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Yahoo Facebook

February 29, 2012 by staff 

Yahoo Facebook, When news broke this week that Yahoo is accusing Facebook of violating as many as 20 of its patents, it took quite a few people by surprise — but at least one patent expert saw it all coming from a mile away. Erin-Michael Gill first publicly predicted a Yahoo/Facebook patent battle in an article published by Forbes.com back in November. Gill is currently managing director and chief intellectual property officer at MDB Capital, an investment bank that specializes in IP issues; his earlier résumé includes an appointment by the Obama administration to be Special Adviser to the Under Secretary of Commerce for Intellectual Property and Director of the USPTO. In short, the guy knows his stuff.

So today we reached out to Gill to get his insights on the Yahoo/Facebook patent situation, now that things have finally started to come to a head. He was working at a conference in Washington DC, but we were able to catch him for a Skype interview from his hotel room there. You can watch our full interview above, but here are some key takeaways from what he said:

Facebook: Quick on new tech, slow on new patents
Gill said that when his firm begananlyzing Facebook’s IP situation, it became clear that its patent collection was fairly small compared to other major tech companies — and the patents they did have seemed to rely on Yahoo’s technology quite a bit:

“One thing we noticed in our data was that Facebook had exponential, unbelievable growth, and was clearly innovating on the technology side, but their patent portfolio didn’t really map to what it was they were actually developing. And we were also doing someanlysis on Yahoo, and it was pretty incredible: The Yahoo portfolio had about 1,000 patents that were granted and enforced today. Facebook had less than 100. And the amount of citations there, how often Facebook was citing Yahoo, was more than two to one, so they were building on the technology that Yahoo developed.”

An IPO filing brings patent accusers out of the woodwork
According to Gill, the Yahoo/Facebook relationship was a ticking time bomb just waiting to go off — and Facebook’s IPO filing was a perfect time for Yahoo to bring its patent complaints to the forefront. Gill pointed to Google and Pandora as just two examples of tech companies that have faced big patent infringement accusations as they were preparing to go public. The idea is, once an IPO is in the works, a company may find it more convenient to make an IP licensing settlement than to fight the claims in court:

“The risk is that when a company is most vulnerable — when it is about to have a public offering — all of a sudden, out of nowhere, a significant IP risk comes out of the woodwork… Yahoo did the same thing to Google when they went public, and there was an urgent cross license they had to do.”

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