Microsoft buys patents from AOL for $1.1bn

Kasmira Jefford
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AOL announced yesterday it is to sell 800 of its technology patents to Microsoft for nearly $1.1bn (£690m), sending shares in the internet firm soaring by 43 per cent.

The company did not say what these patents cover but they are said to include rights from its current and former businesses, spanning from Netscape and MapQuest to CompuServe and

Microsoft will also be granted a non-exclusive licence to a portfolio of over 300 patents that AOL has decided to keep.

AOL, which has been facing pressure from activist investors to pursue the auction, said it intended to return “a significant portion” of the sale proceeds to them.

“The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio,” said chief executive, Tim Armstrong.

The sale process kicked off last autumn and has attracted a string of online suitors including Amazon and eBay, in what has in recent years become an increasingly expensive battleground for patents.

Technology companies have been spending billions on intellectual property assets primarily to defend themselves against the rising tide of patent litigation.