Facebook Has Been Sued Five Times For Patent Infringement In Two Months Since Filing For Its IPO

from the paddle-paddle dept

We recently wrote about a Rob "CmdrTaco" Malda column for the Washington Post, which suggested that getting sued for patent infringement was like frat hazing for tech companies that file to go public. If that's true, then it appears that Facebook is taking its paddle whacks from quite a few upper classmen. In a larger report about the Facebook/Yahoo patent battle, M-CAM mentions as an aside that Facebook has been sued five times for patent infringement in just the two months since it filed for the IPO:

Patent infringement lawsuits can be problematic during a company's quiet period. In the two months since filing for its IPO in February 2012, Facebook has been the target of five such suits: three from non-operating entities, one from Mitel, and one from Yahoo!.

This isn't a coincidence. This is about companies hoping to cash in by filing questionable patent lawsuits at a very inconvenient time for Facebook. These are companies who know the history of similar lawsuits, where many companies feel compelled to "settle" at almost any cost, due to pressure from Wall Street investors who don't understand patent battles, and fear that any prolonged fight is too costly. So companies are sometimes willing to pay through the nose, not because there's any validity to the lawsuits, but because the massive influx of cash from a successful IPO is worth a lot more than fighting the patent lawsuit. In fact, I wouldn't be surprised to see a few more trolls try to jump in before the IPO gets off the ground.

Filed Under: cmdrtaco, hazing, ipo
Companies: facebook, yahoo

Is Getting Sued For Patent Infringement The Equivalent Of Frat Hazing For A Growing Tech Company?

from the only-more-destructive dept

Rob "CmdrTaco" Malda's first column in his new job at the Washington Post (I'm still trying to make sense of this myself) is a good one. He looks at the Yahoo patent lawsuit against Facebook, and posits that getting sued on your way to an IPO is like a Silicon Valley fraternity hazing ritual. He doesn't go quite this far, but there certainly are some similarities. It's an insanely pointless process with significant costs, often disgusting to those going through it... but which they eventually grudgingly admit is worth going through to get to the end goal of being "in the club." I'm not sure it's totally true of just IPO-bound tech companies. I think it's just the nature of just about any semi-successful tech company these days. You get sued for patent infringement. It's just what happens. And it's there where the analogy falls down a bit. You can avoid fraternity hazing by not pledging a fraternity. You have no such choice when it comes to getting sued for patent infringement.

Filed Under: economics, hazing, innovation, patents
Companies: facebook, yahoo