Microsoft Fights Back in Japan: The head of Microsoft's Japan unit acknowledged Tuesday that the U.S. software giant's battle with Japanese anti-monopoly authorities over the company's licensing clause is hurting its corporate image here.

But Michael Rawding said the company will continue to oppose the Fair Trade Commission's decision last month. He said the legal wrangle could last as long as two years. Commission officials agree the battle could be a long one.

The Fair Trade Commission sent an official warning to Microsoft on July 13, demanding that it drop the clause in licensing agreements that the commission suspects help Microsoft unlawfully infringe patents.

The clause prevents companies from suing Microsoft or other licensees over suspected cases of patent and copyright infringement in which elements of manufacturers' own software technology may end up in the Windows system.

The contract clause, called the "non-assertion of patents provision," says companies that sign Windows licensing agreements will forgo the right to sue over suspected patent infringements linked to the licensing.

The commission said the clause is "restrictive" by making it difficult for Japanese electronics companies to obtain royalty fees even when rivals violate their patents. The commission did not levy a fine or issue other penalties.