Microsoft Announces Expanded Access To Extensive Intellectual Property Portfolio

REDMOND, Wash., Dec. 3, 2003 — Microsoft Corp. today announced an expanded intellectual property (IP) policy to provide the IT industry with increased access to Microsoft’s growing IP portfolio. Based on broad consultation with others in the industry, the IP policy streamlines Microsoft® licensing programs to provide broader availability to Microsoft’s IP portfolio, furthering interoperability with other technologies and reinforcing the company’s commitment to innovation. The policy also broadens Microsoft’s commitment to provide the academic community with IP under royalty-free terms for noncommercial use. The policy was announced in conjunction with two new IP licensing programs: one for ClearType®
technology and the other for Microsoft’s File Allocation Table (FAT) file system.

“Many in the industry have been asking Microsoft to clarify our licensing policy and to provide broader availability to our IP portfolio,” said Brad Smith, general counsel and senior vice president at Microsoft. “The changes we are announcing today will promote greater collaboration across our industry, and we look forward to partnering with a broad range of companies.”

Microsoft has been licensing IP on a limited basis since its initial formation and has established cross-licensing agreements with a variety of industry leaders. The company’s industry-recognized research and development (R & D) commitment has generated an increasingly expansive IP portfolio. Microsoft’s new policy will expand Microsoft’s cross-licensing initiatives and will also make it possible for smaller companies and others to license aspects of the company’s IP portfolio.

Managing the IP portfolio, and the increasing requests for IP access, is the responsibility of Microsoft corporate vice president and deputy general counsel, Marshall Phelps.

“Access to and exchange of IP is essential to the growth and development of the broad IT industry,” Phelps said. “The licensing discussions with Agfa Monotype and Lexar Media, as well as our work with academia and industry organizations, signal our intention to increase our partnering with the industry as part of the broad, commercially progressive IP marketplace. We are open for business and want to create win-win opportunities with the industry.”

“By opening up more of its IP portfolio to licensing, Microsoft will allow other companies to leverage its creativity,” said Herve Gallaire, chief technical officer and president, Xerox Innovation Group. “Xerox has been licensing its IP for many years. With thousands of patents in our portfolio, we have seen the inventiveness of our researchers yield considerable benefit not only to Xerox, but also to others that have licensed our patented technologies.”

Commitment to Academia and Continued Royalty-Free Programs

As part of the new IP policy, Microsoft will create programs to license IP rights on both royalty-free and royalty-bearing terms, consistent with industry norms. For example, the company is committing to provide IP to the academic community under royalty-free terms for noncommercial use to further research and development. This builds on Microsoft’s growing base of initiatives to license certain IP rights on a royalty-free basis to promote Web standards and, through its Shared Source programs, to provide access to source code for a variety of Microsoft solutions to developers, partners, customers, academics and the industry. In addition, Microsoft recently announced the availability of a royalty-free licensing program for its Microsoft Office 2003 XML Reference Schemas. Microsoft also made clear that it will continue its existing approach of licensing intellectual property royalty-free to Windows®
-based application developers through the company’s software development kit offerings.

Increased Availability of Popular IP Solutions

Technology licensing is an essential part of maintaining a healthy cycle of innovation in the IT industry. To mark Microsoft’s commitment to enable greater access to its IP, the company announced the availability of two new licensing offerings: one for ClearType technology and the other for Microsoft’s FAT file system. These offerings will be made available under fair and reasonable terms. Both technologies already have experienced early adoption and support.

Microsoft’s subpixel rendering technology, branded ClearType, improves the readability of text on liquid crystal display screens to a point where words look almost as sharp and clear as those on a printed piece of paper. The popularity of this technology and its broad applicability for a range of digital devices led a number of companies to ask for licenses from Microsoft.

“As the world’s leader in fonts and font technologies, Agfa Monotype has developed high-performance solutions such as iType, a font-rendering subsystem operating in millions of consumer electronics devices worldwide,” said Steve Kuhlman, vice president of Display Imaging at Agfa Monotype. “By licensing its subpixel rendering intellectual property for inclusion in iType, Microsoft is making it possible for manufacturers to build products that deliver even clearer, more readable digital text.”

The FAT file system is a popular file storage format used for exchanging media between computers and digital devices. Through FAT file system technology, operating systems can identify unused storage clusters and keep track of all file parts across the storage medium. The result, for implementers of the technology, is rapid identification and access to any part of a file while maximizing full use of the storage medium. By licensing documentation, sample code and patents to this technology, Microsoft makes it easier for other companies to take advantage of enhanced file transfer compatibility and build effective, compatible implementations of the FAT file system in their offerings.

“Lexar Media is glad to support Microsoft’s goal of standardizing the industry around the FAT file system, which will further ensure interoperability of our memory cards, cameras and other consumer devices,” said Jim Gustke, general manager of marketing of Lexar Media. “We believe that such standardization will prompt more consumers to buy Flash storage products, as well as accelerate the innovation of new technologies to fuel the demand for memory cards with capacities of 4 GB and higher.”

Industry Support

Others in the IT industry offered positive comments about Microsoft’s efforts to provide broader access to the company’s IP portfolio, including companies such as Borland Software Corp., VeriSign Inc., Azure Capital Partners, Orbiscom Ltd. and Info2clear. Network Appliance Inc., one of the industry’s storage leaders, commented further on the benefits of IP access.

“Network Appliance is strategically committed to architecting storage solutions that are highly compatible with Microsoft technologies,” said Patrick Rogers, vice president of partners and alliances at Network Appliance. “IP licensing enables us to better achieve this tight integration with licensed Windows protocols, thereby ensuring ongoing support for Microsoft platforms. We’re pleased that Microsoft is further enhancing its commitment to license IP to others in the industry.”

Further information can be found at .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft, ClearType and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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