Text of Apple-Microsoft Agreement

This Agreement is entered into on this 22nd day of November, 1985, by and between Apple Computer, Inc., a California corporation having its place of business at 20525 Mariani Avenue, Cupertino, California 95014 (hereinafter "Apple") and Microsoft Corporation, having its place of business at 10700 Northrup Way, Bellevue, Washington 98008 (hereinafter "Microsoft.")

The parties have a long history of cooperation and trust and wish to maintain that mutually beneficial relationship. However, a dispute has arisen concerning the ownership of and possible copyright infringement as to certain visual displays generated by several Microsoft software products. These products are Microsoft's operating environment program, "Microsoft Windows Version 1.0," the three Microsoft applications programs developed under the January 22, 1982, agreement between Microsoft and Apple for use on Apple's Macintosh Computers: an electronic spread sheet program ("Microsoft Multiplan"), a business graphics program ("Microsoft Chart") and a database program (Microsoft File"), and two other Microsoft application programs: an integrated electronic spread sheet program ("Microsoft Excel") and a word processing program ("Microsoft Word"). By means of this Agreement the parties intend to resolve the dispute and each acknowledges that the valuable consideration underlying this Agreement consists of the resolution of the dispute and the several undertakings and accommodations of the respective parties described below. Accordingly, the parties agree as follows:

1. Acknowledgement. For purposes of resolving this dispute and in consideration of the license grant from Apple described in section 2 below, Microsoft acknowledges that the visual displays in the above-listed Microsoft programs are derivative works of the visual displays generated by Apple's Lisa and Macintosh graphic user interface programs.

2. Visual Copyright License from Apple.

A. Grant. Apple hereby grants to Microsoft a non-exclusive, worldwide, royalty-free, perpetual, non-transferable license to use these derivative works in present and future software programs and to license them to and through third parties for use in their software programs. This license shall not include new software programs written by Microsoft which are similar in function to Microsoft Excel and are offered for to the public prior to October 1, 1986. As a condition to this license, Microsoft shall cause its visual copyright notice to appear in its products which use visual displays licensed hereunder.

B. Warranty. Apple hereby warrants that neither Apple nor any of its agents, representatives or attorneys knows of any patent, copyright, trade secret or any other right or claim of or by any third party to these licensed visual copyrights in the Lisa and Macintosh graphic user interface programs. Each party shall notify the other promptly of any such claim and will cooperate fully in the defense of such a claim. Apple shall indemnify and hold Microsoft harmless from any such claim of which it had such knowledge and any damages and reasonable expenses arising therefrom.

3. Patent License from Apple.

A. Grant. Apple hereby grants to Microsoft a nonexclusive, worldwide, royalty-free, nontransferable license to make, use and sell the inventions described and claimed in claims 9, 11, 12, and 13 of the United States Patent No. 4,464,652 for the life of the patent. Microsoft in turn may license these rights to and through third parties for use in their software programs and hardware products. Microsoft is not required to cause any patent marking to appear in its products which use any such inventions.

B. Warranty. Apple hereby warrants that it owns the patent and to the best of its knowledge there are no claims asserted by any third party to the inventions described in these claims.

4. Release. Apple hereby waives any other copyright, patent, trade secret or other claim or right it may have as to Microsoft Windows Version 1.0.

5. Visual Copyright License from Microsoft. Microsoft hereby grants to Apple a nonexclusive, worldwide, royalty-free, perpetual, nontransferable license to use any new visual displays created by Microsoft during a period of five years from the date of this agreement as part of its Microsoft Windows retail software product in software programs and to license them to and through third parties for use in their software programs. As a condition to this license, Apple shall cause its visual copyright notice to appear in its products which use such Microsoft visual displays.

6. Revision of Microsoft Word. Microsoft shall revise Microsoft Word which operates on the Apple Macintosh computer by enhancing and improving the program as specified in Exhibit A to this Agreement. Microsoft shall use its best efforts to complete the revision by July 31, 1986.

7. General Provisions.

A. Confidentiality. The parties shall keep the terms and conditions of this Agreement in strict confidence, except that each party may state that it has entered into an agreement with the other concerning visual copyrights.

B. Representations. The parties represent that each is free to enter into this Agreement and is not and will not become a party to any agreement inconsistent or in conflict with any of the terms or conditions of this agreement.

C. Breach and Termination. If a breach of this Agreement by either party contines more than 30 days from the date of written notice of such breach by the non-breaching party, that party may terminate the Agreement by giving written notice to the other. Waiver by a non-breaching party of any breach by the other shall not be deemed to be a waiver of any other or subsequent breach. The rights of the parties under this clause are in addition to any other rights or remedies provided by law or under this Agreement.

D. Notices. Any notice required under this Agreement shall be given by first class mail, postage prepaid, with return receipt requested.

E. Assignment. Except in the case of the sale of substantially all of the assets or controlling stock, this Agreement may not be assigned, nor the rights granted hereunder (other than the sublicensing rights contained in paragraph 2) transferred by either party without the prior written consent of the other party.

F. Independent Contractor. This Agreement shall not be construed as creating an agency, partnership or joint venture between the parties.

G. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter treated herein. This Agreement shall not be amended except by a written agreement signed by both parties.

H. Binding Effect. Subject to the limitations expressed above, this Agreement will inure to the benefit of and be binding upon the parties and their successors in interest.


John Sculley, Apple Computer Inc., president and chief executive officer.

William H. Gates, Microsoft Corporation, chairman of the board and chief executive officer.