Siemens and Microsoft to Cross-License Patent Holdings

REDMOND, Wash., and MUNICH, Germany, May 3, 2004 — Siemens AG and Microsoft Corp. today announced a broad cross-licensing agreement to allow expanded access to the patent portfolios each company holds. The agreement signifies an expanded collaboration between Siemens and Microsoft, enabling each company to expand offerings to customers and deliver even more comprehensive and compelling customer solutions. Terms of the agreement were not disclosed.

As leaders in the technology industry, Microsoft and Siemens both make substantial annual research and development (R & D) investments, something that is reflected in part by the thousands of patents held by each company in Europe, Asia, the United States and other parts of the world. Licensing patents plays an important role in both companies’ businesses.

“We are always looking for opportunities to deliver more compelling products and services to our customers around the world, especially within IT and software. This emphasis is also reflected in our agreement with Microsoft, one of the leading players in IT,” said Winfried Bttner, Ph.D., head of Corporate Intellectual Property for Siemens AG, based in Munich. “Siemens is a global leader in innovation, pursuing new technologies that improve public- and private-sector infrastructures through internal R & D, joint ventures and strategic agreements such as this agreement with Microsoft. Now we will leverage Siemens’ inventions with Microsoft’s developments to make both companies’ products stronger for our respective customers.”

During the last fiscal year, Siemens spent $6.3 billion on R & D, corresponding to more than $27 million per working day. Research activities focus on such areas as power, medical, transportation, communications, automation and lighting. About 50,000 employees work at Siemens in the field of research and development around the globe. Siemens holds 45,000 patents worldwide. Another 40,000 patents have been filed and are due to be granted. In the United States alone, Siemens dedicates $700 million and 6,400 employees to R & D.

One example of the close cooperation between Siemens and Microsoft is the HiPath OpenScape solution from Siemens Information and Communications Networks (ICN). The OpenScape solution leverages Microsoft®
Live Communications Server 2003 for intelligent, real-time, communication management. Intelligent routing links into various communication media (e.g., e-mail, PDA, mobile phone, SIP telephone), connects them with one another, and converts information to make it available in the appropriate format. HiPath OpenScape is also configurable to launch a Microsoft Office Live Meeting Web conference, allowing instant ad hoc meetings, training, document sharing and presentations.

“Our agreement with Siemens is a demonstration of Microsoft’s commitment to increasing our alliance with others in the industry by making our patents available for licensing on commercially reasonable terms,” said Marshall Phelps, corporate vice president and deputy general counsel of Intellectual Property at Microsoft. “Technology licensing is an essential part of maintaining a healthy cycle of innovation in the IT industry, and we are pleased to be working with an industry leader such as Siemens.”

This licensing agreement with Siemens builds upon Microsoft’s recently announced intellectual property (IP) policy by underscoring Microsoft’s commitment to expand cross-licensing initiatives and make it possible for others to license aspects of the company’s growing R & D efforts and existing IP portfolio. Microsoft is spending $6.9 billion in R & D in the present fiscal year. The company maintains a growing worldwide patent portfolio that includes more than 10,000 issued and pending U.S. patents. Microsoft has established a solid record of collaborating with other technology innovators and has entered into cross-licensing agreements with many of the industry’s leading investors in technology research.

About Siemens

Siemens AG (NYSE:SI) is a leading global electronics and engineering company with reported worldwide sales of $80.5 billion in fiscal 2003. With its U.S. corporate headquarters in New York City, Siemens in the USA has sales of $16.6 billion and employs 65,000 people throughout all 50 states and Puerto Rico. Eleven of Siemens’ worldwide businesses are based in the United States. With its global headquarters in Munich, Siemens AG and its subsidiaries employ 417,000 people in 192 countries. For more information on Siemens in the U.S.: .

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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