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When William Ferron Jr. sat down with Bill Gates 20 years ago to discuss the legal issues surrounding the product that would become Windows 1.0, protecting Microsoft Corp.’s trademarks were not on the agenda. Instead, Ferron was hired as a copyright guru. “It was amazing to see new IP questions for an emerging part of the industry and where the law was going to go,” says Ferron, a partner at Seed Intellectual Property Law Group, a Seattle boutique. Today the Microsoft brand is worth billions, and copyright questions like the ones that plagued the company in its early days have faded. Copyright law still has a place in piracy cases, but software companies like Microsoft increasingly protect their products with patents, a practice virtually unheard of two decades ago. Ferron and about eight other lawyers at Seed Law are now assigned to protecting Microsoft’s trademarks. Ferron’s team works closely with four of Microsoft’s 100 in-house attorneys. His primary in-house contact on Windows-related matters is Russell Pangorn, a senior patent and trademark attorney. Protecting Microsoft’s $61 billion brand is a litigation-intensive endeavor. And with $39 billion in cash at its disposal, the company can flex its muscles at anyone. Microsoft officials say they use a cost-benefit analysis to determine whom to take on. “The biggest aspect driving trademark issues is what’s going on in the marketplace,” says Ferron. “The situations where customers are being confused and sales are being lost have serious marketplace impact.” If Microsoft has a business relationship with a potential infringer, someone on the legal team will make a phone call. But typically, as with most corporations, enforcing the Microsoft trademark starts with a cease-and-desist letter. “The manner of use can change the tenor of the letter but we always try to work with them,” says Pangorn. There are times when Microsoft’s actions can seem perplexing. In January 2004 the company demanded that Mike Rowe, a 17-year-old high school senior in Victoria, British Columbia, hand over the domain name MikeRoweSoft.com. The company initially offered to pay Rowe $10 to cover the domain name registration fee. When Rowe asked for $10,000 — the teenager said he was “sort of mad at them for only offering 10 bucks” — he wound up with a 25-page letter from lawyers at Smart & Biggar, Canada’s largest IP firm, that threatened legal action. Rowe’s story generated a lot of publicity. Vanity Fair magazine wrote that Microsoft’s chief executive, Steve Ballmer, “should be embarrassed” by the incident. Rowe ultimately settled with Microsoft, winning a free Xbox, a Microsoft certification course and a trip for his family to the Microsoft Research Tech Fest in Redmond, Wash. At the time, Jim Desler, a Microsoft spokesman, acknowledged in the Seattle Post-Intelligencer that going after a teenager for trademark infringement was harsh. However, he said, “It’s important to recognize that, under the law, companies are required to take this type of action to protect their trademark against widespread infringement.” Remarkably, word got out earlier this year that Microsoft had never bothered to register some of its biggest trademarks, including Excel, Office and Word. In 2004 Microsoft sent a letter to Savvysoft Inc. demanding that it change the name of its TurboExcel software, an add-on program that promises to run Excel 300 times faster. The founder of Savvysoft soon discovered that Microsoft had never registered the mark. In damage control mode, Ferron quickly filed a trademark application for Excel in April — 17 years after the program’s launch. Regardless, Microsoft says that it has a common law trademark to Excel because it has been using the name for so long. Ferron declines to comment on the case except to say that the initial introduction of the Excel product predated his work for the company. When warning letters don’t work, Microsoft litigates. And when litigation fails, the company’s giant cash reserves sometimes do the trick. That’s what happened with Microsoft’s 2001 trademark suit against a small Linux seller that wanted to call itself and its software Lindows. In court papers, Microsoft claimed that it had spent more than $1 billion marketing and promoting its Windows operating system. Ferron, who worked on the case along with Preston, Gates & Ellis and Winston & Strawn, says that Microsoft pursued Lindows because the name diluted the Windows trademark. In 2002 the U.S. district court in Seattle refused Microsoft’s request for an injunction against Lindows. Later that year, Microsoft paid Lindows $20 million. In return, the company changed its name to Linspire and assigned its Web domains to Microsoft. Alexandra Dell ( In the News) is a reporter for IP Law & Business magazine, a New York-based publication affiliated with IP magazine.

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