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Go backArticlesSorting out fact from fiction in the Apple-Microsoft lawsuit

Reprinted from PC Magazine, May 31, 1988, pp. 36.

The industry knew that the litigious Apple Computer Corp. would take action. The question was when. That question was answered on Thursday, March 17, when Apple filed a lawsuit claiming that Microsoft had violated terms of an agreement to use certain Apple technologies in the user interface of Windows 1.0.

Clean, distinctive, and accessible, the Macintosh interface has inspired many developers. Now Apple says some imitators have gone too far.
This image can be zoomedClean, distinctive, and accessible, the Macintosh interface has inspired many developers. Now Apple says some imitators have gone too far.
According to Apple, Microsoft has gone too far with its release of Windows 2.03. Hewlett-Packard was also named in the suit after it produced a new Executive for Windows called New Wave, which turned out to be a clone of the Macintosh interface. (In the There’s No Such Thing as Bad Publicity Dept.: Orders for New Wave developers’ kits have skyrocketed since Apple’s suit was announced. Whatever happens to HP legally, the company can’t be too distressed about the suit just now.)

Apple’s action will result in lots of theorizing. Here are some facts and some observations. Let’s start in 1985, when Apple first thought of suing Microsoft for using techniques patented by Apple (under patent number 4,464,652) and for using certain Apple visual copyrights. Microsoft chairman Bill Gates got wind of this potential suit and flew down with a lawyer to Cupertino. In a late night meeting with Apple CEO John Sculley, he threatened to stop development of all Mac software if Apple pursued legal action. This incident is outlined in Sculley’s book, Odyssey, where the story ends with the simple statement: “We made our peace in November.”

What wasn’t mentioned in the book, and the reason the attorney accompanied Gates, was that Sculley was asked to sign a document that gave Microsoft royalty-free rights to the Apple patents and to the copyrights to the visual screens. To add insult to injury, there was an indemnification clause making Microsoft immune from any third-party suits over the interface. All Apple got from Gates was an assurance that Mac development would continue. As a gratuity, Microsoft granted Apple the rights to the visual copyrights to any Windows screens it developed from 1985 to 1990.

Sculley, not sure if Gates was serious about stopping Mac development during a crucial period for the Mac, signed the document on November 22, 1985.

Look familiar? It’s not as elegant, and the DOS program icon is something you won’t see on a Macintosh screen (yet), but other than that...
This image can be zoomedLook familiar? It’s not as elegant, and the DOS program icon is something you won’t see on a Macintosh screen (yet), but other than that...
Most insiders believe Gates was bluffing, since much of his company was concentrating on Mac development. Whatever the case, the document also made it clear that Microsoft did not have to credit Apple or make it known that Microsoft had permission to use certain Apple technologies. To the outside world there was no agreement. Both companies agreed to make the secret document public on March 21, 1988, as part of the litigation and disclosure process.

The agreement also said that if the agreement was breached in any way it would be invalidated. Publicizing and invalidating the original agreement may be Apple’s ultimate goal. All Apple needed was one slip by Microsoft. In fact, it may be that Microsoft’s use of the number 2.03 in the release for which it is being sued is the slip-up. The secret document specified that only Version 1.0 was covered. Microsoft claims that the only additional features in 2.03 are proprietary. The courts will decide these issues.

If there is a small violation ol the agreement, then Microsoft and, presumably, IBM and others have a problem. Some think the shoe is on Sculley’s foot, with IBM the real target of a swift kick. Gates is now caught in a bind that could cost Microsoft dearly if IBM is embarrassed and falls off the critical path leading to full implementation of SAA (Systems Applications Architecture), starting with the complete OS/2 Presentation Manager.

Obviously aimed at IBM and developers of applications running under Windows and OS/2 along with those who might be considering the release of a Mac clone, the suit will forestall an competition until its resolution.

Mention is made about how the graphical user interface was developed by Xerox and Apple can’t sue anybody.

The fact is, Apple own rights to the interface, thanks to a deal made long ago for which Xerox got 2 percent of Apple stock (since sold). Sun Microsystems has always been concerned about the proprietary aspect of the interface and quietly obtained a license from Xerox long ago. And even Microsoft has a license from Xerox.

Microsoft doesn’t like to license anything and rarely talks about its agreement with Xerox. Microsoft likes to think of itself as a licenser, not a licensee. It was probably to protect that image that Gates insisted that the Apple agreement be held in confidence. It can also be argued, though, that the agreement was an embarrassment to both companies since it is so one-sided. Surely, it would not pass the scrutiny of a public forum.

John C. Dvorak

Page added on 14th December 2004.

Copyright © 2002-2006 Marcin Wichary, unless stated otherwise.