A startup that makes software that tracks users’ online activity has lost an intellectual property case against the social media giant, which claims that its privacy tool violates its patents.
In February, Facebook settled a lawsuit with the startup, called Fiddler, for $6.6 million after agreeing to pay Fiddler $2.5 million in royalties for “use of the Fiddler service and its products,” according to a filing filed with the U.S. Patent and Trademark Office.
In the filing, the company said it had paid $5 million to Fiddler and $3.2 million to an investor, who bought a license to use Fiddler’s tools.
Facebook has said the tools are designed to help people keep their online privacy in check.
The lawsuit also accused Fiddler of “inventing new technologies” without paying for the work.
The company’s legal team had asked a federal judge to dismiss the lawsuit in March after failing to persuade the judge that the tools infringe on Facebook’s patents.
But the judge in California rejected that motion in a June order, saying the company had not proved that the tool infringes.
Fiddler, which was founded in 2013, filed the patent infringement lawsuit in April, alleging that Facebook’s software is “an unlawful invasion of Fiddler users’ privacy.”
Fiddler also said the company could not prove that Facebook violated Fiddler patents because Fiddler doesn’t have any patents.
Fiddle was founded by three people, and it had already spent $6 million on lawyers to defend itself in court.
But in May, a judge in Virginia granted the company permission to continue its legal fight, agreeing to allow Fiddler to file for patents on some aspects of the technology.
Fiddlers technology, which works with a company called FIDO, tracks the movements of individuals’ online data and is designed to make people’s lives easier.
Fiddler claims that it does not have any right to those information, so it can’t use them to target ads.