Pressure builds on Microsoft over patents

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Pressure builds on Microsoft over patents

Microsoft and the European commission are embroiled in a fresh dispute over patents in their seven-year war over the software group's dominance of global markets, with Brussels demanding the company hand over technical information about its Windows operating system to rivals for next to nothing.

The group, fined a record €497m (£339m) three years ago for abusing its dominance in the work-group server market and a further €280m last year for failing to comply with the commission's anti-trust ruling, claims it is defending 36 patents in the protocols behind Windows, now upgraded to Vista.

It wants to charge rival software companies 5.95% of their server revenues as a royalty fee for using its protocols on licence but Brussels insists there is little innovation in the codes and they should be available for next to nothing.

Threatening Microsoft with renewed daily fines of up to €3m a day, Neelie Kroes, EU competition commissioner, has said: "Microsoft has agreed that the main basis for pricing should be whether its protocols are innovative. The commission's current view is that there is no significant innovation in these products."

Neil Barrett, an independent trustee endorsed by Microsoft, told her before she issued her latest threat of fines on March 1 that even the patented technology for ensuring inter-operability with Windows could be found elsewhere royalty-free and the group's "prohibitively high" fees should be reduced to around zero per cent. He said rivals would take seven years to recoup their development costs if they met Microsoft's demands.

But the group claims it is defending intellectual property rights by demanding what it called yesterday "reasonable and non-discriminatory" fees and points out that, only this week, Brussels launched a new effort to promote a European patent system to make it easier for companies to buttress their innovations.

Ms Kroes, who formally warned Microsoft it was still failing to comply with the three-year-old anti-trust ruling last month, has given it until April 23 to respond. She has since accused it of stalling to extend its dominance in this segment of the market. She says it has grown from 60% in 2004 to 75% now.

The company said it was in full compliance with the 2004 ruling.







David Gow in Brussels
Friday April 6, 2007
Guardian Unlimited
Guardian News and Media Limited 2007
 
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