Novell to file suit against Microsoft over WordPerfect

WordPerfect may be synonymous with Corel to most Canadians, but its previous owner, Novell, will seek damages from Microsoft for alleged anti-competitive practices.

Provo, Utah-based Novell bought WordPerfect, a company also based in Provo, in 1994. It sold the company to Ottawa-based Corel two years later at a significant loss. Corel has owned the product ever since and on Tuesday announced the availability of version 12 of its WordPerfect Office suite.

Novell has been mulling legal action against Microsoft for about a decade. On Monday, Novell resolved its quarrel with Microsoft over alleged damage to NetWare sales, but could not agree on WordPerfect.

Microsoft agreed to pay Novell US$536 million in a cash settlement for the NetWare portion. In return Novell has agreed to withdraw from the European Union’s antitrust case against Microsoft.

“”That was the basis of the discussion: you guys broke the law and by doing so, you hurt us. We are interested in getting some damages for the pain that you inflicted. . . . It’s either, let’s talk about it, or let’s litigate,”” said Novell spokesperson Bruce Lowry.

The scrutiny that Microsoft came under from the U.S. Department of Justice in 2000 for anti-competitive practices — and more recently in the EU — may have prompted the company to settle up with Novell over its operating system, said one analyst.

“”There was probably enough legal liability that Novell would have been able to take them to court,”” said Matt Rosoff, with Directions on Microsoft, based in Kirkland, Wash. “”A lot of information would have come up during that suit. E-mails and those sorts of things would have come out and Microsoft, in general, has been trying to avoid that.””

Microsoft, however, has not bowed to Novell’s allegations of unfair business practices on the office productivity side.

“”We did not regard that claim as being of anything close to a similar magnitude,”” said Brad Smith, senior vice-president and general counsel at Microsoft, “”and in general we believe that the claim doesn’t have merit and is barred by the statute of limitations at this point, but we’ve all resolved to turn to the courts for an answer on the WordPerfect claim.””

Greg Wood, a spokesperson for Corel, refused comment on the legal developments between Novell and Microsoft, but said that “”this is something that’s going to affect the industry, clearly.

“”I’m sure the office productivity market as a whole — and that includes Corel — will be observing Novell’s moves pretty carefully.””

A victory for Novell could open the door for subsequent lawsuits from other office productivity software vendors, said Rosoff, but it won’t be easy.

“”They’re going to be starting from scratch. They’re going to have a tough time proving some of this.””

The lawsuit probably won’t have a significant impact on Microsoft’s dominance in the office productivity market, he added. “”The No. 1 threat to Microsoft’s Office franchise is previous versions of Office.””

To date, Microsoft has paid an estimated US$3 billion to settle antitrust claims, including those launched by AOL Time Warner and Sun Microsystems. Smith said that Microsoft could face up to $950 million for outstanding claims. The company has approximately US$64 billion in cash reserves.

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Jim Love, Chief Content Officer, IT World Canada

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