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Microsoft buys and licenses AOL patents in $1bn deal | Microsoft buys and licenses AOL patents in $1bn deal |
(about 1 hour later) | |
Microsoft is buying the majority of AOL's patents in a deal worth $1.06bn (£668m). | Microsoft is buying the majority of AOL's patents in a deal worth $1.06bn (£668m). |
A statement said the agreement covers the intellectual property rights to more than 800 innovations. | A statement said the agreement covers the intellectual property rights to more than 800 innovations. |
Microsoft will also be granted licensing rights to about 300 patents that AOL is keeping. | Microsoft will also be granted licensing rights to about 300 patents that AOL is keeping. |
It is the latest in a series of such deals as technology firms act to bolster their chances in related lawsuits. | It is the latest in a series of such deals as technology firms act to bolster their chances in related lawsuits. |
If a company successfully sues another it can demand a sales ban of its competitor's products, or force the loser to pay expensive licence fees. | If a company successfully sues another it can demand a sales ban of its competitor's products, or force the loser to pay expensive licence fees. |
Since the start of the year Intel, Google and Facebook are among those to have bought significant numbers of patent from other tech companies. | Since the start of the year Intel, Google and Facebook are among those to have bought significant numbers of patent from other tech companies. |
Court cases | Court cases |
AOL said it intended to pass on a "significant portion" of the proceeds of the sale to its shareholders. | AOL said it intended to pass on a "significant portion" of the proceeds of the sale to its shareholders. |
"The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio," said the firm's chief executive Tim Armstrong. | "The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio," said the firm's chief executive Tim Armstrong. |
Its shares rose more than 40% on the news. | |
Microsoft's executive vice of legal affairs Brad Smith said: "This is a valuable portfolio that we have been following for years and analysing in detail for several months." | Microsoft's executive vice of legal affairs Brad Smith said: "This is a valuable portfolio that we have been following for years and analysing in detail for several months." |
The companies said that the transaction is expected to be completed by the end of 2012. | The companies said that the transaction is expected to be completed by the end of 2012. |
European cases | European cases |
The deal comes ahead of Microsoft's appearance in a court in Mannheim, Germany on 17 April when it faces claims that it infringed Motorola Mobility's H.264 video-compression technologies. | The deal comes ahead of Microsoft's appearance in a court in Mannheim, Germany on 17 April when it faces claims that it infringed Motorola Mobility's H.264 video-compression technologies. |
Microsoft has moved its European software distribution to the Netherlands ahead of the judgement to prevent a potential shipments ban that might affect distribution of its Windows 7 system software and Xbox 360 gaming consoles. | Microsoft has moved its European software distribution to the Netherlands ahead of the judgement to prevent a potential shipments ban that might affect distribution of its Windows 7 system software and Xbox 360 gaming consoles. |
Microsoft had previously asked a court in Munich to halt sales of Motorola's Razr smartphone claiming it infringed one of its user interface patents. | Microsoft had previously asked a court in Munich to halt sales of Motorola's Razr smartphone claiming it infringed one of its user interface patents. |