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Microsoft paid Apple $150m to settle QuickTime suit

DoJ lawyer uncovers price of settling embarrassing copyright infringement dispute

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David Boies, attorney for the DoJ, noted that John Warden, for Microsoft, had omitted to quote part of a handwritten note by Fred Anderson, Apple's CFO, in which Anderson wrote that "the [QuickTime] patent dispute was resolved with cross-licence and significant payment to Apple." The payment was $150 million. This is very interesting news indeed, because it closes another chapter that has a hitherto secret ending in the saga of Microsoft's murky business practices. It's an interesting and little-known story. The confirmation of the payment appears to be the first hard news that Microsoft had been forced to back down in Apple's case against Microsoft and other defendants (including Intel) in the San Jose District Court in 1994. Microsoft and Intel had been shocked to find that Apple's QuickTime product made digital video on Windows seem like continuous motion, and was far in advance of anything that either of them had, even in a planning stage. The speed was achieved by bypassing Windows' Graphics Display Interface and enabling the application to write directly to the video card. The result was a significant improvement over the choppy, 'slide-show' quality of Microsoft's own efforts. Apple's intention was to establish the driver as a standard for multimedia video imaging, so that Mac developers could sell their applications on the Windows and Mac platforms. Microsoft requested a free licence from Apple for QuickTime for Windows in June 1993, and was refused. In July 1993, the San Francisco Canyon Company entered into an agreement with Intel to deliver a program (codenamed Mario) that would enable Intel to accelerate Video for Windows' processing of video images. However, although Intel certainly knew that Canyon had developed key parts of the code for Apple, it did not specify that this must be undertaken in a clean room, which is a damning condemnation in view of Intel's experience of such matters following its own litigation with AMD. A month later, Canyon delivered the program to Intel containing code that was an exact copy of the code that it had previously delivered to Apple. Intel gave this code to Microsoft as part of a joint development program called Display Control Interface. Canyon admitted that it had copied to Intel code developed for and assigned to Apple. In September 1994, Apple's software was distributed by Microsoft in its developer kits, and in Microsoft's Video for Windows version 1.1d. Apple noticed a suspicious improvement in the performance of Microsoft's video driver. Sure enough: Apple's code was being used. Apple produced a videotape with a clip of Video for Windows, with and without the Apple code. The difference was striking: without the Apple code, the clip was staggered and jerky, whereas the version with Apple's code was smooth and had clear frame transitions. Apple was desperately waiting for Microsoft to send it a beta copy of Windows 95, and found itself in a similar position to Netscape in this respect. Following a bizarre intervention that took the form of a late-night telephone call to Microsoft head-lawyer Bill Neukom by Ann Bingaman, the head of the DoJ's antitrust division, in response to a request from Edward Stead, then Apple's general counsel, this was at last supplied. The next day, Apple added Microsoft to the list of defendants in the San Jose court case. The sub-text of the dispute also began to emerge: "Apple is also claiming that Microsoft has been using the code in question to mess up [Apple's] attempts to make QuickTime a standard." Industry observers saw a clear desire by Microsoft to get developers to develop only for Windows. Now who, you may ask, was at the centre of various false claims, false counter-claims, and cover-ups about what had really been happening? Step forward Brad Silverberg, the absent Microsoft VP, who would have a tale to tell to Judge Jackson's court if only Microsoft would invite him along to the party. ® Complete Register trial coverage Click for more stories Click for story index

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