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Novell to appeal judge's decision to toss Microsoft suit

Published July 16, 2012 8:32 pm

Antitrust • He tosses suit in which the Utah company had sought $1B.
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Novell Inc. said it will appeal a judge's decision Monday that dismissed a long-running antitrust lawsuit against Microsoft Corp. stemming from the introduction of the Windows 95 operating system.

U.S. District Judge Frederick Motz ruled that, as a matter of law, Novell cannot continue to pursue the case filed in 2004 that alleged then-CEO and current Microsoft Chairman Bill Gates had violated antitrust laws in order to stall Novell's development of a Windows 95 version of WordPerfect, which Novell once owned.

An eight-week trial in the case ended in December with a hung jury when a lone member of the panel held out in Microsoft's favor. Novell was asking for nearly $1 billion for damages it says were caused by Gates' decision.

Motz, a Baltimore judge who had presided over a string of antitrust lawsuits against Microsoft that began in the 1990s, said in his ruling Novell "did not present evidence sufficient for a jury to find that Microsoft committed any acts that violated [antitrust laws] in maintaining its monopoly in the operating systems market."

The ruling came despite jurors saying last winter that 11 of their 12 members favored Novell during deliberations after hearing evidence and experts from both sides. Motz noted the jury split in his decision handed down Monday, writing "the fact that a majority of the jurors would have returned a verdict of liability in favor of Novell does not relieve me of the responsibility to rule on [Microsoft's] independent claims.

Jim Lundberg, Novell vice president for legal matters, said the company would appeal. "Novell still believes in the strength in its claim and we do intend to pursue an appeal."

An appeal will go to the 10th Circuit Court of Appeals in Denver. An earlier decision by Motz on a related question was previously reversed by the 4th Circuit Court of Appeals, a ruling that led to the trial late last year in Salt Lake City.

A Microsoft attorney said the company was pleased to ostensibly put the case behind it.

"We've maintained throughout that Novell's arguments lack merit, and we're gratified with today's ruling dismissing the last of Novell's claims and putting this matter to rest," Microsoft's deputy general counsel, David Howard, said in a statement.

Novell, based in Provo, alleged that Gates' decision in 1994 to withdraw support for a previously announced feature of the Windows 95 operating system violated antitrust laws because it was intended to harm the word processor WordPerfect, which Novell bought shortly before that. Novell — then the dominant provider of networking software — had purchased WordPerfect in an effort to compete with Microsoft in areas beyond its core products, a decision that turned out disastrous for the company.

During his testimony during Thanksgiving week last year, an at-times combative and acerbic Gates denied he made the 1994 decision in order to slow Novell's effort to produce a Windows 95 version of WordPerfect in a suite of software that would compete with Microsoft's Office. Instead, Gates said, developers feared the feature dealing with file management could crash Microsoft's computer operating system Windows NT, which was to share codes with Windows 95.

Several jurors said they did not believe Gates' version of events.

Gates' withdrawal of support for the feature meant Novell had to rewrite code that would make its applications such as WordPerfect work together as a suite on Windows 95. That made it too late to update WordPerfect, then the world's leading word processor, and that Microsoft's Office surged insurmountably ahead.

Microsoft denied it had engaged in antitrust actions and also said Novell's stumbles were a result of poor management decisions.

tharvey@sltrib.com

Twitter: @TomHarveySltrib