On Facebook, when you “friend” someone and can then see their network of friends, there’s a patent for that. Friendster, the forerunner of online social networks like Facebook, has sold and transferred eighteen of their patents on a broad range of features and capabilities we take for granted in social networking. The total cost to Facebook for all patents in the deal was $40 million dollars.
Beginning in 2006 when they controlled the social networking market, Friendster began taking patents out on their coding and systems. These patents range from how a network chooses who it thinks you’ll want to meet, to general and sweeping descriptions of online social networks.
It might be confusing then, if Friendster had these patents then why weren’t there lawsuits against every other online social networking site, including Facebook? The simple fact is, to Friendster, it wasn’t worth the time, legal fees, bad press, and subsequent scrutiny of Anti-Trust legislation.
This is part of the explanation why the rights of ownership for the building blocks of present day social networking had such a relatively inexpensive price tag. The other part lies in Facebook’s future. While a date hasn’t been set, Facebook has been clear that soon they will offer an IPO.
In the past, Friendster never sued over use-without-permission of one of their patents, but who knows what they would have decided to do later on. So it seems Facebook now owns the rights to the things it’s been using to make it number one. And with the upcoming IPO, that’s just good due diligence.