Microsoft will soon be charging manufacturers of flash memory card devices and those which use them $0.25 per unit or up to $250,000 to use the FAT filesystem. For those who are unaware the FAT file system was developed by Microsoft back in 1976 and has become the standard file system for all digital still cameras. Microsoft owns patents to the FAT File System but for many years hasn't even hinted that it may one day decide to charge for it. These new licenses appear to come into effect immediately and specifically make mention of 'compact flash memory cards' and 'portable digital still cameras'. What a great way for Microsoft to cash in on the most popular consumer products (as if they don't make enough money already).

Phil: Surely flash memory manufacturers can get around this by simply not pre-formatting cards?

Press Release:

FAT File System Technology and Patent License

December 3, 2003

Most operating systems store computer files by dividing the file into smaller pieces and storing those pieces in separate clusters of a hard disk, floppy disk, or flash memory card. The FAT file system allows an operating system to keep track of the location and sequence of each piece of a file, and also allows the operating system to identify which clusters are unassigned and available for new files. When a computer user wants to read a file, the FAT file system also reassembles each piece of the file into one unit for viewing.

The first FAT file system was developed by Microsoft in 1976. That system was based on the BASIC programming language and allowed programs and data to be stored on a floppy disk. Since that time, the FAT file system has been improved upon multiple times to take advantage of advances in computer technology, and to further refine and enrich the FAT file system itself.

Today, the FAT File system has become the ubiquitous format used for interchange of media between computers, and, since the advent of inexpensive, removable flash memory, also between digital devices. The FAT file system is now supported by a wide variety of operating systems running on all sizes of computers, from servers to personal digital assistants. In addition, many digital devices such as still and video cameras, audio recorders, video game systems, scanners, and printers make use of FAT file system technology.

Microsoft is offering to license its FAT file system specification and associated intellectual property. With this license, other companies have the opportunity to standardize the FAT file system implementation in their products, and to improve file system compatibility across a range of computing and consumer electronics devices.

If you are interested in obtaining a license, please contact our Intellectual Property and Licensing Group at fatspec@microsoft.com for more information.

Pricing and Licensing

Microsoft offers a commercially reasonable, nonexclusive license so that other companies can use the FAT file system in their own products. Currently, Microsoft offers two specific types of licenses:

• A license for removable solid state media manufacturers to preformat the media, such as compact flash memory cards, to the Microsoft FAT file system format, and to preload data onto such preformatted media using the Microsoft FAT file system format. Pricing for this license is US$0.25 per unit with a cap on total royalties of $250,000 per manufacturer.
   
• A license for manufacturers of certain consumer electronics devices. Pricing for this license is US$0.25 per unit for each of the following types of devices that use removable solid state media to store data: portable digital still cameras; portable digital video cameras; portable digital still/video cameras; portable digital audio players; portable digital video players; portable digital audio/video players; multifunction printers; electronic photo frames; electronic musical instruments; and standard televisions. Pricing for this license is US$0.25 per unit with a cap on total royalties of $250,000 per licensee. Pricing for other device types can be negotiated with Microsoft.

Microsoft's FAT file system license offers limited rights to issued and pending Microsoft patents on FAT file system technology, as well as rights to implement the Microsoft FAT file system specification. In order to ensure interoperability between the licensed media and devices and Microsoft® Windows®-based personal computers and to improve consumer experience, the license requires that licensees' FAT file system implementations in the licensed media and devices be fully compliant with certain required portions of the Microsoft FAT file system specification. To help licensees implement the FAT file system, Microsoft will also provide certain reference source code and test specifications as part of the licensing package in both licenses.

In some cases, companies may wish to negotiate broader or narrower rights than the standard Microsoft license for FAT file systems. In this case, pricing may vary. Microsoft remains flexible to adjust terms to reflect crosslicensing, unit volume, version limitation, geographic scope, and other considerations.

FAT File System–Related Patents

The FAT file system licensing program includes rights to a number of U.S. Patents, including:

U.S. Patent #5,579,517
U.S. Patent #5,745,902
U.S. Patent #5,758,352
U.S. Patent #6,286,013

In addition, the FAT file system licensing package includes rights to FAT file system innovations for which Microsoft has filed a claim for a patent that the U.S. Patent Office has not yet granted. This licensing program also provides licensees rights to Microsoft FAT file system issued and pending patents outside the United States, and to the Microsoft FAT file system specification and certain test specifications.