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This is really the year for the global "Gold Rush" in patent litigation. There are and will be ongoing lawsuits regarding patents throughout the rest of 2012. More recently, yesterday afternoon it was reported that:

Facebook and Yahoo! are in patent litigation truce talks

According to court documents available Wednesday online, it was reported that Facebook (NASDAQ:FB) and Yahoo! (NASDAQ:YHOO) are in patent war peace talks that could end a legal battle between the two powerhouse companies.

"The parties are currently engaged in settlement negotiations to resolve this dispute," attorney Kevin Smith of the Yahoo! legal team said in a filing, asking a federal court to allow the companies more time to negotiate. "The parties believe that a further extension will facilitate settlement."

The Background

In March, Yahoo! filed a patent suit against Facebook in US District Court in San Francisco, accusing the social networking giant of infringing on 10 patents.

The Yahoo! suit accused Facebook of infringing on patents in areas including advertising, privacy and messaging and contended that Facebook's growth "has been based in large part on Facebook's use of Yahoo!'s patented technology."

Yahoo! then asked the court to order Facebook to stop its alleged patent-infringing activities and to assess unspecified damages.

Facebook, vehemently denied violating any valid Yahoo! patents. Of course, they did. Most companies usually do. Furthermore, Facebook went on to accuse Yahoo! of infringing on its patented technology in a broad suite of products, including online venues for news, games, cars, travel and photo-sharing service Flickr.

It seems as though the litigation between Yahoo! and Facebook heated up in April, with the older Internet search engine pioneer accusing the social network star of buying patents just to retaliate in court. Then, Yahoo! also added a few more patents to the list of intellectual property it claims Facebook is abusing to play that game too! Sound familiar?

A Facebook spokesman told AFP news service at the time;"We remain perplexed by Yahoo's erratic actions? We disagree with these latest claims and we will continue to defend ourselves vigorously."

Patent litigation is a frequent occurrence among technology firms and we are following a few other legal wranglings as well, besides this story. Some other patent suits we follow that are pending now involve:

1) Vringo (NASDAQ:VRNG), a provider of software platforms for mobile social and mobile video services. Besides its Internet search patents (through a merger in the works), the company develops video ring tones that will display your Facebook friends' pics as a slide show when they call you. With its award-winning video ringtone application and other mobile software platforms - including Facetones™ Video Remix and Fan Loyalty - Vringo transforms the basic act of making and receiving mobile phone calls into a highly visual, social experience.

Vringo in February 2012 announced that it had reached an agreement with Facebook on the legal matter. Some prime recent developments:

  • Vringo has entered into a definitive merger agreement with Innovate/Protect, Inc. (I/P Engine, Inc.), a wholly-owned subsidiary of Innovate/Protect, Inc.
  • On September 15, 2011, I/P Engine filed a complaint in the United States District Court for the Eastern District of Virginia, alleging that several large technology Defendants, namely AOL (NYSE:AOL), Google (NASDAQ:GOOG), and Target Corp. (NYSE:TGT) use I/P Engine's technology on various sites to provide advertising and search related revenue services (e.g. Google AdWords).

Just this week, it was announced that Vringo favorably received four out of six positive construction Markman rulings in its cases against the defendant tech giants; AOL, Google, Target Corp. Most notably, the claim here is willful infringement by Google - which brings a hefty price in terms of settlement that could bring 3X the damages against $60B in revenues received over the years by using the said patents.

2) VirnetX (NYSEMKT:VHC) holds several patents for "secure communications" over the Internet and offers 4G LTE patented technology (the future in wireless communications). Legal proceedings in the United States District Court (Eastern District of Texas) include the following defendants against their patents: Avaya, Apple (NASDAQ:AAPL), Cisco (NASDAQ:CSCO), Mitel (NASDAQ:MITL), NEC (OTC:NIPNF), and Siemens (SI).

On April 26, 2012, VirnetX Holding Corp announced that the United States District Court for the Eastern District of Texas, Tyler Division, issued its patent claim construction, or Markman Order in the ongoing patent infringement action between VirnetX Inc. and Cisco, Apple, NEC and Aastra. In a Markman ruling, a district court hearing a patent infringement case interprets and rules on the scope and meaning of disputed patent claim language regarding the patents in suit.

A Markman decision is often a significant factor in the progress and outcome of patent infringement litigation. The litigation, which the company previously announced it had filed in August 2010, involves certain products that the company believes infringe six patents owned by VirnetX. We believe settlements will be reached this year between Cisco and Apple. It makes no sense for these two companies to litigate a point that they cannot win. Remember, Microsoft (NASDAQ:MSFT) recently settled with a $200M settlement and moved on. Yes, you read that correctly, a settlement with Microsoft.

3) Neonode (NASDAQ:NEON) provides optical infrared touchscreen solutions for handheld and small to mid-sized consumer and industrial electronic devices. This is still another juicy patent play because Samsung has recently disclosed in an Apple patent suit against it that it had been using NEON's swipe-to-unlock patent filed back in 2002. Patents can be very valuable and so far we see Google , Microsoft, and Apple are suing over patents and they have also been on a patent portfolio land grab lately too.

Recall that MSFT recently bought AOL's patents for over $1B and GOOG bought Motorola for its patents. NEON's touchscreen patents are extremely valuable too, so stay tuned. Currently, we have favorable analyst comments and suspect that we will have more news coming on NEON as the story develops because touchscreen technology is not going away anytime soon.

So what is going on here? Well, there is a massive technology patent land grab going on right under your eyes with all the major tech firms. Do these companies want to go to court? No, who does? Its all just negative energy and hurts morale and the bottom line of everyone involved. Most of the defendants know that they have used other smaller firm's patents knowingly for many years, so you can only guess that most of these suits will be settled out of court to save the embarrassment, capital, time and frustration that these types of suits bring down on any company.

Source: Global Patent Wars Intensify In 2012