Microsoft to Remove Controversial Licensing-Deal Provision, Japan Unit Says
Posted on: Monday, 1 March 2004, 06:00 CST
Feb. 27--TOKYO -- Microsoft Corp. has decided to remove a patent-related provision inserted in licensing contracts with personal computer (PC) makers, the U.S. software giant's Japanese unit said Friday.
The decision follows a raid on the Japan unit by the Fair Trade Commission (FTC) on Thursday on suspicion of violating the Antimonopoly Law.
The Japanese antitrust watchdog investigated Microsoft's headquarters in Tokyo regarding the controversial provision the U.S. firm inserts into contracts with original equipment manufacturers (OEM) -- mostly PC and device makers that sell their products loaded with Microsoft's Windows operating system.
"Microsoft has decided that, given its focus on improving customer satisfaction, it would delete the provision in its entirety from the next round of OEM contracts, which will take effect later this year," Microsoft said in a statement released after the raid.
The provision provides that OEMs which took a license to Microsoft's Windows operating system products, including Microsoft's patents on Windows, should not later sue each other, or Microsoft, on claims that Windows violates their patents.
The company said it recently reviewed the provision again after receiving comments on it from some of its OEM customers.
"Microsoft last week notified its OEM customers, including its customers in Japan, that the provision would be deleted," it said.
But the company added it believes that the patent-related provision is "lawful" under Japanese, U.S. and European Union law.
In 1998, the FTC warned Microsoft to stop what it called the unfair business practice of demanding Japanese PC makers install the Excel spreadsheet and the Word application together.
At the time, the FTC also warned against Microsoft's practice of requiring PC makers to accept the Internet Explorer browser as part of its operating system amid competition with a rival browser, saying it was questionable from an antitrust viewpoint.
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(c) 2004, Kyodo News International, Tokyo. Distributed by Knight Ridder/Tribune Business News.
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