Microsoft and the U.S. Justice Department agreed to extend some portions of federal antitrust oversight by 18 months, to May 2011, according to court papers filed on Thursday.

Microsoft settled U.S. antitrust charges in 2002 that it abused its dominance of the market for personal computer operating systems. Court oversight had been scheduled to end on November 12.

The Justice Department and states involved in the antitrust suit said in the filing that the November deadline would not give them enough time to assess whether Microsoft had removed all the errors from the technical information it is required to give potential licensees who write programs for Microsoft's Windows.

Microsoft has consented to this extension, the parties said in the filing, known as a joint status report. The new expiration date is May 12, 2011.

The 2002 consent decree covers the company's ties to computer makers, how its software works with other types of software, and enforcement to ensure it does not repeat past practices.

Microsoft was required to issue licenses for companies that want to write programs for the Windows operating system. It was also required to provide technical information about Windows to help make the programs work.

Once the oversight ends, Microsoft will be able to charge a small royalty on the patented portions of the documentation, about 0.3 percent of the products sold.

It's quite small by Microsoft revenue standards but it's important that ... inventiveness be recognized in the industry, said a person familiar with Microsoft's strategy. It is a very positive step.

The next status hearing is set for next Wednesday, April 22.

Microsoft has also been tangling with EU authorities, and the U.S. company has been fined in Europe several times for allegedly abusing its 95 percent dominance of personal computer systems through its ubiquitous Windows software.

The EU fined the U.S. software company a record 899 million euros last year for discouraging software competition, the biggest ever imposed on a corporation at the time.

600 MICROSOFT EMPLOYEES ON THE JOB

The extension of U.S. court oversight was not linked to Microsoft's coming release of Windows 7, the document said. However, the government needs to thoroughly review all the technical documentation for Windows 7 and that will be possible only after Microsoft releases the final system documents on June 30, the court filing said.

Even if there were no pending release of Windows 7, (the government) would recommend the same extension to the final judgments, the court document said.

Microsoft, in a section of the court document that the company authored, said more than 600 company employees were working on the company's communications protocol program to improve technical documentation provided to licensees.

Microsoft understands that Windows Operating System products released during the pendency of the final judgment must comply with the final judgment and will take all steps necessary to ensure that compliance including providing (the government and states) an adequate opportunity to conduct their compliance review, the company said.

U.S. v Microsoft, U.S. District Court, District of Columbia, No. 98-1232

(Reporting by Diane Bartz; Editing by Brian Moss, Gary Hill)

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