A more complete explanation, from more of a management perspective (source: https://www.filfre.net/2018/07/doing-windows-part-6-look-and... ):

> Gates and others at Microsoft had gone on the record repeatedly saying they intended for Windows and the Macintosh to be sufficiently similar that they and other software developers would be able to port applications in short order between the two. Few prospects could have sounded less appealing to Sculley. Apple, whose products then as now enjoyed the highest profit margins in the industry thanks to their allure as computing's hippest luxury brand, could see their whole business model undone by the appearance of cheap commodity clones that had been transformed by the addition of Windows into Mac-alikes. Of course, one look at Windows as it actually existed in 1985 could have disabused Sculley of the notion that it was likely to win any converts among people who had so much as glanced at MacOS. Still, he wasn't happy about the idea of the Macintosh losing its status, now or in the future, as the only GUI environment that could serve as a true, comprehensive solution to all of one's computing needs. So, within weeks of Jobs's departure, feeling his oats after having so thoroughly cowed Digital Research, he threatened to sue Microsoft as well for copying the "look and feel" of the Macintosh in Windows.

> He really ought to have thought things through a bit more before doing so. Threatening Bill Gates was always a dangerous game to play, and it was sheer folly when Gates had the upper hand, as he largely did now. Apple was at their lowest ebb of the 1980s when they tried to tell Microsoft that Windows would have to be cancelled or radically redesigned to excise any and all similarities to the Macintosh. Sales of the Mac had fallen to some 20,000 units per month, about one-fifth of Apple's pre-launch projections for this point. The stream of early adopters with sufficient disposable income to afford the pricey gadget had ebbed away, and other potential buyers had started asking what you could really do with a Macintosh that justified paying two or three times as much for it as for an equivalent MS-DOS-based computer. Aldus PageMaker, the first desktop-publishing package for the Mac, had been released the previous summer, and would eventually go down in history as the product that, when combined with the Apple LaserWriter printer, saved the platform by providing a usage scenario that ugly old MS-DOS clearly, obviously couldn't duplicate. But the desktop-publishing revolution would take time to show its full import. In the meantime, Apple was hard-pressed, and needed Microsoft -- one of the few major publishers of business software actively supporting the Mac -- far too badly to go around issuing threats to them.

> Gates responded to Sculley's threat with several of his own. If Sculley followed through with a lawsuit, Gates said, he'd stop all work at Microsoft on applications for the Macintosh and withdraw those that were already on store shelves, treating business computing henceforward as exactly the zero-sum game which he had never believed it to be in the past. This was a particularly potent threat in light of Microsoft's new Excel spreadsheet, which had just been released to rave reviews and already looked likely to join PageMaker as the leading light among the second generation of Mac applications. In light of the machine's marketplace travails, Apple was in no position to toss aside a sales driver like that one, the first piece of everyday Mac business software that was not just as good as but in many ways quite clearly better than equivalent offerings for MS-DOS. Yet Gates wouldn't stop there. He would also, he said, refuse to renew Apple's license to use Microsoft's BASIC on their Apple II line of computers. This was a serious threat indeed, given that the aged Apple II line was the only thing keeping Apple as a whole afloat as the newer, sexier Macintosh foundered. Duly chastised, Apple backed down quickly -- whereupon Gates, smelling blood in the water, pressed his advantage relentlessly, determined to see what else he could get out of finishing the fight Sculley had so foolishly begun.

> One ongoing source of frustration between the two companies, dating back well into the days of Steve Jobs's power and glory, was the version of BASIC for the Mac which Microsoft had made available for purchase on the day the machine first shipped. In the eyes of Apple and most of their customers, the mere fact of its existence on a platform that wasn't replete with accessible programming environments was its only virtue. In practice, it didn't work all that differently from Microsoft's Apple II BASIC, offering almost no access to the very things which made the Macintosh the Macintosh, like menus, windows, and dialogs. A second release a year later had improved matters somewhat, but nowhere near enough in most people's view. So, Apple had started work on a BASIC of their own, to be called simply MacBASIC, to supersede Microsoft's. Microsoft BASIC for the Macintosh was hardly a major pillar of his company's finances, but Bill Gates was nevertheless bothered inordinately by the prospect of it being cast aside. "Essentially, since Microsoft started their company with BASIC, they felt proprietary towards it," speculates Andy Hertzfeld, one of the most important of the Macintosh software engineers. "They felt threatened by Apple's BASIC, which was a considerably better implementation than theirs." Gates said that Apple would have to kill their own version of BASIC and -- just to add salt to the wound -- sign over the name "MacBASIC" to Microsoft if they wished to retain the latter's services as a Mac application developer and retain Microsoft BASIC on the Apple II.

> And that wasn't even the worst form taken by Gates's escalation. Apple would also have to sign what amounted to a surrender document, granting Microsoft the right to create "derivative works of the visual displays generated by Apple's Lisa and Macintosh graphic-user-interface programs." The specific "derivative works" covered by the agreement were the user interfaces already found in Microsoft Windows for MS-DOS and five Microsoft applications for the Macintosh, including Word and Excel. The agreement provided Microsoft with nothing less than a "non-exclusive, worldwide, royalty-free, perpetual, non-transferable license to use those derivative works in present and future software programs, and to license them to and through third parties for use in their software programs." In return, Microsoft would promise only to support Word and Excel on the Mac until October 1, 1986 -- something they would certainly have done anyway. Gates was making another of those deviously brilliant tactical moves that were already establishing his reputation as the computer industry's most infamous villain. Rather than denying that a "visual display" could fall under the domain of copyright, as many might have been tempted to do, he would rather affirm the possibility while getting Apple to grant Microsoft an explicit exception to being bound by it. Thus Apple -- or, for that matter, Microsoft -- could continue to sue MacOS's -- and potentially Windows's -- competitors out of existence while Windows trundled on unmolested.

> Sculley called together his management team to discuss what to do about this Apple threat against Microsoft that had suddenly boomeranged into a Microsoft threat against Apple. Most at the meeting insisted that Gates had to be bluffing, that he would never cut off several extant revenue streams just to spite Apple and support this long-overdue Windows product of his which had been an industry laughingstock for so long. But Sculley wasn't sure; he kept coming back to the fact that Microsoft could undoubtedly survive without Apple, but Apple might not be able to survive without Microsoft -- at least not right now, given the Mac's current travails.