Patents arsenal: Why Facebook is buying
Patents accumulation is key strategy as Facebook prepares to go public. It bought $550 million worth of patents from Microsoft.
The two companies said Monday that Facebook is buying about 650 of the 925¬†patents¬†and¬†patent¬†applications. Facebook will get a license to use the rest of the¬†patents.¬†Microsoft¬†will also get a license to use the¬†patentsthat Facebook is buying.
"Today's agreement with¬†Microsoft¬†represents an important acquisition for Facebook," said Ted Ullyot, Facebook's general counsel, in a written statement. "This is another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term."
Facebook is loading up its intellectual property arsenal as it prepares for an initial public stock offering and fights a lawsuit brought by Yahoo Inc. last month. Facebook is countersuing.
The¬†patents¬†purchase comes amid accelerating litigation over who owns the rights to key technological innovation, particularly in the mobile arena. Facebook bought 750¬†patents¬†last month from International Business Machines Corp.
The AOL¬†patents¬†fetched three times what analysts had expected, but now¬†Microsoft¬†has essentially gotten back half of what it paid.¬†Microsoft¬†is a Facebook partner, having bought a 1.6 percent stake in the social networking giant in 2007 for $240 million.
"Facebook is just getting in the game. It goes to show that if you are a significant player in this landscape, you have to have¬†patent¬†protection," BGC Partners analyst Colin Gillis said. "Facebook realizes it's a target."