Facebook beefs up patent arsenal

Facebook will pay Microsoft Corp. $550 million US in cash for hundreds of patents recently sold by AOL Inc., the social networking company’s latest move to bulk up its intellectual property after a lawsuit filed by Yahoo Inc. The deal, shortly

before Facebook is expected to have the largest initial public offering in Silicon Valley history, will give the social network 650 patents and patent applications, as well as a licence to a further 275 patents and applications owned by Microsoft.

Microsoft trumped Amazon, ebay and other tech giants this month with its more than $1-billion

purchase of most of AOL’S patent trove. Valuing patents is a complex process, and it was not immediately clear whether Microsoft profited from the deal with Facebook.

Brad Smith, Microsoft’s general counsel, said on

Monday that the Facebook deal allows it “to recoup over half of our costs while achieving our goals from the AOL auction.”

Facebook was also a participant in the AOL auc

tion, a source said at the time. Facebook’s deal with Microsoft comes as the world’s No. 1 social networking company is preparing for an initial public offering that could value it at up to $100 billion and as Facebook fights a legal battle

with Yahoo, which sued Facebook this year, alleging that Facebook infringed 10

Yahoo patents.