Microsoft has its cake and eats it too in deal with AOL, Facebook

When Microsoft won the auction that brought over 925 US patents from AOL’s portfolio, there was clear indication that Facebook wanted in on the action. They got their wishes today and Microsoft was able to get what they wanted and have half of it paid for through Facebook’s purchase of 650 of those patents. “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 for 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.” Microsoft will have own a license to those patents and will share the remaining 275 with Facebook by giving them a license. Microsoft will also have a license to the other 300 patents that AOL didn’t sell them. Last month, Facebook took its first major step into the patent world when it purchased a batch from IBM. With the company planning on going public next month, they have an internal need for a wider patent portfolio as well as using them in defense as they have a big target on their backs (with Yahoo pointing the biggest gun at it currently). “Today’s agreement with Microsoft represents an important acquisition for Facebook,” said Ted Ullyot, general counsel 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.”