Microsoft Pushes Its Intellectual Property

Microsoft plans to make it easier for other software companies, developers, academic researchers, and even competitors to use its software for their own purposes. The company disclosed Wednesday two new technology-licensing programs and said others will follow as part of an initiative to make its intellectual property more widely available to others. "We are open for business in terms of licensing our intellectual property," general counsel and senior VP Brad Smith said in a conference call to discuss the plan.

Microsoft has had an intellectual-property licensing policy in place for two years and has made its technology available to partners on a case-by-case basis longer than that. What's different is the "pace and scope" of the effort, Marshall Phelps, Microsoft's VP and deputy general counsel, said in an interview. Phelps characterized the company's intellectual-property policy of the past as ad hoc and "inward facing." The revised policy, he said, is meant to be more structured and outward facing.

As evidence of the new direction, Microsoft introduced a licensing program for its ClearType technology, which makes text easier to read on LCD screens, and another for its File Allocation Table file system, which supports media sharing between PCs and other devices. Agfa Monotype Corp. said it will use ClearType in conjunction with its own iType font-rendering subsystem for consumer electronics, while Lexar Media Inc. plans to use the FAT file system to support interoperability across its memory cards, cameras, and other consumer electronics.

Microsoft has 4,000 technology patents and 5,400 patents pending, all of which are available for potential licensing. Terms vary, including royalty-free use of Microsoft software by schools and for certain industry standards, such as Web services, and fee-based licenses in other cases. Company officials deny the intellectual-property push comes in direct response to the rising popularity of open-source software, but admit one goal is to foster broader industry collaboration around its technology. Collaborative development is a hallmark of the open-source model.

For the past few years, Microsoft has been gradually loosening its tight-fisted control over its code. Under its Shared Source Initiative, Microsoft makes the Windows CE operating system, C# language, and other technologies available under certain conditions to schools, governments, customers, and other software companies. Last year, in compliance with terms of its antitrust settlement with the Justice Department, Microsoft introduced a program to license some of its communications protocols to other companies. And in November, Microsoft made the XML reference schemas used in Office 2003 available for free download.

Microsoft will even consider licensing the 50 million lines of source code in the Windows operating system beyond the few companies that now get it through original equipment manufacturer arrangements or the Shared Source Initiative, though company officials say they'll move cautiously in that direction. "The question is, what do you need the source code for?" Marshall says. Microsoft's concerns include worries over incompatible versions of Windows and security vulnerabilities.

One outcome of a farther-reaching licensing initiative will be improved interoperability between third-party products and Windows, which should appease government regulators, competitors, and others who've been pushing Microsoft to create a more open environment, general counsel Smith says. Yet he denies any direct relationship between the new licensing push and Microsoft's ongoing legal proceedings in the United States and Europe.