Facebook announced today that it will pay $550 million to Microsoft for the right to 650 patents and patent applications.
Microsoft acquired those patents and hundreds of others in a deal with AOL earlier this month.
The news was announced on Facebook’s website.
The move comes as Facebook wades deeper into the waters of patent litigation while it readies for an IPO expected in May. The social network is in a major patent lawsuit with Yahoo and is also wrestling with dozens of smaller patent suits.
As tech companies grow, it is common for them to seek out patent portfolios as a form of self-defense against other tech behemoths.
The Facebook purchase is especially intriguing, however, as it suggests a deepening strategic alliance between Facebook and Microsoft . The latter was an early investor in the social network and both companies have common rivals in Google and Apple.
Microsoft acquired 925 AOL patents and patent applications in an auction for $1 billion. Shortly after, reports stated that Facebook had been an unsuccessful bidder in the auction.
Microsoft’s winning bid also gave it a license to 300 other patents that AOL still owns. Today’s announcement stated that Facebook too will have a license to those 300 patents — suggesting that Microsoft obtained a right to sub-license the 300 patents to certain other parties (like Facebook) Update – After some initial confusion, a Facebook spokesman confirmed that Facebook will only have a license to the patents owned outright by Microsoft that it did not purchase–275 patents–as opposed to the 300 patents still owned by AOL that it is licensing to Microsoft.
It is unclear how Facebook will use the patent portfolio in the near futre. Asked if Facebook will use it to sue other companies, a spokesman said:
“We believe that litigation over patents is a substitute for innovation. We believe in innovation.”
The spokesman also said Facebook was intrigued by Twitter’s announcement last week that it sign contracts with its engineers in which the company promised not to use patents in an offensive fashion.
Facebook would not elaborate on the nature of the patents it purchased. Reports have said that the 300 patents which AOL retained ( and Facebook is now licensing ) are related to imaging. If the reports are true, imaging patents would be significant to Facebook in light of its $1 billion purchase of photo-sharing site Intagram.