Microsoft is selling part of the patents bought from from AOL to Facebook for $550 million.
Microsoft and Facebook announced today 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.
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.
As a result of today's 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.
Facebook's latest move to bulk up its intellectual property comes in the wake of a lawsuit filed by Yahoo.
Yahoo is alleging that Facebook infringed 10 Yahoo patents. Facebook countersued Yahoo in April, alleging that Yahoo infringes 10 of Facebook's patents.
In March, Facebook also acquired 750 patents from IBM.
Facebook is also preparing for an initial public offering that could value it at up to $100 billion.