Microsoft and JVC Enter Into Patent Cross-Licensing Agreement to Foster Mutual Innovation and Collaboration

REDMOND, Wash., and TOKYO — Jan. 15, 2008 — Microsoft Corp. and Victor Company of Japan Ltd. (JVC) have signed a patent cross-licensing agreement to further the development of each company’s current and future product lines, which will expand technological innovation and enhance the overall customer and consumer experience.

The agreement, recently signed by representatives of both companies, expands the relationship between JVC and Microsoft to promote the exchange of valuable information and the incorporation of patented technologies in their respective products. The agreement covers a broad range of consumer products each company manufactures and sells. Although the contents of the agreement, including the specific financial terms, are confidential, the parties indicated that Microsoft is being compensated by JVC.

“When technological industry leaders collaborate through intellectual property licensing, we foster greater innovation that will benefit the customer, the consumer and the overall IT ecosystem,” said Horacio Gutierrez, vice president of intellectual property and licensing at Microsoft. “We are proud of the quality of our broad, global patent portfolio, and we look forward to continuing to work with JVC and other industry leaders to develop new and exciting technologies through our collaborative licensing program.”

Recently, Microsoft’s patent portfolio was given the top quality rating in the IT industry by two of the leading independent patent quality rating systems.

“This agreement strengthens the long-standing collaborative relationship between the two companies,” said Tetsuro Fuse, associate director and general manager of intellectual property at JVC. “We are pleased that both companies recognize and respect the value of their respective patent portfolio and expect that this will further contribute to the development of high-quality and excellent products and services provided by both companies.”

Microsoft’s Commitment to Licensing Technology

The licensing agreement is another example of the important role intellectual property (IP) plays in ensuring a healthy and vibrant IT ecosystem. Since Microsoft launched its IP licensing program in December 2003, the company has entered into more than 200 licensing agreements and continues to develop programs that make it possible for customers, partners and competitors to access its IP portfolio. The program was developed to open up access to Microsoft’s significant research and development investments and its growing, broad patent and IP portfolio. In the past year, Microsoft has entered into similar agreements with Fuji Xerox Co. Ltd., Kenwood Corp., Kyocera Mita Corp., LG Electronics, NEC Corp., Nortel Networks, Novell Inc., Olympus Corp., Samsung and Seiko Epson Corp.

More information about Microsoft’s licensing programs is available at http://www.microsoft.com/ip.

About JVC

JVC, well known for its invention of VHS format of VCR, is a leading international electronics company that has achieved success by combining its excellence in audio and video hardware with its global-scale software business, and also has a growing reputation for its professional equipment. JVC operates several business lines through which it offers a wide variety of devices and solutions. JVC business lines are Video, Audio, TV, Entertainment, Information-related Equipment, and Component Devices. Headquarters in Yokohama, Japan, JVC was founded in 1927. For more information, visit the JVC Web site at www.jvc-victor.co.jp/english/global-e.html.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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