Software giant Microsoft Corp. (MSFT: Quote) said Monday that it has agreed to sell a portion of the patent portfolio it recently agreed to acquire from AOL Inc. (AOL: Quote) to social networking giant Facebook Inc. for $550 million in cash.
In an auction earlier this month, Microsoft secured the ability to own or assign about 925 U.S. patents and patent applications plus a license to AOL's remaining patent portfolio, which contains about 300 additional patents that were not for sale.
Monday's deal with Microsoft will give Facebook ownership of about 650 AOL patents and patent applications, as well as a license to the AOL patents and applications that Microsoft will purchase and own.
The deal is subject to customary closing conditions, including U.S. antitrust clearance.
"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.
"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."
Facebook's deal with Microsoft is the latest move by the social networking giant to strengthen its intellectual property portfolio in the wake of a lawsuit filed against it Internet giant Yahoo Inc. (YHOO).
Last month, Yahoo filed a lawsuit against Facebook, alleging that the social networking company violated 10 Yahoo patents covering technologies such as online advertising, privacy controls and messaging.
Facebook countersued Yahoo in April, alleging Yahoo of infringing 10 of its patents covering photo tagging, advertising, online recommendations, among others.
The deal with Microsoft also comes two weeks after Facebook agreed to buy Instagram, a photo-sharing app for smartphones, for about $1 billion in cash and stock.
Menlo Park, California-based Facebook is in the process of going public in an initial public offering that could value it at up to $100 billion.
Microsoft shares are currently trading at $32.15, down 27 cents.
by RTT Staff Writer
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