Facebook and Microsoft announced today a definitive agreement which the software giant will assign to Facebook the right to purchase a portion of the patent portfolio the company recently acquired from America Online. Facebook has agreed to purchase this portion for $550 million in cash. As a result of today’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.
AOL announced earlier this month that the company has entered into a definitive agreement to sell over 800, keeping over 300 significant patent portfolios to itself, of its patents and their related patent applications to Microsoft granting the software giant a non-exclusive license to its retained patent portfolio for aggregate proceeds of $1.056 billion in cash.
“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, executive vice president and general counsel, Microsoft. “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.”
Upon closing of this transaction with Facebook, Microsoft will retain ownership of approximately 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 its auction.