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The startup builds technology to detect intellectual property that has been shared by Internet users without permission.
"We're excited to work with the Source3 team and learn from the expertise they've built in intellectual property, trademarks and copyright. As always, we are focused on ensuring we serve our partners well," the report quoted a Facebook spokesperson as saying.
There have been no details on deal terms but according to media reports, Source3 has raised just $4 million in venture capital funding.
The company had in past announced "Rights Manager" technology to detect and remove video clips shared by people who do not have rights to the video.
But the new acquisition infers that Facebook's "Rights Manager" technology has not been much of a success.
Earlier this year, the social media giant added another option for rights holders: "Leave the content up, and make money off the views that these pirates are generating for you."