by Mike Masnick

Filed Under:
ross levinsohn, scott thompson, silicon valley

facebook, yahoo

Yahoo And Facebook Settle Patent Fight, But Damage To Yahoo's Reputation May Linger

from the scott-thompson's-legacy dept

Back in March, Yahoo made some news by suing Facebook for patent infringement. This was the first major initiative by new CEO Scott Thompson, who apparently was not only oblivious about why you shouldn't lie in your resume, but also completely clueless about how Silicon Valley views patent infringement claims as a sign of absolute weakness. It's a sign of a company that has ceased to innovate. The reaction was pretty loud... but was quickly drowned out by the furor over Thompson's resume, causing him to lose his job. Ross Levinsohn was put in his place, and it appears that his first major act of business was to settle the lawsuit without any money changing hands.

There's a cross-licensing deal as well as some vague claims of a "partnership." However, the details suggest the "partnership" is just a general agreement to try to work together. The licensing agreement involves about half of Yahoo's patents... but also a promise not to sue over the other half.

There were a bunch of patent lawyers -- and some clueless Wall St. types -- who cheered on the patent infringement lawsuit, because they view things in the ultimate short term: if you're not getting paid for your patents, then you're "leaving money on the table." Folks in Silicon Valley mostly know better. You don't build a successful long term strategy by suing other companies that it's going to make sense to work with in the future. You especially don't go patent crazy if you want to retain top engineering talent. This may be difficult for patent lawyers and Wall St. investors to understand, but playing for the long haul means recognizing that there's more than one move on the chess board, and attacking on every single play isn't a good strategy. The real question, though, is if the stink that was attached to Yahoo from this move lingers, or if the company is able to shake it off and just pin the blame on Thompson's brief and horrific tenure.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Jul 6th, 2012 @ 3:31pm


    Yahoo! has a reputation? What year is it?

    reply to this | link to this | view in thread ]

  2. icon
    Liz (profile), Jul 6th, 2012 @ 3:44pm

    Re: Reputation?

    1998. When they were the one of the best search engines and just before they bought Geocities.

    reply to this | link to this | view in thread ]

  3. identicon
    Mason Wheeler, Jul 6th, 2012 @ 6:30pm

    Re: Reputation?

    2012, when they still have the best free email around. Say what you will about the rest of their products, or the people in charge, but Yahoo!Mail remains at the top of its class.

    reply to this | link to this | view in thread ]

  4. icon
    Josef Anvil (profile), Jul 6th, 2012 @ 10:30pm

    Sorry I was late

    I'm here. Now ALL of the Yahoo users have commented.

    reply to this | link to this | view in thread ]

  5. identicon
    patent litigation, Jul 16th, 2012 @ 9:40am


    So another mega-corporate "partnership" has been born from this patent litigation. Doubtless such an arrangement will benefit both Yahoo! and Facebook; but I predict that consumers will eventually be the losers in this deal.

    reply to this | link to this | view in thread ]

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