Yahoo! Inc. is out to settle their patent dispute with Facebook Inc.  Lawyers for the largest web portal asked U.S. District Judge Jeffrey S. White in San Francisco for a two-week extension for filing replies in the lawsuit while the companies hold discussions.  They’ve also asked for a two-week delay in a motion hearing set for August 10.

“The parties are currently engaged in settlement negotiations to resolve this dispute,” Kevin Smith, a Yahoo lawyer, said in the filing. “The parties believe that a further extension will facilitate settlement.”

Back in March, Yahoo filed a case against Facebook for allegedly infringing 10-20 of their patents in advertising, the personalization of web sites, social networking and messaging, and seeks to impose a licensing fee.  Facebook shot back with a countersuit stating that Yahoo infringed their patents covering display advertising, content personalization and photo sharing which accounted for almost 80% or $4 billion of Yahoo’s revenue last year.

Both parties declined to comment on the issue at hand, but earlier this month it was reported that Facebook was willing to settle the dispute with Yahoo.  The two are said to be in talks regarding a massive cross-licensing of patents and an “even deeper integration of Facebook into Yahoo and vice versa, which has been a key element of improved engagement of late on Yahoo.”

Though this may seem like good news for Yahoo, according to some sources, Facebook is not about to shell out a huge amount of money to get their hands on the said patents.
When all these started, Facebook stated that they were extremely disappointed with the actions of Yahoo since they’ve been partners for a long time.

“We’re disappointed that Yahoo, a long-time business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation,” it said in a statement.