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Facebook buys IBM patents to protect from lawsuits

Facebook has bought a whopping 750 patents from IBM in efforts to protect itself from patent infringement lawsuits.

Facebook has bought a whopping 750 patents from IBM in efforts to protect itself from patent infringement lawsuits.

 
The patents in question cover areas relating to software and networking, according to a person close to the matter, though how strong the patents are is not yet clear.
 
To understand the scope of this acquisition, Facebook currently has 56 patents and 503 patent applications awaiting approval, significantly less than the portfolio it bought from IBM. This takes it from a very weak position in the patent world to an extremely strong one.
 
 
Yahoo recently sued Facebook for the alleged infringement of several of its patents relating to privacy, advertising and sharing, core areas of Facebook's business. The acquisition of IBM patents is likely a response to this and similar lawsuits as the social networking giant realises the threat posed by rival firms with a better patent standing.
 
“We expect the number of patent and other intellectual property claims against us to grow,” the company wrote in its initial public offering (IPO) filing in February. “We may introduce new products, including in areas where we currently do not compete, which could increase our exposure to patent and other intellectual property claims.”
 
The financial terms of the transaction are not known, but Facebook is believed to have paid several hundred million dollars for the portfolio.
 
Source: Bloomberg

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