Social Media

Facebook to buy $550 million in AOL patents from Microsoft


The tech industry’s patent wars just got a lot more complicated. Microsoft and Facebook announced today a $550 million patent deal that will add 650 additional patents to the social network’s arsenal, which it can then use to fight back Yahoo. The patents Facebook plans to buy come directly from the patent portfolio Microsoft just bought from AOL for more than $1 billion.

Once the deal goes through, Microsoft will maintain ownership and control of 275 of the 925 patents it purchased from AOL. The AOL patents Microsoft bought cover a wide range of Internet technologies, with the majority of the patents falling in the “online communications” category. It is not yet clear which specific patents Facebook has decided to purchase. AOL will maintain control of about 300 patents, which the company decided not to sell to Microsoft.

“Today’s agreement with Microsoft represents an important acquisition for Facebook,” said Ted Ullyot, general counsel, Facebook, in a statement. “This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook’s interests over the long term.”

Of course, one of the reasons Facebook needs this added protection because it is currently embroiled in a heated patent fight with Yahoo, which says that Facebook violated 10 of its patents. After Yahoo’s initial lawsuit, filed in early March, Facebook struck back with its own infringement claims. Both sides say the other’s infringement accusations are without merit.

The patents will also help Facebook protect itself from other companies looking to cash in on Facebook’s current vulnerabilities. The social network is preparing to launch its initial public offering (IPO) on the NASDAQ stock exchange. Many analysts expect Facebook to achieve a valuation of around $100 billion. Facebook will allegedly launch its IPO on May 17, though no official date has yet been announced.

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