Novell Sues Microsoft over WordPerfect

"The record is clear that bad decisions and business mistakes are the reasons WordPerfect fell out of favor with consumers," Microsoft responds to the antitrust claims. Novell says the company withheld "critical technical information**QT

After playing nice with one another earlier this week when they announced a $536 million legal settlement, Novell and Microsoft on Friday were back attacking one another again.

The flare-up comes as Novell Inc. on Friday filed suit against Microsoft Corp. in U.S. District Court in Utah seeking unspecified damages arising from Microsofts efforts to eliminate competition in the office productivity applications market during the mid-90s when Novell owned the WordPerfect word-processing application and the Quattro Pro spreadsheet application.

Novell said it planned to file the lawsuit earlier this week when it announced that it had reached an agreement that would see Microsoft pay the Waltham, Mass., company $536 million to settle potential antitrust litigation related to Novells NetWare operating system.

At that time, Joseph A. LaSala Jr., Novells senior vice president and general counsel, said the company has held extensive, yet unsuccessful, discussions with Microsoft to resolve the WordPerfect claims without resorting to litigation.

Microsoft general counsel Brad Smith agreed that "we could not resolve claims related to WordPerfect in any manner we thought appropriate, and we are prepared to turn to the courts to resolve it."

LaSala said Friday that the lawsuit was based in part on facts proved by the U.S. government in its successful antitrust case against Microsoft. That case found Microsoft to have unlawfully maintained a monopoly in the market for personal computer operating systems by eliminating competition in related markets.

In the lawsuit filed Friday, Novell claims (PDF form) that Microsoft withheld certain critical technical information about Windows from Novell, thereby impairing its ability to develop new versions of WordPerfect and other Novell office productivity applications.

It also alleges that Microsoft integrated certain technologies into Windows that were designed to exclude WordPerfect and other Novell applications from relevant markets. Novell also claims that Microsoft used its monopoly power to prevent hardware partners from offering WordPerfect and other applications to customers.

Novell acquired the WordPerfect word processing program when it merged with the WordPerfect Corp. in June 1994. In a related transaction at that time, Novell also bought Quattro Pro, a spreadsheet product, from Borland International.

The combined value of WordPerfect and Quattro Pro at that time was more than $1 billion yet, less than two years later in March, 1996, both WordPerfect and Quattro Pro were sold to Corel Corp. for some $170 million.

/zimages/1/28571.gifRead more here about Corel pinning its hopes on WordPerfect.

"WordPerfects share of the word processing market was almost 50 percent in 1990, but fell to less than 10 percent by the time Novell sold WordPerfect and related applications in 1996. Microsoft Words share of the word processing market rose from approximately 20 percent prior to 1990 to a monopoly share of approximately 90 percent by 1996," LaSala said.

Next Page: Microsoft says Novell is trying to pass the blame "for its own mismanagement and poor business decisions."