Microsoft expands IP licensing program

Under pressure from regulators and advances in the open-source movement, Microsoft has decided to open up more of its intellectual property for licensing.

The software giant kicked off the effort by announcing royalty-bearing licensing programs for its Windows FAT file system and ClearType font-rendering technology.

The announcement calls for broad licensing of Microsoft technologies on both royalty-bearing and royalty-free basis and an expansion of cross-licensing deals with smaller companies.

Microsoft's top legal counsel said the company would grant broad access to its portfolio of 4,000 patents, 'trade secret know-how' and Web service standards.
The officials would not elaborate on the full scope of IP that will be made available, but told CRN in a conference call that anti-spam and other file-system technologies are under consideration.

'We are open for business in terms of licensing our IP [intellectual property],' said Brad Smith, general counsel and senior vice president at Microsoft.

'Under the revised IP policy, Microsoft is committed to licensing IP on clear, commercially reasonable terms based on industry norms and streamlining the policy to make it easier for technology companies to work together.'

Aside from the Windows FAT system and ClearType code, however, it remains unclear the extent to which Office APIs and .Net code will be available and to which companies. 'This will be an ongoing process for us,' Smith said. 'We'll take similar steps in the months to come.'

The IP expansion is the brainchild of Marshall Phelps, a 28-year IBM veteran Microsoft hired away in August to help rationalise the company's restrictive and often-criticised IP policies.

Microsoft will take requests from ISVs on a case-by-case basis and expand the program in the months to come, Smith said.

Microsoft has offered up royalty-free IP to Windows developers for several years but will expand that to those developing on competitive platforms as well, they said. Microsoft will not discriminate for or against any class of products or constituencies, a spokesman said.

'When you do programmatic [licensing], it's fair and transparent, and you cannot segregate among competitors,' said Phelps. 'You have to make it all available under the same terms and conditions.'

On the new IP Web site Microsoft debuted, the company highlighted the ClearType and FAT licensing programs and the existing Web Service-Security (WS-S) and Business Process Execution Language (BPEL) 1.1 standards that are available on a royalty-free basis.

ISVs including Borland, VeriSign, Agfa, Lexar Media, Orbiscom, Info2clear and Network Appliance announced support for the program.

Microsoft claims that licensing the documentation, sample code and patents to its FAT file system will allow ISVs such as Lexis Media and Network Appliances to take advantage of enhanced file-transfer compatibility and build better implementations of the FAT file system in their products.

Some analysts say the FAT licensing program will help manufacturers build peripherals and portable devices that interoperate with Windows.

Yet one analyst said Microsoft has always made IP available to select partners and this move is designed more to improve the company's image in the eyes of government regulators and antitrust watchers.

'Microsoft has always been willing to license its technology when it serves Microsoft's business interests,' said Matt Rosoff, an analyst at Directions on Microsoft. 'What's really new is the fact that Microsoft is creating formalised programs for doing this, whereas in the past it's done so on an ad hoc basis.'