[Techtaffy Newsdesk]

Microsoft and Facebook have signed a definitive agreement under which Microsoft will assign to Facebook the right to purchase a portion of the patent portfolio it recently agreed to acquire from AOL. Facebook has agreed to purchase this portion for $550 million in cash. As a result of the 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.

Brad Smith (Executive vice president and general counsel, Microsoft):  Today’s agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction.

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.

In the initial AOL auction, Microsoft secured the ability to own or assign approximately 925 U.S. patents and patent applications plus a license to AOL’s remaining patent portfolio, which contains approximately 300 additional patents that were not for sale.

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.

The transactions are subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

[Image Courtesy: Facebook]