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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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August 27, 2009 4:14 PM

Windows 7 launch party will be in New York

Posted by Sharon Chan

I'm back. Looks like some stuff happened while I was gone -- dustup over pasting a black person into a homogenous Microsoft ad in Poland (Microsoft has apologized for this incident) and a ruling on a patent infringement case over Word which resulted in a $290 million fine and an injunction on selling Word (Microsoft is appealing and has requested a stay).

Today we found out Windows 7, the next version of Microsoft's flagship product, will launch in New York on Oct. 22.

Microsoft spokesman Lou Gellos just confirmed by phone. It was reported this morning by ZDNet's All About Microsoft.

Comments | Category: Legal issues , Microsoft , Windows 7 |Permalink | Digg Digg | Newsvine Newsvine

June 22, 2009 10:40 AM

"Microsoft subsidy bill" passes in WA state for children of H-1B visa holders

Posted by Sharon Chan

My Seattle Times colleague Lornet Turnbull wrote a story today about a "Microsoft subsidy bill" that the Washington state legislature passed granting in-state tuition rates for children of foreign professionals.

It was dubbed the Microsoft subsidy bill because most of the beneficiaries are children of Microsoft workers who came to Washington state under H-1B visas.

According to the story, the bill was passed during the state budget crisis, while higher education suffered hundreds of millions in cuts, and is projected to result in revenue loss to the University of Washington of $430,000 and to Washington State University of $215,000.

Click here for the full story.

Comments | Category: Employees , India , Legal issues , Microsoft , Public policy & issues , Recruiting |Permalink | Digg Digg | Newsvine Newsvine

June 15, 2009 5:05 PM

Microsoft files its first click fraud lawsuit

Posted by Sharon Chan

Microsoft is suing two brothers and their mother in Vancouver, B.C., for $750,000 after the company said the three engaged in online ad fraud to boost traffic to their auto insurance and World of Warcraft Web sites.

According to a civil case Microsoft filed Monday in the Western District of the U.S. District Court, Eric Lam, his brother Gordon Lam and their mother Melanie Suen used click fraud to increase their rankings on Microsoft's search engine Live Search.

Advertisers paid for placement on Microsoft's former search engine Live Search, now known as Bing. When a user entered a search term such as "auto insurance," advertisers bid for sponsored placement in the results. Each time a user clicks on an advertiser's link, the advertiser pays Microsoft. The cost per click ranges from five cents to hundreds of dollars depending on the desirability of the search term, according to court documents.

In click fraud, a person or computer program repeatedly clicks on a link without any interest in the Web site. It can be used to exhaust the ad budget of a competitor, and lower that site's placement in the rankings of the search results.

According to the court documents, the Lams and their mother engaged in click fraud in spring 2008 for advertisers who paid for placement for the search terms "auto insurance" and "WoW," short for the online game World of Warcraft. The Lams' Web site,, sold game gold that could be traded in the online game.

I am trying to get in touch with the Lams to get their comments.

Update 6:35 p.m.: Gordon Lam declined to comment on the story by phone.

Comments | Category: Advertising , Bing , Legal issues , Microsoft , Search |Permalink | Digg Digg | Newsvine Newsvine

June 12, 2009 10:01 AM

European Union says Microsoft needs to provide choice of browsers in Windows 7

Posted by Sharon Chan

To deal with European Union's antitrust concerns, Microsoft said Thursday it would ship Windows 7 in Europe without its Web browser Internet Explorer. Today, the European Union released a statement saying Microsoft is offering less choice, not more.

In its statement, the European Union said:

"... the Commission has suggested that consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all."

The comments are pointed at retail copies of Windows 7 that are sold separately from new PCs:

"As for retail sales, which amount to less than 5% of total sales, the Commission had suggested to Microsoft that consumers be provided with a choice of web browsers. Instead Microsoft has apparently decided to supply retail consumers with a version of Windows without a web browser at all. Rather than more choice, Microsoft seems to have chosen to provide less."

The European Union appeared more positive about removing the browser from copies of Windows 7 that computer makers install on new PCs:

"As for sales to computer manufacturers, Microsoft's proposal may potentially be more positive. It is noted that computer manufacturers would appear to be able to choose to install Internet Explorer -- which Microsoft will supply free of charge -- another browser or multiple browsers."

Here is our story today on Microsoft's move to sell Windows 7 in Europe without the browser. The European Union is expected to rule on whether Microsoft's tying of Internet Explorer to Windows since 1996 is anticompetitive.

Comments | Category: Internet Explorer , Legal issues , Microsoft , Web browsers |Permalink | Digg Digg | Newsvine Newsvine

April 20, 2009 2:54 PM

Lawsuit settled over death of Matthew Ammon, a Microsoft lawyer killed in a Bellevue crane collapse

Posted by Sharon Chan

bellevuecrane.jpgFrom our newsroom's courts reporter Ian Ith, two Seattle companies are expected to finalize a settlement with Matthew Ammon's parents. Ammon, a 31-year-old lawyer at Microsoft, was killed in his apartment in 2006 when a crane in Bellevue collapsed on his building. The settlement amount was not disclosed.

The lawsuit against Lease Crutcher Lewis and Magnusson Klemencic Associates was set to go to trial, with Ammon's parents arguing the crane had been negligently installed and operated. A 210-foot crane fell on the Pinnacle Bellecentre, Ammon's building, and Plaza 305.

Our columnist Danny Westneat had a great commentary on it in March before the settlement. This is what Ammon's mother, Kathy Gaberson, told Westneat:

"Sometimes I'll go by a tower crane, and I become paralyzed," she says. "I can't move. I can't talk. I'll get a visceral feeling, a physical pain in my body. I just wish someone had listened. I wish the very earliest warning signs had been heeded."

(Photo credit: Mike Siegel, The Seattle Times)

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March 30, 2009 11:38 AM

TomTom and Microsoft settle patent suits

Posted by Benjamin J. Romano

Microsoft sued portable GPS maker TomTom in February for patent infringement, raising the specter of a first Microsoft attempt to file suit over an implementation of the open source Linux operating system, which Microsoft has long claimed violated its patents. TomTom counter sued earlier this month.

Today, Microsoft announced that the companies have settled both suits through a "patent agreement under which TomTom will pay Microsoft for coverage under the eight car navigation and file management systems patents in the Microsoft case. Also as part of the agreement, Microsoft receives coverage under the four patents included in the TomTom countersuit. The agreement, which has a five-year term, does not require any payment by Microsoft to TomTom. It covers both past and future U.S. sales of the relevant products. The specific financial terms of the agreement were not disclosed."

Continue reading this post ...

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March 11, 2009 9:02 AM

Microsoft news roundup: Extension granted in EU case; Windows Mobile app store detailed; Man wants up to $1 million from airline that lost his Xbox 360

Posted by Benjamin J. Romano

The European Commission has given Microsoft another month to reply to the regulator's initial finding that the company violated European competition law. Specifically, the EC said the inclusion of Internet Explorer in Windows since 1996 was in violation. The EC investigated after a complaint by rival Web browser maker Opera Software. The new deadline for Microsoft to respond to the EC's "Statement of Objections," issued in January, is April 21 after the EC granted its request for an extension, according to this Bloomberg report.

Continue reading this post ...

Comments | Category: Games & entertainment , Internet Explorer , Legal issues , Mobile , News roundup |Permalink | Digg Digg | Newsvine Newsvine

March 4, 2009 5:04 PM

IE8 can be shut off in Windows 7, possibly squashing latest antitrust complaint as EC dials back monitoring of 2004 decision

Posted by Benjamin J. Romano

A couple of developments on the European regulatory front today. One new, one old.

In a development that could have an impact on the current European Commission antitrust action against Microsoft, a build of Windows 7 has a feature allowing users to "turn off" Internet Explorer 8. The blogger who spotted the capability gets right to the point: "I believe this fully squashes the case that the EU has against Microsoft?" The case in question responds to a complaint from browser-maker Opera, and since supported by Google and Firefox maker Mozilla. In January, the EC issued a "preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law."

Meanwhile, the EC, citing changes in Microsoft's behavior among other factors, no longer needs a full-time trustee to monitor the company's adherence to a 2004 decision finding that Microsoft had illegally withheld interoperability information and tied Windows Media Player to Windows. The EC announced today it would monitor the company's compliance through technical consultants on an ad hoc basis.

Comments | Category: Internet Explorer , Legal issues , Windows 7 |Permalink | Digg Digg | Newsvine Newsvine

February 25, 2009 2:13 PM

Microsoft suing portable GPS maker TomTom for patent infringement

Posted by Benjamin J. Romano

Microsoft today filed a patent infringement suit against TomTom, the Amsterdam-based maker of portable GPS systems for in-car navigation, after more than a year of trying to reach a licensing arrangement, the company said. A Microsoft spokeswoman described the infringed patents as covering "inventions that enable a vehicle computer system to run multiple applications, provide more natural driving directions, integrate other devices, and access the Internet."

[Update, 6:10 a.m. Thursday: A TomTom spokesman told Reuters, "We reject the claim and will vigorously defend ourselves."]

Continue reading this post ...

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February 25, 2009 10:50 AM

Microsoft news roundup: OEM exec says Windows 7 in September, October; Google wants to join EC antitrust proceedign against Microsoft; wrapping up TechFest

Posted by Benjamin J. Romano

"According to current planning, it should be late September or early October." That's what Ray Chen, president of a Tapei OEM, Compal Electronics, told Bloomberg about when Microsoft may begin shipping Windows 7. That would put it ahead of Microsoft's officially stated schedule, which has the new OS due by January 2010. But it would match some observers' expectations that Microsoft will have Windows 7 available in time for the 2009 holiday season.

Continue reading this post ...

Comments | Category: Google , Internet Explorer , Legal issues , Natural user interface , News roundup , Research , Search , Windows 7 |Permalink | Digg Digg | Newsvine Newsvine

February 18, 2009 2:48 PM

Split decision on major Vista Capable ruling; decertification of class action could bring case to a close

Posted by Benjamin J. Romano

U.S. District Court Judge Marsha Pechman issued a key ruling in the ongoing Vista Capable class action lawsuit that could bring the case to a close. She denied Microsoft's motion for summary judgment, but decertified the case as a class-action, according to Microsoft spokesman David Bowermaster. I'm reading the ruling now and will update this post ASAP.

Updated 3:30 p.m.: Pechman's 17-page opinion (PDF) lays out her reason for decertifying the class, which, as I understand it (and I'm not a lawyer) will make proceeding with the case untenable for the plaintiffs as individuals because legal costs are much greater than the amount any individual plaintiff may hope to recover from Microsoft. (I'm trying to contact attorneys for the plaintiffs and I'll update this with their comments when I do. Update, 5 p.m.: Jeffrey Thomas, a plaintiffs attorney, said of the ruling, "We're reviewing it and reviewing the options.")

Continue reading this post ...

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February 18, 2009 5:31 AM

Microsoft news roundup: Obama's antitrust nominee calls Microsoft 'so last century'; Google sued for starving 'nascent competition'

Posted by Benjamin J. Romano

President Barack Obama's nominee to head the antitrust division at the U.S. Department of Justice isn't interested in Microsoft, according to comments she made last summer. "For me, Microsoft is so last century. They are not the problem," Christine Varney said during a June 19 American Antitrust Institute panel discussion, according to Bloomberg. The U.S. economy will "continually see a problem -- potentially with Google" because it already "has acquired a monopoly in Internet online advertising," she said.

Continue reading this post ...

Comments | Category: Advertising , Google , Legal issues , Public policy & issues , Search |Permalink | Digg Digg | Newsvine Newsvine

February 13, 2009 6:51 AM

Microsoft sued over charge to downgrade Vista to XP

Posted by Benjamin J. Romano

With one major case challenging Microsoft's Windows marketing practices nearing a make-or-break juncture, another one was filed. A woman sued Microsoft in federal court in Seattle this week claiming that the company abused its monopoly power to force her to pay extra for a downgrade from Windows Vista to its predecessor, Windows XP.

Emma Alvarado bought a laptop from Lenovo on June 20, 2008, with Windows Vista Business preinstalled. She paid Lenovo "an additional $59.25 in order to 'downgrade' her operating system to Windows XP Professional." Alvarado is seeking class-action status. Here's a copy of her complaint, filed Wednesday: 13-page PDF.

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Comments | Category: Legal issues , Windows , Windows Vista |Permalink | Digg Digg | Newsvine Newsvine

January 21, 2009 3:01 PM

Plaintiffs' expert estimates cost to upgrade 'Vista Capable' PCs at $3 billion to $8.5 billion

Posted by Benjamin J. Romano

Keith Leffler, a University of Washington economics professor and expert witness for the plaintiffs suing Microsoft in the Vista Capable class action suit, was given the task of quantifying the impact of the Vista Capable program on PC prices and on Microsoft. In an exhibit unsealed today, Leffler summarizes his opinions and also estimates the cost of upgrading the 19.4 million PCs sold as "Vista Capable" between April 2006 and January 2007 to meet minimum requirements for running premium versions of the operating system. Leffler put the cost of adding more RAM and graphics cards to these machines in the range of $3.084 billion to $8.522 billion.

That figure could be important if the U.S. District Court Judge Marsha Pechman agrees with the plaintiffs and allows them to use an alternative means of calculating damages to people who purchased Vista Capable PCs -- if, of course, plaintiffs successfully argue that they were, in fact, deceived by the program.

Continue reading this post ...

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January 21, 2009 2:15 PM

Vista Capable class action approaches watershed moment

Posted by Benjamin J. Romano

Attorneys for Microsoft and the plaintiffs challenging its Windows Vista marketing program will go before U.S. District Court Judge Marsha Pechman Thursday morning with the entire case at stake. Pechman will hear oral arguments on two Microsoft motions to dismiss the case on summary judgment and to decertify the class.

Continue reading this post ...

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January 16, 2009 11:24 AM

European Commission, responding to Opera Software complaint, believes Microsoft violated competition law

Posted by Benjamin J. Romano

The European Commission notified Microsoft on Thursday of its "preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law." The notification came in a "Statement of Objections," which was not published by the EC. Microsoft itself announced the news because of its "disclosure requirements" in the U.S. The EC's antitrust investigation stems from a December 2007 complaint by Opera Software, maker of the Opera Web browser, which competes with Internet Explorer.

Continue reading this post ...

Comments | Category: Internet Explorer , Legal issues , Web browsers |Permalink | Digg Digg | Newsvine Newsvine

December 16, 2008 1:24 PM

Microsoft settles most remaining patent suits with Alcatel-Lucent

Posted by Benjamin J. Romano

According to Bloomberg, Microsoft and Alcatel-Lucent have settled six outstanding lawsuits over patents covering video and communications. Alcatel sued Microsoft for infringement of its patents in November 2006. Microsoft is still pursuing appeal of a $368 million verdict that Alcatel won this summer.

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November 20, 2008 4:24 PM

Microsoft seeks to bring Vista Capable class action suit to a swift end

Posted by Benjamin J. Romano

Microsoft this afternoon filed two motions seeking to boot the Windows Vista Capable class action lawsuit from court and decertify the class.

While the internal Microsoft e-mails revealed in the case have garnered headlines -- showing internal conflict over Vista marketing and hardware requirements, and the tricky balance Microsoft tried to strike among its PC industry partners -- the company's lawyers argue today that the plaintiffs' have failed to offer evidence that Microsoft violated the Consumer Protection Acts of Washington or other states.

Update, Friday morning: See this story from today's paper for more details.

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November 20, 2008 2:23 PM

Plaintiffs argue why Ballmer should be deposed in Vista Capable suit

Posted by Benjamin J. Romano

Another set of documents unsealed in the Windows Vista Capable class action lawsuit lays out the plaintiffs' arguments in favor of deposing Microsoft CEO Steve Ballmer, something the company has opposed on the grounds that he "has no unique personal knowledge of any facts at issue."

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November 18, 2008 7:08 AM

Vista Capable: E-mails tell story of tense Monday at Microsoft

Posted by Benjamin J. Romano

There are several interesting narratives to be found in the 252 pages of e-mail released last night in the Windows Vista Capable class action lawsuit unfolding in Seattle. Microsoft is accused of deceiving consumers who bought PCs in 2006 labeled "Vista Capable," but which could only run a basic version of the operating system.

The e-mails are interesting because they give an unvarnished look at how Microsoft worked with its most important partners on marketing for its most important product: Windows. Here is an excerpt from our story in today's paper:

Continue reading this post ...

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November 17, 2008 5:41 PM

Latest batch of documents in Vista Capable class action unsealed

Posted by Benjamin J. Romano

Plaintiffs in the ongoing Vista Capable class action suit today filed another large batch of unsealed internal Microsoft communications and documents in the case. We're going through them now.

These e-mails and other documents are, in part, the source material the plaintiffs are drawing on in their motion for partial summary judgment in the case. If they're anything like the earlier batches of unsealed documents in the case, there's sure to be interesting exchanges between Microsoft executives -- showing disagreement internally around the Vista Capable marketing program in late 2005 and early 2006 -- as well as communications with Microsoft's computer-maker partners.

Update, Tuesday morning: See this story for details from the e-mails of how executives debated whether to lower the standards for the Vista Capable marketing program to appease one of the company's most important partners, chip maker Intel, and once the decision was made, how the company scrambled to contain the fallout with other partners.

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November 13, 2008 4:00 PM

Unsealed docs from Vista Capable class-action suit detail exchanges between Microsoft, Intel

Posted by Benjamin J. Romano

U.S. District Court Judge Marsha Pechman unsealed several documents containing internal Microsoft and Intel e-mails, in the ongoing class action lawsuit against Microsoft over marketing of Windows Vista.

Update, Friday morning: For a more concise telling of what's in the documents, check out this story from today's paper.

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Comments | Category: Intel , Legal issues , Windows Vista |Permalink | Digg Digg | Newsvine Newsvine

November 5, 2008 9:08 AM

Will Microsoft jump in as Google scraps ad partnership with Yahoo?

Posted by Benjamin J. Romano

At 7 a.m. today, Google announced on its official blog that it was scrapping its partnership with Yahoo on search advertising:

"[A]fter four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement."

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October 20, 2008 9:01 PM

Microsoft highlights global anti-piracy effort

Posted by Benjamin J. Romano

Five years ago, Microsoft could not have trotted out examples of its wide-ranging anti-piracy efforts from 49 countries, as it's doing Tuesday. The announcements are a testament to the company's effort to build expertise and partnerships in a multi-front battle against piracy. But five years ago, global software piracy was less pervasive and less financially damaging than it is now.

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October 17, 2008 6:13 AM

Microsoft partners with law firms, Angelina Jolie to help illegal immigrant kids

Posted by Benjamin J. Romano

Microsoft and law firms in nine cities today launched an effort to help illegal immigrant children with legal representation.

My colleague Lornet Turnbull has a story on the effort, Kids in Need of Defense, in today's paper. An excerpt:

"Last year, about 8,000 illegal-immigrant children with no official adult supervision were processed in immigration court. They came from all over the world -- the majority from Central America -- some fleeing untold horror and abuse."

Continue reading this post ...

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October 16, 2008 7:03 AM

AP: Microsoft unit Fast Search raided by Norwegian economic crime police

Posted by Benjamin J. Romano

In May, reported on an accounting probe into Fast Search and Transfer, the enterprise search company Microsoft acquired in January. Today, a report out of Norway says authorities raided Fast's Oslo headquarters on "suspicion that it inflated revenue before it was bought up by Microsoft."

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October 15, 2008 3:00 PM

Microsoft, plaintiffs debate Vista graphics hardware requirements in class-action lawsuit

Posted by Benjamin J. Romano

Microsoft filed a flurry of motions and declarations late Tuesday in the Windows Vista Capable class action lawsuit countering the plaintiffs' request for a summary judgment on the issue of whether PCs sold in late 2006 and early 2007 with less powerful graphics drivers were actually "Windows Vista Capable," as they were labeled through a Microsoft marketing program.

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October 9, 2008 12:42 PM

Has Microsoft removed 'No Walls' phrase from Windows site after complaint?

Posted by Benjamin J. Romano

Commenter Marc Sofer points out that the phrase "No Walls" appears to be gone from the main Web page for Microsoft's big Windows ad campaign. Recall that in late September, shortly after Microsoft's new wave of ads featuring the tag line "Windows: Life Without Walls" hit the street, the Israeli cloud-based operating system company raised a stink, saying the Windows campaign stepped on their pending trademark, "No Walls." In addition to the "Life Without Walls" tag line, the Windows campaign Web site featured the "Imagine no Walls" line.

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October 8, 2008 6:28 AM

Microsoft sticks its nose in WaMu bankruptcy

Posted by Benjamin J. Romano

Microsoft asked a Delaware court handling Washington Mutual's bankruptcy to keep it apprised of proceedings in the case, but the software company's filing Tuesday did not specify why.

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October 2, 2008 7:20 AM

Update: 'Vista Capable' class-action suit against Microsoft moves forward

Posted by Benjamin J. Romano

Things in the class-action lawsuit challenging Microsoft's marketing of Vista are heating up.

Attorneys for the plaintiffs filed a motion for partial summary judgment last week, backed by a sheaf of sealed exhibits. Now the ball is in Microsoft's court to prove to the judge why the documents, designated "confidential," should remain sealed. Included are documents from Microsoft, Intel and an attorney for Sony.

Previous discovery in this case has been damaging to Microsoft. E-mails that came out in the class certification process outlined an internal debate about Vista's marketing and readiness for certain types of hardware.

Some background:

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September 25, 2008 11:20 AM

Legal roundup: Microsoft off the hook (again) in $1.5 billion patent infringement case; makes progress on U.S. antitrust front

Posted by Benjamin J. Romano

The U.S. Court of Appeals for the Federal Circuit ruled in Microsoft's favor on an appeal of a $1.5 billion patent infringement damage award. At issue were two digital music patents owned by Alcatel-Lucent, but originally granted to Fraunhofer Gesellschaft, a German company.

Meanwhile, Microsoft and its antitrust minders made progress in a regular status conference on their extended settlement.

Back to Alcatel-Lucent: After getting slapped with an eye-popping (and record-setting) $1.52 billion jury award in February 2007, Microsoft had asked U.S. District Court Judge Rudi Brewster to reverse the original verdict, order a new trial or dramatically reduce the damage award.

Brewster ruled in August 2007 that Windows Media Player does not infringe on one of the patents, and Microsoft had properly paid Fraunhofer to license the other one. Paris-based Alcatel-Lucent appealed Brewster's reversal, which was upheld today by the U.S. Court of Appeals for the Federal Circuit. See coverage from Reuters.

On the antitrust front, attorneys for Microsoft and the state and federal governments involved in the settlement met this morning in Courtroom 28A for a regularly scheduled quarterly status conference before U.S. District Court Judge Colleen Kollar-Kotelly.

They tackled an important, albeit boring, issue that has been nagging the parties for years: technical documentation of complex communications protocols needed to help non-Windows servers work with Windows computers as well as Windows servers do. By holding back that information, Microsoft illegally leveraged its Windows monopoly to gain power in an adjacent market. This documentation is a central piece of the antitrust remedy.

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September 15, 2008 10:44 AM

Fascinating account of 'The Game,' an adventure race organized by Microsoft execs, sheds light on tech culture

Posted by Benjamin J. Romano

Jonathan Martin writes in The Seattle Times' Pacific Magazine about an adventure scavenger hunt called The Game. The story is a must read for anyone interested in learning more about the mindset of high-achieving smart guys at companies like Microsoft.

Martin's story focuses on one particular running of the annual event in 2002, organized by Joe Belfiore, an 18-year company veteran and currently corporate vice president in charge of the company's Media Center line. He had been putting on these events since high school.

The Game, Martin writes, is meant to be the "ultimate test for the Renaissance man or woman. Or just a really good excuse to turn off your Blackberry, forget work, ignore spouses and have a hell-raising good time."

But the 2002 running ended with a tragic accident that left a participant paralyzed.

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September 9, 2008 1:43 PM

WSJ: Justice girding for possible battle with Google

Posted by Benjamin J. Romano

Antitrust scrutiny of the Google-Yahoo search advertising deal is heating up. The Wall Street Journal reported online Monday afternoon that the Department of Justice has hired a top-notch litigator, possibly in preparation for an antitrust battle with the Internet search giant.

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August 13, 2008 11:19 AM

Microsoft acquisition target DATAllegro sued for patent infringement

Posted by Benjamin J. Romano

A former co-worker of the CEO and founder of DATAllegro -- a high-end data warehousing company Microsoft is acquiring -- is suing the company for patent infringement.

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July 18, 2008 3:02 PM

Former Microsoft employee gets 22 months for fraud scheme

Posted by Benjamin J. Romano

Seattle Times business reporter Isaac Arnsdorf filed this dispatch on the sentencing today of Carolyn M. Gudmundson:

Carolyn M. Gudmundson, the former Microsoft employee who pleaded guilty in January to embezzling about $1 million, was sentenced in federal court today to 22 months in prison.

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July 15, 2008 7:44 AM

Morning news roundup

Posted by Benjamin J. Romano

LOS ANGELES -- I'll be covering the E3 press conferences of Nintendo and Sony - Microsoft's competitors in the game console business - beginning this morning at 9 and 11:30 a.m., respectively. Meanwhile, here's today's story summarizing Microsoft's games and entertainment announcements from Monday. You can see all of my posts from E3 here.

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June 19, 2008 9:22 AM

Chinese official says earlier report wrong, no antitrust probe of Microsoft

Posted by Benjamin J. Romano

Yesterday's Agence France-Presse report on a Chinese antitrust investigation into Microsoft and other foreign software companies is being refuted today. AFP itself reported that the China State Intellectual Property Office issued the following statement: "We have never carried out investigations on suspected market monopoly against enterprises, and currently we do not have any plans for this type of work either."

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June 18, 2008 8:33 AM

AFP: China conducting anti-monopoly probe of Microsoft

Posted by Benjamin J. Romano

Chinese regulators confirmed an antitrust probe of Microsoft and other software companies, according to an Agence France-Presse report this morning. Updated, 4:55 p.m. with the full Microsoft statement. Updated, Thursday morning: Officials from the same Chinese agency quoted in the AFP story are now saying there is no antitrust probe. Please see this post for an update.

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May 29, 2008 3:10 PM

Microsoft acquisition Fast Search is subject of criminal probe in Norway

Posted by Benjamin J. Romano is reporting today on an escalating probe into account irregularities at Fast Search & Transfer, which Microsoft acquired for $1.2 billion.

Update, 4:55 p.m.: Microsoft is taking the matter seriously. See a statement added after the jump.

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May 9, 2008 11:55 AM

Microsoft appealing record EU antitrust fine

Posted by Benjamin J. Romano

In a curt statement, Microsoft said Friday it is appealing the 899 million Euro ($1.3 billion) antitrust fine leveled by the European Union. "We are filing this appeal in a constructive effort to seek clarity from the Court. We will not be saying anything further," the company stated.

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April 21, 2008 10:55 AM

Ninth Circuit declines to hear Microsoft appeal in 'Vista Capable' suit

Posted by Benjamin J. Romano

That's the early word from lawyers representing the plaintiffs in the suit. Remember, Microsoft was seeking to appeal the judge's class certification in the suit. With the Ninth Circuit Court of Appeals declining to take up the case, it should proceed in U.S. District Court.

More to come on this as it develops.

Update, 12 p.m.: Plaintiffs' attorney Jeffrey Thomas said by phone that his side is pleased with the Ninth Circuit's decision and "we're looking forward to proceeding with discovery."

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April 11, 2008 8:13 AM

Microsoft wants 'self-regulation' of consumer privacy in online advertising

Posted by Benjamin J. Romano

In the midst of the maelstrom of online deals rumored to be in the works, Microsoft proposed a major plan for companies to self-regulate consumer privacy practices.

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April 4, 2008 10:11 AM

Judge's order halts action in 'Vista Capable' lawsuit

Posted by Benjamin J. Romano

Last night, U.S. District Court Judge Marsha Pechman granted Microsoft's request to halt proceedings in the "Vista Capable" class action lawsuit pending results from the company's appeal to the Ninth Circuit Court of Appeals. More details coming...

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April 2, 2008 12:18 PM

Symantec, Microsoft agree to drop suit over trade secrets, Vista

Posted by Benjamin J. Romano

Nearly two years ago, Symantec sued Microsoft, alleging a host of business misdeeds. Today, a judge in Seattle granted the companies' joint request to dismiss the suit.

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March 28, 2008 12:05 PM

Microsoft in China, then and now

Posted by Benjamin J. Romano

There are a couple of interesting articles out today about Microsoft's relationship with China, past and future.

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March 27, 2008 6:23 PM

One-time pundit on Microsoft antitrust case to head FTC

Posted by Benjamin J. Romano

A prominent pundit and legal expert during the historic Microsoft antitrust trial, William Kovacic, was named chairman of the Federal Trade Commission.

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March 7, 2008 11:55 AM

Microsoft appealing class-action status in Vista Capable suit

Posted by Benjamin J. Romano

Microsoft is appealing U.S. District Court Judge Marsha Pechman's Feb. 22 decision to certify a class-action lawsuit challenging Microsoft's "Vista Capable" marketing program as deceptive.

In a motion filed Thursday, Microsoft's attorneys argue that Pechman's ruling raises "important legal questions ... which have significance far beyond this case." Microsoft is asking the Ninth Circuit Court of Appeals to immediately review the ruling and asking Pechman to delay further proceedings in the Vista Capable suit until it does.

From Microsoft's motion (18-page PDF):

"If the Court of Appeals answers those questions in Microsoft's favor, this case will not proceed as a class action; if the Court of Appeals resolves these questions in plaintiffs favor, it will lay these threshold legal questions to rest. Either result will allow the parties to approach this action with full information about Microsoft's potential exposure to class-wide damages."

Bloomberg first reported this development.

Update, 12:20: Microsoft's attorneys listed several ways the company would be hurt if the proceedings continued with the case continues with the class-certification appeal unresolved.

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February 27, 2008 7:34 AM

In the bad timing category: EU fine rains on Microsoft launch parade

Posted by Benjamin J. Romano

The reports from Europe are probably echoing around the Los Angeles Convention Center, where Microsoft's "Heroes Happen Here" launch event is scheduled to get going this morning. Despite his best efforts to make peace with Neelie Kroes, the European competition commissioner who announced $1.3 billion in fines against the company, Microsoft CEO Steve Ballmer's launch of three big products later today will be overshadowed by the European regulator.

Ballmer is set to give a keynote speech extolling the virtues of Windows Server 2008, SQL Server 2008 and Visual Studio 2008. Check out today's story for more on what these products, particularly Server 2008, mean for the company and the market. I wonder if he will make reference to the fines -- and whether Microsoft will appeal them. I doubt it. I imagine this is particularly frustrating for Microsoft, especially given its effort last week to position itself and its products as even more open and interoperable -- an announcement that was greeted with a skeptical statement by Kroes even as Microsoft executives were still holding a press conference.

I also wonder whether the fines were announced now with Kroes knowing that Microsoft was trotting out major products. Here's her press release.

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February 22, 2008 5:38 PM

Judge certifies class-action lawsuit against Microsoft for 'Vista Capable' program

Posted by Benjamin J. Romano

Late today, a federal judge in Seattle approved a class-action lawsuit challenging Microsoft's "Vista Capable" marketing program as deceptive. U.S. District Court Judge Marsha Pechman also ruled that Washington law will govern the case.

The plaintiffs' complaint stems from Microsoft's efforts to prop up PC demand after Windows Vista's release was delayed, missing the 2006 holidays -- a key sales period for consumer PCs.

Their allegation is that "a large number of the PCs certified as 'Windows Vista Capable' can only operate 'Vista Home Basic,' which does not include any of the enhanced features unique to Vista and which make Vista attractive to customers," according to Pechman's order (PDF, 25 pages). "In addition, in October 2006, Microsoft offered PC customers an 'Express Upgrade Guarantee Program,' which purportedly allowed consumers purchasing 'Windows Vista Capable' PCs to receive upgrades to Vista for little or no cost. In fact, plaintiffs allege, the upgrade for many of these customers is only to Vista Home Basic."

They say that the "real" Vista -- based on the company's marketing -- is the "Premium" version of the operating system, with features such as the Aero user interface. Microsoft says it described the different features of all four versions of the operating system it released. The other three are "Basic," "Business" and "Ultimate."

Microsoft also argued that some PCs carried a "Premium Ready" sticker to indicate that they had the necessary hardware to run the Premium version, and that the Basic version still represents an upgrade from Windows XP.

Pechman limited the scope of the class and the arguments that plaintiffs can make as the case goes forward. Some of those restrictions:

-- The class can't pursue injuries from participation in the "Express Upgrade" program "unless they amend their complaint to add a named plaintiff who participated in the program."

-- Plaintiffs can't rely on the legal theory that Microsoft's "deceptive advertising induced consumers to purchase PCs that they would not have otherwise purchased."

-- They may, however, pursue a " 'price inflation' theory, i.e. that plaintiffs paid more than they would have for their PCs had Microsoft's 'Windows Vista Capable' marketing campaign not created artificial demand for and/or increased prices of PCs only capable of running Vista Home Basic."

Here's Pechman's official class certification language:

"All persons and entities residing in the United States who purchased a personal computer certified by Microsoft as 'Windows Vista Capable' and not also bearing the 'Premium Ready' designation.

"Excluded from this class are: (a) Defendant, any entity in which defendant has a controlling interest or which has a controlling interest in defendant; (b) Defendant's employees, agents, predecessors, successors or assigns; and (c) the judge and staff to whom this case is assigned, and any member of the judge's immediate family."

Microsoft spokesman Jack Evans issued a statement shortly after the order was issued:

"We are currently reviewing the court's ruling. We believe the facts will show that Microsoft offered different versions of Windows Vista, including Windows Vista Home Basic, to meet the varied needs of our customers purchasing computers at different price points."

Here's a story from last April, when the suit was filed, and another from August, when the judge declined to dismiss the suit.

The Seattle law firm Gordon Murray Tilden is representing the plaintiffs.

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January 29, 2008 4:15 PM

Judge extends Microsoft antitrust oversight to 2009

Posted by Benjamin J. Romano

U.S. District Court Judge Colleen Kollar-Kotelly today decided to extend judicial oversight of Microsoft until Nov. 12, 2009. Most terms of the company's landmark 2001 settlement with state and federal governments were set to expire in November 2007. That expiration date was extended until Jan. 31 as Kollar-Kotelly considered motions from most of the states to extend oversight by five years, which Microsoft and the U.S. Department of Justice opposed. Her decision today splits the difference.

More to come shortly.

Update, 5:05 p.m.: Brad Smith, Microsoft's general counsel, has issued a statement:

"We will continue to comply fully with the consent decree. We are gratified that the court recognized our extensive efforts to work cooperatively with the large number of government agencies involved. We built Windows Vista in compliance with these rules, and we will continue to adhere to the decree's requirements."

Kollar-Kotelly issued a 78-page opinion (PDF) and, mercifully, a six-page executive summary (also PDF) "to assist the public in understanding the Court's ruling". She notes "that this is a very complex and unprecedented case and that this summary, by necessity, simplifies the issues."

Kollar-Kotelly based her decision to extend the bulk of the consent decree, also called the final judgments, on "the extreme and unforeseen delay in the availability of complete, accurate, and useable technical documentation relating to the Communications Protocols". These are the links that allow Microsoft's desktop software to interact with its server software, which Microsoft must make available to competitors. The parties already agreed to extend this portion of the consent decree until 2009.

That delay, in Kollar-Kotelly ruled, "constitutes changed circumstances, which have prevented the Final Judgments from achieving their principal objectives. ... The Court's extension should not be viewed as a sanction against Microsoft, but rather as a means to allow the respective provisions of the Final Judgments the opportunity to operate together towards maximizing" the potential of the communications protocols provision to foster competition.

Update, Wednesday: Here's a link to today's story on the ruling.

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January 14, 2008 10:58 AM

2007 patent leaders

Posted by Benjamin J. Romano

U.S. patent database producer IFI Patent Intelligence today released a ranking of the top patent recipients in 2007. Microsoft ranked sixth, with 1,637 patents received last year, up 12 percent from 2006. Microsoft was one of a handful of companies -- the minority of the top 25 -- to increase the number it received.

The U.S. Patent and Trademark Office issued 157,284 "utility patents" last year, down 9.5 percent from 2006, which was a record year.

Here's the top 10 list:

IBM, 3,148

Samsung, 2,725

Canon, 1,987

Panasonic, 1,941

Intel, 1,865

Microsoft, 1,637

Toshiba, 1,549

Sony, 1,481

Micron Technology, 1,476

Hewlett-Packard, 1,470

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January 14, 2008 7:22 AM

EU round two: Commission probing Microsoft conduct on new issues

Posted by Benjamin J. Romano

Four months after winning a major antitrust case against Microsoft on appeal, the European Commission is again coming after the Redmond software giant. The EC is launching a probe of Microsoft looking at whether the company illegally tied its Internet Explorer Web browser to the dominant Windows operating system, among other issues.

See coverage from Reuters, and The Associated Press.

The Web browser bundling inquiry stems from a complaint raised in December by the Oslo, Norway,-based Opera, which makes a Web browser by that name. At the time the complaint was raised, Microsoft said, "We will, of course, cooperate with any inquiries into these issues, but we believe the inclusion of the browser into the operating system benefits consumers, and that consumers and PC manufacturers already are free to choose any browsers they wish."

This latest salvo from the EC is not surprising, especially given EC Competition Commissioner Neelie Kroes' comments last fall after winning her first case against the company, which centered on communications protocols allowing server software to interact with the Windows operating system for desktops. Bundling of another product, Windows Media Player, with the operating system, was also at issue. More on that after the jump.

Update, 9:55: Microsoft has issued a statement: "We will cooperate fully with the Commission's investigation and provide any and all information necessary. We are committed to ensuring that Microsoft is in full compliance with European law and our obligations as established by the European Court of First Instance in its September 2007 ruling."

Also, here's a link to the European Commission's press release.

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January 4, 2008 3:36 PM

Xbox Live holiday outages prompts class action lawsuit

Posted by Benjamin J. Romano

Microsoft's Xbox Live network suffered some outages over the holidays, and the company yesterday offered subscribers a free arcade download as an apology. But that wasn't enough for three Texans, who this afternoon filed a class action lawsuit against the company, alleging breach of contract.

The complaint describes the December outages -- chronicled on blogs and elsewhere -- that kept people from "accessing online play for several weeks. ... Xbox Live continues to deny subscribers access and has even issued apologies for their failure to correct server problems."

Interruptions in play kicked "many Plaintiffs offline" and "displayed messages such as 'Server Error.' " Others could not get online or use match making and account recovery features "despite paying for these services in their yearly subscription dues. Many Plaintiffs purchased new subscriptions specifically to play online during the holidays."

The complaint alleges that Microsoft knew increased holiday Xbox sales would lead to a bump in Xbox Live subscriptions and game-play on its servers, but the company "failed to provide adequate access and service to XBOX Live and its subscribers."

The outages in December, the plaintiffs allege, constitute a breach of the Xbox Live subscription contract. Xbox Live users pay $30 to $50 a year for access to the gaming network.

Here's a nine-page PDF of the complaint. I've asked Microsoft to comment.

Update, 5 p.m.: Via email from a Microsoft spokesman: "Microsoft only recently learned of the lawsuit, so we are not in a position to comment at this time."

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January 4, 2008 9:42 AM

Antitrust suit alleges iTunes dominance hurting consumers

Posted by Benjamin J. Romano

InformationWeek broke the story of the antitrust lawsuit against Apple, filed New Year's Eve Day in federal court in San Jose, Calif.

In a 24-page complaint (PDF) plaintiff Stacie Somers -- a San Diego County woman who bought a 30-gigabyte iPod from Target in fall of 2005, backed by a group of big-shot antitrust attorneys -- states that Apple's iTunes online music and video store dominates the market with "approximately" 83 percent of the music market and "at least" 75 percent of the video market. It puts Apple's market share among digital music players at "more than" 90 percent for hard-drive based players and "approximately" 70 percent of the flash memory segment.

The plaintiff is seeking class-action status for the lawsuit.

Here's what the plaintiff alleges Apple is doing wrong with all that market dominance:

"Apple has engaged in tying and monopolizing behavior, placing unneeded and unjustifiable technological restrictions on its most popular products in an effort to restrict consumer choice, and to restrain what little remains of its competition in the digital music markets. Apple's CEO Steve Jobs has himself compared Apple's digital music dominance to Microsoft's computer operating system dominance, calling Apple's Music Store 'the Microsoft of music stores' in a meeting with financial analysts.

"Apple has repeatedly acted to foreclose even the possibility of competition by using its market power to force consumers to choose its products based not on their merits, but on the fact that technological restrictions and incompatibilities prevent them from buying its competitors' products."

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December 28, 2007 4:27 PM

Microsoft says states didn't offer enough evidence for continued oversight

Posted by Benjamin J. Romano

Just as we were about to slip off for another holiday weekend, a bit of predictable news on the Microsoft antitrust front: The company today filed a motion countering the states' arguments earlier this month that more provisions of the U.S. antitrust settlement -- already in overtime -- should be extended for another five years.

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December 26, 2007 11:21 AM

AAPL touches $200; FSJ shutdown drama

Posted by Benjamin J. Romano

I know a guy who bought Apple stock about 18 months ago, back when it was still trading in the double-digits. Happy Boxing Day to him. Meanwhile, Daniel Lyons is one guy in need of some eggnog therapy this holiday.

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October 31, 2007 1:15 PM

Merrill Lynch may subpoena Microsoft over identity of racist emailer

Posted by Benjamin J. Romano

Brokerage giant Merrill Lynch is going after someone who has sent racist e-mails to black Wall Street brokers and Al Sharpton posing as a Merrill manager.

According to coverage by The Associated Press and Dow Jones, the company filed suit in U.S. District Court in Manhattan late yesterday seeking to identify and stop the sender, who is using a Microsoft Hotmail -- now Windows Live Hotmail -- e-mail account.

Merrill Lynch thinks the defendant, identified in the suit as "John Doe," is somewhere in the Midwest.

"The offensive e-mails were sent to a number of our employees by an anonymous sender," Merrill Lynch spokesman Mark Herr said in an e-mailed statement. "We have sued the anonymous sender and will move to subpoena both the ISP and Microsoft Hotmail for information that would reveal the identity of the sender."

I've asked Microsoft for a response.

Update: "Microsoft opposes discrimination in any form and will take swift action when it learns its products or services are being used in an abusive or harmful manner," reads a statement from David Bowermaster, a Microsoft senior public relations manager. "In taking such action, Microsoft maintains its commitment to protecting the privacy of its customers. Microsoft complies with properly issued and served subpoenas, search warrants and court orders."

(Bowermaster was formerly a reporter for The Seattle Times.)

Privacy is a huge issue for Microsoft and other providers of online services such as e-mail and instant messaging. It's recently been raised as in issue around targeted online advertising.

Here are some key passages from Microsoft's Online Privacy statement, updated most recently this month:

"Except as described in this statement, we will not disclose your personal information outside of Microsoft and its controlled subsidiaries and affiliates without your consent. ... We may access and/or disclose your personal information if we believe such action is necessary to: (a) comply with the law or legal process served on Microsoft; (b) protect and defend the rights or property of Microsoft (including the enforcement of our agreements); or (c) act in urgent circumstances to protect the personal safety of users of Microsoft services or members of the public." (Emphasis added.)

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October 30, 2007 1:44 PM

Judge taking extra time to mull extension of Microsoft oversight

Posted by Benjamin J. Romano

The landmark antitrust case against Microsoft will plod along for at least another three months so the parties will have enough time fully argue whether it should be extended for five years.

The re-jiggering of the schedule comes after most of the states involved in the case filed motions earlier this month asking U.S. District Court Judge Colleen Kollar-Kotelly to extend oversight of the company by five years. Most of the important pieces of the settlement were due to expire Nov. 12, but the states argued that the 2002 antitrust settlement agreement is only just beginning to foster competition and needs more time to work.

In a joint motion filed today the states and Microsoft asked for an extension to no later than Jan. 31, 2008, "solely for procedural purposes to allow the parties to brief, and the court to consider, the motions."

The filing also lays out a schedule for Microsoft and the Department of Justice to respond to the states' motions to extend. Microsoft's argument in opposition is due Nov. 6, and the DOJ, which said in a filing earlier this month that it opposes extending the settlement, has until Nov. 9 to make its arguments.

The states would file counter-arguments by Nov. 16, and Kollar-Kotelly will determine whether another hearing is needed.

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October 19, 2007 1:21 PM

More states call for extension of antitrust oversight of Microsoft

Posted by Benjamin J. Romano

New York, Maryland, Louisiana and Florida have joined the California group of states in calling for an extension of judicial oversight of Microsoft.

In a motion filed Thursday in the court overseeing the landmark antitrust settlement, the states write:

An extension is appropriate to assure that marketplace participants have sufficient opportunity to establish positions to compete against Microsoft, an entrenched monopolist. Indeed, experience since entry of the Court's decree in 2002 refutes the central assumption that supported departure from the 10-year term typical of antitrust remedial decrees -- that the industry section was characterized by rapid change. Just the opposite: Microsoft's Windows monopoly is indisputably resilient.

The motion for an extension by New York, Maryland, Louisiana and Florida is notable because they agreed with the Department of Justice's assessment in August that the consent decree had been successful. Thursday's filing (PDF, 9 pages) addresses that point, noting that in the August review, the New York group wrote "that the Final Judgments have begun to foster competitive conditions among middleware products, and more generally in the delivery of web-based applications and services. ... However, the process envisioned by the Final Judgments is far from complete. The inescapable fact remains that, at the client operating system level, Microsoft has a 90%+ market share."

Thursday's filing also provides a score card of sorts on where each of the states stands on extension of judicial oversight.

Of the 17 states plus the District of Columbia, 11 support extension; three have no objection to an extension; three have not taken a position on the matter; and one, Wisconsin, does not join the motion for extension.

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October 17, 2007 1:54 PM

States seek to extend judicial oversight of Microsoft

Posted by Benjamin J. Romano

On Tuesday, California, Connecticut, Iowa, Kansas, Minnesota, the Commonwealth of Massachusetts and the District of Columbia formally asked the judge overseeing the soon-to-expire antitrust settlement between Microsoft and state and federal governments to extend it for five years.

Major provisions of the settlement are due to expire Nov. 12, while some other provisions around technical documentation have already been extended for two years. The filing (26-page PDF) cites "continuing problems" with the availability of documentation, and how the lack of documentation has hampered competitors ability to benefit from the settlement.

The main focus is on the portions of the settlement regarding middleware -- software that runs on top of the operating system, such as media players and Web browsers. The states say these provisions need more time to work.

The settlement "has yet to pry open the OEM channel of distribution to competitive browsers, because no major OEM currently distributes a browser other than Microsoft's Internet Explorer (IE)," the California group of states wrote.

That's important because:

"Many new middleware technologies are just now appearing that may, in the near
future, pose a competitive threat to Microsoft's operating system monopoly.
These technologies substantially depend upon the browser. Because Microsoft
still retains control of the OEM channel for browser distribution, in part because
its illegal conduct with respect to IE has not yet been fully remedied, it is critical
that [the middleware provisions] be continued until these technologies mature."

The filing Tuesday followed a request the states made at a hearing in Judge Colleen Kollar-Kotelly's courtroom in September to extend oversight.

That request followed conflicting reports from the various government parties to the settlement on its effectiveness.

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September 17, 2007 2:24 AM

Microsoft to study ruling before deciding on appeal

Posted by Benjamin J. Romano

In a brief press conference with reporters outside the Luxembourg court room where Microsoft was handed a defeat in Europe today, General Counsel Brad Smith said the company still has to evaluate the ruling before deciding whether to exhaust its last avenue of appeal.

"I think we need to read the decision before we make any kind of decisions," Smith told a scrum of reporters. "I believe in these kinds of things that although there's a lot of drama, one needs to step back and read first, think second and decide third ... and that is the order in which we're going to take things."

A video of his remarks can be found here (.wmv file).

Smith acknowledged that the Court of First Instance agreed with the European Commission on the most important points in the case.

He struck a conciliatory tone, recommitting Microsoft to compliance with the European competition laws it violated.

"It's clearly very important for us as a company that we comply with our obligations under European law," Smith said. "We'll study this decision carefully and if there are additional steps that we need to take in order to comply with it, we will take them. It will take us a little bit of time, at least over the next few hours, to read the decision carefully, but certainly that is one of our strongest convictions as we go forward."

He recounted efforts Microsoft has made to ensure that Windows Vista, the latest version of the operating system software in which it has a monopoly, did not run afoul of the European Commission's 2004 decision, which has now been upheld by Europe's second-highest court.

Smith said Microsoft is "gratified" that it was able to have "constructive discussions with the European Commission last year that enabled us to bring to market Windows Vista in conformity with the Commission's 2004 decision."

Smith reflected on what has transpired since the European Commission started its investigation into Microsoft's business practices in 1998:

"The world has changed. The industry has changed and our company has changed. We sought to underscore that over a year ago when we published what we describe as our Windows Principles, principles intended to ensure that future versions of Windows, starting with Windows Vista, would comport not only with U.S. law, but with the principles that are applicable here in Europe as well.
"We've sought to be open and transparent and we've sought to strengthen our ties with the rest of our industry. Indeed it's notable, that just last week we announced a new agreement with Sun Microsystems and the week before that we announced a new agreement with Novell -- two of the companies that started out on the other side of this case almost nine years ago."

Smith said one constant is the company's commitment to Europe. He said when the case started, Microsoft offered Windows in 24 European languages; today it is available in 41. In 1998, the company had 3,900 employees on the continent. Today it has 13,000. Its research and development investment has also ballooned during the past decade from $3 million in 1998 to nearly $500 million now.

Smith is expected to hold a formal press conference at 5:30 a.m., Redmond time, with reporters from around the world. Check back here afterwards for updates.

Meanwhile, European Commission officials applauded the court's decision.

"This judgment confirms the objectivity and the cerdibility odf the Commission's competition policy," Commission President Jose Manuel Barroso said in a statement, according to Reuters.

EC Competition Commissioner Neelie Kroes, viewed as a driving force behind the Microsoft case, suggested the decision could have implications for other companies, particularly those in high tech.

"The court has upheld a landmark commission decision to give consumers more choice in software markets. That decision sets an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high tech industries," Kroes said, according to a report by Dow Jones.

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September 17, 2007 12:45 AM

European court upholds decision against Microsoft

Posted by Benjamin J. Romano

The Court of First Instance just issued its highly anticipated ruling on Microsoft's appeal of a March 2004 decision by the European Commission to sanction and fine the company for abusing its monopoly in PC operating systems. The decision is relatively straightforward, but, as expected, it's still nuanced, as indicated by the headline on this news release the court issued shortly after delivering its brief decision this morning (PDF, five pages):


However, the Court has annulled certain parts of the decision relating to the appointment of a monitoring trustee, which have no legal basis in Community law

On March 24, 2004, the European Commission completed a five-year inquiry and found that Microsoft's Windows operating system "broke European Union competition law by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players." Here's the EC's news release from that time.

The company was given six months to make available to competitors "the interfaces required for their products to be able to 'talk' with the ubiquitous Windows OS," also described as "interoperability information." The company was also ordered to offer European consumers an unbundled version of Windows without Windows Media Player built in. Microsoft was also fined an eye-popping 497 million euros, or $613 million.

The European Commission also called for the apointment of a monitoring trustee to assist it in monitoring Microsoft's adherence to the decision. According to the Court of First Instance's statement today, "He was to have access to Microsoft's assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products. All the costs associated with the monitoring trustee, including his remuneration, were to be borne by Microsoft."

In June 2004, Microsoft challenged the EC's decision and the fine before the Court of First Instance, one step below the highest judicial authority in Europe. Today's ruling is the outcome of that appeal.

On the question of interoperability information, the court found that the EC correctly determined that Microsoft's refusal to share that information resulted in an abuse of its dominant position in the operating system market.

Also, the court found that the "degree" of interoperability between Windows and server software sought by the EC was "well founded" and the remedy it imposed -- forcing Microsoft to "disclose the 'specifications' of its client/server and server/server communication protocols to any undertaking wishing to develop and distribute work group server operating systems" -- was appropriate.

Further, the court rejected "Microsoft's claims that the degree of interoperability required by the Commission is intended in reality to enable competing work group server operating systems to function in every respect like a Windows system and, accordingly, to enable Microsoft's competitors to clone or reproduce its products."

The court concluded, "The absence of such interoperability has the effect of reinforcing Microsoft's competitive position on the market and creates a risk that competition will be eliminated."

On the question of bundling Windows Media Player into the Windows operating system, the court agreed with the EC's decision that the two products were tied together, to the detriment of consumer choice, and upheld the remedy requiring Microsoft to offer a version of Windows without the player.

The court noted that "independent companies, like [Seattle-based] RealNetworks, ... design and supply competing [media player] products independently of operating systems." This was one of several ways the court determined that Windows Media Player and Windows are in fact seperate products -- a precursor to the finding that they were illegally tied together.

RealNetworks, which settled with Microsoft on the question of bundling two years ago, applauded the court's decision. "The standards affirmed by the European Court should help ensure fair competition for all Windows application developers," Real's General Counsel Bob Kimball said in a statement this morning.

The hefty fine was upheld. The court determined that the EC "did not err in assessing the gravity and duration of the infringement and did not err in setting the amount of the fine."

Finally, on the question of the monitoring trustee, the court found that the EC's creation of such a position -- with its own "powers of investigation and capable of being called upon to act by third parties" -- went "far beyond" merely seeking an outside expert to help with its investigation and monitoring of Microsoft. It struck down the creation of the monitoring trustee position.

Decisions of the Court of First Instance can be appealed to the brought before the Court of Justice of the European Communities, the highest court in Europe. Microsoft would have two months from today to decide to appeal.

As of 1:50 a.m., Redmond time, the company's General Counsel Brad Smith, who was in the Luxembourg court room to hear the decision, had not yet issued a statement on the ruling. He is expected to hold a press conference later this morning.

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September 4, 2007 10:05 AM

iPhones for sale in China, but no bargain

Posted by Kristi Heim

When the hottest electronics gadget in years meets the world's biggest producer of counterfeit goods, it just seemed inevitable that fake iPhones would spawn.

What's surprising is that some unauthorized iPhones sold in electronics markets in China's biggest cities, according to a Chinese news story, are actually more than double the price. It's not clear to me whether the iPhones in question are real or copies. The phones are manufactured for Apple by Hon Hai Precision Industry in Shenzhen, one of the cities where shoppers can find the unauthorized gadget for sale.

The fact that at least some people in China are willing to shell out $1,170 for this device speaks to the nature of the world's largest mobile phone market. Here's a good photo comparing a real iPhone with a Chinese version on the right.

While Chinese consumers seem unwilling to pay much for software, they're obsessive over the latest hardware. To keep trend-conscious users interested, new versions of mobile phones are released every six months, a much shorter time frame than they're updated here.

By the time Apple releases its iPhone in China in 2008, perhaps the country's more advanced mobile phone users will have moved on to the next craze.

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August 30, 2007 11:08 AM

DOJ says Microsoft antitrust settlement a success; California, other states disagree

Posted by Benjamin J. Romano

The Department of Justice issued a news release this morning saying, "competition and consumers have benefited from the final judgments entered because of the Department's antitrust enforcement efforts against Microsoft."

The Justice Department was joined by a handful of states. But several others, known as the California group, disagreed.

From Bloomberg News:

Antitrust regulators from California and five other states said in a filing today that Microsoft still maintains a monopoly over personal computer operating system software and some provisions of the settlement have yielded "little, if any, tangible pro-competitive results."

"There can be little doubt that Microsoft's market power remains undiminished,"' state regulators said in the filing in federal court in Washington. Key provisions of the settlement "have had little or no competitively significant impact."

The California group never agreed to the final judgment and was forced to join in it.

The Justice Department release was timed to a series of filings by the parties in the broad antitrust settlement, most of which expires this November, including Microsoft, the department and the states.

In a statement this morning, Microsoft General Counsel Brad Smith noted that the company intends to continue its compliance with terms of the settlement after it expires and codified its own view of its responsibilities in a set of Windows Principles issued last year.

"As it was specifically intended, the Consent Decree defined clear rules for how Microsoft competes without pre-ordaining winners in the technology marketplace. The Consent Decree shaped how we view our responsibilities and led us to adopt a set of voluntary principles that will continue to apply even after major parts of the U.S. antitrust ruling expire this November," Smith said.

The Justice Department cited several examples of middleware competitors -- including Web browsers such as Mozilla's Firefox, Opera, and Apple's Safari; and multimedia players from Apple and Adobe -- to support its assertion that the final judgment has protected competition. I asked a department spokeswoman for the hard data on which these statements are based; she said she would get back to me.

It's important to note -- and the Justice Department does -- that the settlement was aimed only at preserving competition in this middleware software category. It was not an attempt to roll back Microsoft's monopoly in operating system software. Windows is still the dominant OS, running more than 90 percent of the world's computers.

From the department's statement:

"The core allegation in the original lawsuit, upheld by the U.S. Court of Appeals in June 2001, was that Microsoft had unlawfully maintained its monopoly in PC-based operating systems by excluding competing software products known as middleware that posed a nascent threat to the Windows operating system. Specifically, the Court of Appeals upheld the District Court's conclusion that Microsoft engaged in unlawful exclusionary conduct by using contractual provisions to prohibit computer manufacturers from supporting competing middleware products on Microsoft's operating system, prohibiting consumers and computer manufacturers from removing access to Microsoft's middleware products in the operating system, and reaching agreements with software developers and third parties to exclude or impede competing middleware products."

It continued,

"[A]s Microsoft was never found to have acquired or increased its monopoly market share unlawfully, the final judgments were not designed to eliminate Microsoft's Windows monopoly or reduce Windows' market share by any particular amount. Rather, the final judgments were designed to re-invigorate competitive conditions that Microsoft had suppressed so that the market could determine the success of these software products. The final judgments are succeeding in that goal."

Here's the Justice Department's final judgment review, filed today with the court. (PDF, 11 pages).

Microsoft also filed its own report on the final judgment (PDF, 12 pages), supported by two expert reports (PDF, 44 pages), (PDF, 45 pages).

Update: Here is the filing from the California group. (PDF, 21 pages).

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July 24, 2007 1:11 PM

Software piracy gangs busted in China

Posted by Kristi Heim

Microsoft is applauding a joint campaign by the FBI and Chinese police that broke up two software piracy gangs and seized software worth, well, somewhere in the millions, mostly bound for the United States.

The two-year effort resulted in arrests of 25 people, allegedly part of a ring operating from Shanghai and Shenzhen.

Chinese authorities and the FBI placed a different dollar value on the goods, according to this story. The Chinese Ministry of Public Security said it seized 360,000 programs and property valued at $7.9 million, while the FBI's Los Angeles office estimated the seized software's retail value to be $500 million. That would make each program worth almost $1,400.

Microsoft General Counsel Brad Smith hailed the get-tough stance toward counterfeiters.
"Customers around the world are turning you in, governments and law enforcement have had enough, and private companies will act decisively to protect intellectual property," he said.

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June 5, 2007 10:26 AM

Avvo launches with glitches

Posted by Tricia Duryee

In today's paper, I wrote about Avvo, a Seattle startup that aims to create profiles of every attorney in the country. The service would compete with the Yellow Pages or other ways consumers find divorce lawyers or bankruptcy attorneys today.

Avvo aims to be more than a list of lawyers by providing ratings for each lawyer on a scale of 1 to 10.

I took a quick peek at the site last week after the company allowed a preview before the site's launch. I found nothing unusual, except that it was really slow.

However, CNET reports today a number of odd glitches and information it found:

According to Avvo's profiles of "licensed attorneys," President Abraham Lincoln, once a lawyer who traveled on horseback between county courthouses, and Scopes defense attorney Clarence Darrow, who died in 1938, have no disciplinary sanctions pending and are encouraged to update their profiles by personalizing them with "professional experience" and achievements. Supreme Court Justices Ruth Bader Ginsburg and Samuel Alito each receive hardly flattering "experience" and "trustworthiness" ratings of three out of five stars.

Avvo does not disclose how it comes up with its ratings.

Board member Rich Barton, the CEO of who helped Avvo CEO Mark Britton start the company, readily acknowledged to me in reporting today's story that the company's techniques will cause some controversy.

"As long as we stay focused on the fact that we are empowering the consumer with information, in the court of public opinion you will win," he said.

UPDATE: See the comment down below for Mark Britton's response that he sent to the CNET reporter regarding what he found on the Avvo site.

He said, in part: "We're working hard to constantly add more information and, now that we're live, lawyers and consumers can help by adding their own content. In just the few hours since launch, hundreds of attorneys have claimed their profiles and provided consumers valuable information regarding their body of work."

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April 18, 2007 5:10 PM

Bill Gates goes to China

Posted by Kristi Heim


Bill Gates has been a widely recognized figure in China for years, as evident in the Shanghai airport book store, which had his biography prominently displayed in this 2005 photo.

It's one measure of how far Chinese media and Internet technology have come that China Central Television (CCTV) and Internet portal Sina are asking for questions from Internet users for a TV interview with Microsoft Chairman Bill Gates, who is visiting China this week.

It's also a measure of how far Microsoft has come in its long march toward finding the right business strategy in China. After years of fits and starts, the company has made a lot of progress over the last year.

In late 2005 Lenovo became the first Chinese hardware maker to agree to preinstall Windows software on new machines. Now the two companies are partnering to open a research and development center. And Microsoft is finally announcing software prices that consumers in developing countries can afford.

It's also worth noting that the U.S. software industry, of which Microsoft is far and away the largest and most important player, didn't participate in the recent WTO case against China. The complaint mentions books, music, videos and movies.

As for Gates, some questions people in China are asking him are posted here.

Among them are:

Do you think China's software industry will surpass India's?

What's your outlook on the world today?

Is your success thanks to yourself or to your good luck in business?

When are you going to make Windows source code public?

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April 9, 2007 12:51 PM

More trade actions with China

Posted by Kristi Heim


U.S. Trade Representative Susan Schwab holds a pirated DVD copy of "Night at the Museum," a couple of weeks before the DVD is scheduled to be released on April 24.

On the heels of a Commerce Department decision to impose punitive duties on Chinese paper imports, the Bush administration announced today it would file two new cases against China with the World Trade Organization.

The WTO complaints focuses on poor enforcement of intellectual property rights in China that has allowed rampant piracy of movies, music, books, software and pharmaceuticals.

China has set "excessively high thresholds for launching criminal prosecutions" against distributors of pirated products, the first complaint states. The second complaint challenges a policy that allows only state-owned importers to distribute foreign books, DVDs and other items, creating a bottleneck that encourages piracy.

"This is more than a handbag here or logo item there; it is often theft on a grand scale" said U.S. Trade Representative Susan Schwab.

The action sets in motion a 60-day period in which trade officials from the U.S. and China will try to resolve the disputes. It also raises tensions in an already anxious political climate.

The precarious but hugely important U.S.-China trade relationship was the subject of a major speech last week by Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. The Washington State China Relations Council has a good analysis of the speech here, saying his "tough love" approach and engaging China in a "dialog of the possible" represent the best policy option in the current environment.

Economists from Stanford University's Center for International Development have taken a contrarian perspective that the U.S. actually benefits from the trade deficit with China. Read their paper here.

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February 21, 2007 9:21 AM

Microsoft, AT&T and the Supremes

Posted by Benjamin J. Romano

Microsoft marked a milestone today, arguing for the first time before the U.S. Supreme Court in a patent dispute with AT&T.

While the company's long-running antitrust battle once looked like it would reach the highest court in the land, it never did.

Today's roughly hour-long argument stemmed from a patent claim filed by AT&T in 2001. A technology in Windows that converts recordings from analog to digital signals and back again for playback infringes on an AT&T patent. That's not disputed. The question is whether AT&T can collect royalties for copies of Windows made and sold overseas. It boils down to the reach of U.S. patent law. See this Bloomberg story we ran on Tuesday for more details.

A transcript of the oral arguments should be posted here later today.

Brad Smith, Microsoft's general counsel, gave this first take in an interview about 40 minutes after Microsoft's appearance before the Supreme Court:

The Justices were very well prepared and well informed and I think that contributed to a very good discussion with probing questions for both sides. But we certainly came away encouraged by our chances for success. We're certainly not going to predict any outcome on the basis of an oral argument. I don't think it's possible to do that. But I think we came out of the courtroom just as encouraged as we were when we went into it.

He said it was especially important to have the U.S. government arguing along side Microsoft in this case.

"That comes through very clearly when you read the transcript about why in the U.S. government's view and our view, it would be a mistake for the courts to seek to apply U.S. patent laws to activities that take place overseas," Smith said.

Smith seemed a bit awed by the stretch of the court's history:

"It's an amazing courtroom. It's the highest court in the country, obviously. It feels almost a little bit like a temple, a temple to justice. Here's a court that's over 200 years old, grappling with technology that is all very recent and is continuing to change very rapidly."

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January 4, 2007 11:06 AM

Applied Discovery hits milestone

Posted by Tricia Duryee

Bellevue-based Applied Discovery, a division of LexisNexis, said today that it has reached a new milestone.

The company helps law firms conduct discovery electronically. Today, it said in 2006 it processed 1.16 billion pages of electronic documents, representing a 49 percent jump over 2005 and a 65,186 percent increase over pages processed in 2001.

The company said the benchmark provides solid evidence that the $1.5 billion e-discovery market expanded quickly in 2006 and is an indicator of industry growth trends in 2007.

Electronic discovery technology enables law firms to quickly and securely capture, review and assess digital documents online as part of the "discovery" process in most legal cases.

It said the increase is linked to the growth of using digital communications for corporate communications. For example, the majority of corporate documents today are digital, through the use of email, instant messaging and mobile phone text messaging.

LexisNexis purchased Bellevue-based Applied Discovery in July 2003 for an undisclosed amount.

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November 21, 2006 1:59 PM

Microsoft's open-source spat

Posted by Benjamin J. Romano

Microsoft CEO Steve Ballmer's detailed answer to a question raised at a conference in Seattle last week has re-ignited controversy around the company's stance toward open-source software and called into question its pact with Novell.

The complex debate centers on whether users of Linux are violating Microsoft patents, and what Microsoft may or may not do about it. Ballmer suggested that Linux users -- other than those using Novell's offerings -- could be liable for violating Microsoft's intellectual property.

Novell strongly disagrees and offered this statement Monday:

Since our announcement, some parties have spoken about this patent agreement in a damaging way, and with a perspective that we do not share. We strongly challenge those statements here..
We disagree with the recent statements made by Microsoft on the topic of Linux and patents. Importantly, our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property. When we entered the patent cooperation agreement with Microsoft, Novell did not agree or admit that Linux or any other Novell offering violates Microsoft patents.

Now, there's a move afoot in the open-source community to change the GNU General Public License that covers Linux. The change, as reported by Reuters, would aim to extend protection granted to one segment of the open-source community (Novell users) to the rest of the community.

For more coverage and opinion on this ongoing story, check out: CNET and Mary Jo Foley.

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October 27, 2006 11:30 AM

Zillow targeted with complaint

Posted by Kim Peterson

A nonprofit group has filed a complaint against Seattle-based, saying that the online real estate site is so inaccurate when it comes to home valuations that it is causing bigger problems.

The complaint came from the National Community Reinvestment Coalition, which works to try to bring more private money into low- and moderate-income neighborhoods. That group said it founded the Center for Responsible Appraisals and Valuations.

Zillow says the allegations are groundless. Here are some of the key portions in the complaint, which is online here.

Zillow says that most of its home valuations are within 10 percent of the selling price of the home as valued by the owner or a real estate professional, according to the group. But the NCRC did its own audit and found that Zillow came within that 10 percent zone less than a third of the time.

The group also said that Zillow overvalues homes in affluent areas and undervalues homes in neighborhoods that are primarily African American or Latino. That disrupts the NCRC's mission of bringing more private money into underserved areas.

The NCRC also said it was unfair that Zillow gets to freely give estimates while traditional appraisers have to deal with liability issues and reporting and record-keeping requirements.

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October 19, 2006 11:51 AM

New RIAA lawsuits: 3 in Washington in legal trouble

Posted by Kim Peterson

If you think that the recording industry has stopped its hunt for piracy violations, you'd better stop downloading that copy of "SexyBack" immediately.

Today the Recording Industry Association of America announced a new round of lawsuits, including three against Washington residents. According to the association, the people named in the lawsuits illegally distributed copyrighted music through peer-to-peer services. The association got everyone's names by sending subpoenaes to Internet service providers.

Some of these people may not have even known they were distributing the music. The way some peer-to-peer programs work, users automatically share the music on their computers unless they specifically turn that sharing feature off.

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August 31, 2006 11:38 AM

iPod maker in Taiwan sues reporters

Posted by Kristi Heim

If you thought Apple Computer's attempt to quash internal leaks by suing bloggers was excessive, consider this: a Taiwanese maker of iPods has sued two Chinese journalists for reporting on labor abuses at its factory in southern China, according to today's South China Morning Post.

It started when China Business News reported that workers at Hongfujin Precision Industry in Shenzhen had to work long hours under harsh conditions and more than half were sick. The company makes iPods for Apple and is a subsidiary of Taiwan-based Foxconn.

An Apple spokesman told the Associated Press that the company is working behind the scenes to resolve the dispute. Meanwhile, Hongfujin filed a 30 million yuan defamation suit (about $3.75 million) against the journalists and persuaded a Shenzhen court to freeze their personal assets: bank accounts, homes and a car.

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August 25, 2006 2:42 PM

This weekend: Penny Arcade Expo

Posted by Kim Peterson

An estimated 17,000 video game fans are expected to head to Bellevue's Meydenbauer Center this weekend for the Penny Arcade Expo.

This convention, just a few years old now, has grown to what seems to be the largest video game convention out there, especially now that E3 is scaling down to fewer than 10,000 people. PAX, as it is called, isn't an industry conference; rather, it's solely for video game fans.

Admission is about $25 each day. Check the convention home page for more information.

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July 11, 2006 2:20 PM

Tattle on your boss for money

Posted by Kristi Heim

The Business Software Association, which is now touting itself as a "watchdog group," is offering to pay employees cash to turn in their employers for using pirated software.

The industry organization, which includes tech giants Microsoft, Adobe, Apple and others, sent out a Wild West-style reward poster yesterday hinting at why it is "handing out cash." Today it formally announced payments from a "Rewards Program" that encourages individuals to report infringements in their current or former workplaces.

BSA said it gave $15,000 cash to three people for reports of software piracy that led to investigations and settlements. All three, including an IT support employee and a customer service representative, reported on their companies after leaving them. The BSA didn't say whether it had job openings for anyone fired after tattling.

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July 6, 2006 10:57 AM

Google as a verb: It's official

Posted by Kim Peterson

Google is now officially a verb. Oxford English Dictionary added the word in verb form June 15, so you can legitimately say you've "Googled" something.

Techdirt wonders if this move is going to move Google closer to losing the trademark on its brand name.

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June 15, 2006 12:45 PM

Gambling writers encouraged to take up knitting, water polo

Posted by Kim Peterson

Washington's new law banning online gambling even extends to people who write about the subject, and Seattle Times columnist Danny Westneat explores that area (possibly even breaking the law himself) in a column today.

State officials armed with the new law have targeted a Bellingham man named Todd Boutte who reviews online gambling sites, saying his Web page was illegal, according to Westneat.

"1984 has finally arrived," Boutte told Westneat. "I can't believe this is happening in a liberal place like Washington."

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May 26, 2006 2:30 PM

But, hey, "Web 2.1" might still be available

Posted by Kim Peterson

Quoted: "It's a pretty standard business practice." - Sara Winge, vice president of corporate communications at O'Reilly, on the company's request to register the term "Web 2.0" as a trademark when it relates to conferences.

O'Reilly has caused a small uproar by sending a letter demanding that IT@Cork, a non-profit networking group, not use the term in the title for a future conference.

Winge goes on: "While we stand by the principle that we need to protect our 'Web 2.0' mark from unauthorized use in the context of conferences, we apologize for the way we initially handled the issue with IT@Cork."

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May 26, 2006 12:52 PM

More on F5 Networks and nationwide SEC probe

Posted by Kristi Heim

Today's story on federal investigations of F5 Networks and more than 20 other companies concerning the timing of stock option awards was picked up by McAdams Wright Ragen's Tim Bueneman.

He reiterated today that F5's management had strongly denied any backdating in a conversation with him last Thursday, prior to F5's announcements that the company received a grand jury subpoena from U.S. District Court in New York and was under investigation by the Securities and Exchange Commission. In his note to investors Monday, Bueneman said he had spoken with F5 Chief Accounting Officer John Rodriguez on May 18, who was explicit in saying "F5 has not back-dated any options."

May 18 is the same day F5 received the grand jury subpeona and a notice from the SEC of the inquiry, though F5 didn't announce those events publicly until Monday. F5 says it is cooperating with the grand jury and the SEC investigations, and that its board has authorized a review of the company's stock options grants, to be conducted with the help of outside independent legal counsel and independent accounting experts.

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May 23, 2006 10:38 AM

Software piracy down in emerging markets

Posted by Kristi Heim

China, Russia and India, usually given the dubious distinction as the world's biggest markets for pirated software, today topped the list of countries with the most progress on reducing software piracy last year, according to the Business Software Allilance. In both Russia and China, piracy rates dropped 4 percent, while the rate declined 2 percent in India. Ukraine and Morocco were also included in the group with the biggest reductions in piracy.

About 35 percent of software on the world's PCs last year was still illegal, according to the BSA, amounting to $34 billion in losses. But the progress in emerging markets was a positive sign. The BSA credited education, enforcement and policy efforts for the change.

Seems to me the progress has a lot to do with the development of homegrown software industries in those countries, and the government's desire to protect a nascent asset.

Even with the lowest rate of software piracy, the amount of damage was highest in the United States, where piracy was blamed for $6.9 billion in losses. Read the report here.

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May 19, 2006 1:51 PM

Some Northwest links in Milberg Weiss indictment

Posted by Mark Watanabe

From Deputy Business Editor Rami Grunbaum:

The law firm that corporate executives love to hate, Milberg Weiss Bershad & Schulman, was indicted Thursday along with two of its name partners on a litany of charges centering on alleged illegal kickbacks to plaintiffs who picked the firm to litigate their class-action securities lawsuits.

Microsoft, Infospace, Sonus Pharmaceuticals, Avenue A, Willamette Industries and most recently Boeing -- these and other local companies have felt the sting of lawsuits by Milberg Weiss (or a predecessor firm, which was not indicted). It's been the nation's leading practitioner of the securities class-action suit.

All told, according to the indictment, the firm collected more than $200 million for its work in more than 150 class-action and shareholder derivative-action lawsuits. It directed more than $11.3 million in illegal kickbacks to three "paid plaintiffs" who helped Milberg Weiss secure the coveted position of lead law firm in the suits, prosecutors said.

Did any of the alleged kickbacks to plaintiffs involve Northwest companies? The 102-page indictment identifies two for which the law firm allegedly made specific payments to a plaintiff.

-- For a suit against Heart Technology, a Redmond company that made artery-cleaning medical hardware, an unnamed co-conspirator was paid $19,859 in 1997, according to the indictment.

-- In a lawsuit against Oregon biotech company Epitope, $3,849 was paid in 1993 to one of the paid plaintiffs who was indicted earlier.

All plaintiffs in a class action are supposed to be treated equally, so such undisclosed payments for steering business to a law firm would be illegal.

Milberg Weiss has denied the allegations. A statement from the company also said it "is particularly incensed that the prosecutors decided to indict the firm itself. The firm has 125 attorneys and another 240 employees who, even according to the government, did not participate in or know anything about the matters at issue. But they will inevitably suffer serious personal and professional harm as a result of the government's actions."

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May 19, 2006 10:37 AM

You shall not pass?

Posted by Monica Soto

The U.S. Patent and Trademark Office decided to re-examine's "1-Click" check-out system patent after a New Zealand actor raised "compelling" concerns.

This isn't the first time the patent has landed Amazon in court. A month after its 1-Click patent was granted in Sept. 1999, Amazon sued for using a similar feature. The companies settled the lawsuit in March 2002.

In an odd twist, the patent's validity is being challenged by Peter Calveley -- among a dozen actors to provide motions for "The Lord of the Ring's" computer-generated elves and orcs.

We're sure Amazon wants to send the lawsuit into the firey chasms whence it came.

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