Cross-License Their Patent Portfolios, Sell Ads Together

Facebook and Yahoo are calling off their heated patent lawsuit battle, and in fact have just agreed to cross-license their entire patent portfolios to each other without money changing hands, sources directly familiar with the deal tell me. Sources also confirmed that the two web giants are entering into an ad sales partnership that will let Yahoo show Like buttons in its ads, as first reported by Kara Swisher of AllThingsD this morning.

Update 1:15pm PST 7/6: Facebook has just confirmed the patent portfolio cross-license agreement as well as the ad sales and distribution partnership in a press release.

However, Swisher noted the companies would only cross-license “some key patents”, and Facebook might have to pay to license others from Yahoo. The patent deal is actually much larger. It encompasses their entire intellectual property stockpile such that they won’t have to pay be able to use each other’s patents, and won’t be able to sue each other over them either. → Read More