In a potentially embarrassing blow to Yahoo, Facebook has discovered a document that seems to prove Yahoo was wrong in claiming that two patents owned by Facebook were issued under false pretenses.
Yahoo recently alleged that two patents Facebook purchased and then asserted against Yahoo were issued to the original inventor only because crucial information was intentionally withheld from the patent office. But Yahoo just didn't look in the right places. Facebook located a document that contradicts Yahoo's claim, along with evidence that Yahoo never tried to access the document.
As background, Yahoo sued Facebook in March, alleging that the company infringed ten patents held by Yahoo. In response, Facebook countersued Yahoo with ten patents of its own, most of which Facebook acquired from other entities. As part of its defense against these new counterclaims, Yahoo alleged that two of Facebook's patents were obtained fraudulently.
Yahoo's claims stem from the time before Facebook actually bought the patents, which were filed in 2010 and 2011, and list a person named Chris Cheah as inventor. Both patents claim inventions regarding a "system for controlled distribution of user profiles over a network." According to Yahoo, the patents were only issued because of an "intentional deception" involving failure to disclose the contributions of a person named Joseph Liauw. It was a "failure to name all inventors," Yahoo claimed.
Facebook attempted to prove these claims wrong by digging through Patent Office documents, which show a sworn statement from Liauw stating "I, Joseph Liauw hereby state that I was incorrectly named as an inventor in the above-referenced patent application, and that this error in inventorship occurred without deceptive intention on my part."
In other words, the patent acquired by Facebook can't be invalidated based on the failure to name Liauw as an inventor, because Liauw himself said he had no hand in the invention. Yahoo had actually gone so far as to claim that "Mr. Liauw never submitted a declaration regarding an error in inventorship." In the course of locating the document proving Yahoo wrong, Facebook discovered that no one had ever requested it before.
Other than Facebook's request for the document, the files "did not contain any other Request for Access," Facebook said.
"Had Yahoo reviewed the prosecution file for the ’311 provisional application, it would have immediately discovered—contrary to the false allegations in its Reply—that there was no deception whatsoever," Facebook wrote.
Facebook has asked the court to strike this portion of Yahoo's defense against Facebook's patent infringement counterclaims, as well as its "counter-counterclaims" relying on allegations of inequitable conduct. The request was filed in US District Court in San Francisco yesterday, and will be argued in a hearing scheduled for June 22. Yahoo could file an brief opposing the motion before that date. We've asked Yahoo for a response to Facebook's new allegation, and will update this post if we receive an answer.
If Facebook gets the ruling it wants, it would be a blow to Yahoo, but it would not invalidate all of Yahoo's defenses against the Facebook counterclaims. Even assuming all the patents are valid, Yahoo denies infringing them, just as Facebook has denied infringing Yahoo patents.
But the case may never reach a jury. Patent lawsuits are often settled—with Oracle/Google being a notable exception. With Yahoo CEO Scott Thompson resigning after it was discovered he falsified his resume, there's been speculation a new CEO might be more willing to settle with Facebook. Whatever steps Yahoo takes next, it will have to perform better research.