AOL says it has agreed to sell 800 of its patents and their related applications to Microsoft and grant it a license for its remaining patents for a total about $1.06 billion in cash.

New York-based AOL Inc. also says it plans to return some of the sale proceeds to its shareholders.

AOL shares jumped 37 percent in premarket trading.

The company says it will still hold over 300 patents and applications covering a variety of core and strategic technologies. AOL also received a license to the patents being sold to Redmond, Wash.-based Microsoft Corp.



AOL says it will determine the best way to distribute some of the sale proceeds to shareholders before the sale closes, which is expected to happen by the end of this year.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)