[A2k] IP-Watch: EU: Microsoft Raised IP Rights As Late Defence In European Case

[Thiru Balasubramaniam]

http://ip-watch.org/weblog/wp-trackback.php?p=3D920

12 February 2008
EU: Microsoft Raised IP Rights As Late Defence In European Case

By David Cronin for Intellectual Property Watch
BRUSSELS - The European Commission has accused Microsoft of invoking
intellectual property rights =93in the eleventh hour=94 to protect its
dominant position in the global computer market.

Per Hellstrom, a senior official in the Commission=92s directorate-
general for competition, indicated on Monday that the European Union=92s
antitrust efforts against Microsoft have not ceased, despite a
landmark legal ruling last year. Speaking at an 11 February event in
Brussels, Hellstrom said that Microsoft had invoked intellectual
property rights =93only in the eleventh hour=94 of the probe against it,
which also related to its refusal to share information with competitors.

In September, the European Court of First Instance upheld a =80497
million euro fine against Microsoft that the Commission imposed in
2004. This penalty, the largest ever handed out in an EU competition
case, followed a probe in which the Commission concluded that
Microsoft had been =91bundling=92 its flagship Windows - an operating
system found in 95 percent of the world=92s personal computers - with
the company=92s MediaPlayer.

Because most personal computers run Windows, they are often unable to
be linked up to larger computers - or servers - running alternative
operating systems.

Microsoft=92s rival Sun Microsystems had complained to the Commission
that the US software giant would not grant it data needed to ensure
that Windows was interoperable.

=93Microsoft=92s defence was that the information was covered by
intellectual property rights,=94 Hellstrom said. =93This argument was
never used when Sun asked for the information. It was only used in the
eleventh hour. Microsoft showed one patent a day before we adopted our
decision [in 2004].=94

He maintained that this refusal was designed to =93eliminate
competition=94 and that it had an adverse impact on technological
development.

Last month, the Commission announced it was conducting a new
investigation into Microsoft. Following a complaint by the European
Committee for Interoperable Systems, the Commission decided to study
accusations that Microsoft is denying access to information on a range
of its products, including Office, a widely-used package that includes
word-processing and spreadsheet applications.

Microsoft=92s Brussels office declined to comment on Hellstrom=92s
comments, which were delivered at a seminar hosted by Trans Atlantic
Consumer Dialogue. The TACD bands together 65 consumer organisations
from Europe and the United States.

The seminar explored what steps are needed to ensure that related
technologies developed by different firms can interact with each other.

David Lippeatt, an economic and finance officer with the US mission in
Brussels, said that problems with a lack of standardisation have been
evident in his country for more than 100 years. In the early
nineteenth century a fire occurred in Baltimore, which resulted in
$125 million dollars worth of damage. When fire services from other
regions were called in, they found that they their hose connections
could not fit into the hydrants used in Baltimore.

Still, he argued against governments advocating stringent rules on
interoperability. =93Mandating interoperability risks depriving
intellectual property owners of the right to their property,=94 he said,
arguing that =93market forces and not governments=94 should promote
solutions to problems that occur in the technological field.

But Andr=E9 Rebentisch from the European Software Market Association
said it is vital that small firms be allowed to use computer products
without having to pay royalties to larger firms that hold patents on
those goods. Robust action by public authorities is needed to help
small and medium-sized firms, he added.

Rishab Aiyer Ghosh, a senior researcher with the United Nations
University in Maastricht, Netherlands, noted that royalty-free
standards are already being used in the computer industry. For
example, the World Wide Web Consortium, a body dedicated to greater
advancement of the Internet, promotes interoperable software.

=93Standards inherently limit innovation,=94 he said. =93Standards are ther=
e
to be the common ground on which innovation takes place. But there is
also a value to standards. If there is some great new ICT [information
and communication technology] and I=92m the only one who uses it, it is
not very valuable to me.=94

David Cronin may be reached at info@ip-watch.ch.

------------------------------------------------------------


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997