OEM Patent Clause Cancelled

A contract provision that prevents OEMs from enforcing patents against Microsoft for proprietary code that OEMs include in Windows PCs will be removed from OEM licenses. Microsoft announced the change shortly before investigators from Japan’s Fair Trade Commission (FTC) raided its offices looking for documents related to the company’s OEM licenses.

Non-Assertion of Patent Rights

The contract provision in question, known as non-assertion of patents, is included in contracts that OEMs negotiate with Microsoft. The clause says that an OEM cannot sue Microsoft if Microsoft appears to infringe on the OEM’s patents related to computer systems that include Microsoft OSs.

This clause was an issue during Microsoft’s antitrust trial with the U.S. Department of Justice (DoJ). Sony told the court that it has a “significant history and patent portfolio in various areas, including audio, video, software applications and other technologies” and it had successfully negotiated limits on the non-assertion clause to protect its intellectual property. However, the settlement between the DoJ and Microsoft changed that. It required that the top 20 OEMs have uniform contracts with Microsoft, which prevented the negotiation of special limitations—including limits on or the suspension of the non-assertion of patents clause.