Social media giant Facebook Inc. (FB) will acquire about half the patents that once belonged to AOL Inc. (NYSE: AOL) until they were acquired by Microsoft Corp. (NASDAQ: MSFT) last week. Microsoft paid AOL about $1.06 billion for ownership of 925 patents and the right to buy about another 300 patents that AOL did not sell.
Facebook paid $550 million in cash for ownership of about 650 of the patents acquired by Microsoft plus a license to any further AOL patents and patent applications that Microsoft “will purchase and own.” Microsoft will retain ownership of about 275 of the AOL patents and applications, and will get from Facebook a license to the patents that the social media company just acquired.
Facebook has been sued by Yahoo! Inc. (NASDAQ: YHOO) for infringing certain of Yahoo’s patents, and today’s acquisition of the AOL patents from Microsoft is likely a move by Facebook to get some ammo to use in future negotiations.
For its part, Microsoft claims that it never intended to keep all the AOL patents it bought last week. The sale to Facebook, according to Microsoft’s press release,
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.
Paul Ausick
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