“Facebook will pay Microsoft Corp $550 million for hundreds of patents that originated with AOL, beefing up its intellectual property arsenal,” Alexei Oreskovic and Diane Bartz report for Reuters. “The deal gives social network Facebook 650 patents and patent applications and license to another 275 patents and applications. It comes shortly before Facebook is expected to have the largest initial public offering in Silicon Valley history.”

Oreskovic and Bartz report, “Patents have become a top priority for technology companies as many of them, including Google Inc and Apple Inc., become embroiled in patent-related lawsuits. The patents, which Microsoft bought this year from AOL, cover a broad spectrum of technology, including mobile services, cell phone handsets, advertising and e-commerce, a source familiar with the situation said.”

“Microsoft bought the AOL patent portfolio knowing that it was an all-or-nothing deal and always planned to sell a large number of them while retaining licenses to them, a source close to the Facebook deal said,” Oreskovic and Bartz report.Microsoft will retain a license to the patents and applications it is selling to Facebook under the terms of the deal.”

Oreskovic and Bartz report, “Yahoo sued Facebook earlier this year, claiming that Facebook had infringed 10 Yahoo patents, including several covering online advertising technology. Facebook countersued Yahoo in April, accusing Yahoo of infringing 10 of Facebook’s patents. ‘Nothing about today’s action changes the fact that Facebook continues to infringe our patents … We see today’s announcement as a validation of our case against Facebook,’ a Yahoo spokeswoman said in an emailed statement.”

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