Novell's WordPerfect Lawsuit Against Microsoft to Go Forward

Friends in development, enemies in the courtroom, Novell is continuing with its billion dollar-plus suit against Microsoft.

For more than a year now, Microsoft and Novell have appeared to be best buddies. While it is true that two former enemies are now on good terms, they'd never agreed to settle one issue: Novell's lawsuit against Microsoft for illegally crushing WordPerfect.

Now, the Fourth U.S. Circuit Court of Appeals, in Richmond, Va., has given Novell the green light to continue with its lawsuit.

Bloomberg reports that Microsoft asked the Supreme Court the week of Jan. 13 to not allow Novell to continue with its multibillion-dollar lawsuit. Microsoft argued that Novell wasn't a competitor or a customer of operating systems during the period in the mid-'90s when Novell owned WordPerfect, and thus had no grounds for its case.

When the suit was filed in November 2004, Microsoft also claimed WordPerfect's fall from popularity was the result of Novell's own mismanagement and poor business decisions. "The record is clear that bad decisions and business mistakes are the reasons WordPerfect fell out of favor with consumers. It's also unfortunate, and surprising, that Novell has just now chosen to litigate over a business it owned for a very short time and that it sold more than eight years ago."

Novell, for its part, claimed that Microsoft withheld critical Windows 95 technical information from Novell, thereby making it difficult for Novell to deliver a Windows Version 95-compatible version of WordPerfect. Novell also claimed that Microsoft had deliberately made Windows 95 so that it would be harder for Novell to create a fully functional WordPerfect for Windows.

During the mid-'90s, under the leadership of Ray Noorda, Novell had acquired the WordPerfect word processor by merging with the WordPerfect Corp. and by buying Quattro Pro, a once-popular spreadsheet program, from Borland. The intent was to create a Novell office suite to compete with what would become Microsoft Office 95.

Novell, unable to successfully compete with Office 95, sold WordPerfect to Corel for a fraction of what it had paid for the program. The acquisition had cost Novell $1.2 billion in May 1994, but by 1996 it sold it for a bargain-basement price of $170 million. Today, Corel continues to sell WordPerfect, but it has only a minute fraction of the word processing market.

In 2005, the court dismissed Novell's technical claims. However, it let Novell continue to try to prove that Microsoft's illegal marketing tactics with manufacturers and illegal use of its operating system monopoly power are what took WordPerfect from being the dominant word processor of the early '90s to an also-ran by 1996.

Now, despite Novell's close partnership with Microsoft, Novell has never given up on its WordPerfect lawsuit. With this new decision, and Microsoft's appeal, the two will continue to fight in the courts, no matter how close they may appear in cross-platform Linux and Windows development.