Microsoft Appeals EU Order

Software giant wants relief from decision demanding that it make Windows desktop communications protocols available to competitors.

Microsoft has filed a fresh appeal of the European Commissions decision forcing it to make Windows desktop communications protocols available to competitors.

The application for annulment was filed on Aug. 10 with the EUs (European Union) Court of First Instance and made public on Wednesday. It follows an earlier agreement that Microsofts broader case with the CFI should decide the finer points of the protocol licensing issue.

"We are taking this step so the court can begin its review now of this issue, given its far-reaching implications for the protection of our intellectual property rights around the world," said a Microsoft spokeswoman.

Separately, three U.S. think-tanks have applied to argue on behalf of Microsoft in the software companys ongoing appeal against the ECs March 2004 antitrust decision—a move that drew criticism from Microsofts opponents in the case.

In March 2004 the EC declared Microsoft had abused its dominance on the desktop to illegally push into the server market. The EC imposed a record 497 million-euro fine on Microsoft and required that the company allow competitors to license secret Windows communications protocols, among other remedies.

Microsoft is appealing the decision, but a separate court ruling required Microsoft to implement the remedies while its appeal progresses; a ruling in the wider case is expected to take another two years.

The software company has satisfied the EC on all its remedies except for the protocol licensing issue. Microsoft has presented the Commission with several proposals for compliance on the licensing side of things, but all effectively block the protocols from being used in open-source software such as Linux and Samba. Such software currently poses the greatest competitive threat to Microsoft in the server market.

Microsoft argues its protocols are valuable intellectual property, and as such are protected from being made public or used in open-source programs. Open-source developers and the Commission say the protocols arent inherently valuable; their only worth is that they allow Microsoft to lock out competitors.

"If the Court of First Instance upholds the March 2004 decision then it should be possible for the protocols that do not embody innovations to be circulated under open-source licenses," said Commission spokesman Jonathan Todd.

In June, Microsoft and the Commission agreed to allow the CFI to settle the matter. Microsofts new action is designed to make sure the CFI takes the issue seriously, the company said.

Microsofts proposals so far still leave open-source projects without access to basic interoperability information, according to Volker Lendecke, co-founder of open source consultancy SerNet (Service Network) and a leading Samba developer.

"We really want all of the protocols needed to make Windows clients and Windows servers fully believe we are a Windows-compatible implementation. To compete, we need to be able to match the behavior of the network one to one," Lendecke said in an earlier interview. That level of information still isnt included under Microsofts royalty-free licence, he said.

The open-source question is key to ensuring competition in servers, according to the FSFE (Free Software Foundation Europe). "If the protocol specifications dont go to competitors, releasing them is pointless. And the only real competitor is Samba, exactly the kind of player Microsofts action is trying to cut off," said FSFE attorney Carlo Piana.

Separately, three U.S. think-tanks—the IIPI (International Intellectual Property Institute), the PFF (Progress and Freedom Foundation) and the IPI (Institute for Policy Innovation) —have applied to present arguments in favor of Microsoft before the CFI.

The organizations, which campaign against government regulation in the U.S., all have strong ties to Microsoft. Marshall C. Phelps, one of the IIPIs directors, is also a corporate vice-president and deputy general counsel for intellectual property at Microsoft. Susan Mann, Microsofts manager of federal government affairs, is an IIPI advisor, according to the institute.

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The IPI and the PFF have both argued in favor of Microsoft in antitrust disputes. PFF advisor C. Boyden Gray is a lawyer who argued on Microsofts behalf in a U.S. antitrust case, while the IPI has argued against the Commissions antitrust decision against Microsoft.

The groups deal with intellectual property, rather than the computing industry, and are likely to have argued that their intellectual property interests entitle them to participate, according to Piana.

He said the request was a waste of the courts time. "Their interest is in a point of law, not on the consequences for their activity if the decision is implemented," he said. "You must have a direct interest resulting from the operative part of the decision, not on the point of law, to intervene."

The parties authorized to intervene in the case on the Commissions behalf are RealNetworks, the Software and Information Industry Association, the European Committee for Interoperable Standards and the FSFE. On Microsofts side the interveners are the Association for Competitive Technology and the Computing Technology Industry Association.

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