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The new proposal, called Second Revised Proposed Final Judgement, is an update to the proposed settlement reached in November last year between Microsoft, the DOJ and nine US states.
Nine other US states and the District of Columbia are still pursuing the case against Microsoft.
The revisions follow a review of public comments on the settlement, Microsoft said.
First to go is a clause that opponents claimed allowed Microsoft to require PC makers and other special licensees to give up their intellectual-property rights.
The nine dissenting states also asked the same court to reject the original proposed settlement because Microsoft was using that clause to force PC makers to waive their patent rights.
The changed settlement proposal also forbids Microsoft from promoting its own middleware applications over those supplied by competitors. Windows users should be allowed to launch competing software, instead of the Microsoft application, via an "unbiased mechanism," according to the updated settlement.
Microsoft, the DOJ and the settling states asked Judge Kollar-Kotelly to approve the settlement as final judgment.