According to the settlement, Microsoft will pay Lindows $20
million and Lindows will forgo the 'Lindows' name entirely,
adopting instead the Linspire name that it had been using in
Europe. The company will also withdraw its trade mark applications
in respect of Lindows.
The dispute dates back to December 2001 when Microsoft filed a
trade mark suit in the US seeking to prevent Lindows Inc. from
using the terms LindowsOS and Lindows.com, arguing that they
infringe on its rights in Windows.
Microsoft then raised further actions in Europe, winning
preliminary injunctions against Lindows in Finland, Sweden and the
Benelux countries. As a result, Lindows changed the name of its
operating system from Lindows to Linspire in April.
But the main action, in the US, has not gone entirely
Microsoft's way. A US court refused to allow Microsoft to appeal a
decision that the meaning of the term 'windows' must be considered
as it was understood prior to 1985 – before Microsoft's Windows was
first released.
The interpretation of 'windows' was fundamental to Microsoft's
case because if a trial jury found that the term 'windows' was
generic prior to 1985, then it could not now or in the future be
trade marked by Microsoft.
This appears to have been too high a risk to take, and yesterday
the software companies announced that they had agreed terms of
settlement.
"This case was centred on the fundamentals of international
trade mark law and our necessary efforts to protect the Windows
trade mark against infringement," said Tom Burt, corporate vice
president and deputy general counsel for Microsoft. "This
settlement addresses those concerns, and we are pleased that
Lindows will now compete in the marketplace with a name distinctly
its own."
"We are pleased to resolve this litigation on terms that make
business sense for all parties," said Michael Robertson, CEO of
Lindows. "Over the next few months Lindows will cease using the
term Lindows and transition to Linspire globally as our company
name and primary identifier for our operating system product."
Details of the settlement are confidential, but a copy of the
settlement agreement has been filed with the US Securities and
Exchange Commission, as part of Lindows' recently announced
floatation disclosures.
