Facebook Buys 650 AOL Patents from Microsoft for $550 Million

If you have not been living under a rock, you already know about Yahoo’s patent lawsuit against Facebook, and Facebook’s counter-lawsuit. You must also be aware that AOL recently sold most of its patent portfolio to Microsoft — nearly 800 patents for $1.05 billion.

While Facebook itself bought itself some patent protection from IBM, we speculated that they may not be enough to properly defend itself, and that Facebook may need to buy some more. We also suggested that Facebook should buy AOL’s patent portfolio.

Apparently, Facebook has gone ahead and done exactly that. It has acquired around 650 of the AOL patents from Microsoft. Microsoft will now own around 275 AOL patents and applications, as well as a license to the ones it sold off to Facebook.

“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.” said Ted Ullyot, general counsel, Facebook.

The deal actually makes sense, as Microsoft owns a significant stake in Facebook, and has backed it since years. Facebook gets the patents it needs, and Microsoft gets the license to them, while retaining the patents it needed most.

“Today’s agreement with Facebook enables us to recoup over 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,” said Brad Smith, executive vice president and general counsel, Microsoft.

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