Microsoft Sells Most of AOL Patents It Just Acquired to Facebook for $550 Million

Posted by at 11:27 am on April 24, 2012

Facebook has signed an agreement to acquire $550 million in patents from Microsoft, the companies announced jointly Monday. The patents were part of the $1.065 billion in patents Microsoft purchased from AOL earlier this month.

In the initial agreement, Microsoft took ownership of approximately 925 U.S. patents and patent applications, in addition to a license to AOL’s remaining patent portfolio of about 300 patents. Facebook has now taken possession of 650 of those patents, “plus a license to the AOL patents and applications that Microsoft will purchase and own,” Facebook said in a release.

That leaves Microsoft with 275 of the original patents and applications it purchased from AOL. Microsoft will also retain a license to 650 of the patents and applications now owned by Facebook, in addition to the 300 or so AOL patents it gained a license to earlier.

“Today’s agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction,” Brad Smith, executive vice president and general counsel of Microsoft, said in the release.

Facebook, which is expected to go public in May, is embroiled in a patent suit with Yahoo. Yahoo had sued Facebook saying the company violates 10 of its patents covering advertising, privacy controls and social networking.  Facebook responded with its own lawsuit this month accusing Yahoo of violating 10 of its patents. Most of the patents Facebook will own are around IM, Privacy and social networking.

Yahoo has released a statement about Facebook’s purchase of 650 AOL patents from Microsoft.

Nothing about today’s action changes the fact that Facebook continues to infringe our patents. Companies who purchase patents are often working from a position of weakness and take these actions to strengthen their portfolio. We see today’s announcement as a validation of our case against Facebook.

For Microsoft the patents they are keeping will help them in search to take on Google.

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