Japan's Fair Trade Commission Takes Aim at Microsoft Over Restrictive Licensing Terms

The Japanese government has cracked down on Microsoft's business practices, issuing a cease-and-desist order against the US software giant over allegations of anti-competitive behavior. The issue stems from a clause in Microsoft's licensing agreement that prevents PC manufacturers from claiming patent rights to related technologies, potentially leaving them vulnerable to patent infringement suits. This provision has been in place since 1993, when Microsoft applied for only a handful of patents per year. However, as the PC market expanded rapidly, the clause's impact became more significant, and several Japanese companies, including a major Osaka home appliance manufacturer, have been affected.

Key Takeaways:

• The Fair Trade Commission of Japan has issued a cease-and-desist order against Microsoft over its restrictive licensing terms, which prevent PC manufacturers from claiming patent rights to related technologies.
• The provision in question has been in place since 1993, when Microsoft introduced it as part of its licensing agreement.
• The clause has been used by several Japanese companies, including a major Osaka home appliance manufacturer, which had its technology used in Microsoft's Windows operating system without permission.
• When the Ministry of Economy, Trade and Industry (METI) asked other home appliance makers about similar incidents, several cases surfaced, leading to the issue being brought to the FTC's attention.
• Microsoft Chairman Bill Gates introduced the plan to provide new Windows information to PC firms at a discount in exchange for a contractual promise that they would not file patent suits once the computers were shipped.
• The PC market was rapidly expanding at the time, and manufacturers silently agreed to the provision.
• The Japanese government is the first to allege that the clause violates anti-monopoly law.

Statistics:

• 1993: The year Microsoft introduced the restrictive licensing clause.
• Several dozen patents per year: The number of patents Microsoft applied for annually during the time the clause was implemented.
• Rapidly expanding PC market: The timeframe during which the licensing clause's impact became more significant.
• Several Japanese companies: The number of companies affected by the clause, including a major Osaka home appliance manufacturer.
• 14-07: The timestamp of the report's publication date.

Sources:

• [Nikkei]