Judge Frederick Motz ruled late last week that Novell could push ahead with claims that Microsoft damaged its office productivity applications business through the anti-competitive use of its operating systems monopoly, and that Microsoft restrained trade through agreements with OEM partners.
The judge granted Microsoft’s motion to dismiss four other claims, however, on the grounds that Waltham, Massachusetts-based Novell should have brought the claims – that Microsoft monopolized the market for word processing and spreadsheets – sooner.
Novell launched its private antitrust action against Microsoft in November 2004 shortly after a $536m settlement between the two related to Novell’s NetWare operating system business. The claims relate to the WordPerfect and Quattro Pro applications that Novell sold to Corel in March 1996.
The critical issue in deciding whether to allow Novell to proceed with the claims was whether they were covered by the US government’s antitrust action against Microsoft, according to Judge Motz’s memorandum in support of his motion.
While the government’s case against Microsoft touched on its monopolization and attempted monopolization of the word processing and spreadsheet markets, charges related to those markets were not actually brought against Microsoft by the government.
Novell’s claims on these issues were therefore not protected by the suspension of the statute of limitations triggered by US Government proceedings, according to the judge, and should have been brought by Novell with four years of Microsoft’s alleged actions.
The judge decided that Novell can bring claims related to action allegedly undertaken by Microsoft against Novell’s office applications for the purpose of maintaining its operating systems monopoly, however, as such claims were clearly covered in the government case.
Judge Motz cited a 1997 email sent from Jeff Raikes, now the group vice president of Microsoft’s information workers business, to US investor and businessman Warren Buffet, that was presented by Novell in support of its argument.
If we own the key ‘franchises’ built on top of the operating system, we dramatically widen the ‘moat’ that protects the operating system business, Raikes wrote. We hope to make a lot of money off these franchises, but even more important is that they should protect our Windows royalty per PC.
Unless a settlement is reached in the meantime, the next stage in the legal process will be for Microsoft and Novell to agree a schedule for discovery and summary judgments, which could come as soon as the next telephone conference between the Judge and the two companies, which is scheduled for July 6.
