Patent Wars: Facebook Strikes Back At Yahoo

Facebook, the No. 1 social network site, sued Yahoo (Nasdaq: YHOO), the No. 2 search engine, for alleged patent infringement only two weeks after being sued for the same charges.

Filing its claims in U.S. District Court in San Francisco, Facebook denied all allegations of infringing 10 of Yahoo's patents while admitting that it may be using some of the older website's technologies for general functions.

Facebook admits that some websites incorporate social features and that the Internet enables many forms of communications, the filing said. But the Menlo Park, Calif.-based company denied using Yahoo's intellectual property and maintained it has enough of its own patents, either developed in-house or purchased.

Yahoo, based in Sunnyvale, Calif., started the legal battle last month when it sued Facebook in U.S. District Court in San Jose, Calif. At the time, Facebook denied the charges in statements, saying it would file a response in a timely manner.

Facebook is trying to raise as much as $5 billion via an initial public offering that could value the company as high as $100 billion. Presentations to prospective investors were to have begun this week.

Lawyers said Yahoo took advantage of the IPO period to tackle Facebook so as to settle claims. The company took a similar case to Google (Nasdaq: GOOG) before its 2004 IPO and came away with shares valued at $230 million.

Initial hearing dates for both cases haven't been determined.

Yahoo shares closed at $15.18, down 18 cents, in Tuesday trading.