Microsoft’s Patent Deal With Facebook ‘Shows Benefits Of Collaboration’

IP Specialist Comments On Latest Agreement

27.04.2012

The way that technology companies are increasingly collaborating when it comes to patents has been highlighted by Microsoft’s latest deal to sell intellectual property rights to Facebook, according to a specialist lawyer at Irwin Mitchell.

Earlier this week, Facebook confirmed it had agreed a multimillion dollar deal to purchase 650 of the 925 patents that Microsoft acquired from AOL earlier this month, with Microsoft set to obtain a licence to utilise the patents that it is selling to Facebook.

The agreement is the latest example of the strategic alliance which has developed between the companies, Microsoft continuing to be an investor in Facebook and the social media giant also using technology from the software corporation’s Bing search engine.

James Wellburn, a solicitor specialising in commercial litigation and intellectual property at Irwin Mitchell’s Birmingham office, said the deal would be favourable to all parties involved as it allows Microsoft to sell those patents which it had no great desire to retain but which it had to acquire as part of an ‘all or nothing’ agreement with AOL.

He outlined: “This kind of deal highlights the huge role that collaboration between parties can play when it comes to minimising the potential for litigation.

“Microsoft took significant steps to protect itself from IP-related issues by purchasing the portfolio of patents from AOL and it may have been easier in this case for the company to complete the transaction quickly by buying in bulk so as to steal a march on its rival bidders.

“However, it appears the company has since had time to assess the patents it has acquired to decide on which were crucial to its own intellectual property portfolio and which were disposable, hence the subsequent sale of 650 patents to Facebook for approximately $550m.

“While this is a seemingly quick turnaround in terms of purchasing and selling patents, it does highlight that major technology companies are fully aware of how susceptible they may be to litigation if they do not act early and decisively to ensure they have the right protection in place.”