On Monday, the U.S. Supreme Court let stand a lower court's ruling that Novell can proceed with an antitrust suit against Microsoft. The justices declined to hear Microsoft's appeal, with Chief Justice John Roberts recusing himself because he owns Microsoft stock. The court did not offer a reason for declining the case, its standard practice.
The suit dates back to 2004. Novell sued Microsoft, claiming the software giant "deliberately targeted and destroyed" its WordPerfect word-processor and Quattro spreadsheet applications because they are compatible with operating systems besides Windows.
Plaintiffs Could Multiply
Microsoft has reason to be concerned, according to Mark Ostrau, co-chairman of the Antitrust and Unfair Competition Group and a partner in the Intellectual Property and Technology Transactions Groups at Fenwick & West LLP, a Silicon Valley law firm specializing in high technology.
"As soon as you make it possible for people who have ancillary products or applications like WordPerfect to sue based on Microsoft's monopolization of the operating system, it opens up a larger class of potential plaintiffs than Microsoft has had to face before," Ostrau said. "So this case with Novell is a big issue."
Microsoft settled a similar case with Novell in 2004 when it paid $536 million to resolve Novell's claim that Microsoft set out to run its market prospects for the Netware operating system. Ostrau said Microsoft could probably also settle this case.
Killing the Antitrust Weeds
Microsoft may have to look over its shoulder to see what other applications it allegedly crushed as it made market moves to protect its operating system. "Everywhere Microsoft looks it's trying to put all these antitrust issues behind it. But try as it might, new issues keep popping up," Ostrau said.
The European Commission assessed Microsoft a record $1.35 billion antitrust fine just last month because, the watchdog group said, the company wasn't living up to its end of a 2004 antitrust agreement.
"The key issue here is that Microsoft was trying to limit antitrust cases to operating-system competitors, and not people who have products that allegedly got pushed out as a consequence of Microsoft protecting its operating system," Ostrau said. "That's where the door opens up a lot that Microsoft was trying to shut."
Ostrau doesn't expect Microsoft has much of an appetite to continue litigating against Novell. These cases, he said, tend to feed off one another, turning up evidence that other companies may be able to use against Microsoft.
"Microsoft made a lot of money doing the things they did," he said. "So even though they are spending a lot of money now to get out of legal trouble, they are probably still ahead."