Microsoft Loses Appeal in Novell WordPerfect Case

Published: March 19, 2008

by Alex Woodie

The U.S. Supreme Court yesterday rejected Microsoft's appeal to block a lawsuit by Novell regarding the WordPerfect word processing program. As a result, Novell is now free to pursue a multibillion dollar lawsuit against Microsoft for abuse of monopoly power. The big question now is whether Microsoft will settle out of court or go to trial and put its new "kinder, gentler" approach to interoperability to the test.

Novell filed a lawsuit against Microsoft in Maryland in late 2004, just weeks after the two software companies settled their respective lawsuits regarding Microsoft's alleged monopolistic abuse of Novell's NetWare operating system. Microsoft paid Novell $536 million to drop its lawsuit, but the companies could not come to an agreement on the WordPerfect matter.

Novell's lawsuit alleges Microsoft used its monopoly power and withheld technical information that prevented Novell's WordPerfect word processing software and QuattroPro spreadsheet software from working with the Windows 95 operating system. Novell owned the programs for a couple of years in the mid-1990s before selling it to Corel. The programs are now basically dead.

A Maryland court gave Novell the go-ahead to go to trial in early 2005, and since then Microsoft has been appealing that decision in federal district court and the 4th Circuit Court of Appeals. On Tuesday, Microsoft officially ran out of appeals when the Supreme Court denied Microsoft's request to review a lower court's decision.

According to the Associated Press, Chief Justice John Roberts abstained from the vote because he is a Microsoft shareholder.

Microsoft released a statement following the decision asserting that a court will find in favor of the software giant, and validate its claim that it did not purposefully prevent WordPerfect from working with Windows 95.

Unless the two companies come to an agreement, Microsoft is facing the possibility of another large cash payout, if a jury or a judge rules in favor of Novell, which is a distinct possibility. However, considering the partnership that Novell and Microsoft formed 15 months ago to work together to promote interoperability between their products, the chances of an out-of-court agreement might not be so remote.

An out-of-court settlement looks even more promising considering the recent overtures Microsoft has made to be more open with its technical documentation, in particular the Open XML file format it introduced with the Office 2007 productivity suite that has backers of OpenOffice.org--the modern-day WordPerfect--so upset with Microsoft.

If Microsoft is so keen to admit its past sins and start fresh, it may help to settle this Novell suit quietly, especially with the European Commission opening a fresh antitrust investigation of Microsoft over whether the Open XML format is "sufficiently interoperable" with competing products. Obviously, the EC is not afraid to show its teeth, as it recently fined the software giant the European equivalent of $1.4 billion.

But Microsoft has been known to have a stubborn streak, so who knows what it may do in the Novell matter.

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