Microsoft Competitor Left in Dust Loses Suit

SALT LAKE CITY (CN) - A federal judge has dismissed a long-running, $1.3 billion antitrust case against Microsoft after finding insufficient evidence that Windows 95 knocked competing office software out of the market.

U.S. District Judge Frederick Motz concluded Utah-based Novell's lawsuit on Monday after seven years of litigation.

In 2004, Novell said Microsoft withheld critical technical information required to make its WordPerfect and Quattro Pro products compatible with the Windows 95 operating system.

Novell claimed that Microsoft monopolized the software applications market and the operating systems market, and that it engaged in exclusionary agreements in unreasonable restraint of trade.

Just one claim went to the jury, but the case ended in a December 2011 mistrial.

"Although Novell presented evidence from which a jury could have found that Microsoft engaged in aggressive conduct, perhaps to monopolize or attempt to monopolize the applications market, it did not present evidence sufficient for a jury to find that Microsoft committed any acts that violated § 2 [of the Sherman Act; U.S. antitrust laws] in maintaining its monopoly in the operating systems market," Motz found. "Therefore, Microsoft's Rule 50 motion [to dismiss] will be granted."

Novell argued that its once-popular office software, specifically word-processing application WordPerfect and spreadsheet application Quattro Pro, would have flourished in the market had Microsoft not canceled support for namespace extension application programming interfaces (APIs).

On Oct. 3, 1994, Microsoft withdrew support for a Windows 95 beta. The move limited exposure to the operating system's features, specifically APIs, and allegedly delayed Novell's launch of an office suite.

Novell said that "the real reason for withdrawing support for the namespace extension APIs was to provide a competitive advantage to Microsoft's own office productivity suite, Office," according to the court's summary of the case.

Novell also cited an internal email from then- Microsoft CEO Bill Gates.

"I have decided that we should not publish these extensions," Gates wrote in the Oct. 4, 1994, email. "We should wait until we have a way to do a high level of integration that will be harder for the likes of Notes [a Lotus product], WordPerfect to achieve, and which will give Office a real advantage."

In spite of that evidence, however, Motz disagreed that the release of Windows 95 derailed Novell's products.

"There is no basis for inferring that office productivity applications Novell developed that did not draw upon the superior functionality of Windows 95 would have been as successful as the applications that ran on Windows 95," Motz wrote.

"WordPerfect was extremely popular in the 1980s and early 1990s when it ran on many non-Microsoft operating systems," he added. "However, this popularity did not diminish Microsoft's share of the PC operating systems market, which was approximately 90 percent during that period. On this record, it cannot reasonably be inferred that if in the years after 1995 Novell's applications ran on operating systems other than Windows, that fact would have challenged Microsoft's monopoly in the PC operating systems market."

David Howard, Microsoft's deputy general counsel, applauded the decision.

"We've maintained throughout this case that Novell's arguments lack merit, and we're gratified with [the] ruling dismissing the last of Novell's claims and putting this matter to rest," Howard said in a statement.

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