How buying patents from IBM can save Facebook


Facebook Tight

The acquisition of 750 patents from IBM by Facebook signals the venture of the social networking giant into a realm new to them: patent defense. The company has never been as involved as some of their peers when it comes to patenting with 503 filed to date and 56 or more issued, but this will expand their portfolio in light of a recent battle waged against them by Yahoo.

How do purchased patents after the fact help them fight Yahoo? Leverage.

There are unsubstantiated (but likely accurate) reports that some of the patents purchased were being licensed by Yahoo. If this is correct, it would justify this as more than a preventative move against future patent troll moves. It means that Facebook is ready to play hardball as they prepare for their IPO.

Yahoo’s timing was impeccable as the struggling tech giant knows that they can cut the best deal with Facebook by hitting them while they’re getting ready to go public. Facebook will want to sweep this under the rug as quickly as possible and had left itself vulnerable with such a puny patent portfolio.

Facebook’s response was to strike back at the bottom line. If it can be assumed that some of the patents they purchased give them dealing power against Yahoo, they may be able to expedite the process or have it turned away before IPO launch day. Even if the battle continues, this is something that they probably should have done already. Chances are good that they were intending their patent buying for after the cash infusion the IPO would allow.

Yahoo simply raised the stakes and moved the timing up a bit.

This move signifies more than just a counterattack against Yahoo. If successful, it can be a deterrent against future patent trolling that show that the young but large company is not a chump that can be bullied easily.

In short, they may have saved their future with this one move.

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