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Facebook Buys 750 IBM Patents to Defend Against Yahoo Patent Lawsuit

Yahoo on March 12, filed a patent infringement lawsuit against Facebook in a California federal court, alleging the social network has inappropriately used technology in a way that infringes on ten of Yahoo’s patents, including several online ad technology.

The patent acquisition comes hot on the heels of Yahoo’s decision to sue Facebook for patent infringements, ahead of its initial public offering.

A spokesperson for Facebook issued the following statement regarding Yahoo’s lawsuit:

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”

While Facebook is planning to defend the lawsuit, the Yahoo spokesman indicated confidence in his company’s case:

“These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

In a move to bolster its intellectual property portfolio to defend itself against patent-related lawsuits, particularly from rival Yahoo, Facebook has bought 750 patents from Internation Business Machines (IBM) – that cover technologies ranging from search to semiconductors to software and networking.

The patents will reinforce Facebook’s patent portfolio, which stand at roughly 56 issued patents and 503 applications as of December 31. While Yahoo had over 3300 patents and published patent applications.

According to reports, Yahoo has previously licensed the patents that IBM has just sold to Facebook. If true, owning those patents would put Facebook in a much stronger position when it comes to negotiating with Yahoo.

A Facebook spokesperson said the company had “purchased a set of patents from IBM”, but did not provide any further details. And, and IBM representative could not be reached.

It’s still unclear how much Facebook paid for the IBM patents.

Earlier this month, Facebook disclosed that it had established a new credit line, worth $5bn, which would be used for working capital and general corporate purchases.

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