Facebook’s Response to Yahoo’s Patent Lawsuit

Like many in tech, I believe all software patents should be abolished. That said, I think Facebook made the right move by filing a lawsuit against Yahoo’s patent attack.

As I see it, Facebook had 4 choices:

– Settle. Given their pending IPO, this would have been the easiest route. But, by rewarding Yahoo, settling would have encouraged more frivolous patent lawsuits.

Like many in tech, I believe all software patents should be abolished. That said, I think Facebook made the right move by filing a lawsuit against Yahoo’s patent attack.

As I see it, Facebook had 4 choices:

– Settle. Given their pending IPO, this would have been the easiest route. But, by rewarding Yahoo, settling would have encouraged more frivolous patent lawsuits.

– Defend without countersuing. On the surface this would have been the “principled” stance, but it would have severely weakened their legal position, and therefore would have made it more likely that Yahoo profited from the lawsuit.

– Countersue without signaling any aversion to patent lawsuits.

– Countersue and signal that they are averse to patent lawsuits, which in turn signals that they will drop the lawsuit if Yahoo does. This seems to be what Facebook has done:

“From the outset, we said we would defend ourselves vigorously against Yahoo’s lawsuit,” Ted Ullyot, Facebook’s general counsel, said in a statement. “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.” [emphasis added] – NYTimes

Countersuing gives Facebook the best chance of fending off Yahoo’s lawsuit – and therefore not rewarding patent lawsuits. And signaling they are only doing so in response to Yahoo (hence might drop the suit if Yahoo does) keeps them on the right side of innovation.