The lawsuit failed to provide an adequate example in which AOL executives made a material misstatement or omission prior to the announcement of the patent sale on April 9, 2012, Cote said.
It was well known in the market that AOL's patent portfolio might be extremely valuable, Cote wrote. The company disclosed in numerous public filings that its patents were among its most valuable assets, and an activist investor in AOL, Starboard Value, had publicly speculated that the portfolio could be worth as much as $1 billion, Cote said.
The deal also came at a time in the market for such patents was heating up. Nortel, for example, sold a patent portfolio for $4.5 billion in June 2011, Cote noted.
Press reports from the time and AOL disclosures that it was working to sell the patents "render implausible any suggestion that the public was not aware that AOL possessed an extremely valuable patent portfolio," Cote wrote.
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The judge also did not accept the plaintiffs' claim that an auction for the patents was essentially a sham, and that AOL knew long before April 9 that it would sell them to Microsoft, Cote said.
"The remaining allegations in the complaint simply provide no basis for an assertion that AOL and Microsoft reached a secret deal for the sale of the patents months before the auction was conducted," the judge wrote.
Representatives for the plaintiffs and AOL were not immediately available for comment. The lead plaintiff is Barbara Keeling, who the complaint said sold AOL stock during the class period and before the deal.
The case is In re AOL, Inc Repurchase Offer Litigation, U.S. District Court, Southern District of New York, No. 12-cv-03497.