Today in Apple history: Apple signs damaging deal with Microsoft

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Windows used a number of elements of the Mac UI
One of the most damaging deals in Apple history.
Photo: Ste Smith/Cult of Mac

November 21: Today in Apple history: Apple signs Microsoft deal November 21, 1985: Following Steve Jobs’ departure, Apple comes close to signing its own death warrant by licensing the Macintosh’s look and feel to Microsoft.

The deal, between Microsoft co-founder Bill Gates and Apple CEO John Sculley, comes hot on the heels of the Windows operating system’s release. The pact gives Microsoft a “non-exclusive, worldwide, royalty-free, perpetual, nontransferable license to use [parts of the Mac technology] in present and future software programs, and to license them to and through third parties for use in their software programs.”

Oh, boy!

The deal, now looked upon as disastrous, kind of (kind of!) made sense at the time.

The Macintosh hadn’t set the world on fire from a sales perspective. Gates — then an Apple developer, with his two most successful programs being Excel and Word for Macintosh — advocated that Apple adopt what would become the Windows strategy, by licensing Mac OS to third parties.

Apple refused to do this, believing that companies serious about software should also build their own hardware. As a result, companies like Digital Research began building Mac clones.

Invaders at the (Bill) Gates

Apple was able to fight off the Digital Research challenge, but Microsoft had more going in its favor. You could make the case that Apple needed Microsoft’s software more than Microsoft needed Apple’s hardware.

Under the deal, Microsoft agreed to continue to develop Word for Mac. The company also agreed to delay the arrival of Excel for Windows until October 1, 1986.

Microsoft also would acknowledge — on-screen — that “the visual displays in [its programs] are derivative works of the visual displays generated by Apple’s Lisa and Macintosh graphical user interface programs.”

Gates argued that Windows simply borrowed from the same Xerox PARC graphical user interface that inspired Apple to develop its user-friendly GUI.

A lousy deal for Apple

This pact between Cupertino and Redmond proved disastrous for Apple. While it produced the desired effect of buying short-term peace, it set the scene for Apple’s troubled 1990s. It also paved the way for Microsoft’s subsequent dominance of the software industry.

Relations soured a couple of years later when Windows 2.0 arrived, looking far closer to the Macintosh interface than the original Windows. Apple alleged that Microsoft copied 189 different design elements illegally — only for Judge William Schwarzer to rule that the interface elements for the new Windows were covered by the existing license between Apple and Microsoft.

  • Deplorable Lance Corvette

    If I was a copyright, trademark and trade secret lawyer – which I am – I would physically restrain a client from signing such a deal, unless there was a really, really, really, really big payment accompanying it.

    Words like “royalty free” and “perpetual” scare me. And I see room for all sorts of mischief in just that short quoted passage.