Apple v. San Francisco Canyon

Citation: Apple Computer, Inc. v. San Francisco Canyon Co. [citation needed]

Factual Background
San Francisco Canyon Co. was a software developer that contracted with Apple Computer in 1992 to port the QuickTime technology to Microsoft Windows. They made their first release of QuickTime for Windows in November 1992.

In July 1993, Intel contracted San Francisco Canyon Co. to improve the performance of Microsoft's Video for Windows technology on Intel processors. By the end of 1993, Intel and Microsoft had combined their efforts to improve Video for Windows by creating a joint technology called Display Control Interface, that was included in version 1.1d of Video for Windows.

Trial Court Proceedings
The lawsuit, filed on December 6, 1994, alleged that the San Francisco Canyon used some of the code developed under contract to Apple, in their additions to Video for Windows. Apple expanded the lawsuit to include Intel and Microsoft on February 10, 1995, alleging that Microsoft and Intel knowingly used the software company to aid them in stealing several thousand lines of Apple's QuickTime code in their effort to improve the performance of Video for Windows.

On March 3, 1995, a Federal judge issued a temporary restraining order that prohibited Microsoft from distributing its current version of Video for Windows. Microsoft subsequently released version 1.1e of Video for Windows, that removed all of the code contributed by San Francisco Canyon, stating in the release notes "does not include the low-level driver code that was licensed from Intel Corporation." Later testimony in the Microsoft anti-trust trial revealed that, at the time, Apple was threatening Microsoft with a multi-billion dollar lawsuit over the allegedly stolen code, and in return Bill Gates was threatening with the cancellation of Office for the Mac.

In August 1997, Apple and Microsoft announced a settlement deal. Apple would drop all current lawsuits, including all lingering issues from the Apple Computer, Inc. v. Microsoft Corp. lawsuit and the "QuickTime source code" lawsuit, and agree to make Internet Explorer the default browser on the Macintosh unless the user explicitly chose the bundled Netscape browser. In return, Microsoft agreed to continue developing Office, Internet Explorer, and various developer tools and software for the Mac for the next five years, and purchase $150 million of non-voting Apple stock.

The companies also agreed to mutual collaboration on Java technologies, and to cross-license all existing patents, and patents obtained during the five-year deal, with one another.