AOL Sale The Latest Shot In Tech Patent War

Apr 9, 2012
Originally published on April 9, 2012 4:14 pm
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AUDIE CORNISH, HOST:

It's ALL THINGS CONSIDERED from NPR News. I'm Audie Cornish.

ROBERT SIEGEL, HOST:

I'm Robert Siegel and it's time now for All Tech Considered.

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SIEGEL: Today, two stories about big business. In a few minutes, how hackers are cashing in with government money. First, AOL got a rare boost today. Its shares soared after news that the struggling company is selling Microsoft a portfolio of more than 800 patents for just more than a billion dollars.

As NPR's Wendy Kaufman reports.

WENDY KAUFMAN, BYLINE: AOL's patents had been known to be up for sale but the billion-dollar price was substantially higher than many analysts expected. The price reflects the value companies are placing on patents amid an escalating patent war among technology giants

JULIE SAMUELS: The acquisition is just further proof that the patent wars have ratcheted up to such a level that we've kind of surpassed any grounding in reality, it seems.

KAUFMAN: Julie Samuels is a patent attorney at the Electronic Frontier Foundation. She notes that today's deal follows last year's $12.5 billion purchase by Google of MotorolaMobility, largely for its patents, and a multibillion dollar purchase of Nortel patents by a consortium of tech companies.

The trove of patents sold and licensed today by AOL include those related to online communications, advertising, social networking, mapping, targeted content delivery and search.

Maulin Shah, managing director of Envision IP - a patent research company - calls the Microsoft purchase strategic. He notes that Microsoft was late getting into Internet search and may now feel the need to protect itself from the likes of Google.

MAULIN SHAH: If they got sued for patent infringement from someone like Google, Microsoft now has its own patents that relate to core search engine technologies and Internet content delivery technologies, that they could counter-sue Google with. So it's almost like they were buying an insurance policy from AOL.

KAUFMAN: AOL, which has been floundering for years, has been under pressure from some of its investors, led by Starboard Value LP, to earn better returns by selling off some of its patents. Now, the company says it will do just that, giving shareholders some of the money it makes from this sale.

Wendy Kaufman, NPR News. Transcript provided by NPR, Copyright NPR.