In February, Microsoft announced a $44.6 billion unsolicited bid for internet company Yahoo!, which was withdrawn on Sunday when Microsoft CEO Steve Ballmer sent a letter to Yahoo! CEO Jerry Yang expressing disappointment over the company’s lack of action on the offer.

Microsoft’s bid was motivated largely by the growing revenues generated from online advertising for companies such as Yahoo! However, the use of trade marked terms as triggers for advertising on the websites of many internet search engines has proved controversial among IP owners, and led to a number of lawsuits accusing search engines of trade mark infringement.

In the same month that it bid for Yahoo!, Microsoft also announced that it would implement new interoperability principles – a move designed to improve relations with its rivals. However, many viewed the move as being primarily driven by the company’s need to make its products more interoperable with those of its competitors in the face of its recent antitrust troubles with the European Commission.

Earlier this year, Microsoft was hit with the latest in a series of antitrust fines by the Commission. "Microsoft was the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," said Competition Commissioner Neelie Kroes following the February decision.

But in an interview with Managing IP last month, Microsoft’s global vice-president of IP and licensing Horacio Gutierrez denied that the company has failed to comply:

"Microsoft is in full compliance with the EU Commission's decision," said Gutierrez. "Immediately after the Court of First Instance issued its judgment in September 2007, Microsoft engaged in a constructive discussion with the Commission, which announced in October 2007 that Microsoft is in complete compliance. At that time, EU Competition Commissioner Neelie Kroes publicly welcomed Microsoft's concrete steps to ensure full compliance with the EU decision."

During the same interview, Gutierrez also explained how Microsoft’s new interoperability principles relate to the company’s traditionally strict stance on IP protection:

"People ask us, ‘how does that announcement relate to your stance with respect to protection of IP’, as if there were some kind of conflict between the two," he said. "In fact, there is no conflict between the set of principles that we're now operating under and our position that the IP protection on software innovation is really critical. What Microsoft has done is strike the right balance ... What customers also want when it comes to the internal functionality of the software is competition. They want product differentiation. They don't want their vendors to offer the same product; they want their vendors to compete with each other."

You can read more of Gutierrez’s comments in the April issue of Managing IP.