In an amendment made to its initial public offering (IPO) paperwork with the US Securities and Exchange Commission (SEC), Facebook has cautioned prospective investors about a patent lawsuit which Internet pioneer Yahoo has filed against the social network, and which can severely hit Facebook's business.
The lawsuit to which Facebook has referred to in its recently updated SEC filing is the March 12-dated complaint which Yahoo has filed against the social networking company in a US District Court in California court. In its lawsuit, Yahoo has alleged that Facebook has violated 10 of the company's patents in wide-ranging areas like advertising, messaging, and privacy.
Including Yahoo's lawsuit among risks to Facebook's bottom line, the popular social network said in its amended SEC filing that the legal proceedings initiated by Yahoo are still "in its early stages;" and that there is uncertainty about the final result as well as Facebook's liabilities, if any, as regards Yahoo's claims.
In its warning to the potentaial investors about the lawsuit filed by yahoo, Facebook said in its amended SEC filing that in case the court's verdict in the case goes against the company, "the impact could be material to our business, financial condition, or results of operations."
Facebook, however, also said that it is yet to file its response to Yahoo's accusations and assert its counterclaims; and added in the SEC filing that it intends defending the lawsuit "vigorously."
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