Yahoo! has accused Facebook of infringing on 10 to 20 patents and warned the social network to pay licensing fees or prepare for a possible lawsuit, the New York Times reported.
The two companies discussed the matter on Monday, the Times said, citing unnamed individuals with knowledge of the matter.
"Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property," the Times quoted a Yahoo spokesman as saying.
"We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights."
The Times quoted Barry Schnitt, a Facebook spokesman, as saying: "Yahoo contacted us the same time they called The New York Times and so we haven't had the opportunity to fully evaluate their claims."
Neither company could immediately be reached for comment.
Patent disputes are common in Silicon Valley, but this one comes as Facebook is preparing to go public in a bid to raise $5 billion in the largest-ever flotation by an Internet company.
Yahoo!, an Internet pioneer that has been struggling to reinvent itself in recent years, holds over 1,000 patents.
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