Right on the heels of Facebook buying a hefty patent portfolio from IBM, an even bigger deal has gone down—to the tune of a billion dollars.

The sum was spent by Microsoft, who won an auction for 800 patents held by AOL. They also have licenses for the remaining 300 patents still held by AOL, and likewise, they have licensed back to AOL the 800 patents purchased.

It may be a lot of back-and-forth, but it’s all part of the strategy. Says Brad Smith, General Counsel and Executive Vice President of Legal and Corporate Affairs for Microsoft, “by participating [in the auction], Microsoft was able to achieve our two primary goals: obtaining a durable license to the full AOL portfolio and ownership of certain patents that complement our existing portfolio.”

It’s worth noting that Microsoft already has a lion’s share of tech patents, and makes millions from those that are licensed to Google’s Android platform alone.

Incidentally, this deal may be good news for Facebook as well, who after being sued for infringement by Yahoo, may have been a target for a similar suit from AOL. But as Microsoft is one of Facebook’s earliest investors, it seems they may not have much to worry about.

Just another example of the high stakes, power, and intrigue that is Patent Law!