I hope Yahoo crushes Facebook in its patent suit

If Yahoo is awarded $50 billion, it's a way consumers will realize what is at stake

(Mark Cuban is an entrepreneur and prolific angel investor. He is the owner of the Dallas Mavericks. In this opinion piece, he calls for patent reform.)

Anyone who reads this blog knows how much I hate patent laws. I think 99% of the time they are anti-competitive, corruptive,  impede creativity and innovation and can kill small businesses. I think the ratio of patent law doing a good job protecting company IP vs it being used purely to negatively impact competitors or to troll for un-earned revenue is probably 1000 to 1, or worse.

When I read that Yahoo was suing Facebook my immediate reaction was disdain. As I thought more about it, I came to realize that this case could be the watershed moment that causes enough people to recognize just how horrific  our patent law is.

I am not saying that there is zero value to patents. There are plenty of examples out of the however many patents that have been issued where the patent was put to legitimate use to protect a company from a large predator.  It’s the law of big numbers. When there are enough of anything issued, some good will be done.  Look at the patent that some individual has for a BCS Playoff System. Im sure he was the first one to think of it and of course he should be protected from the BCS.  Does patent law get any better than this?

Seriously, there are industries where patents are used fairly to protect intellectual property. The technology industry is not one of them.

Change is needed. However, it's not going to come from our government. The lobbyists have taken over. One of the symptoms of the illness patents have caused the technology industry is the explosion of lobbyists pushing the agenda of big patent portfolio holders. They are not going to let our lawmakers give an inch.

Rather than originating in Congress, it's going to take a consumer uprising to cause change. What better way to create a consumer uprising than to financially cripple and possibly put out of business the largest social network on the planet ?

If Yahoo were to be awarded $50 billion from Facebook, I think consumers may take notice. And don’t think that $50 billion should be an impossibility.

If Yahoo’s patents truly are valid and recognize that they got Google to pay money for their Pay Per Click patent (acquired from Overture), then there is absolutely no reason why the same Patent shouldnt be valid against Facebook. The company looking at an IPO with a $100 billion market cap !

The same with the patent for personalizing pages. My.Yahoo.Com was way ahead of its time when it was introduced. Facebook is built on personalized pages. If ever a patent in this patent environment should be valid, these two should be valid in today’s world.

Which is the exact reason why Yahoo should do everything possible to use the patents to tear apart facebook with as large an award as it possibly can get. 1 Billion. Peanuts. 10 Billion, Peanuts. Start at 50B.  After all there is no way Facebook gets as large as it is without use of Yahoo’s Patents. No personalized pages, no PPC, no Facebook IPO. No Facebook as we know it.

This is what patents are for, right? To protect companies with original IP from smarter, faster, aggressive companies who catch the imagination of consumers and advertisers. What else could patents be for?

I hope Yahoo is awarded $50 billion. It is the only way that consumers will realize what is at stake with patent law as is.

Then maybe we can get it right and further innovation and competition in this country.

(image source: sbnation.com)