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Microsoft eases its rules for access to technology

By Kim Peterson
Seattle Times technology reporter

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Though company executives wouldn't admit it, the move could also boost Microsoft's standing with antitrust regulators in the United States and in Europe, where the company's business practices are under investigation.

"This is not directly related to the legal issues in the U.S. or Europe," said Brad Smith, Microsoft's general counsel, in a conference call with reporters yesterday. However, he said, regulators have urged the company to make its products more interoperable with other systems.

"Think of this as a step that is consistent with the kinds of steps that government regulators have been encouraging us to take," he said. "It moves in the direction that they have been suggesting that we move in a number of instances."

Microsoft has licensed its intellectual property in the past, but usually case-by-case and as part of negotiations with other companies.

Now, the company said it has streamlined the process and given its portfolio of patents more visibility. Microsoft has 4,000 patents worldwide and 5,400 others pending.

The company has set up a Web site — at www.microsoft.com/mscorp/ip — with information on the technology available to be licensed. Companies developing commercial products will be expected to pay license royalties to Microsoft, while academic institutions doing noncommercial research will have royalty-free access to all patents.

Competitors could also license some technology.

"We're making really clear this technology is available for all comers," said David Kaefer, director of business strategy at the company. Kaefer said, however, that Microsoft can refuse any requests.

The program is expected to generate revenue, but Smith said it would not be enough to have a material impact on the company.

Yesterday's announcement provided a glimpse of the work being done at the company by Marshall Phelps, who joined Microsoft in June to supervise its intellectual-property groups. Phelps spent 28 years at IBM, where he helped to develop the company's patent-licensing program and intellectual-property portfolio.

He said yesterday that with an annual research budget of $6.8 billion, Microsoft is going to produce a good deal of intellectual property, and the company wondered what to do with it all.

Two technologies in particular were highlighted for licensing yesterday: the File Allocation Table (FAT) file system and the ClearType readability software.

Operating systems use FAT to track information about computer files, such as their location, and to reassemble the files for viewing. It has become widely used to exchange media between computer and digital devices, and could be of interest to digital camera or camcorder companies, for example. The license is priced at 25 cents per unit with a $250,000 cap on total royalties per manufacturer.

Some companies might just write Microsoft a $250,000 check instead of keeping track of the per-unit royalties, Kaefer said.

Microsoft is also licensing a technology called subpixel rendering, which can display features of text as small as a fraction of a pixel in width.

The technology is often referred to as Microsoft ClearType, and it could be used to show images on a screen on mobile phones, personal digital assistants and other devices.

The company said the ClearType license will cost $1 per unit for personal digital assistants, $2 per unit for personal computers and $3 for Tablet PC devices.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com

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