Facebook pays Microsoft $550m for AOL patents

Facebook has cut a deal with Microsoft to buy a tranche of AOL patents for $1 billion.

Facebook pays Microsoft $550m for AOL patents

Earlier this month, Microsoft outbid Amazon and eBay with a $1bn offer for 925 patents from AOL for $1bn. It also took out a license for AOL’s remaining 300 patents, which aren’t up for sale.

Under today’s deal, Facebook will buy 650 former AOL patents and patent applications from Microsoft, and take a license for the remaining AOL patents that Microsoft retains. Microsoft, on the other hand, will keep a license to use the 650 patents that Facebook is buying.

The deal will see Microsoft recover half of its costs from the AOL auction, said Microsoft executive vice president and general counsel Brad Smith, while keeping access to those it deems necessary. “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.”

The patent deal was an “important acquisition” for Facebook, said Ted Ullyot, the social network’s general counsel. “This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook’s interests over the long term.”

The deal comes amid a growing patent war in the tech industry – and ahead of Facebook’s expected IPO, with the social network buying photo app Instagram for $1 billion two weeks ago.

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