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Japanese FTC Warns Microsoft

ChibiOne writes "The Japanese Fair Trade Commission has ordered Microsoft to cut a restrictive contract clause, designed to protect the software giant from patent-related lawsuits by PC manufacturers that sell products using Microsoft's Windows operating systems. Under such provision, Japanese makers would be unable to sue Microsoft even if the software giant's technologies are deemed to violate their patents. The Japan Times Online has the scoop."

22 of 204 comments (clear)

  1. Re:Sign here, no need to read it..... by XeRXeS-TCN · · Score: 5, Informative

    "Manufacturers have voiced concern that Microsoft could conceivably gain access to proprietary information about their cutting-edge products, and would be able to distribute their technology to competitors using the Windows operating system."

    I don't know if M$ would actually do this or not, but the disputed clause in the contracts essentially gives M$ a free ride to do so.

    Is it so surprising that a company like Microsoft would steal technology? They generally license it when they can't get away with it, but if they could steal with no repercussions (as this agreement would technically allow) you can bet that they would steal technology to stay "competitive". They have gone for the most underhanded business tactics against many companies and organisations over the years, most notably the open source and free software movements; and don't forget they essentially stole the original concept for a "windows" system from Apple, so I wouldn't trust them further than I could comfortably spit out a rat.

    Additionally, the FTC obviously considers those concerns legitimate, as the article says:

    The FTC raided Microsoft's Japan headquarters in February as part of its investigations.

    This isn't a *supposedly* "dubious" company like Sharman Networks (KaZaA) are accused of being, this is the so-called "untouchable" Microsoft, who sell nothing but legal product; so for any organisation to go so far as to raid their headquarters, the concern must be very believed and legitimate indeed.

  2. Re:'scuse me but... by chris_mahan · · Score: 3, Informative

    > Japanese alphabet

    Japanese alphabet?

    alpha, beta...

    There's no Japanese alphabet, there are character sets.

    Three of them: Kanji, Hiragana, Katakana

    --

    "Piter, too, is dead."

  3. Re:'scuse me but... by offpath3 · · Score: 3, Informative

    I believe the technical term for Hiragana and Katakana would be "syllabary".

  4. Depends on the lawyerspeak... by Kjella · · Score: 2, Informative

    ...because patents are IP, it can exist at multiple locations at once. It would be possible for Microsoft to licence all their patents through a contract, so I would assume anything less than that can also be put into a contract.

    To follow up on your analogy, you could not sign away their right to sue. But they could sign a contract that would allow you to take possession of their car, e.g. as security for a loan.

    Now to take that to an extreme, let us say their contract allow you to take possession of it any time you want, by any means, no notice, permanently etc. Essentially, a licence to steal. And they can't sue you for stealing it, since you're allowed to by the contract.

    In short, there's a lot of wierd stuff you can do with contracts. Ask a contract lawyer, not slashdot, what is legally possible and not possible.

    Kjella

    --
    Live today, because you never know what tomorrow brings
    1. Re:Depends on the lawyerspeak... by polveroj · · Score: 2, Informative

      To follow up on your analogy, you could not sign away their right to sue.

      AFAIK, you can sign away your right to pursue a civil case, but you can't prevent a criminal case from being brought up. If you sign a contract saying you won't sue someone for anything they say about you, you can't later demand compensation for a damaged reputation. However, a contract allowing someone to stab you doesn't prevent them from being thrown in jail for it if the police catch them.

      I think your other points are all right; I was just pointing out that there are really two cases. (Well, sort of three: you can allow someone by contract to do something otherwise illegal if you can legally transfer to them your right to do it. Since you can give away patents/cars, you can allow people to "steal" them, but stabbing yourself is a non-transferable right [if it's a right at all].)

  5. Re:Sign here, no need to read it..... by bladesjester · · Score: 4, Informative

    While I agree that microsoft is rather underhanded in their buisness practices, the accusation of them stealing the windows concept from apple isn't true. Both apple and ms got the idea from xerox...

    --
    Everything I need to know I learned by killing smart people and eating their brains.
  6. Re:Sign here, no need to read it..... by achurch · · Score: 5, Informative
    But he said Microsoft would drop the clause from all contracts signed from August onward. He said this decision was made following internal discussions over the past year.

    Perhaps M$ agrees? Sometimes even the 900lb gorilla can catch on.

    Actually, the decision to drop the clause from August onward was made before the warning--the warning was issued because Microsoft refused to drop it before then (which is probably why the article calls it a "largely symbolic" move), and Microsoft is still contesting it.

  7. Re:Obligatory... by shigelojoe · · Score: 5, Informative

    ...in Japan!

    Er, I mean... here.

  8. Japanese Windows OEM by Neo-Rio-101 · · Score: 2, Informative

    I have a copy of Windows XP Professional OEM version running on my PC. It set me back a whole 28,000 yen (Roughly US$280) Please somebody, tell me that what the Japanese pay for Windows is not ridiculously overpriced. The full boxed version of XP over here actually verges on US$400... so the OEM version looks cheap in comparison. MS must think that XP is worth the price of a CPU or top-of-the-line motherboard.

    --
    READY.
    PRINT ""+-0
  9. Re:NEVER would they do that! by Santarelli · · Score: 3, Informative

    This is a good point: from the point of view of a single consumer, there are few options in taking on a giant corporation. There's legal process (we saw how well that works against MS and who can afford it anyway), legislation, (see parenthetical sarcasm above) or, a much simpler solution: do not buy their product. Nothing changes a company's policy more effectively than having their bottom line hit. Unfortunately, this can only be achieved through solidarity. MS, among other giga-corporations, pays big money to advertisers who in turn pay psychologists and other analysts to experiment on how to better make you buy their products. Power to the people! only works when the people are responsible enough to take the power. One of the more powerful tools the people have is the boycott; barring that (it can have catastrophic ripples in the economy), create or join a co-op which will only buy products based on certain criteria for a group of member consumers. ...and for today's paradox: If you are paranoid enough to believe the government wants to read all email, vote Republican.

  10. What's unfair about this is . . . by achurch · · Score: 4, Informative

    Sony (and every other HW vendor) now has a choice: Let MS use their patents, or don't have MS support of their platform.

    What's "unfair" about that?

    As has been pointed out many times before, Microsoft has a (virtual) monopoly on operating systems. If Microsoft were the little guy, this wouldn't be so much of a problem, but they're not; shipping computers without Windows is tantamount to corporate suicide. This gives Microsoft immense leverage in contracts.

    Now, keep in mind this is happening in Japan. Japan's anti-monopoly law has a clause forbidding "yuuetsu-teki chii ranyou", literally "abuse of overpowering status": in other words, if one of the parties to a contract or agreement has significantly more power or authority than the other(s), then that party is not allowed to dictate terms freely--they have to limit themselves to what they could reasonably expect to get agreement on without such power. This clause is applied not infrequently(*); in this case, the FTC decided that OEMs would not have agreed to the no-sue clause if they had not been in the position of having to accept whatever terms Microsoft gave them, and so it declared the clause "unfair" and issued the warning.

    (*)For example, the yuuetsu-teki chii ranyou clause was recently used to prevent retail stores from forcing distributors to cut wholesale prices in response to a new law requiring sales tax to be included in display prices.

  11. Re:Sign here, no need to read it..... by Antaeus+Feldspar · · Score: 4, Informative
    Is it so surprising that a company like Microsoft would steal technology? They generally license it when they can't get away with it, but if they could steal with no repercussions (as this agreement would technically allow) you can bet that they would steal technology to stay "competitive".
    They did.
    --
    If people are to respect the law, perhaps the law should begin by respecting the people.
  12. Re:'scuse me but... by chris_mahan · · Score: 2, Informative


    >Have you considered fucking off to slashdot.jp? Just a thought.

    I'll have more of the fourth word than you in my lifetime. How does that make you feel, troll?

    To the others:
    Indeed, Romaji is an official character set in Japanese. Also, Hiragana, Katakana, and Kanji _are_ syllabaries.

    --

    "Piter, too, is dead."

  13. Re:Apache License by polveroj · · Score: 2, Informative

    Is Apache okay because they don't actually say 'you can't take us to court'? Rather they say 'taking action terminates this license'. Consequently the patent holder is free to take action, as long as they wear the consequences of their Apache license being cancelled?

    The Apache license is very different. It says that any contributors who add patented material implicitly give all Apache users the right to use the specific patents that they added. If you later sue Apache for using the patented material that you contributed, you have to give up the right to use Apache (and the patents granted by that use).

    The MS contract, on the other hand, basically says "We can take all your patents and you can't sue us about it. Ever."

  14. Haijo-kankoku: FTC warnings by achurch · · Score: 4, Informative

    How exactly is this a warning for MS? Sounds more like a "do whatever the fuck you want, we won't hold anyone responsible" message, to me.

    The haijo-kankoku (FTC warning, literally "recommendation to eliminate [illegal behavior]") isn't just a "slap on the wrist" in Japan--it's the first step in taking real action against the company. The procedure goes something like this:

    1. The Fair Trade Commission investigates and finds a potential violation of the anti-monopoly law.
    2. The FTC issues a haijo-kankoku to the company. If the company agrees that it was in the wrong, it can correct its behavior (possibly paying a fine) and stop the process here.
    3. The FTC holds a hearing on the issue. It may decide that the action does not actually violate the law, and stop here. Otherwise . . .
    4. The FTC issues an order (haijo-meirei) to the company to correct its behavior, possibly accompanied by a fine.
    5. If the company still doesn't obey, various other nasty stuff can happen. Japanese companies rarely go this far--you can get closed down for things like this.
  15. Re:'scuse me but... by xenoandroid · · Score: 2, Informative

    The modern japanese 'alphabet' includes roman characters. Officially there are three character sets: hiragana, katakana, kanji. sound based characters for official japanese words, sound based characters for foreign words, chinese characters respectively. However if you go to any Japanese site you're likely to see roman characters somewhere, often used for modern terminology, titles of some things, and many times company or organizational names, ex. FTC.

  16. Re:Sign here, no need to read it..... by Anonymous Coward · · Score: 5, Informative

    Concepts behind the GUI are older than Xerox. Look up Jef Raskin's 1969 paper on the Quick Draw Interface. Engelbart's mouse is similarly dated.

    Xerox created a prototype from existing ideas. It was nowhere near as developed as the original Mac.

    Apple licenced some concepts and hired developers like Raskin for others.

    Microsoft, on the other hand, licenced nothing and had access to Apple source code when developing the original Word application.

    Hmm...

  17. Re:This is silly by Atsi+Otani · · Score: 2, Informative

    Yeah, I think this looks like the Japanese FTC is fighting to protect Japanese comapanies.

    The newspaper I read (the Asahi) reported something like "the FTC decided to act because some computer makers with strong audio/visual technology complained about the contract clause"
    Hmm.. a computer maker with "strong audio/visual technology" that wants to fight Microsoft = Sony?

    The Japanese FTC's nickname happens to be "the watchdog that never barks," because it rarely does anything. I think Sony (or some other Japanese company) applied strong pressure upon the FTC.

    The legal system in Japan is unbelievably slow, so I really don't expect anything to come out of this move, though.

  18. Definitely sign here, no need to read it..... by cgenman · · Score: 4, Informative

    While I agree that microsoft is rather underhanded in their buisness practices, the accusation of them stealing the windows concept from apple isn't true. Both apple and ms got the idea from xerox...

    True, but Apple engineers took what they saw at Xerox and expanded upon it into a fully-fledged OS. Microsoft added a clause into a product for the Macintosh which Apple believed was giving a license for UI use on just Windows 1.0 as a cooling off period, but instead gave away the look and feel of the Macintosh to Microsoft entirely, which MS then proceeded to plunder in legendary fashion.

    Ironically, Either Apple or Microsoft could theoretically have sued many of the Xwindows systems out of existence, but once the (legally protected) Windows prescident was set, the (non-legally protected) flood of similar Operating Systems with similar looks and feels was released upon the world.

    Theoretically, this has allowed Operating System creators to learn freely from eachother, which should allow us to reach a state of computing Nirvana. Freeflow of ideas, yadda yadda. Sadly, in many ways it allows the dominant OS vendor to stay "good enough" at all times, freely stealing the fruits of other people's software when it becomes important, and allowing them to fail with their own experiments without contributing to the pot.

    So yes, while Apple was inspired by the work at Xerox, Microsoft's arrangement with Apple more directly resembles contract theft.

  19. Contract vs. License by shadow255 · · Score: 2, Informative

    The Apache liscense has a similar clause (mostly to protect against SCO-like suits). It will be interesting to see if they are asked to revise their liscense as well.

    Don't confuse licenses with contracts. As much as some entities would like us to believe they're one and the same, they're not. What's more, the Apache Foundation doesn't charge money for use of its licensed software, in contrast to Microsoft.

    --

    Logic is a wonderful thing but doesn't always beat actual thought. -Terry Pratchett

  20. Re:Is this legal anyway? by torokun · · Score: 2, Informative

    (I'm not a lawyer, just a law student. This is not legal advice. Don't rely on it as such.)

    First, you're right that you can't contract out of criminal law.

    Second, you can contract out of civil law, most of the time. The issue here is that it's not 'theft' if two parties agree to something. The only issue is whether the contract itself is valid...

    FYI, legal settlements are basically contracts wherein the plaintiff promises not to sue over a civil offense, in return for stuff...

    In the case of property though, we have the concept of title, so a contractual promise not to sue over use of property is not the same thing as granting title to the property. You can still do it though, imho... ;)

    With patents, I believe license agreements run with the patent, so sale of a patent to a 3rd party binds the 3rd party to any previously existing promises not to sue...

  21. Re:'scuse me but... by Anonymous Coward · · Score: 1, Informative

    Not quite. Kanji are logographs, not a syllabery (indeed, a word written with one kanji can have multiple syllables).