Microsoft and Facebook Announce Partnership Agreement for AOL Patents

On Monday of this week, Microsoft made the announcement of an agreement with Facebook in which the company will assign to Facebook the right to purchase a portion of the patent portfolio is acquiring from AOL.

The purchase will reportedly cost Facebook $550 million in cash for its portion of the patent rights. The total of 925 U.S. patents come from an AOL auction in which Microsoft secured the ability to own or assign the patent rights. Additionally, Microsoft also gained the rights to a license of some 300 patents in AOL’s portfolio which were not up for sale.

Based on the agreement with Microsoft, Facebook will take ownership of about 650 of the AOL patents while, Microsoft will retain ownership of approximately 275. The companies will also be able to license the patents which are owned by the other.

“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.”

“Today’s agreement with Microsoft represents an important acquisition for Facebook,” said Ted Ullyot, general counsel, 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.”