Microsoft pushed to disclose Windows code in EU case

Microsoft Corp. is fighting off pressure to license its Windows operating system source code to other companies in the ongoing European antitrust lawsuit against the software maker, according to a source familiar with the case.

In a written response to the European Commission's allegations that Microsoft has abused its dominant position in the operating-system market, Microsoft argued that compulsory licensing of its codes would breach international copyright law, said the source, who has an edited version of Microsoft's confidential reply that was filed with the European regulator on Nov. 16.

This 102-page version was handed out to other companies involved in the lawsuit, including Sun Microsystems Inc., whose complaint to the European competition regulator in 1998 sparked the investigation into the software maker.

However, contrary to some recent reports that quote from this nonconfidential version of Microsoft's reply, Sun is not pushing for full source code disclosure, according to a person close to the company.

"They (Sun) believe the anticompetitive behavior could be addressed without Microsoft revealing its source code," said the person, adding that "the code can be described so that other companies can implement it."

Patents that protect ideas, and copyright laws that protect the expression of ideas, are less defined in Europe than they are in the U.S., the person said, requesting anonymity. He said it appears Microsoft is focusing its defense in the European case on the fact that Europe has signed up to the international intellectual-property agreement known as Trade-Related Aspects of Intellectual Property Rights (TRIPS).

This agreement allows for compulsory licensing of patented codes if those codes are essential for interoperability with other products, he said. But it is less clear with copyright. Under TRIPS and U.S. law certain things cannot be granted copyright: ideas, principles and methods of operation. But the line between what can and cannot be copyrighted is fine, the person said.

"Copyright is their defense, and there is room for debate, but ultimately I think their argument is flawed," he said.

Microsoft faces fines of up to 10 percent of its global sales if the Commission finds it guilty of abusing its dominant position. It may also be forced to make structural changes to its business practices in order to allay the European Commission's concerns.

Commission spokeswoman Amelia Torres declined to comment on the leaking of Microsoft's written response.

Microsoft's senior counsel in Europe, John Frank, declined to comment on any details in the company's reply. "I thought this was supposed to be a confidential document," he said, referring to published reports about the document. "I don't think it helps anyone to have selected quotes leaked."

Frank and his team are "working to resolve the dispute" with European regulators, he said. Nothing has been altered since last week, when Microsoft changed its mind and called off a hearing with European regulators and the complainants in this case, he said.

Meanwhile, the European Commission has set a Jan. 7 deadline for comments from other companies involved in the case. Companies can still request a hearing, although Frank said the right to request a hearing is reserved for the defendant.

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