Microsoft Eases Licensing Rules at DOJ Behest

In another step toward a more open approach to how it sells its software, Microsoft (Nasdaq: MSFT) has agreed to change its licensing agreement, bringing itself into compliance with earlier court rulings and making it easier and cheaper for other firms to make compatible products.

The U.S. Department of Justice (DOJ) said Microsoft has agreed to final revisions of its Windows server software license. The changes will become available for public review in a matter of days, the DOJ said, and will include the removal of a controversial nondisclosure agreement.

The change comes as Microsoft releases Windows Server 2003 and begins to phase out support for older versions of its server platform.

Mum's Not the Word

The new licensing agreement was drafted after the DOJ raised questions about the lack of uptake of Microsoft's original offer, which included sharing of detailed information about its server OS only with partners that agreed to a nondisclosure agreement limiting their ability to share what they learned. Only three software firms had agreed to those terms.

In a statement, Microsoft chief counsel Brad Smith said the changes are aimed at making it "easier for companies to license our technology" and represent the company's commitment to "full compliance with every aspect of our settlement."

The Easy Way

Forrester analyst Rob Enderle said Microsoft has taken the easy road in several recent legal matters, indicating a desire to put the antitrust issue to rest.

"It can only be a distraction from the real goal, which is to continue to be innovative and drive new products to market," Enderle told the E-Commerce Times, noting that most recent changes dictated by court order represent changes in language rather than major concessions by the software maker.

The DOJ said it will continue to monitor the licensing landscape by consulting with third parties that might want to build products that work with Microsoft's, with special attention given to "the royalties contained in the licenses." In addition, the DOJ noted that the agreement it reached with Microsoft after a marathon antitrust proceeding enables it to issue enforcement orders and similar decrees from time to time.

Out of Stock

Separately, Microsoft and discount e-tailer Overstock.com announced a settlement in a case involving allegations that Overstock advertised Microsoft software without authorization.

Terms of the settlement were not disclosed, but the companies indicated it involved a substantial payment from Salt Lake City, Utah-based Overstock to the software giant.

"We determined that reaching a settlement sooner would be less costly than prolonging the litigation," Overstock counsel Jonathan Johnson said in a statement. "Although the settlement amount was substantial, it was not material to the company's liquidity and will not affect the future prospects of the company. We're glad to have the matter behind us."