Yahoo, Facebook Extend Settlement Talks In Patent Suit (Law360)

By Stewart Bishop

A California federal judge on Wednesday granted an extension of time in the patent lawsuit between Yahoo Inc. and Facebook Inc. so settlement talks could continue between the two Internet giants.

Following an indication by Yahoo lawyer Kevin A. Smith of Quinn Emanuel Urquhart & Sullivan LLP on Tuesday that the parties might be close to an agreement to nix the suit, U.S. District Judge Jeffrey S. White pushed the due dates for multiple court filings and one hearing back by two weeks.

"The parties are currently engaged in settlement negotiations to resolve this dispute. The parties believe that a further extension will facilitate settlement," Smith said in a court filing.

A Facebook spokesman, Andrew Noyes, declined to comment on Wednesday. A representative from Yahoo, Dana Lengkeek, also declined to comment.

In March, Yahoo made good on a threat to take action against Facebook if the social media giant didn't agree to a licensing deal, and sued Facebook alleging infringement of several patents covering areas like advertising, privacy and social networking.

Yahoo's complaint asks for treble damages and a permanent injunction, claiming Facebook has been aware of the patents since at least Feb. 27, when Yahoo notified it of the alleged infringement.

Facebook struck back with counterclaims in early April, asserting that Yahoo infringes 10 of Facebook's social networking and advertising patents.

On May 16, Facebook hit back at Yahoo's claims that two of Facebook's patents are unenforceable due to inequitable conduct, alleging Yahoo's argument is based on demonstrably false information and asking the court to strike the claims from the suit.

Yahoo had argued that Facebook failed to list inventor Joseph Liauw as one of the people behind the two patents-in-suit and that there is no sworn statement from Liauw in U.S. Patent and Trademark Office records that explains his omission, which renders the patents unenforceable.

However, Facebook says Yahoo's inequitable conduct theory is dead wrong, principally because Liauw submitted a written statement acknowledging he had been mistakenly named as an inventor on the provisional application for the patents.

On May 3, Yahoo informed Facebook that it might be infringing 16 patents in addition to those that Yahoo had already asserted against the social media company.

In a filing with the U.S. Securities and Exchange Commission, Facebook said it had received a letter from Yahoo on April 23 stating that Yahoo believed 16 patents it claims to hold "may be relevant" to open-source technology it alleges is being used in Facebook's data centers and servers.

The Yahoo patents-in-suit are U.S. Patent Numbers 6,907,566; 7,100,111; 7,373,599; 7,668,861; 7,269,590; 7,599,935; 7,454,509; 5,983,227; 7,747,648; 7,406,501; 7,933,903; and 7,698,315.

The Facebook patents-in-suit are U.S. Patent Numbers 7,827,208; 7,945,653; 6,288,717; 6,216,133; 6,411,949; 6,236,978; 7,603,331; 8,103,611; 8,005,896; and 8,150,913.

Yahoo is represented by Charles K. Verhoeven, Jennifer A. Kash and Kevin A. Smith of Quinn Emanuel Urquhart & Sullivan LLP.

Facebook is represented by Stephen C. Neal, Michael G. Rhodes, Heidi L. Keefe and Mark R. Weinstein of Cooley LLP and William F. Lee, Cynthia D. Vreeland, Mark D. Selwyn and Joseph F. Haag of WilmerHale.

The case is Yahoo Inc. v. Facebook Inc., case number 3:12-cv-01212, in the U.S. District Court for the Northern District of California.

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