Microsoft Corp. said Friday that it has improved its communications protocol licensing program, which was the focus of sharp criticism early last month from the U.S. Department of Justice and 16 states that had agreed to a remedy settlement ending years of antitrust litigation.
The settling parties warned the U.S. District Court for the District of Columbia last month that Microsoft wasnt fully living up to its obligations, and it said that the court might need to issue an order to ensure full compliance. Of particular worry was Microsofts efforts regarding the communications protocol licensing requirement, which the court had singled out as the "most forward-looking provision" in the remedy settlement, ordered in November 2002. The program, which allows third-party developers to obtain licenses to Windows operating system code, was included to encourage interoperability between third-party middleware and Windows.
The Redmond, Wash., software maker said Friday that it has set up a simplified, low-cost royalty structure and established more favorable licensing terms for prospective licensees. Existing licensees can convert to the new terms, and the previous terms will be available for new licensees until Sept. 30.
New terms include improvements in the timing of updates, licensee review of protocols at the beginning of the licensing process and other logistics, the company announced Friday.
A new royalty structure will be offered based on the percentage of a licensees revenue from products that include Microsoft protocols, and royalty prepayments were reduced to $50,000 from $100,000. All of the available protocols can be licensed at 5 percent of the licensed product revenues. Also the scope of the license was extended to cover communications with any Windows legacy client in addition to Windows 2000, Windows XP and future operating systems.
The company said that it is "generally willing to provide even broader usage rights" than required by the settlement and that it already has voluntarily given rights exceeding the requirements to a number of licensees.
According to Microsoft, EMC Corp., Network Appliance Inc., VeriSign Inc. and Starbak Communication Inc. are licensed to deploy Microsoft protocols in their products.
In 2000, Microsoft was found to have maintained an illegal monopoly in the desktop operating system market. Its illegal conduct included retaliation against original equipment manufacturers that promoted non-Microsoft middleware, namely the Netscape Navigator browser. Of the 18 states—plus the District of Columbia—that had joined the antitrust suit, only Massachusetts refused to settle and continues to fight for more stringent remedies. Massachusetts will present its arguments to the U.S. Court of Appeals for the District of Columbia in November.