Correct, based off HPFS (iirc) and it's a phenomenal Filesystem. The only downside is the lack of documentation for it which Microsoft refuses to give out. From the open documentation I've seen however, it's extremely complicated when it comes to it's security measures.
In light of this new patenting a few of us are developing a new Filesystem which will be even simpler than FAT, allow long filenames out of the box, and be extremely easy for anyone to implement into thier OS.