A Rhode Island lawyer has filed a class action lawsuit against Facebook over their new “Instant Personalization” program on behalf of Derrick Rose of East Providence, Rhode Island. The suit is a bit questionable as the class action published on the lawyer’s website states “Facebook is abusing personal information for private profit”, although it’s pretty clear that Facebook is not directly profiting through the Instant Personalization program.

While this may simply be an attempt/stunt by Peter Wasylyk to gain national attention, there are legitimate concerns raised in the suit which effectively turn users’ complaints over the Instant Personalization program into legalese:

The lawsuit, filed in the U.S. District Court for the District of Rhode Island, alleges that Facebook’s “Instant Personalization” feature has violated users’ privacy rights and seeks to certify a national class of Facebook users.

The suit also states that “The activation of Instant Personalization and the sharing of information about users with unrelated third party websites violated users reasonable expectations of privacy”. While I’m a little bit skeptical of how this first class action against Facebook over the program will work out, since there are significant typos (parts of sentences missing) in the release on the lawyer’s homepage, I think it’s a sufficient statement.

Peter Wasylyk, who’s representing Derrick Rose, claims that Facebook has broken the law with their new program by violating users “reasonable expectations of privacy”. I have no idea how substantial a case something like this really is, as many of the suits we’ve seen in the past, which have resulted in some form of settlement, come from large firms.

While I’m not sure how the lawyer will argue that Facebook is using the Instant Personalization program for profit, it’s no doubt interesting to see the first suit over the program.

Technology patent trolling seems to have become a regular pasttime — something that is influenced proprtionally with lucrative potential of a patent, and which the long-flawed approval process at the USPTO (U.S. Patent & Trademark Office) abets in the first place. Now there’s another questionable patent lawsuit, this one involving ‘online communities’, and naturally, Facebook is a target with its community of more than 400 million users.

In fact, the lawsuit was filed in 2007 — the patent in 2001 — but Facebook asked for temporary delay to explain — presumably to point out how ridiculous the patent wording is, or something of that nature. As Mike Masnick explains on Techdirt, there has to be tons of “prior art” on the concept of a “system for creating a community for users with common interests to interact in.”

This wording for patent 6,519,629 — which was approved in 2003 — is so broad that it could mean pretty much anything having to do with websites today, including the comment sections of blogs, of forums, and far more. My understanding of the patent process is that you have a limited time to file patent on an idea, and it cannot be accepted if the idea has been in the public domain in some form for over one year. (I have experience with USPTO details due to a search engine-based project via an employer, early in my Web career, and I’m basing my comment on this.)

Even if the one year limit is not true, the fact is that online communities have existed long before this patent filing, including newsgroups, BBSes, and probably forums. That in itself should suffice as prior art, if anyone at the USPTO bothered to use the Web itself to research patent claims. (Obviously none of them have heard of the Wayback Machine.) Be that as it may, the lawsuit is apparently proceeding. This isn’t the first time that Facebook has been sued over patents. Facebook also has its own patent relating to user affinity to an application.

What are your thoughts regarding software patents. Is the patent holder, Cross Atlantic Capital Partners, within their rights to sue, or is the USPTO at fault for allowing such a broadly-worded patent? Should there even be software patents?

If you’re looking to delete your Facebook account, you are better off using Facebook’s account deletion form than Seppukoo which has now been blocked from Facebook. That’s why the Seppukoo website now has a tutorial on how to manually delete your account posted on their homepage (which we’ve embedded below). Not only has Seppukoo been blocked but they were also sent a Cease and Desist from Facebook’s D.C.-based law firm: Perkins Coie.

At this point there’s little reason for Facebook to continue with litigation as the company has been effectively blocked from accessing Facebook. The site had enabled users to commit “virtual suicide” by killing their Facebook account for them. Rather than simply following the steps to disabling their Facebook account, users could watch Seppukoo delete all comments they’ve ever posted and delete each friend one at a time.

It was a cool concept but it’s clear why Facebook wouldn’t want people using the product. Earlier this year Facebook killed off Burger King’s Whopper Sacrifice application, which encouraged users to delete some of their friendships in exchange for a free whopper. The reason was that the application violated Facebook’s terms of service. Hundreds of thousands of users had used the application before it was shut down and it continued to receive tons of press after being disabled.

While Seppukoo was ultimately committing their own virtual suicide when they first launched this service, the site has garnered a lot of attention since Facebook shut them down. While Dr. Jack Kevorkian may support the concept of assisted digital suicide, creating products which automate the process is not the best long-term business plan.

This afternoon a number of Facebook users received notice of the pending class action law suit in which a $9.5 million independent fund was allocated for projects to promote the cause of online privacy. Facebook has been forced to send out a notification by court order to Beacon users that may have been effected by the service. Ironically, participation in the settlement is “opt-out” only, something that Facebook was criticized for under the Beacon program.

Users received the following email this evening:

Facebook is sending you this notice of a proposed class action settlement that may affect your legal rights as a Facebook member who may have used the Beacon program. This summary notice is being sent to you by Court Order so that you may understand your rights and remedies before the Court considers final approval of the proposed settlement on February 26, 2010.

This is not an advertisement or attorney solicitation.

This is not a settlement in which class members file claims to receive compensation. Under the proposed settlement, Facebook will terminate the Beacon program. In addition, Facebook will provide $9.5 million to establish an independent non-profit foundation that will identify and fund projects and initiatives that promote the cause of online privacy, safety, and security.

For full details on the settlement and further instructions on what to do to opt out of, object to, or otherwise comment upon the proposed settlement, please go to http://www.BeaconClassSettlement.com.

Please do not reply to this email.

So what do settlement participants receive? Nothing aside from knowledge of this settlement. All this money will be used for is to set up a fund and to pay for all the attorney fees. Additionally, $41,500 will be distributed among the 19 class action representatives. While Facebook has already publicly acknowledge this settlement it appears that users are officially being notified of it now.

On any given day we receive 5 to 50 stories to post on AllFacebook, however there’s no way for us to currently cover everything that goes on. Determining which stories to publish is part art and part science, however that doesn’t mean you shouldn’t be aware of all the things going on related to Facebook. That’s why we’ve decided to post occasional updates on the stories that we couldn’t get to the day before. Today we have 3 stories from yesterday that you should be aware of.

Initial Class Action Complaint Filed Against Facebook and Zynga

Last week we wrote about an impending class action suit which named a number of companies on the social web including Facebook, Zynga, and a number of offer networks. At the time we reached out to the law firm responsible for the class action to find out more details. They told us that they were currently seeking individuals who had been deceived in order to name them in the suit. One week later it appears as though they’ve found that individual: Rebecca Swift.

On behalf of Swift and other victims, Kershaw, Cutter & Ratinoff, LLP has filed an initial class action complaint against Zynga and Facebook. No other networks appear to be named in this initial complaint, however there could be additional complaints filed in the near future. The turnaround time on this has been extremely quick. You can view the full complaint via Valleywag.

Facebook’s Common Stock Valuation Jumps

In what appears to be an effective press release for SecondMarket, Bloomberg published an article stating that Facebook’s valuation has jumped in private markets over the past few months. While many of us love to speculate about the future of Facebook and what their valuation will be, private markets are also extremely tricky for setting exact valuations. Then again, if someone is willing to pay a specific price, that price determines the value of the company at the time of the transaction.

In illiquid markets however it’s difficult to track bid and ask rates on shares since the information is not complete.

Adknowledge Acquires SocialMedia’s Ad Network

SocialMedia which was previously one of the leading Facebook platform ad networks, sold their ad network to Adknowledge for an undisclosed amount. This is part of a continued roll-up of ad networks which the company began back in 2008. The company currently own Cubics, Adonomics, Lookery’s ad network, SuperRewards, and now SocialMedia’s ad network. Adknowledge has been focused on the performance advertising space, an area which has come under increasing scrutiny amidst new class actions like the one we covered earlier in this post.

Adknowledge has been aggressive in building a large social advertising roll-up, this acquisition being the latest in an ongoing series of acquisitions.