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Justices turn down Microsoft appeal
2008-03-18
The Supreme Court on Monday handed Microsoft Corp. a defeat by refusing to rule on the software giant's request to halt an antitrust suit against it. The suit was brought in 2004 by Waltham, Mass.-based Novell Inc., which said in court papers that Microsoft "deliberately targeted and destroyed" its WordPerfect and QuattroPro programs in order to protect its Windows operating system monopoly. Novell alleged that Microsoft targeted the programs because they could run on alternative operating systems and therefore could enable alternatives to Windows to gain market share. Microsoft argued in court filings that Novell did not compete in the operating systems market, and therefore cannot claim to have been harmed by alleged anticompetitive conduct by Microsoft in that market. A federal district court and the 4th U.S. Circuit Court of Appeals, based in Richmond, Va., sided with Novell and allowed the suit to proceed. Microsoft's lawyers said that decision expands the application of antitrust laws "far beyond their intended scope." Plaintiffs in antitrust suits can seek damages that are triple the actual harm. A federal court ruled in 2001 that Microsoft had illegally protected its Windows operating system monopoly. As part of a settlement with the federal government and 17 states the following year, Microsoft agreed to court oversight of its business practices. A federal judge in January extended that oversight to November 2009. The federal government's antitrust lawsuit focused on Microsoft's anticompetitive actions against Netscape and Sun Microsystems Inc. Novell argues that its software is similar to Netscape's Navigator browser and Sun's Java: neither competed directly with Windows, but Microsoft saw them as benefiting potential competitors. Novell sold WordPerfect and QuattroPro to Corel Corp. in 1996. Despite the suit, the two companies later became business partners. In 2006 Microsoft agreed to pay Novell $240 million to license its Linux enterprise software and to spend $94 million over five years to market both Novell's software and Windows to its corporate customers. Microsoft also agreed to pay Novell $108 million under a patent agreement. The deal also required Novell to pay millions in royalties to Microsoft. The Supreme Court's decision allows Novell's lawsuit to continue. Microsoft said it would defend itself in lower court. "We believe the facts will show that Novell's claims, which are 12 to 14 years old, are without merit," David Bowermaster, a Microsoft spokesman, said in an e-mail. The case is Microsoft Corp. v. Novell Inc., 07-924. Chief Justice John Roberts, who owns Microsoft stock, recused himself from the decision. Microsoft shares rose 34 cents to close at $28.30 Monday, while Novell shares fell 6 cents to $6.01. __ AP Business Writer Jessica Mintz contributed to this story from Seattle.
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