One of AOL Inc.'s largest shareholders said Friday that it's nominating a slate of candidates for election to the company's board, because it claims that the company isn't doing enough to make money off its hundreds of technology patents.

New York-based investment firm Starboard Value LP, which owns about 5.2 percent of AOL's outstanding shares, said it delivered a letter to AOL's board listing the five candidates that it wants to elect at the company's upcoming shareholder meeting.

Starboard said in its letter that AOL's portfolio of over 800 patents cover a wide variety of Internet technologies and that if "properly harvested and monetized," the portfolio could produce more than $1 billion in licensing income.

But Starboard claims that AOL hasn't responded to proposals that would do that, which is why it's nominating its candidates. The five candidates include Jeffrey Smith, Starboard's co-founder and chief executive.

A Web pioneer in the 1990s, AOL has been working on turning around its business as demand for its dial-up Internet access service shrinks.

AOL issued a statement Friday pointing to its improved quarterly earnings and stock price growth as signs that the company is on the right track. It also said that it has held several meetings with Starboard to address its concerns, but that the firm rejected that path.

AOL added that it knows how valuable its patent portfolio is and had begun a process to reap their value, even before Starboard started voicing its concerns.

A total of eight directors are up for reelection at AOL's upcoming shareholders meeting.

In afternoon trading, AOL shares slipped 19 cents to $18.25.