Yahoo has asserted claims on patents that include the technical mechanisms in the Facebook's ads, privacy controls, news feed and messaging service, according to a source briefed on the matter.
Representatives from the two companies met on Monday and the talks involved 10 to 20 of Yahoo's patents, said the source, who was not aware of what specific dollar demands Yahoo may have made for licenses.
Yahoo did not elaborate in an emailed statement on details of its discussions with Facebook, but indicated it would not flinch at taking the social networking giant to court over its patents.
Yahoo said other companies have already licensed some of the technologies at issue, and that it would act unilaterally if Facebook refused to pay for a patent license.
"Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property," the company said.
The meeting between the two companies was first reported by the New York Times.
A Facebook spokesman said: "Yahoo contacted us at the same time they called the New York Times and so we haven't had the opportunity to fully evaluate their claims."
Should Yahoo wind up suing Facebook, it would mark the first major legal battle among technology giants in the social media sphere and a major escalation of patent litigation that has already swept up the smartphone and tablet sectors and high-tech stalwarts such as Apple Inc, Microsoft Corp and Motorola Mobility.
Yahoo's patent claims follow Facebook's announcement of plans for an initial public offering that could value the company at about $100 billion.
Several social networking companies, including Facebook, have seen an uptick in patent claims asserted against them as they move through the IPO process.
However, most of those lawsuits have been filed by patent aggregators that buy up intellectual property to squeeze value from it via licensing deals, and none by a large tech company such as Yahoo.