Microsoft and Lindows Settle Trademark Case

REDMOND, Wash., and SAN DIEGO — July 19, 2004 — Lindows.com and Microsoft Corp. today jointly announced that a worldwide settlement has been reached in the trademark infringement cases between the two companies.

"This case was centered on the fundamentals of international trademark law and our necessary efforts to protect the Windows® trademark against infringement," said Tom Burt, corporate vice president and deputy general counsel for Microsoft. "This settlement addresses those concerns, and we are pleased that Lindows will now compete in the marketplace with a name distinctly its own."

"We are pleased to resolve this litigation on terms that make business sense for all parties,” said Michael Robertson, CEO of Lindows, Inc. “Over the next few months Lindows will cease using the term Lindows and transition to Linspire globally as our company name and primary identifier for our operating system product."

The settlement agreement resolves all claims in this litigation, both in the United States and internationally. Terms of the settlement are confidential.

About Linspire

Linspire is an affordable Linux-based operating system, designed specifically for desktop and laptop computers in homes, schools and businesses.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information, print and online media only:

Rapid Response Team, Waggener Edstrom for Microsoft, (503) 443-7070, [e-mail:rrt@wagged.com]

Ellie Sanchez, Linspire, (858) 587-6700, ext. 263

For more information, financial analysts only:

Curt Anderson, Microsoft Investor Relations, +1 (425) 706-3703

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