Microsoft shells out $1.1 billion for AOL patents

With fierce patent skirmishes erupting all around the industry, properly arming oneself has never been more important. Of course, you don’t need to tell Microsoft that. The company has splurged on its latest trip to the armory, shelling out a whopping $1.056 billion on a heaping bundle of AOL patents—800 in total.

The announcement doesn’t detail which patents Microsoft is buying. However, it adds that, on top of the 800 that are changing hands, Microsoft will get a non-exclusive license to AOL’s remaining 300 patents. Those patents cover, among other things, "advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security."

Conversely, AOL will keep a license to the patents it’s selling.

Microsoft legal chief Brad Smith comments, somewhat cryptically, "This is a valuable portfolio that we have been following for years and analyzing in detail for several months." He adds that the patents being sold "complement our existing portfolio."

The transaction is expected to close by the end of the year. If you happen to own AOL stock, good news: AOL expects to let shareholder reap "a significant portion" of the proceeds. The company will figure out how to do that before the deal is completed.

Comments closed
    • ShadowEyez
    • 8 years ago

    Do any of these patent wars actually lead to better technology and better R&D or is it more of a get money from lawsuits/protect yourself from lawsuits.

    • Bensam123
    • 8 years ago

    And this is why AOL is still in business.

    • Sargent Duck
    • 8 years ago

    Interesting, I’d be really keen on knowing what these patents pertain to, as I thought AOL was just a service provider. Although they might have some search and IM patents. Keep us updated Cyril.

      • jpostel
      • 8 years ago

      AOL has the old CompuServe patents too. The probably have a stack of patents for something like “posting a comment to a electronic forum”. Oh no! Now they are going to come after me!

      I am going to go with my gut and say this will be used against Google and Facebook.

        • yogibbear
        • 8 years ago

        More like press ‘X’ to close a window… ZOMG SUCK IT APPLE!

    • Xenolith
    • 8 years ago

    I suspect they will get their money back from licensing fees and lawsuits.

    • jdaven
    • 8 years ago

    You mean there was a patent for the methodology of sending millions of plastic discs to every home in America.

      • LaChupacabra
      • 8 years ago

      If only AOL had held onto some of them, they could have sold disks instead of patents

      [url<]http://www.glossynews.com/aol/article-1302.php[/url<]

        • squeeb
        • 8 years ago

        Wow thats crazy. I had a huge stack of AOL cd’s a long time back…but nothing on Floppy. Sadly I think the collection is gone.

    • dpaus
    • 8 years ago

    This whole trend of buying up massive patent portfolios on fundamental Internet/mobile communications technologies is deeply, deeply disturbing to me. I know they all say they’re ‘just doing it for defensive reasons’, but isn’t that precisely what the U.S. and Soviet Union both said about their stockpiles of tens of thousands of multi-megaton warheads?? (enough to wipe out all life on the planet several times over)

    I think we need an Internet version of [url=http://www.flickr.com/photos/thenewfrontiersman/3197364604/<]The Doomsday Clock[/url<]

      • Deanjo
      • 8 years ago

      [quote<]I know they all say they're 'just doing it for defensive reasons', but isn't that precisely what the U.S. and Soviet Union both said about their stockpiles of tens of thousands of multi-megaton warheads??[/quote<] And that seemed to have worked. The stalemate resulted in zero nukes being launched (against each other).

        • dpaus
        • 8 years ago

        It resulted in a lot of sleepless nights for a lot of people, until Reagan and Gorbechev sat down in Reykjavik and said ‘We have to stop this nonsense’

        If only we still had a physical Comdex, so we could get Ballmer, Cook, Page & Brin, Whitman, Ellison and a few others into a similar room and lock the door until they come to their senses. While they’re doing that, we take all the patent trolls – and their lawyers – out back and shoot them.

          • Deanjo
          • 8 years ago

          [quote<]It resulted in a lot of sleepless nights for a lot of people,[/quote<] There would have been just as many, if not more sleepless nights for many if one country had all the nukes. Just ask the Japanese. Do you think the bombs in Hiroshima and Nagasaki would have been dropped if the Japanese had equivalent destructive power?

            • BobbinThreadbare
            • 8 years ago

            If the Japanese had the bombs? Yes, they probably still would have been dropped since Japan had no way of deploying any weapons against the US at the time.

            • Deanjo
            • 8 years ago

            Oh really, guess Pearl Harbor or the Aleutian Island never happened then. Might want to brush up on your history.

            • BobbinThreadbare
            • 8 years ago

            Those events took place in 1945? Or do you not understand what “at the time” means?

            • Deanjo
            • 8 years ago

            They took place prior to 1945 so they had the capability of delivering such a bomb. Had the Japanese had an equivalent bomb in their catalog of weapons chances are there would not have been any dropped on Japan for fear of retaliation with at least equivalent devastation.

            • BobbinThreadbare
            • 8 years ago

            Like I said, “at the time.” That means the 6th of August 1945, not 3 years earlier.

            • Deanjo
            • 8 years ago

            So you are saying that the Japanese airforce suddenly evaporated in 1945? Sorry but pre and post august 6th the Japanese still had more then enough Mitsubishi Ki-21’s to do the job. There were also Japanese subs that were more then capable of parking off the coast of San Fran and detonating. Remember the Japanese were not afraid of a little kamakazi action.

            • dpaus
            • 8 years ago

            All right, now you’re just being silly. Japanese subs of the day had hatch openings of 1.4m x 4m for loading torpedoes. Fat Man was 3m across and Little Boy was 3.3m. And if they just carried it on the deck, they couldn’t submerge and never would have made it past Midway.

            And the Ki-21 had a bomb load of 2,000 lbs. The Fat Man and Little Boy bombs each weighed in around 10,000 lbs (“Wait; what if 5 of them carried it together? They could grip the husk with their dorsal mounts” “Yes, but the Ki-21 still only had a maximum range of 1,600 miles, so it was basically non-migratory” “Oh, right”)

            • Deanjo
            • 8 years ago

            [quote<]All right, now you're just being silly. Japanese subs of the day had hatch openings of 1.4m x 4m for loading torpedoes. Fat Man was 3m across and Little Boy was 3.3m. And if they just carried it on the deck, they couldn't submerge and never would have made it past Midway.[/quote<] Final assembly inside the sub. The same way they put a ship in a bottle. BTW, Little boy only had a diameter of 28" and the 3 meter length included the tail stabilizer that accounted for a 3rd of its length which would not have been needed. There is also the fact that they did not have to have a photocopy design of the US bombs.

            • Bensam123
            • 8 years ago

            I don’t believe you’re trying to justify using a sub as a delivery vehicle for a nuclear bomb that was designed for a plane… XD

            • Deanjo
            • 8 years ago

            Not trying to justify that, just saying that to think that the Japanese had no such way of delivering an atomic device is just plain ignorance. Just like how that self confidence lead to attacks on Pearl Harbor and New York. The Japanese were pretty resourceful and to think that they were not capable of delivering a device is just plain wishful thinking. Either way I’m pretty sure if there was a detonation of a atomic device even in testing by the Japanese prior to the US dropping that Truman would have thought twice and more then likely not given the order to drop them.

            • Bensam123
            • 8 years ago

            They didn’t have a nuclear program in any shape or form! If they did they would’ve designed it for whatever was their best method of delivery at the time… But you were just arguing a small technicality.

            • Bensam123
            • 8 years ago

            Dean, all nations weren’t on the same military level during WW2. Japan was very cryptic for lack of a better word. You should take a look at what sort of vehicles they were using during the war. They had planes and aircraft carriers, but their bombers were highly lackluster. They had nothing like the B-29s we had or even the B-17s.

            They could’ve strapped one to a boat and ran it into our islands… but that’s all they really could do. Germany was the ones with competitive bombers at the time and were the ones also developing their version of the atomic bomb. They would’ve been more then happy to drop them all over europe and turn the UK into a mushroom cloud.

            Military force aside, I don’t think you get the whole WW2 dynamic. Axis powers were trying to take over the world, that wasn’t the goal of the US entering into the war… Japan is still Japan today, not one of the US states, even though it could’ve been.

            [url<]http://en.wikipedia.org/wiki/Axis_powers[/url<]

            • Deanjo
            • 8 years ago

            You know that Allied bombers were known to be captured and flown by the Axis right?

            Such as noted in Tactical and Technical Trends, No. 33, September 9, 1943.

            [quote<]The use of captured U.S. aircraft by the Axis countries should be seriously contemplated, in view of certain incidents which have occurred during the last few months both in the Pacific and over Europe. Early in the year, there were two distinct occasions where unidentified U.S. Navy planes were observed in the Pacific area. One hovered over one of our task forces for a good part of a day, apparently on a reconnaissance flight. Another failed to respond to proper recognition signals. It is believed that some of these planes may have been captured by the Japanese and are in use for reconnaissance purposes. On the Western front, sightings of B-17's apparently enemy operated, are increasing. Returning from one recent mission, the first wing of our heavy bombers was joined by one unidentified B-17 which accompanied the formation until near the German coast when it met some twin-engine enemy planes and turned back with them. While the purpose of this particular maneuver remains in doubt, the inherent dangers are obvious, although to date no attempts to imitate American markings have been observed. This is further illustrated by a recent report that on the return flight from an attack on a town in central Italy, one of a number of unescorted B-17's was destroyed and three damaged by a P-38 marked with a swastika which made five determined attacks on the formation. The next day, during a return flight from northwest Sicily, a formation of light bombers was trailed by a tan-colored P-38 for forty miles before it turned back towards Italy. Photo reconnaissance has indicated the presence of one of these fighters on a nearby Italian airdrome. On another occasion over France, a P-47 was observed flying in company with an Me-109 and another enemy plane. In addition, a Fortress has been photographed at a German Air Force experimental station and reports that the enemy has in his possession examples of other U.S. aircraft in good condition have been received from time to time. [/quote<]

            • Sargent Duck
            • 8 years ago

            And the allies flew captured axis planes as well. I recall reading one auto-biography of an allied pilot flying a Me-109 with two Spitfire wingmen!

            The Japanese would never have developed an atomic bomb, that’s not the way they fought. The Russians fought with over-whelming man power. The Germans/US/British fought a technological war. They spent heavily in developing ever increasingly technogolical weapons to which the other side would counter. In the period of 6 years, look at the technology that Germany/US had in 1939 compared to what they had in 1945, it’s amazing.The Japanese fought with a sense of honor and skill. Their main fighter, the zero changed very very little from 1939 to 1945. Although it was one of the best in 1939, by 1945 it was a relic. The American’s Hellcat could fly faster, keep up with the zero in turns, had more firepower and self-sealing fuel-tanks with armour plating. The navy paints a similar story. I forget what battle it was (the American’s lost a lot of destroyers), but the American’s relied on radar at night while the Japanese relied on look-outs. Although the look-outs won that year, radar very quickly won out. By 1945, the Japanese were not much more ahead than they were in 1939. And they NEVER would have thought about an atomic bomb. Let’s be honest, nukes aren’t very honorable and the Japanese culture lived for honor. They just wouldn’t think like that.

            And EVEN if we wanted to entertain that redicoulous notion of *if* the Japanese had a nuclear bomb, they couldn’t pull it off by launching an attack on the States. The US transported the nuclear bomb and its support crew to Iwo Jima via a cruiser. I highly highly doubt that a Japanese sub would have enough fuel to sail from Japan to the coast of US carrying that much of an extra load while escaping detection from all the American planes and ships on sub watch!

            So let’s just stop with this silly talk of Japan having a nuclear bomb. If you want to continue down that avenue, perhaps we should start talking about the US having laser weapons during WW2.

            • rechicero
            • 8 years ago

            Too many cliches… The Ki-84 was faster (much faster at cruise speed than the Hellcat). The armament was probably heavier (2 mg + 2 20mm autocannon vs 6 mg). The J2M Raiden was as faster as the Hellcat, but with heavier armament. They were developing a jetfighter (Nakajima something, I don’t remember the name) and of course they had a nuclear program (http://en.wikipedia.org/wiki/Japanese_nuclear_weapon_program).

            About submarines, they had even one that could transport 3 aircraft so I’d say they would probably be able to transport a nuclear bomb. Their operational range was “anywhere in the world and return” (or 69,500 km, more than enough to go from Tokyo to the West coast several times) and, in fact, they planned to attack the Panama Canal although they finally decided than they’d rather defend their home islands.

            Of course, they didn’t develop the bomb.

            • Sargent Duck
            • 8 years ago

            huh. Thanks for that wiki link, did not know that. That does change my nuclear argument somewhat. But not by much as the Japanese government never really took the pursuit of a nuclear bomb seriously and by 1945 they were still in the very early stages of just learning about it.

            As for the aircraft comparison, I didn’t say the Hellcat could beat the Ki-84, I said it could beat the Zero, the main Japanese fighter. The Ki-84 only saw 3500 built whereas the Zero saw over 11,000. And the Americans had plenty at their disposal. Yes, the Ki-84 could beat the Hellcat in level flight (427 mph, 687 km/h) vs the Hellcat’s (380 mph, 610 km/h), but the Corsair could match the speed (417 mph, 671 km/h).

            The jet fighter you’re probably thinking of is the Nakajima Ki-201. It never even reached the prototype stage by time the Japanese surrendered.

            I forgot about that sub. Good catch.

            Ok, so I was a little off, I’ll admit that. But I still stand by my argument that the Japanese didn’t invest in technology as heavily as the US/British/German armies. Had the war continued, America had such a technological leap ahead of the Japanese (the B-36, the British Comet, radar), that the Japanese wouldn’t be able to catch up.

            • rechicero
            • 8 years ago

            Just wanted to offer some data, it wasn’t like the Japanese didn’t research. They did in pretty much the same areas as anyone else, but they lack the resources to develop and, specially, build as fast as the US.

            And to complete the data, I’ve researched a little and I was talking about the Nakajima Kikka. It reached the prototype stage and it flew. [url<]http://en.wikipedia.org/wiki/Nakajima_Kikka.[/url<] And they had radar too [url<]http://en.wikipedia.org/wiki/List_of_Japanese_World_War_II_radar.[/url<] So the technological gap wasn't really there. In fact, in some areas (like torpedoes), the Japanese were clearly the best. Again, production was more important (the Germans had some advantages in key technologies, but they lost the war anyway).

            • Bensam123
            • 8 years ago

            If the Japanese had nukes during WW2 they would’ve dropped them all over the soviet union and maybe us (IF they actually had the planes and the logistics to do it) and I’m sure the germans would’ve been more then happy to do this. Germany was developing their own nuclear arms program and they were pretty close.

            The atomic bomb, no matter how you view it, ended all nonsense and the war.

            There was no cold standoff after WW2 ended. We didn’t position nukes a plane jump away from their island and just dangle them there. I don’t think you know a whole lot about the cold war, WW2, or nuclear weapons being used as deterrence.

        • Grigory
        • 8 years ago

        Exactly!

        • Bensam123
        • 8 years ago

        This is a joke right?

        The cause of the tension WAS the continued stockpiling of nuclear arms. We were very lucky the cold war didn’t turn us all into a bunch of blisters on the ground. No one credits it as such because it never became a hot war, for the most part.

      • BobbinThreadbare
      • 8 years ago

      So unlike copyright, patents actually have a time limit. I know most things about the internet are still pretty new, but still 1992 was 20 years ago now, so we have what 5-10 more years of this nonsense and then everything will be open?

        • SuperSpy
        • 8 years ago

        Ask Mickey Mouse how well that worked for him.

          • BobbinThreadbare
          • 8 years ago

          That’s the worry, that congress will just keep increasing the time.

          However, do the large companies actually want all these patents? Is it really in Microsofts interests to be shelling out 1 billion dollars right now?

            • CasbahBoy
            • 8 years ago

            Congress will absolutely keep increasing the time until there is an equally as powerful lobby pushing for the time to remain the same or decrease. Unfortunately the people that vote them in aren’t a powerful lobby, we’re more the door they walk through to get into the party.

      • crabjokeman
      • 8 years ago

      Unfortunately, there’s no mutually assured destruction with patents. 🙁

    • yogibbear
    • 8 years ago

    Buying bits of worthless paper with other bits of worthless paper. What a crazy world we live in.

      • dpaus
      • 8 years ago

      Go ahead and try telling a Circuit Court or Supreme Court judge that all he does is shuffle ‘worthless bits of paper’. Just don’t call me for bail money.

      • crabjokeman
      • 8 years ago

      I’ll gladly take all of that worthless paper currency off your hands (you’re welcome).

      • TurtlePerson2
      • 8 years ago

      Patents are the right to exclude others from making or selling the patented invention. I don’t know who taught you that patents are worthless.

        • yogibbear
        • 8 years ago

        I know what patents are and generally understand why they have value, I just think most software patents are ridiculous.

      • Anarchist
      • 8 years ago

      the worthless-ness of paper money, and by extension the inflation of cost of living, is the means with which the top 0.001% of population enslaves the bottom 90%. While Gates and Zuckerbug are throwing around billions, the mere slaves are finishing another day of work fearful of losing their source of their meager income and health insurance enroute to their long journey back home. The more price rise the more fearful the slaves become. It really is quite remarkable how well the scheme works … and any dissent is railroaded by the media as gathering of communists demanding free stuff …

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