Thanks to IAIHMB for the news.
In a twist on the classic David and Goliath formula, Web giant Yahoo is suing Menlo Park, Calif., start-up Xfire for patent infringement. The basis of the complaint, filed last week in a U.S. District Court in Northern California and served on Xfire representatives two days ago, alleges that Xfire is willfully infringing on a patent controlled by Yahoo. The patent, referred to as the '125 patent for the last three numbers of U.S. Patent No. 6,699,125, was granted to two then-Yahoo employees, Brian Gottlieb and Chris Kirmse, on March 2, 2004. As is typical, ownership of inventions by employees remains with the corporation the employees work for. Such ownership rights are usually sealed in hiring contracts signed by employees when they're hired.
In the case of the '125 patent, Gottlieb and Kirmse were employed by Yahoo when they developed technologies for a game-specific variation on Yahoo's popular Yahoo Messenger. Yahoo has been the sole owner of the '125 patent since it was granted. The complaint describes the Yahoo Messenger instant-message service--in this case, the GameProwler instant messenger application--as one that "allows users to use a game server in connection with a messenger server to permit 'buddies' to know when other 'buddies' are playing games online, and easily join such games."
Xfire offers a client application that allows gamers to chat with other gamers online. It also serves to help quickly facilitate gameplay on remote servers. The Xfire client was first made available in beta form last year. Xfire recently promoted the fact that it had reached 1 million registered users. Yahoo's GameProwler appears to be the application it feels was compromised by the Xfire client. Industry sources told GameSpot that Xfire currently has a patent pending for its service.