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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

April 23, 2012 at 9:20 AM

Facebook to buy AOL patents from Microsoft for $550 million

Facebook is paying Microsoft $550 million for a portion of the patents that Microsoft recently bought from AOL.

Earlier this month, Microsoft bought some 900 patents from AOL for $1 billion.

“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,” according to a news release from Microsoft and Facebook.

That means Microsoft will retain about 275 of the patents it bought from AOL, and can have use of — via a licensing deal — the 650 patents it’s selling to Facebook. AOL had also previously agreed to grant Microsoft non-exclusive use of 300 patents that are being retained by AOL.

“Today’s agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction,” Brad Smith, Microsoft’s executive vice president and general counsel, said in the news release. “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.”

The agreement comes as Facebook is wrangling with Yahoo over patents.

“Today’s agreement with Microsoft represents an important acquisition for Facebook,” Ted Ullyot, Facebook’s general counsel, said in the news release. “This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook’s interests over the long term.”

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