Comes v. Microsoft
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Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washin ...
has been involved in numerous high-profile legal matters that involved litigation over the history of the company, including cases against the United States, the European Union, and competitors.


Governmental

In its 2008 annual report, Microsoft stated:


Antitrust

In the 1990s, Microsoft adopted exclusionary licensing under which PC manufacturers were required to pay for an MS-DOS license even when the system was shipped with an alternative operating system. Critics attest that it also used predatory tactics to price its competitors out of the market and that Microsoft erected technical barriers to make it appear that competing products did not work on its operating system. In a consent decree filed on July 15, 1994, Microsoft agreed to a deal under which, among other things, the company would not make the sale of its operating systems conditional on the purchase of any other Microsoft product. On February 14, 1995, Judge
Stanley Sporkin Stanley Sporkin (February 7, 1932March 23, 2020) was a director of enforcement for the Securities and Exchange Commission (SEC), general counsel for the Central Intelligence Agency and United States federal judge of the United States District Cour ...
issued a 45-page opinion that the consent decree was not in the public interest. Later that spring, a three-judge federal appeals panel removed Sporkin and reassigned the consent decree. Judge Thomas Penfield Jackson entered the decree on August 21, 1995, three days before the launch of
Windows 95 Windows 95 is a consumer-oriented operating system developed by Microsoft as part of its Windows 9x family of operating systems. The first operating system in the 9x family, it is the successor to Windows 3.1x, and was released to manufacturi ...
. A Microsoft purchase of
Intuit Intuit Inc. is an American business software company that specializes in financial software. The company is headquartered in Mountain View, California, and the CEO is Sasan Goodarzi. Intuit's products include the tax preparation application ...
was scuttled in 1994 due to antitrust concerns that Microsoft would be purchasing a major competitor. After bundling the
Internet Explorer Internet Explorer (formerly Microsoft Internet Explorer and Windows Internet Explorer, commonly abbreviated IE or MSIE) is a series of graphical web browsers developed by Microsoft which was used in the Windows line of operating systems ( ...
web browser A web browser is application software for accessing websites. When a user requests a web page from a particular website, the browser retrieves its files from a web server and then displays the page on the user's screen. Browsers are used o ...
into its Windows operating system in the late 1990s (without requiring a separate purchase) and acquiring a dominant share in the web browser market, the antitrust case '' United States v. Microsoft'' was brought against the company. In a series of rulings by judge Thomas Penfield Jackson, the company was found to have violated its earlier consent decree and abused its monopoly in the desktop operating systems market. The "findings of fact" during the antitrust case established that Microsoft has a
monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...
in the PC desktop operating systems market:
Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows. (III.34)
The findings of fact go on to explain the nature of the "barrier to entry":
The fact that there is a multitude of people using Windows makes the product more attractive to consumers. The large installed base ... impels ISVs (independent software vendors) to write applications first and foremost to Windows, thereby ensuring a large body of applications from which consumers can choose. The large body of applications thus reinforces demand for Windows, augmenting Microsoft's dominant position and thereby perpetuating ISV incentives to write applications principally for Windows ... The small or non-existent market share of an aspiring competitor makes it prohibitively expensive for the aspirant to develop its PC operating system into an acceptable substitute for Windows. (III.39–40)
The proposed remedy (dividing Microsoft into two companies) was never applied. The judge who decided the original case was removed from the decision concerning the penalty due to public statements, and replaced by a judge more sympathetic to Microsoft. While new penalties were under consideration, the Clinton administration ended and the Bush administration took office. The new administration announced that in the interest of ending the case as quickly as possible, it would no longer seek to break the company up, and that it would stop investigating claims of illegal tying of products. Eighteen days later, Judge Kollar-Kotelly ordered the justice department and Microsoft to "engage in discussions seven days a week, 24 hours a day." The judge cited the events of September 11, 2001, in her direction to begin settlement talks but did not explain the linkage between the two. Attorney General Ashcroft, however, denied that the events of September 11 had any effect on the outcome. Microsoft subsequently reached a settlement with the
Department of Justice A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...
and some of the states which brought suit against it. Several class-action lawsuits filed after the conviction are still pending. In early 2002, Microsoft proposed to settle the private lawsuits by donating $1 billion
USD The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
in money, software, services, and training, including Windows licenses and refurbished PCs, to about 12,500 underprivileged public schools. This was seen by the judge as a potential windfall for Microsoft, not only in educating schoolchildren on Microsoft solutions but also in flooding the market with Microsoft products. Among the protesters were
Apple Inc. Apple Inc. is an American multinational technology company headquartered in Cupertino, California, United States. Apple is the largest technology company by revenue (totaling in 2021) and, as of June 2022, is the world's biggest company ...
which feared further loss of its educational market share. The federal judge rejected the proposed settlement. In 2003 to 2004, the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
investigated the bundling of
Windows Media Player Windows Media Player (WMP) is the first media player (application software), media player and media library application that was developed by Microsoft for playing sound reproduction, audio, video and viewing images on personal computers runnin ...
into Windows, a practice which rivals complained was destroying the market for their own products. Negotiations between Microsoft and the Commission broke down in March 2004, and the company was subsequently handed down a record fine of €497 million ($666 million) for its breaches of EU competition law. Separate investigations into alleged abuses of the server market were also ongoing at the same time. On December 22, 2004, the European Court decided that the measures imposed on Microsoft by the European Commission would not be delayed, as was requested by Microsoft while waiting for the appeal. Microsoft has since paid a €497 million fine, shipped versions of Windows without
Windows Media Player Windows Media Player (WMP) is the first media player (application software), media player and media library application that was developed by Microsoft for playing sound reproduction, audio, video and viewing images on personal computers runnin ...
, and licensed many of the protocols used in its products to developers in countries within the European Economic Area. However, the European Commission has characterized the much delayed protocol licensing as unreasonable, called Microsoft "non-compliant" and still violating antitrust law in 2007, and said that its
RAND The RAND Corporation (from the phrase "research and development") is an American nonprofit global policy think tank created in 1948 by Douglas Aircraft Company to offer research and analysis to the United States Armed Forces. It is finan ...
terms were above market prices; in addition, they said
software patent A software patent is a patent on a piece of software, such as a computer program, libraries, user interface, or algorithm. Background A patent is a set of exclusionary rights granted by a state to a patent holder for a limited period of time, u ...
s covering the code "lack significant innovation", which Microsoft and the EC had agreed would determine licensing fees. Microsoft responded by saying, that other government agencies had found "considerable innovation". Microsoft appealed the facts and ruling to the European Court of First Instance with hearings in September 2006. In 2000, a group of customers and business filed a
class action A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
suit in ''Comes v. Microsoft Corp.'', alleging that Microsoft violated
Iowa Iowa () is a state in the Midwestern region of the United States, bordered by the Mississippi River to the east and the Missouri River and Big Sioux River to the west. It is bordered by six states: Wisconsin to the northeast, Illinois to th ...
's antitrust laws by engaging in monopolistic practices. In 2002, the Iowa Supreme Court ruled that indirect purchasers (consumers who purchased computers from a third-party, with Microsoft's software pre-installed in the computer) could be included as members of the class in the class action suit. On remand, the trial court certified two classes of plaintiffs, and the Iowa Supreme Court ultimately affirmed the class certification. In August 2007, the parties ultimately reached a settlement valued at $179.95 million. On September 17, 2007, the EU
Court of First Instance A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accorda ...
rejected Microsoft's appeal. The court affirmed the original contested finding: All elements of Microsoft's appeal were dismissed. Microsoft accepted the judgment of the Court of First Instance and proceeded to make available interoperability information as originally required by the European Commission. Microsoft also faced competition law in South Korea and was fined $32 million in December 2005 and ordered to unbundle instant messaging, Windows Media Player and Windows Media Service, or let competitors' products take their place. Microsoft noted in their October 2005 SEC filing that they may have to pull out of South Korea, although they later denied fulfilling such a plan. Microsoft's 2006 appeal was struck down; they have another appeal pending. Microsoft also faced sanctions from
Japan Fair Trade Commission The is the competition regulator in Japan. It is a commission of the Japanese government responsible for regulating economic competition, as well as enforcement of the Antimonopoly Act. Headed by a chairman, the commission is commonly known as ...
twice in 1998 when Japanese manufacturers were forced to include
Microsoft Word Microsoft Word is a word processor, word processing software developed by Microsoft. It was first released on October 25, 1983, under the name ''Multi-Tool Word'' for Xenix systems. Subsequent versions were later written for several other pla ...
on new systems instead of homegrown word processor software Ichitaro, and again in 2004 for clauses detrimental to ability of Japanese computer manufacturers to obtain a Windows OEM license. European antitrust regulators on February 27, 2008, fined Microsoft $1.3 billion for failing to comply with a 2004 judgment, that the company had abused its market dominance. The new fine by the European Commission was the largest it has ever imposed on an individual company, and brings the total in fines imposed on Microsoft to around $US 2.5 billion, with current exchange rates. Microsoft had previously been fined after the commission determined in 2004 that the company had abused the dominance of its Windows operating system to gain unfair market advantage. The commission imposing the new fine said, that it was because the company had not met the prescribed remedies after the earlier judgment.


European Union

The European Union Microsoft competition case is a case brought by the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
of the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
(EU) against
Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washin ...
for abuse of its dominant position in the market (according to competition law). It started as a complaint from Novell over Microsoft's licensing practices in 1993, and eventually resulted in the EU ordering Microsoft to divulge certain information about its server products and release a version of Microsoft Windows without
Windows Media Player Windows Media Player (WMP) is the first media player (application software), media player and media library application that was developed by Microsoft for playing sound reproduction, audio, video and viewing images on personal computers runnin ...
.


=February 2008 fine

= On February 27, 2008, the European Union (EU) competitions commission announced its decision to fine the Microsoft Corporation 899 million ( US$1.35 billion), approximately 1/10 of the company's net yearly earnings, for failing to comply with the 2004 antitrust order. The first decision in this antitrust case was given in 2004 citing that Microsoft withheld needed
interoperability Interoperability is a characteristic of a product or system to work with other products or systems. While the term was initially defined for information technology or systems engineering services to allow for information exchange, a broader defi ...
information from rival software companies which prevented them from making software compatible with
Windows Windows is a group of several proprietary graphical operating system families developed and marketed by Microsoft. Each family caters to a certain sector of the computing industry. For example, Windows NT for consumers, Windows Server for ser ...
. The commission ordered Microsoft to provide this information. Microsoft agreed to this, providing the information for royalty fees of 6.85% of the licensee's revenues for the product on grounds of innovation (specifically, 3.87% for the patent license and of 2.98% for the information license). The EU found these royalty fees unreasonable and Microsoft was ordered to lower them. Microsoft complied with this, adjusting the royalty rates to 1.2% (changing the rates for the licenses to 0.7% and 0.5%, respectively) in the European Union, while keeping the rate the same for the rest of the world. The EU still saw this as an unreasonable rate, and Microsoft, two months after lowering the rates, reduced the rates yet again to a flat rate of €10,000 or a royalty of 0.4% applicable worldwide. Microsoft's royalty rates, which were deemed unreasonable for the period of 15 months between June 21, 2006, and October 21, 2007, are the cause for the fine. So far, the EU has fined Microsoft €1.68 billion in 3 separate fines in this case. This fine will go towards the European Union annual budget. European Commissioner for Competition Neelie Kroes stated that the fine was "reasonable and proportionate," as the figure could have gone up as high as €1.5 billion, the maximum that the EU commission can impose. She also said that it should act as "a signal to the outside world, and especially Microsoft, that they should stick to the rules" and that "Talk is cheap. Flouting the rules is expensive." Although she also expressed hope that "today's decision closes a dark chapter in Microsoft's record of non-compliance with the Commission." It is not certain whether Microsoft will appeal this decision. A Microsoft spokesperson has stated that Microsoft will review this latest fine, citing that "The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved." Microsoft's General Counsel Brad Smith commented "It's clearly very important to us as a company that we comply with our obligations under European law. We will study this decision carefully, and if there are additional steps that we need to take in order to comply with it, we will take them." Microsoft had appealed against fines by the EU before, but all the charges were defeated. If Microsoft does not appeal the decision, the company will have 3 months (starting February 27) to pay the fine in full. The decisions came after Microsoft announced they were disclosing 30,000 pages of previously secret software code last Thursday (February 21). The EU competition commissioner commented that this move "does not necessarily equal a change in business practice."


=Spanish antitrust investigation

= In September 2011, the competition commission in
Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , i ...
began an investigation into Microsoft's licence agreements, which prevent the transfer of Microsoft software to third parties.


United States

''United States v. Microsoft Corp.'', 87 F. Supp. 2d 30 ( D.D.C. 2000) was a set of consolidated civil actions filed against
Microsoft Corporation Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washingt ...
on May 18, 1998, by the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
(DOJ) and twenty U.S. states. Joel I. Klein was the lead prosecutor. The plaintiffs alleged that Microsoft abused
monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...
power in its handling of
operating system An operating system (OS) is system software that manages computer hardware, software resources, and provides common services for computer programs. Time-sharing operating systems schedule tasks for efficient use of the system and may also i ...
sales and
web browser A web browser is application software for accessing websites. When a user requests a web page from a particular website, the browser retrieves its files from a web server and then displays the page on the user's screen. Browsers are used o ...
sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship
Internet Explorer Internet Explorer (formerly Microsoft Internet Explorer and Windows Internet Explorer, commonly abbreviated IE or MSIE) is a series of graphical web browsers developed by Microsoft which was used in the Windows line of operating systems ( ...
(IE) web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the
browser wars A browser war is competition for dominance in the usage share of web browsers. The "first browser war," (1995-2001) pitted Microsoft's Internet Explorer against Netscape's Navigator. Browser wars continued with the decline of Internet Explore ...
as every Windows user had a copy of Internet Explorer. It was further alleged that this unfairly restricted the market for competing web browsers (such as
Netscape Navigator Netscape Navigator was a web browser, and the original browser of the Netscape line, from versions 1 to 4.08, and 9.x. It was the flagship product of the Netscape Communications Corp and was the dominant web browser in terms of usage share in ...
or
Opera Opera is a form of theatre in which music is a fundamental component and dramatic roles are taken by singers. Such a "work" (the literal translation of the Italian word "opera") is typically a collaboration between a composer and a libr ...
) that were slow to download over a modem or had to be purchased at a store. Underlying these disputes were questions over whether Microsoft altered or manipulated its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers, Microsoft's conduct in forming restrictive licensing agreements with
OEM An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
computer manufacturers, and Microsoft's intent in its course of conduct. Microsoft stated that the merging of Microsoft Windows and Internet Explorer was the result of innovation and
competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indiv ...
, that the two were now the same product and were inextricably linked together and that consumers were now getting all the benefits of IE for free. Those who opposed Microsoft's position countered that the browser was still a distinct and separate product which did not need to be tied to the operating system, since a separate version of Internet Explorer was available for
Mac OS Two major famlies of Mac operating systems were developed by Apple Inc. In 1984, Apple debuted the operating system that is now known as the "Classic" Mac OS with its release of the original Macintosh System Software. The system, rebranded "M ...
. They also asserted that IE was not really free because its development and marketing costs may have kept the price of Windows higher than it might otherwise have been. The case was tried before U.S. District Court Judge Thomas Penfield Jackson. The DOJ was initially represented by
David Boies David Boies (; born March 11, 1941) is an American lawyer and chairman of the law firm Boies Schiller Flexner LLP. Boies rose to national prominence for three major cases: leading the U.S. federal government's successful prosecution of Microsof ...
. On June 30, 2004, the U.S. appeals court unanimously approved the settlement with the Justice Department, rejecting objections that the sanctions were inadequate.


Acquisition of

Activision Blizzard Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. It was founded in July 2008 through the merger of Activision, Inc. (the publicly traded parent company of Activision Publishing) and Viven ...

On January 18, 2022,
Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washin ...
announced its intent to acquire
Activision Blizzard Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. It was founded in July 2008 through the merger of Activision, Inc. (the publicly traded parent company of Activision Publishing) and Viven ...
for $68.7 billion in cash. Under the terms of the agreement, which would be expected to close by Spring 2023 pending regulatory and shareholder approval, Microsoft would own
Activision Activision Publishing, Inc. is an American video game publisher based in Santa Monica, California. It serves as the publishing business for its parent company, Activision Blizzard, and consists of several subsidiary studios. Activision is one ...
,
Blizzard Entertainment Blizzard Entertainment, Inc. is an American video game developer and publisher based in Irvine, California. A subsidiary of Activision Blizzard, the company was founded on February 8, 1991, under the name Silicon & Synapse, Inc. by three gradu ...
, and
King King is the title given to a male monarch in a variety of contexts. The female equivalent is queen, which title is also given to the consort of a king. *In the context of prehistory, antiquity and contemporary indigenous peoples, the tit ...
under the
Xbox Game Studios Xbox Game Studios (previously known as Microsoft Studios, Microsoft Game Studios, and Microsoft Games) is an American video game publisher and part of the Microsoft Gaming division based in Redmond, Washington. It was established in March 2000, ...
brand. The acquisition proposal itself has reignited antitrust concerns targeted at Microsoft, with mixed reactions from international regulators and rival companies. In December 2022, Microsoft faced a legal action by customers against the acquisition under
Clayton Antitrust Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipie ...
.


Usage of Microsoft Office 365 and Teams in schools

The Court of Justice of the European Union on 16 July 2020 had ruled that "it is illegal to send private data outside of EU to the US" Microsoft Office 365 had been banned from several schools in Europe over privacy concerns.


Tax disputes

In 2007, the Internal Revenue Service began investigating Microsoft over allegations that the company may have transferred some software rights to its international subsidiaries in an effort to evade paying tax to the United States. In 2014, after Microsoft was held in contempt of court after refusing to hand over the required foreign data, Microsoft filed a Freedom of Information request on September 22, 2014 regarding a contract between law firm Quinn Emmanuel Urqhart and Sullivan and the IRS; when IRS did not respond within the required 20 day period (the IRS responded by saying it needed an extension, but after the time elapsed did not provide the requested information) Microsoft filed a lawsuit against the IRS in November.


Other

In March 2004, during a consumer class-action lawsuit in Minnesota, internal documents subpoenaed from Microsoft revealed that the company had violated nondisclosure agreements seven years earlier in obtaining business plans from
Go Corporation GO Corporation was founded in 1987 to create portable computers, an operating system, and software with a pen-based user interface. It was famous not only for its pioneering work in Pen-based computing but as well as being one of the most well ...
, using them to develop and announce a competing product named PenWindows, and convincing Intel to reduce its investment in Go. After Go was purchased by
AT&T AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile te ...
and Go's tablet-based computing efforts were shelved, PenWindows development was dropped. In May 2004, a class-action lawsuit accused Microsoft of overcharging customers in the state of California. The company settled the case for $1.1 billion, and a California court ordered Microsoft to pay an additional $258 million in legal fees (including over $3,000 per hour for the lead attorney in the case, more than $2,000 per hour for colleagues, and in excess of $1,000 per hour for administrative work). A Microsoft attorney responded, "Somebody ends up paying for this. These large fee awards get passed on to consumers." The total bill for legal fees was later reduced to just over $112 million. Because of the structure of the settlement, the law firm which sued Microsoft could end up getting more money from the company than California consumers and schools, the beneficiaries of the settlement. In 2006, Microsoft initiated an investigation of Lithuanian government institutions for determining whether they choose long-term strategies of the software they use correctly. The investigation, funded by Microsoft itself, will be performed by the
Vilnius University Vilnius University ( lt, Vilniaus universitetas) is a public research university, oldest in the Baltic states and in Northern Europe outside the United Kingdom (or 6th overall following foundations of Oxford, Cambridge, St. Andrews, Glasgow and ...
together with the Lithuanian Institution of the Free Market, a
think tank A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmenta ...
organization. The investigation was initialised after the government started to prepare 860 thousand litas project to encourage the use of open-source software. The vice-president of Microsoft, Vahe Torossian, stated that "the government should not be technologically subjectivist". Microsoft was sued for the "Windows Vista Capable" logo and in
Iowa Iowa () is a state in the Midwestern region of the United States, bordered by the Mississippi River to the east and the Missouri River and Big Sioux River to the west. It is bordered by six states: Wisconsin to the northeast, Illinois to th ...
.
Microsoft Word Microsoft Word is a word processor, word processing software developed by Microsoft. It was first released on October 25, 1983, under the name ''Multi-Tool Word'' for Xenix systems. Subsequent versions were later written for several other pla ...
was also a subject of court case. On July 12, 2013, Microsoft is suing the U.S. Customs and Border Protection over Google phone ban. Homeland Security Secretary Janet Napolitano is also named in the lawsuit.


Private

Microsoft has also fought numerous legal battles against private companies. The most prominent ones are against: *
Alcatel-Lucent Alcatel–Lucent S.A. () was a French–American global telecommunications equipment company, headquartered in Boulogne-Billancourt, France. It was formed in 2006 by the merger of France-based Alcatel and U.S.-based Lucent, the latter being a s ...
, which won US$1.52 billion in a lawsuit which alleged that Microsoft had infringed its patents on playback of audio files. This ruling was overturned in a higher court. * Apple Inc. (known as ''Apple Computer, Inc.'' at the time), which accused Microsoft in the late 1980s of copying the "look and feel" of the graphical user interface of Apple's operating systems. The courts ruled in favor of Microsoft in 1994. Another suit by Apple accused Microsoft, along with Intel and the
San Francisco Canyon Company San Francisco Canyon Company was a software development company that was contracted by Apple Computer in 1992 to port the QuickTime technology to Microsoft Windows. They made their first release of ''QuickTime for Windows'' in November 1992. In Ju ...
, in 1995 of knowingly stealing several thousand lines of QuickTime source code in an effort to improve the performance of
Video for Windows Video for Windows was a suite of video playing and editing software introduced by Microsoft in 1992. A runtime version for viewing videos only was made available as a free add-on to Windows 3.1, which then became an integral component of Windows ...
. After a threat to withdraw support for Office for Mac, this lawsuit was ultimately settled in 1997. Apple agreed to make Internet Explorer the default browser over Netscape, and Microsoft agreed to continue developing Office and other software for the Mac for the next 5 years, purchase $150 million of non-voting Apple stock, and made a quiet payoff estimated to be in the US$500 million-$2 billion range. * AOL, on behalf of its Netscape division. Netscape (as an independent company) also was involved in the '' United States v. Microsoft'' antitrust suit. * AtomicPark.com, which in 2009 was ordered to pay $1.2 million to Microsoft for selling unauthorized versions of Microsoft software. * Be Inc., which accused Microsoft of exclusionary and anti-competitive behavior intended to drive Be out of the market. Be even offered to license its Be Operating System (BeOS) for free to any PC vendors who would ship it pre-installed, but the vendors declined due to what Be believes were fears of pricing retaliation from Microsoft: by raising the price of Microsoft Windows for one particular PC vendor, Microsoft could price that vendor's PCs out of the market. * Bristol Technology, which accused Microsoft illegally withheld Windows source code and used its dominant position with Windows to move into other markets. A ruling later ordered Microsoft to pay $1 million to Bristol Technologies (see also Windows Interface Source Environment). * Caldera, Inc. in 1996, accused Microsoft of several anti-competitive practices, including
vaporware In the computer industry, vaporware (or vapourware) is a product, typically computer hardware or software, that is announced to the general public but is late or never actually manufactured nor officially cancelled. Use of the word has broade ...
announcements, creating FUD, exclusionary licensing and artificial tying. (NB. Caldera's public lawsuit documents.) (NB. Microsoft's public lawsuit documents.) One of the claims was down to bundling and tying MS-DOS 7 and Windows 4 into a single product (
Windows 95 Windows 95 is a consumer-oriented operating system developed by Microsoft as part of its Windows 9x family of operating systems. The first operating system in the 9x family, it is the successor to Windows 3.1x, and was released to manufacturi ...
) for the sole purpose of eliminating competition, another to having modified Windows 3.1 so that it would not run on DR DOS 6.0 although there was no technical reason for it not to work. Several industry experts revealed that Microsoft put encrypted code, which became known as AARD code, in five otherwise unrelated Microsoft programs in order to prevent the functioning of DR DOS in pre-releases (
beta version A software release life cycle is the sum of the stages of development and maturity for a piece of computer software ranging from its initial development to its eventual release, and including updated versions of the released version to help impro ...
s) of Windows 3.1, (xviii+856+vi pages, 3.5-inch floppy) Errata

https://web.archive.org/web/20190417212906/https://www.pcjs.org/pubs/pc/programming/Undocumented_DOS/#errata-2nd-edition]

/ref> and that it was technically possible to run Windows 4 on DR-DOS 7 after bypassing some new and non-essential interface code through WinGlue.
/ref>
/ref> In 2000, Microsoft settled out of court for an undisclosed sum, which in 2009 was revealed to be $280 million, (NB. This document of the ''Caldera v. Microsoft'' case was an exhibit in the later '' Comes v. Microsoft'' case.) and the Caldera evidence was destroyed in 2003. * Opera Software, which accused Microsoft of intentionally making its MSN service incompatible with the
Opera Opera is a form of theatre in which music is a fundamental component and dramatic roles are taken by singers. Such a "work" (the literal translation of the Italian word "opera") is typically a collaboration between a composer and a libr ...
browser on several occasions. *
Sendo Sendo was a British manufacturer and supplier of mobile phones founded in 1998 and based in Birmingham. The company went into administration in June 2005 and its technology was bought by Motorola. The company specialised in low-cost handsets aim ...
, which accused Microsoft of terminating their partnership so it could steal Sendo's technology to use in
Pocket PC 2002 Pocket PC 2002, originally codenamed "Merlin", was a member of the Windows Mobile family of mobile operating systems, released on October 4, 2001. Like Pocket PC 2000, it was based on Windows CE 3.0. Although mainly targeted for ( QVGA) Pocket ...
Phone Edition. *
Spyglass Spyglass may refer to: * Another term for a hand-held refracting telescope A refracting telescope (also called a refractor) is a type of optical telescope that uses a lens as its objective to form an image (also referred to a dioptric tel ...
, which licensed its browser to Microsoft in return for a percentage of each sale; Microsoft turned the browser into Internet Explorer and bundled it with Windows, giving it away to gain market share but effectively destroying any chance of Spyglass making money from the deal they had signed with Microsoft; Spyglass sued for deception and won an $8 million settlement. * Stac Electronics, which accused Microsoft of stealing its data compression code and using it in MS-DOS 6.0. Microsoft eventually lost the subsequent '' Stac v. Microsoft'' lawsuit and was ordered by a federal court to pay roughly $120 million in compensation. * Sun Microsystems, which held Microsoft in violation of contract for including a modified version of Java in Microsoft Windows that provided Windows-specific extensions to Sun's Java language; Microsoft lost this decision in court and were forced to stop shipping their Windows-specific Java virtual machine. Microsoft eventually ceased to include any Java Virtual Machine in Windows, and Windows users who require a Java Virtual Machine need to download the software or otherwise acquire a copy from a source other than Microsoft. * Zhongyi Electronic, which, having licensed two fonts which it had designed to Microsoft for use only in Windows 95, filed suit in China in April 2007, accusing Microsoft of using those fonts in subsequent Windows 98, 2000, XP, Server 2003 and four other Chinese-language Windows operating systems. Beijing's No. 1 intermediate people's court ruled on November 16, 2009, that Microsoft violated the scope of licensing agreements between the two companies. The result of the verdict is that Microsoft has to stop selling Chinese-language versions of the aforementioned operating systems. Microsoft said it will appeal. One of the fonts in question may be SimSun. * Many other smaller companies have filed patent abuse and predatory practice suits against Microsoft.


Patents


Alcatel-Lucent

The dispute between Microsoft and Lucent (and later Alcatel-Lucent) began in 2003 when Lucent Technologies (acquired by
Alcatel Alcatel may refer to: * Alcatel, a former French telecommunications equipment company, which became Alcatel-Lucent and is now part of Nokia * Alcatel Mobile, a brand of mobile phones, tablets and wearables, formerly a joint venture between Alcatel ...
in 2006) filed suit against Gateway in the
U.S. District Court for the Southern District of California The United States District Court for the Southern District of California (in case citations, S.D. Cal.) is a federal court in the United States Court of Appeals for the Ninth Circuit, Ninth Circuit (except for patent claims and claims against th ...
in
San Diego San Diego ( , ; ) is a city on the Pacific Ocean coast of Southern California located immediately adjacent to the Mexico–United States border. With a 2020 population of 1,386,932, it is the eighth most populous city in the United State ...
. Lucent also sued Dell in the
U.S. District Court for the Eastern District of Virginia The United States District Court for the Eastern District of Virginia (in case citations, E.D. Va.) is one of two United States district courts serving the Commonwealth of Virginia. It has jurisdiction over the Northern Virginia, Hampton ...
; soon thereafter, that court transferred the Dell case to San Diego, where it was consolidated with the case against Gateway. Lucent claimed in this first San Diego case that Dell and Gateway had violated patents on MP3-related technologies developed by
Bell Labs Nokia Bell Labs, originally named Bell Telephone Laboratories (1925–1984), then AT&T Bell Laboratories (1984–1996) and Bell Labs Innovations (1996–2007), is an American industrial Research and development, research and scientific developm ...
, a division of predecessor company
American Telephone & Telegraph AT&T Corporation, originally the American Telephone and Telegraph Company, is the subsidiary of AT&T Inc. that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agen ...
. Other patents said to be infringed relate to
MPEG The Moving Picture Experts Group (MPEG) is an alliance of working groups established jointly by ISO and IEC that sets standards for media coding, including compression coding of audio, video, graphics, and genomic data; and transmission and f ...
video technology, speech technology, internet technology, and other technologies. Microsoft intervened in the lawsuit in April 2003 and Alcatel was added after it acquired Lucent. After the first San Diego lawsuit was filed, Microsoft and Lucent have filed additional patent lawsuits against each other. In February 2007, Microsoft filed a lawsuit at the International Trade Commission claiming that Alcatel-Lucent infringed its patents. There is a second case in San Diego where Microsoft is asserting that Alcatel-Lucent infringes 10 of its patents, and yet another case in Texas where each alleges that the other is infringing its patents.


Burst.com

* Burst.com claims that Microsoft stole Burst's patented technology for delivering high speed streaming sound and video content on the internet. Also at issue in the case is a 35-week period of missing emails in the evidence Microsoft handed over to Burst which was discovered by Burst.com's lawyers. Burst accuses Microsoft of crafting a 30-day email deletion policy specifically to cover up illegal activity. Microsoft settled with the company for $60 million in exchange for an agreement to license some of the company's technologies.


Eolas

*
Eolas Eolas (, meaning "Knowledge"; bacronym: "Embedded Objects Linked Across Systems") is a United States technology firm formed as a spin-off from the University of California, San Francisco (UCSF), in order to commercialize UCSF's patents for work d ...
and
University of California The University of California (UC) is a public land-grant research university system in the U.S. state of California. The system is composed of the campuses at Berkeley, Davis, Irvine, Los Angeles, Merced, Riverside, San Diego, San Franci ...
, which accused Microsoft of using some of its software patents in their web browser, won $521 million in court; however, Eolas' patents were invalidated in 2012.


SurfCast

SurfCast is suing Microsoft for infringing patent on Live Tiles.


Copyrights


Apple

''Apple Computer Inc. v. Microsoft Corporation'', 35 F.3d 1435 ( 9th Cir. 1994) was a
copyright infringement Copyright infringement (at times referred to as piracy) is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, s ...
lawsuit in which Apple Computer, Inc. (now
Apple Inc. Apple Inc. is an American multinational technology company headquartered in Cupertino, California, United States. Apple is the largest technology company by revenue (totaling in 2021) and, as of June 2022, is the world's biggest company ...
) sought to prevent Microsoft Corporation and Hewlett-Packard from using visual
graphical user interface The GUI ( "UI" by itself is still usually pronounced . or ), graphical user interface, is a form of user interface that allows users to interact with electronic devices through graphical icons and audio indicator such as primary notation, inst ...
(GUI) elements that were similar to those in Apple's
Lisa Lisa or LISA may refer to: People People with the mononym * Lisa Lisa (born 1967), American actress and lead singer of the Cult Jam * Lisa (Japanese musician, born 1974), stylized "LISA", Japanese singer and producer * Lisa Komine (born 1978), J ...
and
Macintosh The Mac (known as Macintosh until 1999) is a family of personal computers designed and marketed by Apple Inc. Macs are known for their ease of use and minimalist designs, and are popular among students, creative professionals, and software en ...
operating system An operating system (OS) is system software that manages computer hardware, software resources, and provides common services for computer programs. Time-sharing operating systems schedule tasks for efficient use of the system and may also i ...
s. Some critics claimed that Apple was really attempting to gain all
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...
rights over the
desktop metaphor In computing, the desktop metaphor is an interface metaphor which is a set of unifying concepts used by graphical user interfaces to help users interact more easily with the computer. The desktop metaphor treats the computer monitor as if it is ...
for computer interfaces, and perhaps all GUIs, on
personal computer A personal computer (PC) is a multi-purpose microcomputer whose size, capabilities, and price make it feasible for individual use. Personal computers are intended to be operated directly by an end user, rather than by a computer expert or tec ...
s. Apple lost all claims in the lawsuit, except that the court ruled that the "trash can" icon and file folder icons from Hewlett-Packard's now-forgotten NewWave windows application were infringing. The lawsuit was filed in 1988 and lasted four years; the decision was affirmed on appeal in 1994, and Apple's appeal to the U.S. Supreme Court was denied.


Trademarks


Lindows

''Microsoft v. Lindows.com, Inc.'' was a court case brought on December 20, 2001, by
Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washin ...
against Lindows, Inc, claiming that the name "Lindows" was a violation of its
trademark A trademark (also written trade mark or trade-mark) is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from othe ...
"Windows". In addition to the United States, Microsoft has also sued Lindows in Sweden, France, Belgium, Luxembourg, the Netherlands and Canada. Michael Robertson has called this situation "Sextuple Jeopardy", an extension of the term
double jeopardy In jurisprudence, double jeopardy is a procedural defence (primarily in common law jurisdictions) that prevents an accused person from being tried again on the same (or similar) charges following an acquittal or conviction and in rare case ...
. In response to these lawsuits, Lindows had launched ''ChoicePC.com'', which allows people to purchase lifetime Lindows memberships that includes a free copy of LindowsOS, free LindowsOS upgrades for life, and a ChoicePC.com T-shirt, for US$100. All money from the memberships goes towards helping Lindows in its legal battle against Microsoft.


MikeRoweSoft

In a legal dispute, Microsoft sued a Canadian high school student named Mike Rowe over the
domain name A domain name is a string that identifies a realm of administrative autonomy, authority or control within the Internet. Domain names are often used to identify services provided through the Internet, such as websites, email services and more. As ...
MikeRoweSoft.com. The case received international press attention following Microsoft's perceived heavy handed approach to a 12th grade student's part-time
web design Web design encompasses many different skills and disciplines in the production and maintenance of websites. The different areas of web design include web graphic design; user interface design (UI design); authoring, including standardised code a ...
business and the subsequent support that Rowe received from the online community. A settlement was eventually agreed, with Rowe granting ownership of the domain to Microsoft in return for training and gifts. , the domain MikeRoweSoft.com still redirects to microsoft.com.


Shah

Microsoft sued several parties for ''contributory cybersquatting''—that is, encouraging others (through software and instructional videos) to cybersquat on domain names that infringed on Microsoft's trademarks. Microsoft prevailed in court and also established a precedent that liabilities under the
Anticybersquatting Consumer Protection Act The Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d),(passed as part of ) is a U.S. law enacted in 1999 that established a cause of action for registering, trafficking in, or using a domain name confusingly similar to, or di ...
(ACPA) include contributory trademark infringement.


Windows Commander

From 1993 until 2002, Total Commander was called '' Windows Commander''; the name was changed in 2002, out of fear of a lawsuit after the developers received a letter from Microsoft pointing out that the word "windows" was trademarked by Microsoft.


wxWindows

The wxWindows project was renamed to
wxWidgets wxWidgets (formerly wxWindows) is a widget toolkit and tools library for creating graphical user interfaces (GUIs) for cross-platform applications. wxWidgets enables a program's GUI code to compile and run on several computer platforms with mini ...
in September 2003 out of fear of a lawsuit after the founder developer Julian Smart received a letter from Microsoft pointing out that the '
Windows Windows is a group of several proprietary graphical operating system families developed and marketed by Microsoft. Each family caters to a certain sector of the computing industry. For example, Windows NT for consumers, Windows Server for ser ...
' is a UK trademark owned by Microsoft.


Microwindows

The
Microwindows In computing, Nano-X is a windowing system which is full featured enough to be used on a Personal Computer, PC, an embedded system or a personal digital assistant, PDA. It is an Open Source project aimed at bringing the features of modern graphic ...
project was renamed to Nano-X Window System in January 2005, due to legal threats from Microsoft regarding the
Windows Windows is a group of several proprietary graphical operating system families developed and marketed by Microsoft. Each family caters to a certain sector of the computing industry. For example, Windows NT for consumers, Windows Server for ser ...
trademark.


Other


Ticketmaster deep linking case

In 1997, Ticketmaster sued Microsoft over practice of
deep linking In the context of the World Wide Web, deep linking is the use of a hyperlink that links to a specific, generally searchable or indexed, piece of web content on a website (e.g. "http://example.com/path/page"), rather than the website's home page (e ...
- at the time a controversial practice as it was argued it would bypass advertising on a website's front page - on its Sidewalk.com website, having previously blocked requests coming from the website following a stalemate of an agreement that would allowed such. The case was settled two years later when Microsoft agreed to stop deep linking Ticketmaster on Sidewalk.com.


Xbox 360

Microsoft has been accused of deceiving consumers by concealing the high failure rate of its
Xbox 360 The Xbox 360 is a home video game console developed by Microsoft. As the successor to the original Xbox, it is the second console in the Xbox series. It competed with Sony's PlayStation 3 and Nintendo's Wii as part of the seventh generati ...
game console. A woman from
California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...
sued Microsoft in October 2008 in Superior Court in Sacramento County, stating that the company violated multiple state consumer-protection and unfair-competition laws. The woman alleged that the company continued to sell the Xbox 360 even though it knew that the console's hardware was likely to fail.


References


External links


Microsoft On The Issues

Microsoft Litigation Resource Page

Microsoft case could make EU 'litigation capital of the world'
{{DEFAULTSORT:Microsoft Litigation History of Microsoft Computer case law