MENLO PARK, CALIFORNIA (BNO NEWS) -- Software powerhouse Microsoft Corp. on Monday announced it has sold patents originally from Internet services and media company AOL to social networking giant Facebook for $550 million in cash.
According to a statement released by Microsoft, it reached a definitive agreement with Facebook under which Microsoft will assign to Facebook the rights to purchase a portion of the patent portfolio it recently agreed to acquire from AOL, Inc.
In the initial AOL auction, Microsoft secured the ability to own or assign approximately 925 U.S. patents and patent applications plus a license to AOL's remaining patent portfolio, which contains approximately 300 additional patents that were not for sale. As a result of Monday's agreement, Facebook will obtain ownership of approximately 650 AOL patents and patent applications, plus a license to the AOL patents and applications that Microsoft will purchase and own.
However, Microsoft will retain ownership of roughly 275 AOL patents and applications; a license to the approximately 650 AOL patents and applications that will now be owned by Facebook; and a license to approximately 300 patents that AOL did not sell in the auction. "Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," said Brad Smith, Microsoft's executive vice president and general counsel.
"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," Smith added.
Meanwhile, Facebook general counsel Ted Ullyot said the transaction is another 'significant step' in the company's ongoing process of building an "intellectual property portfolio to protect Facebook's interests over the long term." The transactions are still subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
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