1. This document is a supplementary memorandum of cooperation between the Chinese government and Microsoft regarding the development of a Chinese version of Windows 95. 2. It outlines standards and specifications for the Chinese language version, including supported character sets, fonts, input methods, and testing requirements. 3. Key Chinese organizations like CITS and CPTC will develop related standards and test the Chinese parts of the software for compliance. Microsoft will contract with recommended Chinese companies for fonts and input methods.

1. CHINESE WINDOWSTM 95 PROJECT AGREEMENT ON
SPECIFICATION AND STANDARDS
(SUPPLEMENTARY MEMORANDUM OF Cooperation)
MICROSOFT WINDOWSTM95 PROJECT AGREEMENT ON
SPECIFICATION AND STANDARDS
SUPPLEMENTARY MEMORANDUM OF UNDERSTANDING FOR CHINESE1
1
To any mild student of English and Chinese languages, it is amazing to witness the creative translation of Chinese into English by
Microsoft. Microsoft’s deft translation is scarier than Orwellian doublespeak. The strange construction of the title of this agreement in
English as crafted by Microsoft was done for a singular purpose. Microsoft was determined from the outset to defraud the Chinese
Government and the software developers. Microsoft could not bring itself admit that the scope of the agreement being documented
herein is about “Chinese version of Windows™95”.
Microsoft’s intent to defraud is proved by the following:
1. Microsoft intentionally changed “Chinese Windows™ Project Agreement” to “Microsoft Windows™ and thus changing the
scope and purpose of this agreement.
2. Microsoft intentionally added “for Chinese” to the end of title to avoid arousing suspicion about the difference in translation.
This agreement is not only an agreement on specification and standards. It is also the definitive agreement in which the Chinese
Government spelled out for Microsoft on how to engineer its Chinese Version of Windows™95 with the help of local software vendors.
The Chinese Government provided a short list of Chinese software vendors to provide the necessary fonts and the Input Method Editors
for use in the Chinese version of Windows™95. This is also the definitive agreement in which the Chinese Government stated that CITS, a
Chinese Government entity, instead of the individual Chinese software vendors is the licensor and will manage the copyright and royalties
on behalf the Chinese software vendors. According to the Chinese Government, “CITS will license to MS technologies in a reasonable way,
at reasonable price and in accordance with the provisions of the relevant departments of Chinese Government” The Chinese software
vendors listed in this agreement would then be selected by Microsoft to enter into a Licensing agreements for either fonts or Input
Method Editors, but the terms and conditions as well as fee and royalties would have already been determined in this agreement.
The substantive negotiation for the fonts and Input Method Editors were conducted between Microsoft and the Chinese Government
with the recommended Chinese software vendors sitting quietly on the sideline. This agreement stipulated that the three‐way licensing
agreement between Microsoft, Chinese software vendors and CITS must conform to this agreement.

2. In accordance with the Memorandum of Cooperation for Chinese Windows™ 95 Project (“MOU”)
entered into by and between the Ministry of Electronics Industry of the People’s Republic of China
(“MEI”) and Microsoft Corporation (“MS”) on December 8, 1994, the Standardization Department of
China State Bureau of Technical Supervision (“CSBTS”) and the Computer and Information
Advancement Department of MEI have jointly engaged in consultations with MS and reached an
agreement as follows on matters regarding the specifications and standards for the Chinese language
version of Microsoft Windows™95 and the Chinese partners:
Whereas, in accordance with the Memorandum of understanding for Chinese Windows 95 Project (the
“MOU”) entered into between the Ministry of Electronics Industry of the People’s Republic of China (the
“Ministry”) and Microsoft Corporation (“Microsoft”) on December 8,1994. The parties have engaged in
further discussions regarding the specifications and standards for the Chinese language version of Microsoft
Windows 95 (the “Software”);
And Whereas the Computer and Information Advancement Department of the Ministry, the
Standardization Department of China State Bureau of Technical Supervision(“CSBTS”) and
Microsoft, following extensive discussion have agreed on standards and specifications for the
software, and have identified certain Chinese development partners who shall work with Microsoft
in completing research and development projects relating to the software. These partners include
the China system Platform Standardization Technical Committee (“CPTC”), and the Committee
on information Technology Standards (“CITS”).

3.
1 CSBTS and MEI will ensure the specific performance of this Agreement by the Committee on
Information Technology Standards (“CITS”) and the China System Platform Standardization
Technical Committee (“CPTC”). MS respects2 Chinese Government’s standard management
of Chinese information fundamental technology market and the technology license procedures
3
agreed upon by both Parties (see Appendices A and B for details).
1. CSBTS and the Ministry will ensure the performance by CPTC and CITS of all responsibility
attributed to them in this Supplementary MOU.
MS respects Chinese government policy on Chinese information technology standardization and
the technology transfer method agreed upon mutually by MS, CSBTS and the Ministry. For
detail, See Appendices A and B.
2 CSBTS and MEI designate CITS and CPTC to organize the formulation of corresponding
Chinese National Standards or Industry Standards and Specifications with reference to the
specifications and requirements proposed by MS and its Chinese partners regarding the
functions of Chinese version of Windows™ 95. MS complies with such standards and
2
Chinese Government wants Microsoft to respect its “standard management of Chinese information technology market.” No such luck!
Microsoft could not bring itself kowtow to the Chinese Government and concede to the Chinese Government a role in managing the
information technology market, such as setting the prices of licenses and royalty fees. The English version of the agreements omitted the
word “market” and completely ignores the ideas expressed in the Chinese version of the agreement! No consensus ad idem.
3
Microsoft is piqued by Chinese Government’s involvement in the IT market.

4. specifications once approved and promulgated by CSBTS or MEI. The standards and
specifications shall include the technical details such as Chinese language, fonts, device
drivers as well as application program interfaces.
2. On the basis of the specifications proposed by Microsoft and its Chinese development
partners, CITS and CPTC shall formulate corresponding National Standards or
Industry Standards and shall submit such draft National standards or industry
standards to the Ministry for approval. The Ministry shall submit approved National
standards to CSBTs for promulgation in accordance with the Standardization Law.
The Ministry shall promulgate approved Industry Standards and shall file them for the
record with CSBTs in accordance with the Standardization Law. The said National
Standards or Industry Standards will include standards related to Chinese-language
related functionalities, fonts, device drivers, application program interfaces and other
technical details. Microsoft shall comply with such standards once promulgated in
accordance with the terms of this section.
3 The Character Sets supported by the Chinese version of Windows™95 shall include all
characters available in GB2312 and Chinese characters in GB13000 (CJK Chinese
character set). The plan proposed by the Chinese Party for extension of Chinese
characters regarding the coding structure and code assignment shall be used as the basis
for formulation of the relevant standards. The plan shall be applicable to all software
companies relating thereto including foreign companies and the Chinese version of
Windows™ ™. See Exhibit 1 for the plan proposed by the Chinese Party for extension of
Chinese characters regarding the coding structure.

5. 3. The Software shall support all Chinese Characters available in the Chinese Character Code
Sets GB2312 and GB13000 (CJK Chinese character set). The coding structure and code
assignment of the Software shall conform to the proposal by CITS for extending the
GB2312 standard. The CITS plan of character set. Coding scheme and code assignment
will be used as the basis for the future GB extension standard to be submitted to the
CSBTS for approval as the National standard or to the Ministry for approval as the
Industry standards. The Ministry, CPTC, CITS and CSBTS shall publicly endorse and
promote these code standards within standards organizations, the software Industry and in
respect of any software development undertaken in the People’s Republic of China. These
code standards shall be applicable to all software companies in relevant fields of
development, including Microsoft. CITS’ initial commitment to this standard is expressed
in Exhibit 1.
4. In respect of the Chinese fonts incorporated by the Chinese version of Windows™ 95, MS shall
accept the standardized True Type Chinese fonts as recommended by CITS; CITS will license
to MS technologies in a reasonable way, at reasonable price and in accordance with the
provisions of the relevant departments of Chinese Government. See Appendix A for the list of
recommended development partners for fonts and terms of agreement.

6. 4. Microsoft acknowledges4 the recommendations made by CITS, of the Chinese
development partners listed in Appendix A. and, with the assistance of CITS5. Microsoft
shall enter into agreements with one or more of such companies to acquire rights in respect
of certain True Type Chinese fonts in accordance with Appendix A.
5 In respect of the input methods for Chinese language incorporated by the Chinese version
of Windows™ 956, MS shall accept the standardized input methods for Chinese language as
recommended by CITS; CITS will license to MS technologies in a reasonable way7, at
reasonable price and in accordance with the provisions of the relevant departments of
Chinese Government. See Appendix B for the list of recommended development partners
and terms of agreement.
5. Microsoft acknowledges the recommendations made by CITS, CPTC and the Ministry
of Chinese Development Partners listed in Appendix B, and, with the assistance of
4
Microsoft’s aversion for Chinese government’s intervention is palpable throughout this document. Starting with Clause 4, “Microsoft
shall accept” in Chinese becomes “Microsoft acknowledges” in Chinese. Microsoft is reluctant to accept the dictum of Chinese
Government.
5
Another important fundamental philosophical difference between Microsoft and the Chinese Government also surfaced in this clause.
Microsoft detested the idea that it has to enter into a licensing agreement with the Chinese Government. The Chinese Government’s
view as stated in the Chinese version is that “CITS will license to Microsoft in a reasonable way, at a reasonable price and in accordance
with the provisions of the relevant departments of Chinese Government.” Microsoft, on the other hand, believes that it is entitled to
enter into agreement with individual Chinese company with the “assistance of CITS”. The inconvenient wordings, such as “reasonable
way”, “reasonable price” and “in accordance with the provision of … Chinese Government” were not part of Microsoft’s vocabulary.
6
The clause in the Chinese version of the agreement limited the scope of the agreement to “the Chinese Version of Windows 95”, and
once again Microsoft deliberately omitted it in the English Version. Microsoft’s sudden penchant for brevity is rather moving. In an
agreement about Chinese version of Windows 95, Microsoft goes out its way to avoid mentioning it. What subterfuge, what dark
machination, could possibly be motivating these IT wizards? Microsoft and the Chinese Government are clearly at odds about who is in
charge in the whole licensing process. Chinese Government believed that it is in charge while Microsoft believed that the Chinese
Government has little or no business in a licensing agreement and is only a source of assistance in the matter. As far as the individual
Chinese software company is concerned, the Chinese Government has negotiated a “reasonable price” to license the technology to
Microsoft in a “reasonable way.” The license fee and royalty for its fonts and input methods incorporated in the Chinese version of
Windows 95 are already stated in the Supplement to the Memorandum of Understanding.
7
The sentence, “CITS will license to MS technologies in a reasonable …”, in the Chinese version of the Supplementary Agreement, which
described CITS as the licensor and in charge of pricing the license fee and royalties, was omitted in its entirety in the English version.

7. CITS, Microsoft shall enter into agrements with one or more such companies to
acquire rights in repect of input method editors (including non-keyboard input method
editor) in accordance with Appendix B.
6. CSBTS and MEI will designate their testing agency to verify compliance of the Chinese
language portions of Chinese version of Windows™ 95 with relevant Chinese Government
standards and requirements. CPTC will propose the testing outlines and criteria and MS will
render the necessary support. CITS will be entitled to the testing fees from MS in a
reasonable way, at reasonable price and in accordance with the provisions of the relevant
departments of Chinese Government and recognize the Chinese version of Windows™ 95
passing the test. CITS will recognize the fonts and input methods used by the Chinese
version of Windows™ 95 as recommended by CITS. See Appendix C for testing fees and
terms of agreement.
7. CSBTS and the Ministry shall designate a testing agency to verify compliance of all
Chinese language portions of the Software with relevant written Chinese
Government standards and requirements. CITS shall propose the testing plan criteria
to be used by the designated testing agency. Fonts and input method editors acquired
by Microsoft from an agree Chinese Development Partners as set out in this

8. Supplementary MOU shall be deemed to be approved by the Ministry, and CITS.
Microsoft shall provide necessary technical support for testing of the Software. The
designated testing agency, under the direction of CITS, shall issue nationally
recognized certification documentation in respect of compliance of the Software
with all applicable mandatory National Standards or mandatory Industry Standards.
CITS shall be entitled to an agreed upon reasonable fee from Microsoft for the
services that it performs under this Clause, following final certification of the
software, in accordance with Appendix C, which fee shall be inclusive of all fees
charged by the designated testing agency.
7. MEI and CSBTS agree to recommend to users the Chinese version of Windows™ 95 complying with
the standards and specifications in Chinese as preferred product.
8. The Ministry and CSBTS agreed to recommend Chinese Windows 95 complying the relevant
standards on Chinese as preferred product to Chinese users.
8. MEI and CSBTS represent that they have the authority to approve and permit Chinese citizens to
license the copyright in computer software developed in the People’s Republic of China in
accordance with Article 28 of the Regulations for the Protection of Computer Software. MEI shall
approve the assignment and licensing of copyright in computer software stipulated in the agreements
entered into by and between MS and Chinese development partners in accordance with Clause 4 and
5 above.

9. 6. The Ministry represents that it has the authority to approve the assignment and
licensing of copyright in computer software developed in the people’s republic of
China by Chinese citizens in accordance with Article 28 of the Regulations for the
Protection of computer software. The Ministry shall approve the assignment and
licensing of copyright in computer software stipulated in agreements entered into
between Microsoft and Chinese Development Partners in accordance with Clauses 4
and 5 above.
9 In respect of the contracts for license of technologies of True Type fonts and input methods
signed by MS and Chinese companies, in the event that contents licensed under the
contracts are consistent with those recommended by CITS, CSBTS and MEI will support
the performance of such contracts, provided however that this does not cover the cases of
the technologies such as extending GB2312 to GB13000 and modified versions.
9. CSBTS and the Ministry will support the continuous execution of the contracts MS
signed with Chinese companies in the case where truetype fonts and IME are in the
recommendation list by CITS. This does not cover the cases such as extending GB2312
to GB13000.
10 This Supplementary MOU and its appendices will form an integral part of the MOU.
10. This Supplementary MOU and its appendices shall form an integral part of the MOU.

10.
Both Chinese and English versions of this Agreement shall be executed with each version having
the same legal effect in ascertaining both Parties’ intentions.8
<Missing in the English version>
8
The differences between the two versions of the agreement are not due to linguistic or cultural nuances or errors in translation. It is
simply that the parties signing these agreements had not or perhaps never would have reached a meeting of the minds or consensus ad
idem, a necessary part of any commercial contract. Perhaps it would have been more intellectually honest to refer to the Chinese version
of the agreement as the “Understanding of Chinese Government …” and the English version as the “Understanding of Microsoft …”
The Chinese Version is a bit more honest since it does contain a clause conceding that both version of the agreement have the same legal
effect in ascertaining both parties’ intention. The Chinese Government at least conceded the possibility that either party may have
different intents. Curiously the English version of the agreement failed to even mention the existence of the Chinese version of the
agreement.
Just like the Chinese Government, Microsoft was keenly aware of the substantial differences in either party’s views. By deliberately
omitting the clause stating the equal validity of both Chinese and English version, Microsoft was trying to plant its version, i.e. the English
version, as the whole truth in the future legal proceedings outside of China.
A benign interpretation of this “Non‐Agreement” is as follows. Microsoft’s negotiating team at the time realized that it has reached an
impasse with the Chinese Government. Chinese Government’s insistence that it has sole authority over the licensing and royalty
concerning fonts and IME did not bode well for Microsoft’s intent to steal the fonts and IME for a song with a simple cap in license fee.
Instead of reaching a real agreement, Microsoft’s negotiation team simply decided to hide the inconvenient truth, i.e. the Chinese version
of the agreement” from its corporate headquarter.
A lesser benign interpretation of the events would show that Microsoft’s negotiating team, staffed with oversea‐Chinese and Taiwanese
compatriots all with competent bi‐lingual skills, negotiated hard with the Chinese Government in Chinese and the agreement reached
with the Chinese Government is substantially and correctly recorded in the Chinese version of the contract.
While the Chinese Government was mainly concerned with mildly admonishing Microsoft for having the audacity to try to engineer the
Chinese version of Windows 95 in Taiwan and getting about setting important standards in regards to the 30 thousands hieroglyphs and
methods of inputting them into the modern day PC, Microsoft was eager to get pass what it viewed as unnecessary and unhelpful
meddling by the Chinese Government. In Microsoft’s opinion, it is a classical case of Adam Smith vs. Karl Marx. In the opinion of the
Chinese Government, it is a case of nerdy Harvard dropout ignorant of China’s six thousand years old history fumbling his way to the
China market and thus requiring some gentle nudging.
Having failed to extricate the Chinese Government out of a commercial licensing agreement with Chinese firms and failed to reach an
agreement on a cap in licensing fee beyond the Chinese version of the Windows 95, Microsoft simply wished away the Chinese version of
the agreement by omitting its existence and took the battle to the next round, i.e. the three‐way licensing agreement between CITS, an
entity of Chinese Government, Microsoft and the software vendor. Instead of respecting “Chinese Government’s standard management
of Chinese information fundamental technology market and the technology license procedures” as stated in the Clause 1 of Chinese
version of the agreement, Microsoft deviated from the licensing and royalty terms agreed in the Supplement to the Memorandum of
Understanding by expanding the scope of license beyond Chinese version of Windows 95. Microsoft expanded the scope of license
agreement beyond “Microsoft Windows95 PRC version” by adding “or any other Microsoft Product.”
As far as the Chinese Government and the individual software companies were concerned the copyrights and royalties were already
uniformly negotiated by the Chinese government with Microsoft. The individual licensing agreement was supposed to conform to the
Supplement to the Memorandum of Understanding.

11. <Missing in the Chinese version>
<Missing in Chinese Version>
IN WITNESS WHEREOF, the parties have caused this Supplementary MOU to be executed by their
respective duly authorized representatives as of the date indicated below.
STANDARDIZATION DEPARTMENT
CHINA STATE BUREAU OF TECHNICAL SUPERVISION
Signature: (sign)
Date: September 20, 1995
COMPUTER AND INFORMATION ADVANCEMENT DEPARTMENT
MINISTRY OF ELECTRONICS INDUSTRY
Signature: (sign)

12. Date: September 20, 1995
MICROSOFT CORPORATION
Signature: (sign)
Date: September 20, 1995

13. APPENDIX A
APPENDIX A
1. List of Recommended Development Partners for Fonts
GB13000 (in the order of Chinese phonetic alphabet):
Song: Beijing Stone Computer Development Center
Beijing Zhong Yi Electronics Company
China Institute of Printing Science Technology
Hei: Beijing Zhong Yi Electronics Company
China Institute of Printing Science Technology
Kai: Institute of Computer Science of Peking University
GB2312 (in the order of Chinese phonetic alphabet):
Song: Institute of Computer Science of Peking University
China Great Wall Computer Group Corp.
Hei: China Great Wall Computer Group Corp.
Kai: Beijing Zhong Yi Electronics Company
China Great Wall Computer Group Corp.
Fang Song: Beijing Stone Computer Development Center
Beijing Zhong Yi Electronics Company

14. China Great Wall Computer Group Corp.
2. The following terms shall be complied with in the adoption by the Chinese version of
Windows™ 95 of such Chinese fonts as recommended by CITS:
B. Standard Terms of Font License Agreements9
Each Font License Agreement with an agreed Chinese Development Partner shall include the
following:
9
The title, “The Standard Terms of Fonts Licensing Agreements”, has no counterpart in the Chinese version, which
attributed the terms to apply narrowly to “Chinese Version of Windows™95” and nothing more. Microsoft sought to
expand the scope of the agreement by deliberate fabrication and omission. The Chinese version carefully limited the scope
of the terms to the Chinese version of Windows 95. Microsoft’s deliberate omission of term “Chinese version of Windows
95” is a proof of Microsoft’s intent to defraud the other parties by expanding the scope of the agreement.

15.
A. The Chinese fonts development partners recommended by CITS shall provide all Chinese fonts
available in GB13000 Chinese code sets. CITS shall be uniformly responsible for managing the
copyright and royalties in respect of such font library as recommended by CITS.10
8. The fonts provided by vendors recommended by CITS should cover all the Chinese
characters in GB13000.
 MS, CITS and the partners recommended by CITS for development of Chinese fonts will
jointly enter into a contract for license of Chinese fonts technology.
The contract shall include a license to MS to use the relevant technology in MS products
designated by MS.
The contract shall contain a sufficiently license to permit MS to have necessary use of the
relevant technology, including but not limited to the right to license to end-users, original
equipment manufacturers and computer peripheral manufacturers, and create improvements
based on such technology. The contract shall include warranties and indemnities from the
Chinese development partners regarding functions and ownership of intellectual property
rights of the relevant technology.
1. The agreement shall be a three-party agreement between CITS, Microsoft and the Chinese
10
Microsoft intentionally omitted the sentence “CITS shall …”, which described CITS’s authority in managing the copyright
and royalties. Chinese version of the Supplementary Agreement described CITS as the licensor of the fonts and IME’s.
Microsoft refused to recognize that position and intentionally omitted all references CITS’s claim.

16. Development partner. The payment will be made to a bank account nominated by both
CITS and font vendor.11
2. The agreement shall include a license to Microsoft to use the relevant technology in all
Microsoft products designated by Microsoft.
3. The agreement shall contain a sufficiently broad license to permit Microsoft to have all
necessary use of the relevant technology, including. But not limited to the right to license to
end-users. Original equipment manufacturers and computer peripheral manufacturers, and
create improvements and derivative works based on the licensed technology.
5. The agreement shall include warranties and indemnities from the Chinese Development
partners regarding functionality and ownership of intellectual property rights of the relevant
technology.
B. Prior to the distribution of the Chinese version of Windows™ 9512, the Chinese fonts
development partners recommended by CITS shall provide MS with all the data and
necessary technical materials relating to the Chinese fonts, and be responsible for correction
of errors in the fonts provided by them and program errors, and for amendment and
supplementation to the necessary fonts. MS shall render necessary materials, software tools
and technical assistance to CITS and the development partners.13
6. The agreement shall oblige the Chinese Development partner (a) to deliver to
Microsoft all source code, object code and documentation of the relevant technology:
(b) to correct all deficiencies and errors in the relevant technology, and repair any
errors, and amend any characters in the font set.
11
There is no equivalent wording in the Chinese version of the agreement.
12
“Prior to the distribution ...” was omitted in the English Version to fraudulently expand the scope of the terms beyond
Chinese version of Windows™95.
13
This sentence appeared in part in Section 8 of English version of the agreement.

17. 8. The agreement shall oblige Microsoft to provide technical assistance and software
tools to the Chinese Development partner and CITS. Microsoft shall complete the
acceptance before the Software is launched.
C. MS shall complete acceptance of the font product provided by the development partners before
the Chinese version of Windows™ 95 is officially launched.
<Missing>
<Missing>
D. MS shall accept at least two fonts (Song and Hei) in the Chinese version of
Windows™95. MS will pay USD1.20 as royalties for each font of each legitimate copy
of the Chinese version of Windows™ 95 or other MS product (including the updated
version) incorporating such font which is distributed by MS, subject to a maximum total
sum of USD500,000 for each font. MS will pay a down payment of USD96, 000 in
respect of each font upon official distribution of the Chinese version of Windows™ 95,
representing the royalties in respect of the first 80,000 copies of MS products. MS will
pay a minimum royalty of USD96,000 for each font.

18.
4. The agreement shall cap the license fee to the amounts set out in this section,14 and
shall terminate if the Software and all other Microsoft products in which the relevant
technology have been included are withdrawn from the market.15 Microsoft shall
acquire at least two fonts. Song and Hei, and Microsoft shall pay US$1.2 in respect of
each copy of the software or other Microsoft product incorporating the relevant
technology which is distributed by Microsoft, up to a maximum of US$500.000.
Microsoft shall pay a non-refundable down payment of US$96.000, on shipment of the
Software, or first Microsoft product incorporating the relevant technology16,
representing the royalties in respect of the first 80.000 copies of the relevant
technology.
E. MS’s obligation to pay royalties in respect of fonts recommended by CITS terminates
upon cessation by MS of distribution of the Chinese version of Windows™ 95 and other
MS products incorporating such fonts.17
14
The highlighted phrase, “The agreement shall cap”, in the English version of agreement has no counterpart in the Chinese
version of the agreement.
15
The termination of the licensing fee is described in a separate and independent section in the Chinese version of the
agreement. Microsoft intentionally combine the Section regarding Fee and Royalties and the Section describing the
Termination to fraudulently introduce “license fee cap”.
16
The highlighted phrase, “or first Microsoft Product …” has no counterpart in the Chinese version and was added to
fraudulently expand the scope beyond “Chinese version of Windows™95”.
17
Microsoft deliberately merge this entire section with the section regarding fee and royalties to falsely create the
appearance of cap in license fee.

19.
APPENDIX B
APPENDIX B
1. List of Recommended Development Partners for Input Methods (in the order of Chinese phonetic
alphabet):
Pictograph Code:
Hieroglyphic Code – Aiwen Computer Company
Zheng Code – Beijing Zhong Yi Electronics Company
Phonetic Code:
GW ABC – China Great Wall Group
Tianli Code – Tianli Company
New Pinyin – Suntendy Company
Natural Code – Chaoxiang Company
A. List of Recommended Partners and details of license fees18
18
The English version of the Agreement for a reason which will be known shortly decided to reduce the actual list of recommended
development partners for input methods to a sentence fragment “List of Recommended Partners, and details of license fees”. What
could be so objectionable about an actual list of Chinese companies that Microsoft is supposed to do business? Without referring to the
Chinese version of the agreement how would such as list be even legally established in a court of law? How can Zhongyi even prove that
it is one of the recommended development partners for input methods?
The answer to these questions may be not so sinister. By omitting the actual list of recommended development partners, Microsoft’s
negotiation team cleverly pared Appendix B to fit within a single A4 or Letter size page just like the Chinese version. If an actual list were
to be included, the English version of the Appendix B would have overflow to a second page and arouse suspicion on the part of Chinese
Government. This explanation may seem completely implausible and asinine, but unfortunately it may be the real truth. The body of the
agreement was two pages long. The signature page was a single page. Appendix A was two pages long. Appendix B had to fit into a single
page. Microsoft negotiation team made sure that the number of pages in the English version of the agreement conforms to that of the
Chinese agreement.

20.
1. The following terms shall be complied with in the adoption by the Chinese version of
Windows™95 of such input method editor (IME) for Chinese language as recommended
by CITS:
B. Standard Terms of Input Method Editor license agreement19
Each input method editor license agreement with an agreed Chinese Development Partner
shall include the following:
 CITS is uniformly responsible for managing the copyright and royalties in respect
of such input methods for Chinese language as recommended by CITS.20
19
“Standard Terms of Input Method Editor License agreements” has no equivalent in the Chinese version of the agreement. Microsoft is
attempting to impose the form of a software licensing agreement without really reaching a consensus ad idem with the Chinese
Government. As far as the Chinese Government is concerned, this entire supplement is about Chinese version of Windows 95. The
Chinese version of section is a simply a declarative sentence, “The following terms shall be complied with in the adoption by the
Chinese version of Windows™95 of such input method editor (IME) for Chinese language as recommended by CITS:” This sentence
clearly spelled trouble for Microsoft Negotiators for it demonstrated Chinese Government’s intent that the agreement is about licensing
the adoption of Chinese IME in the Chinese version of Windows 95. Microsoft created a fictitious title “Stand Terms of Input Method
Editor License agreement” and delete the inconvenient reference to “Chinese Version of Windows 95”
20
The depth of deception employed in the translation of a simple Chinese sentence points to the heart of the problem. The Chinese
Government is trying to resolve the impasse it has with the Chinese version of Windows 95, while Microsoft was focused on creating a
perpetual license for fonts and input methods for the Chinese version of Windows and everything else beyond. My suspicion is that
Microsoft is not only motivated by sheer greed but also by its discernable displeasure for having been singled out by the schoolmaster
and been given a proper thrashing. Microsoft may just avoid the pain of having to negotiate with the Chinese Government for every
major version of Microsoft Windows such as Windows 98 and Windows XP.
As someone who has represented major US hi‐tech companies in similar negotiation back in 1980 and 1990, I can certainly sympathize
with the daunting tasks faced by Microsoft’s team facilitating between Microsoft’s legal department and the Chinese Government. The
body of law governing copyrights and software license must have been scant at the time. The Chinese officials across the table were most
likely not familiar with the rigor demanded in a Western legal contract. The mandarins in Redmond were most likely equally uninformed
about difference between politics and commerce, the East and the West.
The wrangling with a single Chinese sentence by the Microsoft negotiation team depicted its dire situation of being caught between
Microsoft’s mandarins in Redmond bent on a commercial edge and a team of Chinese officials set about a political task of chastening
Microsoft.

21.
<Missing in English Version>
<Missing in English Version>
 MS, CITS and the partners recommended by CITS for development of Chinese IME
will jointly enter into a contract for license of Chinese IME technology. The contract
shall include a license to MS to use the relevant technology in MS products designated
by MS.
The contract shall contain a sufficiently license to permit MS to have necessary use of
the relevant technology, including but not limited to the right to license to end-users,
Original equipment manufacturers and computer peripheral manufacturers, and create
Improvements based on such technology. The contract shall include warranties and
indemnities from the Chinese development partners regarding functions and ownership
of intellectual property rights of the relevant technology.
The all‐encompassing, blanket licensing agreements that Microsoft’s legal department filed away under Chinese fonts and IME may be
the worst Pyrrhic victory in Microsoft’s history. The Licensing Agreement crafted by Microsoft’s negotiating team was grounded in deceits.
The deceits were made against the Chinese Government that had relied on Microsoft to pen the English version of the agreement. It is
not an unusual practice for the Chinese official to skip a line by line comparison of the two versions of the agreements. The knowledge of
English was far from universal in China and these officials thought most of time correctly that the English version would never see the
light of day in China. The same deceits were also made against Microsoft’s senior management and legal department. Bill Gates and
Microsoft’s General Counsel most likely reviewed the English version of the agreement and believed it as the singular truth. Microsoft’s
department most likely believed that its bi‐lingual negotiation team had manhandled the Chinese Government into submission and
Microsoft is safe to use the fonts and IME royalty free perpetually. Like the Chinese officials, no one in Redmond ever conducted a due
diligence review of the two versions of the agreements.
It is also plausible that the intent to deceive may have come from high places in Redmond. It is hard to imagine that Microsoft’s legal
department let a set of bi‐lingual agreements to be signed without addressing the existence of two linguistic versions and their equal
validity. The omission of bi‐lingual agreement clause is most likely deliberate on the part of Microsoft’s legal department for the purpose
of gaining an advantage in potential litigation in the US.
If Microsoft was indeed successful in reaching an agreement with the Chinese to license the Chinese fonts and IME for all current and
future versions of Microsoft Windows, there would not be so many discrepancies between the Chinese and English version of the
agreement. Microsoft, most likely, took a calculated risk thinking that the Chinese government and the Chinese companies would never
sue.

22.
1. The agreement shall be a three‐party agreement between CITS, Microsoft and the
Chinese Development partner. The payment will be made to a bank account nominated
by both CITS and font vendor.21
2. The agreement shall include a license Microsoft to use the relevant technology in all
Microsoft products designated by Microsoft.
3. The agreement shall contain a sufficiently broad license to permit Microsoft to have all
necessary use of the relevant technology, including but not limited to the right to license
to end-users, Original equipment manufacturers and computer peripheral manufacturers,
and create improvements and derivative works based on the licensed technology.
5. The agreement shall include warranties and indemnities from the Chinese
Development partners regarding functionality and ownership of intellectual property
rights of the relevant technology.
21
The sentence “The payment will be made to a bank account nominated by both CITS and font vendor” has no counterpart in the
Chinese version of the agreement. Instead of conceding the leading role taken up by CITS, which according to the Chinese version of the
agreement manages copyright and royalties on behalf of the individual companies. Apparently that management responsibility includes
collecting money from Microsoft and then dividing it out to the individual Chinese companies.
Since Microsoft consistently omitted CITS’s claim for the leadership role, this sentence about the bank account is the only place in the
English version of the agreement where Microsoft acknowledge the role played by CITS. Microsoft may also had been uncomfortable with
the implication of CITS taking money from individual development partners and its implication with the Foreign Corrupt Practices Act
(FCPA) of 1977. It stated something that was agreed between the three parties to the licensing agreement and yet was not written out in
the Chinese version of the contract. Microsoft just wanted to make sure that it is covered.

23.  The Chinese IME development partners recommended by CITS shall provide MS with
all the data, source codes and necessary technical materials relating to IME, and be
responsible for correcting omissions in IME provided by them, program errors or other
IME errors. MS shall render necessary materials, software tools and technical assistance
to CITS and the IME development partners.
6. The agreement shall oblige the Chinese Development partner (a) to deliver to Microsoft
all source code, object code and documentation of the relevant technology: (b) to correct
all deficiencies and errors in the relevant technology.

24.
 MS shall accept at least two IMEs (phonetic code and pictograph code) in the Chinese
Version of Windows ™ 95. MS will pay USD0.50 as royalties for each IME of each
legitimate copy of the Chinese Version of Windows™ 95 or other MS product
incorporating such IME which is distributed by MS, subject to a maximum total sum of
USD250,000 for each IME. MS will pay a down payment of USD25,000 in respect of
each IME upon official distribution of the Chinese version of Windows™ 95,
representing the royalties in respect of the first 50,000 copies of MS products. MS will
pay a minimum royalty of USD25,000 for each IME.
4. The agreement shall cap the license fee to the amounts set out above22, and shall terminate
if the Software and all other Microsoft products in which the technology have been
included are withdrawn from the market. Microsoft shall acquire at least input method
editors. Stroke based and phonetic and Microsoft shall pay US$10.5 in respect of each
copy of the software or other Microsoft product incorporating the relevant technology
which is distributed by Microsoft, up to a maximum of US$250.000. Microsoft shall pay a
non-refundable down payment of US$25.000, on shipment of the Software, or first
Microsoft product incorporating the relevant technology, representing the royalties in
respect of the first 50.000 copies of the relevant technology.
22
In the Chinese Version of this section， the translation of this clause starts with “Microsoft in Chinese version of Window 95 shall
accept”. Nowhere is the phrase “The agreement shall cap the license fee to the amount set out above” to be found in the Chinese
version of the agreement. By introducing the phrase “The agreement shall cap the license fee to the amounts set out above”, Microsoft’s
negotiation team is simply trying to bamboozle the Chinese and unilaterally declared a victory when there was none.
It could be argued that the IME development partner does not have a free will in entering into this agreement with Microsoft.

25.
 MS’s obligation to pay royalties in respect of IME recommended by CITS terminates
upon cessation by MS of distribution of the Chinese Version of Windows™ 95 and other
MS products incorporating such IMEs.23
<Missing>
<Missing>
23
According to the Chinese version of the agreement, Microsoft’s obligation terminates only when Microsoft ceases to distribute the
Chinese Version of Windows 95 and other MS products incorporating such IMEs. No other conditions were set forth for the termination
of Microsoft’s obligation to pay royalties. If the Chinese Government had agreed to a cap in license fee, additional wordings would have
been added here.
This one sentence clause is so horrible for Microsoft to countenance that it made it disappeared. Microsoft created the phrase, “The
agreement shall cap the license fee to the amounts set out above” to tag onto this one sentence.
Instead of reaching a real mutual understanding with the Chinese Government on the end of the royalty payments, Microsoft tried to
create a license fee cap cutting and pasting sentence fragments from the Chinese version of the agreement to fashion license fee cap
clause that Microsoft failed to obtain from the Chinese Government. Once again, there is no consensus ad idem.

26.
APPENDIX C
Testing Fee
Testing Fee
After the Chinese version of Windows™ 95 passes the compatibility testing conducted by the testing
agency designated by CSBTS and complies with the requirements of the Chinese Government
regarding standards and specifications, MS will pay to CITS a fee of USD10,000 as the testing fee
for the Chinese version of Windows™ 95, such fee to be inclusive of all charges relating to the
testing of the Software.

28.
CODE ASSIGNMENT SKETCH ON EXTENSION OF
INTERNAL CODE OF CHINESE VERSION OF WINDOWS™ 95