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Apple-Microsoft Agreement 1985

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  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
  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 Mutliplan"), 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
  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
  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
  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 conflic 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 reuired 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
containd 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
  William H. Gates, Microsoft Corporation, chairman of the board and
chief executive officer.