Texas judge says Microsoft NDAs are OK

A judge in Texas has dismissed a lawsuit filed against Microsoft that claimed that parts of the firm's confidentiality agreements signed by licensees impeded a state antitrust investigation into Microsoft's business practices. He cited a ruling made Judge Thomas Jackson in the US Department of Justice lawsuit against Microsoft. In that case, Jackson dismissed the DOJ's argument that Microsoft's non-disclosure agreements (NDAs) prevented PC makers from cooperating with its antitrust investigation of Microsoft.

A judge in Texas has dismissed a lawsuit filed against Microsoft that claimed that parts of the firm's confidentiality agreements signed by licensees impeded a state antitrust investigation into Microsoft's business practices.

District Court Judge Joseph Hart's decision cited a ruling made Dec. 11 by District Judge Thomas Jackson in Washington, D.C. in the USDepartment of Justice's (DOJ) lawsuit against Microsoft, said Microsoft spokesman Mark Murray.

In that federal case, Jackson dismissed the DOJ's argument that Microsoft's non-disclosure agreements (NDAs) prevented PC makers from cooperating with its antitrust investigation of Microsoft. The judge found Microsoft's requirement that it be given notice and an opportunity to object before a licensee discloses any confidential information was reasonable.

A spokeswoman for the Texas Attorney General's office said it was too early to say whether or not officials would appeal the ruling.

"We are disappointed with the judge's ruling, however we wanted to make a statement and we did," said spokeswoman Sonya Sanchez. "We want Microsoft to know that our office will not tolerate any interference with our antitrust investigation and our investigation continues."

Texas Attorney General Dan Morales sued Microsoft in November before the federal judge made his ruling. Morales argued that Microsoft's requirement that it be informed before a licensee disclosed information was intimidating licensees who wanted their participation to remain confidential. The NDA, thus, was preventing licensees from coming forward and interfering with the attorney general's "constitutional and statutory responsibilities to conduct unobstructed confidential investigations," Morales had said.

In both cases Microsoft argued that its NDAs, which are vital to protecting a company's intellectual property, are similar to agreements used throughout the software industry. In addition, Microsoft argued that the Texas attorney general's office had not provided any evidence that its NDAs had interfered with the state probe.

"We're pleased to have this matter resolved and we will continue to work with the Attorney General's office to address any questions or concerns they have," Tom Burt, associate general counsel for Microsoft, said in a statement.

Texas is one of about 10 states investigating Microsoft's business practices, along with the DOJ and the European Commission. A lawsuit the DOJ filed against Microsoft is pending. That lawsuit claims Microsoft violated a 1995 consent decree barring it from tying licensing of its operating system with another product by forcing PC manufacturers to preinstall Internet Explorer on Windows 95 computers. Microsoft, which is now temporarily offering OEMs Windows 95 without the Internet Explorer icon, claims the browser is not a separate product, but an integral part of the operating system.

The Texas attorney general's office has a home page at http://www.oag.state.tx.us/.

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