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Microsoft Foresees More Lawuits in Japan

A legal battle between Microsoft and Japanese anti-monopoly authorities is likely to conclude next year and might lead to lawsuits or other patent infringement complaints against the U.S. software company, an executive said Thursday.

Any such action will likely happen only in Japan, apply to Japanese patents filed in or before 2004, and will not affect U.S. patents, Microsoft Corp. Senior Vice President Brad Smith said during a trip to Tokyo.

The Fair Trade Commission, the nation's antitrust body, and Microsoft have been wrangling since 2004 over a controversial clause in licensing agreements.

The clause prevents companies from suing Microsoft over patent and copyright infringement if they suspect their own software technology has ended up in the Windows operating system.

Microsoft, based in Redmond, Washington, has repeatedly said the clause is lawful. It dropped the clause in 2004.

The commission has said it suspects the clause has helped Microsoft unlawfully infringe patents. Hearings have been held in Tokyo to look at the commission's and Microsoft's positions. Smith said a decision from the commission is expected in 2008.

The clause has so far prevented companies from bringing infringement complaints against Microsoft, said Smith, Microsoft's general counsel, who oversees policy on intellectual property and competition issues worldwide.

"Maybe they would have some new ability to raise that claim," including possible lawsuits against Microsoft and computer manufacturers, if the commission rejects Microsoft's view, he said.

Commission officials are not certain that Microsoft has violated any patents, and it is still unclear what the commission may decide.

Several Japanese electronics makers have complained about suspected infringements since December 2000.

Major Japanese manufacturers are partners with Microsoft, including Sony Corp., Toshiba Corp. and Matsushita Electric Industrial Co., which makes Panasonic brand products.

Microsoft has been slapped with hefty fines by European Union regulators, who have said Microsoft broke competition laws and abused its dominant market position.

Recently, the EU has threatened Microsoft with new, multimillion-dollar (euro) fines over claims it is asking rivals to pay too much for information that would help their servers work with Windows. Microsoft has countered that regulating such pricing on a global basis goes beyond the EU's jurisdiction.

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