JFTC Issued Microsoft Ruling on its NAP Clause Practice

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On September 16, 2008, Japan Fair Trade Commission (the “JFTC”) issued a ruling against Microsoft Corporation (“MS”) regarding its use of a so called “NAP” clause in its software licenses. The MS NAP clause prevented licensees from asserting certain intellectual property rights against MS and its customers.

The ruling was issued after almost four years of hearings. In the ruling, the JFTC found that the NAP provision in MS’s licenses for its Windows operating systems (“OS”) for personal computers (“Windows OS”) violated the prohibition against dealing on restrictive terms, one of the unfair trade practices under the Anti Monopoly Act (the 'AMA'). As a result, the JFTC issued a cease and desist order against MS.

The JFTC’s more than 140-page ruling is voluminous and covers a wide range of topics. The full implications of this wide ranging ruling likely will only become clear over time. Set forth below is the summary of the JFTC ruling (the “JFTC Ruling”).

Please see update for more information.

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