Texas Court Rules in Favor of Microsoft

Texas Court Rules in Favor of Microsoft

, February 17, 1998 — Today, Texas State District Court Judge Joseph Hart dismissed a lawsuit brought by the Texas Attorney General challenging provisions of non-disclosure agreements to which Microsoft is a party.

In response to the lawsuit, Microsoft had pointed out that its nondisclosure agreements are similar to agreements used throughout the software industry, and that these agreements play an important role in the high tech industry by protecting a company’s intellectual property – the most valuable asset of any software company.

The lawsuit claimed that provisions in the non-disclosure agreements (NDAs) might interfere with the Texas Attorney General’s investigation into issues related to Microsoft. Microsoft sought dismissal of the case because of a complete absence of any evidence that the NDA agreements have interfered in any way with the State’s investigation. Similar NDA provisions are commonly used by virtually all high tech companies, including Sun Microsystems, Novell and Netscape, to protect trade secrets and intellectual property.

“We are pleased that the court recognized the important role non-disclosure agreements play in protecting Microsoft’s intellectual property – our most valuable asset,”
said Tom Burt, Associate General Counsel for Microsoft Corporation.
“These agreements do nothing to prevent the government from doing its job. Microsoft has cooperated with the state’s investigation, and we will continue to cooperate with the Attorney General’s office as its investigation continues.”

Today’s decision follows a similar decision in December 1997 by U.S. District Court Judge Thomas Penfield Jackson, who rejected similar arguments made by the U.S. Department of Justice.
“There is no evidence of record that the NDAs are meant for any purpose other than to require that Microsoft be given notice and an opportunity to object before any confidential information is disclosed that might be of value to a commercial adversary,”
Judge Jackson wrote in a December 11 opinion.

There has been no evidence of any party, anywhere in the country, being deterred from sharing information with any government entity because of provisions in any NDA.

“Microsoft works hard to create great new technology for consumers. Just like any other software company, we need to protect our software code and other intellectual property. We’re pleased to have this matter resolved and we will continue to work with the Attorney General’s office to address any questions or concerns they have,”
Burt said.

For more information, press only:

Melanie Hoelscher (425-637-9097) Waggener Edstrom

Mark Murray (425-882-8080) Microsoft Corporate Public Relations

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