【Research Center for the Legal System of Intellectual Property】

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A Recommendation to Microsoft ; IP and Antimonopoly Act

RA　Yuka Aoyagi

The RCLIP website starts a monthly column about Intellectual Property legislation. Research assistants at RCLIP will write this column by turns with one free topic of their choice. To start the rotation, please allow me to write the latest legal topic for the first column instead of IP issue itself this time.

On July 13, 2004, the Japan Fair Trade Commission (JFTC) issued a Recommendation to Microsoft Corporation on its violation of the section 19 of the Antimonopoly Act (corresponding to the Subsection 13 of the Unfair Trade Practices, "Dealing on Restrictive Terms"). When licensing Windows OS to personal computer manufacturers, Microsoft rendered them a license agreement containing the NAP (Non-Assertion of Patents) provision which contains covenants not to sue or participate in any kind of proceedings against Microsoft or other licensees for infringement of the licensee's patents. The JFTC found such conduct inconsistent with Japanese law because it unjustly restricts business activities of personal computer manufacturers.

The section 21 of the Antimonopoly Act has stipulated the antimonopoly exemption from the Antimonopoly Act for the exercise of intellectual property rights. However, as a matter of fact, not all activities relating the exercise of intellectual property right are exempted. A license agreement on intellectual property can be considered as violation of the Antimonopoly Act like this incident. The JFTC has released a guideline on this matter. The guideline says a monopoly in a market using monopolistic use of technology is not acceptable even though the Antimonopoly Act accepts a right to monopolize technology. A typical example of such conduct is found in this recent case of Microsoft Corp.