Facebook Acquires 650 AOL Patents From Microsoft

By David Cohen 

Facebook reached an agreement with Microsoft to acquire about 650 of the 925 or so patents and patent applications the software giant acquired from AOL earlier this month.

Microsoft shelled out more than $1 billion for ownership of or the right to assign some 925 patents and patent applications from AOL, and it will recoup about one-half of that from the social network, which will pay $550 million in cash for approximately 650 AOL patents and patent applications, as well as a license to the Microsoft-owned AOL patents and applications.

The move today marks the latest step in the complex relationship between Facebook, Microsoft, AOL, and Yahoo. Facebook is currently embroiled in a controversial patent-infringement lawsuit filed by Yahoo in March. Meanwhile, last September, AOL, Yahoo, and Microsoft joined forces to challenge Facebook on the online display advertising revenue front.

Facebook General Counsel Ted Ullyot said of the patent transaction:

Today’s agreement with Microsoft represents an important acquisition for Facebook. This is another significant step in our ongoing process of building an intellectual-property portfolio to protect Facebook’s interests over the long term.

Microsoft Executive Vice President and General Counsel Brad Smith added:

Today’s agreement with Facebook enables us to recoup more than one-half of our costs while achieving our goals from the AOL auction. As we said earlier this month, we had submitted the winning AOL bid in order to obtain a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio.