Facebook buys currency of the day from Microsoft -- patents

By Michelle Maltais

April 23, 2012 12 AM PT

It seems patents have been playing an increasingly crucial role in the business ecosystem. Microsoft just flipped to Facebook for $550 million a portion of its recent $1-billion bundle buy of patents from AOL.

The companies said Facebook is buying about 650 of the 925 patents and patent applications.

“It is interesting to see that Microsoft paid $1.14 million per patent property while Facebook paid $850,000 for part of the same portfolio,” said Mark Radcliffe, intellectual property attorney with DLA Piper. “The 30-plus-percent differential is really interesting because it says that Microsoft was buying more than they needed.”

Ultimately, he said, this sale underscores the role of patents as financial rather than legal assets.

“It will be interesting to review what patents were retained by Microsoft because it can suggest Microsoft’s major concerns,” Radcliffe said, noting that the company can enforce only the patents it has retained.

By selling the patents, Microsoft covers its costs and dumps the expense of maintaining the patents it doesn’t want or need. Facebook will get a license to use the rest of the patents. Microsoft will also get a license to use the patents that Facebook is buying.

As for Facebook, the company adds to its arsenal as it prepares for an initial public offering and girds for a lawsuit that Yahoo filed last month. Facebook has filed a countersuit. The social network also recently bought 750 patents from IBM.

Young companies like Facebook “want to avoid Google’s mistakes with Android, which has resulted in over 40 patent lawsuits against Android vendors,” Radcliffe said. “Facebook has already used patents which it purchased to help defend itself; six of the eight patents in its counterclaim against Yahoo’s patent suit were purchased by Facebook.”

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