Microsoft and Facebook have signed an agreement under which Facebook will pay $550m in cash to purchase a portion of the patent portfolio it recently agreed to acquire from AOL in about a $1.1bn deal.
The deal gives Facebook ownership of around 650 AOL patents and patent applications, out of the 925 patents, plus a license to the AOL’s remaining patent portfolio, which contains 300 additional patents that were not for sale.
Upon closing of the transaction, Microsoft will retain ownership of 275 AOL patents and applications.
Microsoft executive vice president and general counsel Brad Smith said 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," added Smith.
Facebook general counsel Ted Ullyot said 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," added Ullyot.
The patents, which Microsoft purchased from AOL covered technology, including mobile services, cell phone handsets, advertising and e-commerce Reuters reported citing a source.
