Microsoft acts on anti-trust settlement

By Alun Williams

Posted on 5 Aug 2002 at 17:52

The making public of the APIs relates to the third milestone: a communications protocol licensing agreement. This relates to Section III.E of the proposed decree. Essentially, this is the official channel by which Microsoft will licence, to third parties, the technologies involved in the five middle-ware applications. In theory, competitors can examine the publicly available APIs and decide whether to compete with Microsoft in various areas - a new media player, for example. If they do so, they would licence the relevant technologies from Microsoft.

Although pricing was not revealed - the program will be officially announced tomorrow (6 August) - Smith asserted that Microsoft did not view this part of the settlement as a new means of revenue generation. It seems that Microsoft has devised a 'task-based' licensing program, for example identify areas such as 'file serving' or 'streaming media'. The relevant technologies to achieve such functionality will then be available for licence from Microsoft. Fifty base protocols will be required whatever task is licensed, but 113 previously undocumented communications protocols have been released. Smith emphasised the unique nature of such a licensing program - never before, he believes, has a company had to devise an arrangement to license out the technologies within its products.

The terms of the settlement - Smith pointed out - acknowledge that a 'substantial intellectual property' was involved and thus Microsoft was expressly permitted to charge for royalties.

Finally, as of 1 August, Microsoft has reviewed its licensing arrangements with OEMs. Among the changes to the agreements - now restricted to one-year terms - Microsoft has, driven by feedback from OEMs, assumed expanded patent, trademark and copyright indemnification. In other words, OEMs will be able to pass on disputes involving such issues, with regard to the delivery of Windows systems, on to the shoulders of Microsoft itself.

Summing up, Smith related the five principles to the changes outlined by Microsoft. In terms of the company accepting responsibility for meeting the terms of the settlement, he suggested over 3,000 Microsoft employees had been trained in matters relating to the settlement. In terms of resources, he claimed that several hundred employees had been working for several months to address the issues involved. He asserted the company had always erred on the side of reasonableness - citing the single API withheld from disclosure. In terms of processing feedback, Smith cited the company's handling of OEMs and the consultation over the licensing agreements. And finally, on the issue of building constructive relationships within the industry, he again cited Microsoft's work with OEMs as well as the Department of Justice and the Attorney General.