Sun-Microsoft Pact Excludes OpenOffice Users

Microsoft Corp. and Sun Microsystems Inc. have agreed not to sue each other or their customers for patent infringements, but the pact announced in April specifically states that the protection does not apply to licensees of a free alternative to Microsoft Office software, government documents show.

In its annual filing this week with the Securities and Exchange Commission, Sun, based in Santa Clara, Calif., included the underlying legal documents of the wide-ranging settlement agreement that marked a new era of cooperation between the two rivals, which pledged that the pact would lead to interoperability between their products.

The agreement states that neither company would sue the other or its customers for any patent infringement alleged before the deal was signed or for the next 10 years, as long as Microsoft paid Sun annual extension fees. The deal, however, specifically excludes licensees of OpenOffice, a free alternative to Microsoft Office.

"Microsoft shall not be foreclosed by this agreement from seeking damages from authorized licensees of OpenOffice for copies of OpenOffice made or acquired prior to the effective date of this agreement," the filing says. "Nor shall Microsoft be foreclosed from seeking any damages from Sun, its affiliates, authorized licensees or any third party for any copies of OpenOffice made or deployed by a user after the effective date."

Sun contributed the code that became the foundation of OpenOffice, and remains a major supporter of the project. The company also offers its own version of the software, called StarOffice, which is protected under the agreement.OpenOffice is freely available through the Internet, and is often distributed with versions of the open-source Linux operating system. The software package offers many of the same core capabilities of Microsoft Office, including a word processor, spreadsheet, database and other programs.

Office accounted for nearly 30 percent of Microsoft's total revenue last fiscal year, bringing in $10.8 billion in sales. The importance of the suite to Microsoft, as well as Linux's gains as a competitor of Microsoft's other big revenue generator, Windows, has stoked speculation that the Redmond, Wash., software maker was preparing to launch a patent-related legal challenge. Microsoft declined to discuss the matter, issuing an e-mail response to an interview request. "As is common when two large patent holders structure a patent agreement covering many products, the Sun/Microsoft agreement is complex," the company said. "We believe that the patent and technology agreements provide the companies with the framework to work collaboratively in the future to drive innovation for our customers."

Ryan Singer, a spokesman for the OpenOffice project, said Thursday in response to an e-mail query that the clause was "not a big deal."

"I do not see this changing the level of resources that Sun so generously awards the community, nor do I see it changing the intimate working relationships the community has built with many Sun employees," Singer said. "In the end, it leaves OpenOffice.org no better or worse off patent-wise than any other open-source project."

Many analysts say its unlikely Microsoft is contemplating a legal challenge, given the company's recent moves to settle as many outstanding legal disputes as possible.Matt Rosoff, analyst for research firm Directions on Microsoft, said the agreement clause is more likely the results of Microsoft's lawyers taking steps to ensure that its intellectual property is protected under the cross-licensing agreement with Sun.

"Microsoft isn't going to allow Sun to turn its intellectual property over to third parties," Rosoff said. "It's a safety valve I don't think this is a precursor for any lawsuit."

In July, however, Microsoft launched a strong focus on securing patents. Chairman Bill Gates told financial analysts that the company would file more than 3,000 patents this fiscal year, up from 2,000 last year. In addition, the company would boost efforts to license its intellectual property.