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Legal questions dog Microsoft anti-spyware buy

By Paul Roberts , IDG News Service , 12/16/2004
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With the ink barely dry on Microsoft's acquisition of anti-spyware company Giant Company Software, questions have arisen about the ownership of the anti-spyware code Microsoft bought.

Microsoft acknowledged that Sunbelt Software of Clearwater, Fla., is part owner of Giant's AntiSpyware software. That agreement between Giant and Sunbelt does not prevent Microsoft from further developing new products based on the Giant code, according to Microsoft. However, Sunbelt President Alex Eckelberry said that his company has exclusive rights over elements of the technology, including the ability to offer SDKs  for Giant AntiSpyware technology. That could make it difficult for Microsoft to integrate Giant technology with other products.

Microsoft issued a short statement regarding Sunbelt's claims Thursday saying, "We understand that Giant granted a co-ownership right to Sunbelt concerning an earlier version of Giant’s anti-spyware software product. However, the granting of that right to Sunbelt does not constrain either party from innovating and developing new products that are based on that earlier version."

A Microsoft spokeswoman declined to comment specifically on Sunbelt's other claims.

Sunbelt and Giant have had a close business relationship since 2002, with Sunbelt licensing and selling technology developed by Giant, according to Eckelberry.

Among other things, Sunbelt struck an agreement to sell Giant's antispam product, Spam Inspector, under its own label, iHateSpam. Until September, the company also sold a product, CounterSpy, that used Giant's AntiSpyware engine. The companies parted ways in September, with Sunbelt focusing on the corporate antispyware market and Giant focused on the home PC antispyware market, Eckelberry said.

However, Sunbelt claims co-ownership of everything related to Giant's AntiSpyware product up to Sept. 20, including "the user interface elements, explorer tools (and ) software update services," Eckelberry said.

While the co-ownership agreement will not prevent Microsoft from changing the Giant product to suit its own needs, Sunbelt's exclusive rights to create and distribute SDKs for the Giant AntiSpyware engine could require Microsoft to seek permission from Sunbelt before allowing third-party companies access to Giant's data.

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