hours looking to find a square needle, to fit into a round hole, at the bottom of a HUGE haystack.
- nknight 15y ago
  IBM isn't particularly aggressive with its patent portfolio, especially in areas not relevant to its core businesses, nor are they likely to want the distraction and cost of suing a company a fraction their size in search of a small slice of its revenue.
- chii 15y ago
  you underestimate the way patents tend to get worded, and the "broad" applicability of some software patents.
bsphil 15y ago
I hope more people take note of the absurdity of the current software patent system because of this fight.
jamesaguilar 15y ago
That's a pretty smart way to deal with the problem. Yahoo is not a patent troll in the sense that it has no assets of its own to lose. It is far more vulnerable to this sort of counterattack than, say, Intellectual Ventures.
mkramlich 15y ago
Extrapolating from the contents of the software patents I have seen, I shudder to think at how much utter slop and obvious-to-any-engineer-versed-in-the-field kinds of patents are going to be among those 750. "A method by which a button is rendered on the screen such that it can be clicked on with a mouse, causing some action to occur." etc, etc. Also the fact that any company could even buy software patents, let alone buy 750 of them, makes the system look absurd. The whole point was to reward the original inventors. Now it rewards trolls and lawyers and those with big war chests. (a method by which my comments are posted to a website configured as a discussion forum with an orange bar at the top. the target website may also include links to other pages, and include caching.)

30 points by mrkmcknz 15y ago

togasystems 15y ago

It seems that the winners of the Patent Troll wars are the older technology companies.

kareemm 15y ago
It's certainly not users. Imagine the resources being devoted to battling lawsuits that could be spent creating a better customer experience.
- vicngtor 15y ago
  Spot on.
- deleted 15y ago
  [deleted]
- tatsuke95 15y ago
  Billions. It's obscene. And the worst part is no layman outside of the tech circles knows it's happening. >It only had 56 issued and 503 filed patents in the US. And Facebook is considered to have a light patent portfolio. 500+ in the works? Really? And they're victims? Craziness.
nknight 15y ago
I'm not sure IBM is adding much to its bottom line with these sales. I don't think profit is their only, or perhaps even primary, motive here.

iamandrus 15y ago

So Facebook is going to fight fire with fire? This is not the way to handle it.

philip1209 15y ago
Considering: - the relative net worths of the companies - the respective user sizes and incomes - the huge investors backing Facebook for its IPO Facebook is totally correct to fight fire with fire. Because they have more fire.
NathanKP 15y ago
It's common for companies who both patented technologies each other need to use to make an agreement where they exchange rights to use each others patents. It is strategic and keeps them both moving forward while still keeping the little guy down.
drucken 15y ago
It is not the ideal way, but would you rather they made a gamble and failed against the legal framework (their opponent is not really Yahoo after all), or spend some upfront capital now to protect both their customers, employees, shareholders and even end-users. If it helps, you can think of software patents like a tax on business, especially the larger you become. If you were Facebook, would you take the risk of not paying your taxes, particularly on your public share offering? At least, protecting themselves now gives them the option to fight however they think is most effective. Without it, they are just legal easy prey.

donaldc 15y ago

None of this patent fight between facebook and yahoo will "promote the Progress of Science and useful Arts". It's a giant waste of time and resources. Software patents should be invalidated. (Quote from the Copyright and Patent Clause of the U.S. Constitution.)

AgentConundrum 15y ago
It's been said on HN that, for a while now, all the big tech companies have been engaging in a form of Mutually Assured Destruction, stockpiling nuclear patents. Patents are being used as a deterrent beyond their intended purpose. Now, with the ongoing Oracle v. Google and Yahoo v. Facebook battles, the patent cold war is turning into an outright patent war. With IBM selling these patents for legal reasons rather than for technological progress (in fact, arguably for technological hindrance), patent holders could now be becoming a sort of arms dealer.
fossuser 15y ago
I agree - I wrote a bit about copyright [here](http://zacharyalberico.com/day/2012/01/24 http://zacharyalberico.com/day/2012/01/24) that relates somewhat. Patents are in a much better place as far as the the limited time part goes (only 20 years), but they don't make sense and shouldn't apply to software - where they clearly don't work. The goal behind patents is to encourage companies to publicly reveal their designs in exchange for a guaranteed monopoly of 20 years. The monopoly is a necessary evil in order for the public to benefit from advancements that might otherwise remain perpetual trade secrets. In the case of software, the monopoly drastically outweighs any public benefit of being public and seems instead to be used to stifle the innovation of others.
- mc32 15y ago
  If they don't invalidate SW patents, maybe an option would be to limit the protection to say, 3 years? This would allow for some patents to be relevant, if companies thought it was worth their while. But, given the limited (time of) protection, most would probably decide it was not a great business strategy --such that it would specially make SW Patent Trolls unviable.

relaunched 15y ago

Given the projected market cap of Facebook, relative to Yahoo, the settlement could be worth 1/2 of Yahoo's market cap or more. Given Yahoo's revenues and they way patent infringement is punitively calculated, the infringement on Facebook's newly accounted patents would have to be worth a huge portion of Yahoo's revenue to matter. Otherwise, Yahoo could just close down the infringing services, settle on the back stuff, and continue suing Facebook. If IBM's patents were core to how Yahoo made money, IBM would have already sued and / or licensed them to Yahoo. The fact that they didn't, leads me to believe that a lot of attorneys, on Facebook's behalf, are going to be billing tons of hours looking to find a square needle, to fit into a round hole, at the bottom of a HUGE haystack.

nknight 15y ago
IBM isn't particularly aggressive with its patent portfolio, especially in areas not relevant to its core businesses, nor are they likely to want the distraction and cost of suing a company a fraction their size in search of a small slice of its revenue.
chii 15y ago
you underestimate the way patents tend to get worded, and the "broad" applicability of some software patents.

bsphil 15y ago

I hope more people take note of the absurdity of the current software patent system because of this fight.

jamesaguilar 15y ago

That's a pretty smart way to deal with the problem. Yahoo is not a patent troll in the sense that it has no assets of its own to lose. It is far more vulnerable to this sort of counterattack than, say, Intellectual Ventures.

mkramlich 15y ago

Extrapolating from the contents of the software patents I have seen, I shudder to think at how much utter slop and obvious-to-any-engineer-versed-in-the-field kinds of patents are going to be among those 750. "A method by which a button is rendered on the screen such that it can be clicked on with a mouse, causing some action to occur." etc, etc. Also the fact that any company could even buy software patents, let alone buy 750 of them, makes the system look absurd. The whole point was to reward the original inventors. Now it rewards trolls and lawyers and those with big war chests. (a method by which my comments are posted to a website configured as a discussion forum with an orange bar at the top. the target website may also include links to other pages, and include caching.)