Microsoft deal with AOL part of patent scramble

Tech » Internet access company sells 800 patents to Microsoft for $1B.

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Yahoo Inc., like AOL an Internet pioneer, has valuable patents and an ailing business as well. But its straits are not as dire as Kodak’s and RIM’s. Still, Yahoo chose to wield its patents in March, suing Facebook for infringement on 10 patents. As is customary, Facebook retaliated with its own patent suit against Yahoo, shortly after acquiring the patents from IBM.

The recent trend doesn’t mean that patents are on an unstoppable rise in value. Ferragu, the Sanford Bernstein analyst, believes that the smartphone fight is heading for a truce, where a "gentleman’s club" of companies figure out the relative strengths of their patent portfolios and work out royalty rates in accordance.

But patents are likely to keep driving deals.

"Patents are a very important asset class that have been ignored way too long," says Alexander Poltorak, CEO of patent-management firm General Patent Corp. "Patents are the currency of the knowledge-based economy."

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