Judge asks why Microsoft hasn’t sold more licenses

WASHINGTON – A U.S. District Court judge has asked the Department of Justice to investigate why only nine companies have signed up to license Microsoft’s technology for their own software products, an offering that’s part of the federal antitrust settlement with Microsoft.

During an antitrust settlement oversight hearing Friday, Judge Colleen Kollar-Kotelly questioned why more companies hadn’t taken advantage of the licensing portion of the antitrust settlement, approved by Kollar-Kotelly in late 2002.

Kollar-Kotelly, of the U.S. District Court for the District of Columbia, asked the Justice Department to interview software companies to see if changes are needed in the licensing terms in the antitrust settlement. In a July hearing, Kollar-Kotelly said new licensing terms that Microsoft would later announce should satisfy concerns over royalty rates Microsoft was charging for its communications protocols.

Microsoft previously agreed to reduce an advance payment for licenses from $100,000 to $50,000, and to require royalties of 1% to 5% of the revenue from any products that use the protocols.

A representative of the Justice Department wasn’t available Friday to comment on the judge’s request, but Microsoft spokesman Jim Desler said his company looks forward to any findings after the department talks to software vendors. Kollar-Kotelly has scheduled another antitrust settlement compliance hearing for January.

In a status report released Monday, the Justice Department noted that Microsoft has made “limited” progress in obtaining more licenses. But the Justice Department report didn’t request the judge take any specific action right now, instead suggesting that “further steps may need to be taken in order to effectuate the goals of the remedy.”

Microsoft on Oct. 18 defended its progress, saying the company is talking with close to 40 vendors about licensing its technology. The progress from four to nine licensees in three months shows a large effort on Microsoft’s part, Desler said Friday.

“We’ve taken some aggressive steps in terms of promoting this program and it terms of educating the industry about it,” Desler added. “We’ve more than doubled the number of licensees we have in three months. This does show some momentum, but this is still a work in progress.”

Some companies’ software may be able to interoperate with Microsoft products, making the licenses unnecessary, Desler said. “I think the judge wanted to know whether or not (the number of licenses) is due to the terms and conditions of the licensing program or whether it is due to a lack of interest on some parties,” he said. “This is just simply a natural part of the compliance process.”

Asked if Microsoft would support further revamping of the licensing terms if that’s where the Justice Department  investigation led, Desler didn’t commit to more changes. “I think we just take this whole process step by step,” he said. “The next step is for the Department of Justice to talk with industry and report back on what they’ve learned.”