Microsoft Says Japan Battle Hurting Image

The head of Microsoft's Japan unit acknowledged Tuesday that the U.S. software giant's battle with Japanese anti-monopoly authorities over a controversial licensing clause has hurt its corporate image here.

But Michael Rawding, Microsoft Japan's president and chief executive, said the company will continue to oppose a Fair Trade Commission ruling last month ordering Microsoft to retroactively remove the clause from its licensing agreements.

The clause prevents companies from suing Microsoft over patent and copyright infringement if they suspect their own software technology has ended up in the Windows operating system. The Fair Trade Commission has said it suspects the clause helps Microsoft unlawfully infringe patents.

Rawding said legal wrangling could last as long as two years. Commission officials also say the battle could be long.

"It's never a good thing to be involved in this sort of activity," Rawding told The Associated Press on the sidelines of a news conference on this year's Microsoft Japan strategy at a Tokyo hotel.

Microsoft dropped the clause from new contracts earlier this year, although the company has repeatedly said the wording is lawful. But the Fair Trade Commission is demanding the clause be dropped in contracts signed in the past. Microsoft rejected that demand on July 26.

The date for the first session of hearings with the commission has not yet been set. If a decision goes against Microsoft, the company can appeal in a Japanese court.

Rawding said Microsoft would cooperate fully with the commission's investigation, but added he didn't understand why Japanese authorities had a problem with the clause when similar investigations in the United States and Europe found it "lawful and appropriate."

Commission officials are not certain any patents have been violated by Microsoft. But several Japanese electronics makers have complained about suspected patent infringements since December 2000, especially regarding multimedia technologies that are increasingly vital in the industry.

Major Japanese consumer electronics companies that are partners with Microsoft include Sony, Toshiba and Matsushita Electric Industrial Co., which makes Panasonic brand products.

Copyright © 2004 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.

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