SAN FRANCISCO, April 23, 2012 /PRNewswire-USNewswire/ -- Covington & Burling advised Microsoft Corp. in negotiating a definitive agreement with Facebook that assigns the social networking company the right to purchase a portion of a patent portfolio that Microsoft recently purchased from AOL Inc. Under the agreement, announced today, Facebook will pay $550 million in cash.
Covington also represented Microsoft in its $1.056 billion purchase of 925 AOL patents and patent applications earlier this month. In that deal, Microsoft secured the ability to own or assign approximately 925 U.S. patents and patent applications plus a license to AOL's remaining patent portfolio, which contains approximately 300 additional patents that were not for sale.
As a result of today's agreement, Facebook will obtain ownership of approximately 650 AOL patents and patent applications, plus a license to the AOL patents and applications that Microsoft will purchase and own.
After closing the transaction, Microsoft will retain ownership of approximately 300 AOL patents and applications; a license to the approximately 650 AOL patents and applications that will now be owned by Facebook; and a license to approximately 300 patents that AOL did not sell in its auction.
"Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," said Brad Smith, executive vice president and general counsel of Microsoft. "As we said earlier this month, we had submitted the winning AOL bid in order to obtain a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio."
"This is an important acquisition for us and constitutes a win-win for the two companies," said Ted Ullyot, general counsel of Facebook. "This is another significant step in building our intellectual property portfolio to protect Facebook's interests over the long-term."
The transaction is also subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Covington team for both deals was led by Bruce Deming and included Ingrid Rechtin, Brad Chernin and Andrew Hall (corporate). Also advising on the transactions were Robert Heller and Sarah Burnham (tax), Evan Cox, Amy Toro and Jeff Davidson (intellectual property), Ken Ebanks and Paula Domingos (corporate) and Miranda Cole (EU antitrust).
Covington & Burling LLP, an international law firm, provides corporate, litigation, and regulatory expertise to enable clients to achieve their goals. Founded in 1919, the firm has more than 800 lawyers and offices in Beijing, Brussels, London, New York, San Diego, San Francisco, Silicon Valley, and Washington, DC.
Contact: Rebecca Carr
SOURCE Covington & Burling