Ina Fried

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Microsoft’s Top Lawyer: We Never Wanted All of AOL’s Patents

Microsoft’s top lawyer said that the company’s decision to sell a huge chunk of the patents it bought from AOL was part of the plan all along.

“We never felt it was necessary or even important for us to own all the patents,” Microsoft general counsel Brad Smith said in an interview.

As first reported by AllThingsD, Facebook is paying Microsoft $550 million for access to a big chunk of the patents that the company acquired earlier this month from AOL.

The rules of the AOL auction required parties to bid for the entirety of the patent portfolio up for sale, and prevented companies from teaming up to bid. However, Smith said, Microsoft’s plan all along was to sell off a chunk of the patents in order to recoup some of its costs.

“That was our plan from the day we went into the auction,” he said.

Microsoft and Facebook began working on a deal the day after Redmond emerged as the winner of the AOL patents.

With the deal, Microsoft got a license to all of AOL’s patents, including those AOL was not selling and those now being resold to Facebook. Microsoft is also holding on to about 275 of the former AOL patents.

Microsoft is in a bit of a tricky situation, however, as it now can appear to be taking sides in a dispute between two major partners: Facebook and Yahoo.

It’s a delicate balance for Microsoft, which would prefer to keep both companies happy.

“We have a very high regard for the value of the Yahoo patent portfolio,” Smith said. “It’s an important portfolio that reflects all of the tremendous value Yahoo brought to this space, and we are very sensitive to the importance of our relationship with Yahoo and our relationship with Facebook.”


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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google