MUMBAI: Social networking site Facebook has reached a definite agreement with Microsoft to purchase a portion of the patent portfolio it recently agreed to acquire from AOL for $550 million in cash.
"The parties are evaluating the accounting treatment for these transactions. These transactions are also subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended," Facebook said in a statement.
Microsoft had recently bought 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. Microsoft had paid approximately $1.056 billion to buy those patents.
As a result of 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.
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.
“The agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction. 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," said Microsoft EVP and general counsel Brad Smith.
“The agreement with Microsoft represents an important acquisition 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," said Facebook general counsel Ted Ullyot.
