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Microsoft, Facebook announce $550 million patent deal

Microsoft, Facebook announce $550 million patent deal

By Gaurav Shukla | Updated: 5 June 2012 14:50 IST

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Highlights

Facebook will be paying $550 million to Microsoft to acquire a portion of patents that Redmond is getting from AOL.

Patents are the hot trade in town these days and everyone is just jumping in to grab a few of them. The latest firms to join the mix are Microsoft and Facebook.

According to a press note issued today, Facebook will be paying $550 million to Microsoft to acquire a portion of patents that Redmond is getting from AOL. Facebook will be receive the ownership of around 650 patents and applications; however Microsoft will still have the licence to these 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, Microsoft.

"Today's agreement with Microsoft represents an important acquisition for Facebook," said Ted Ullyot, general counsel, Facebook.

This deal is also expected to give Facebook an upper hand in social giant's IP fight with Yahoo. Both the companies have recently sued each other for several patents relating to web technologies and with the current deal with Microsoft, Facebook now has around 1500 patents in its kitty, most of them relating to web technologies. It appears Facebook wants to cover all bases in-case the IP fight with Yahoo takes an ugly turn or more such lawsuits crop up

To remind you, Microsoft paid $1 billion earlier this month to acquire approximately 925 U.S. patents plus a license to 300 additional patents that are not for sale from AOL. After today's deal, Microsoft will retain ownership of approximately 275 AOL patents along with license to 950 patents.

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Further reading: AOL, Facebook, Microsoft, patents

Microsoft, Facebook announce $550 million patent deal

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