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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 trademark wasn’t on the agenda. 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, who is 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 increasingly software companies like Microsoft protect their products with patents, a practice virtually unheard of 20 years 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. (“It’s a law firm in and of itself,” says Ferron.) Microsoft senior trademark and copyright attorney, Russel Pangorn, is his primary contact on Windows matters. 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. The company says it uses a cost-benefit analysis to determine who 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. Sometimes Microsoft’s actions are perplexing. In January 2004 the company demanded that Mike Rowe, a 17-year-old Canadian, hand over the domain name MikeRoweSoft.com, offering to pay $10 for the domain name registration fee. Rowe asked for $10,000, and in return received 25-page-letter from Microsoft’s counsel Smart & Biggar, threatening legal action. Rowe’s story generated a lot of publicity — Vanity Fair wrote that Microsoft chief executive, Steve Ballmer, “should be embarrassed about” the incident. And Rowe ultimately settled with Microsoft for 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, Microsoft spokesperson Jim Desler 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.” And though they received some negative press for bullying a teenager, Microsoft did send a message to potential infringers: When it comes to their trademark, they don’t play around. Remarkably, earlier this year, word got out 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 wouldn’t comment on the case except to say that the initial introduction of the Excel product predated his work for the company. When 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. So that year, Microsoft paid Lindows $20 million, and the company changed its name to Linspire and assigned its Web domains to Microsoft.

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