Melco Group Signs Linux Software Patent Agreement with Microsoft Corp. for Buffalo-Branded Products

Melco Group’s customers will receive patent covenants for their use of devices running Linux and related open source software

REDMOND, WA and NAGOYA, Japan, July 15, 2009 -- Microsoft Corp. (NASDAQ: MSFT) and Melco Holdings Inc., parent company of Buffalo Inc. and Buffalo Group (“Melco Group”), have entered into an agreement that will provide Melco Group’s customers with patent coverage for their use of industry-leading technologies running Linux and other related open source software.

Specifically, the patent covenants apply to Buffalo-branded Network Attached Storage (NAS) devices, which run Linux, and Buffalo-branded routers, which also run Linux. Although the contents of the agreement have not been disclosed, the parties indicate that the only financial consideration in this agreement is royalties paid by Melco Group to Microsoft.

“We are pleased to reach this agreement with Melco Group,” said David Kaefer, general manager of Intellectual Property and Licensing at Microsoft. “Many companies have entered similar agreements with Microsoft covering their Linux-based offerings, something that is a reflection of both Microsoft’s decades-long commitment to R&D in the operating system space and the high-quality patent portfolio we’ve developed through our R&D efforts.”

Buffalo is a global leader in both the manufacturing and distribution of NAS and router devices, such as LinkStation and AirStation. The company is also a global partner of Microsoft, manufacturing Windows-certified PC peripherals.

“We are very pleased to be able to work with Microsoft on this matter,” said Hajime Nakai, director and member of the board at Buffalo. “While we plan to increasingly adopt Windows Storage Server for our NAS business, we also wanted to ensure that our open source and Linux-embedded devices had the appropriate IP protections. By collaborating with Microsoft on a practical business solution, we are able to provide our customers with the appropriate IP coverage, while also maintaining full compliance with our obligations under the GPLv2.”

Microsoft’s Commitment to IP Collaboration

This patent agreement is another example of the important role that intellectual property (IP) plays in ensuring a healthy and vibrant IT ecosystem. Since Microsoft launched its IP licensing program in December 2003, the company has entered into more than 500 agreements and continues to develop programs that make it possible for customers, partners and competitors to access its IP portfolio. The program was developed to open access to Microsoft’s significant research and development investments and its growing, broad patent and IP portfolio. In recent years, Microsoft has entered into patent agreements with other leading companies that use Linux for their embedded devices, including LG Electronics, Samsung Electronics Co. Ltd., Fuji Xerox Co. Ltd., Kyocera Mita Corp., TomTom International BV and Brother International Corp.

Source: Microsoft Corporation