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Novell Files WordPerfect Antitrust Lawsuit against Microsoft

  • Seeks damages for anticompetitive Microsoft business practices in 1994-96 period

WALTHAM, Mass. | November 12, 2004

Novell today filed a lawsuit in the United States District Court in Utah seeking unspecified damages arising from Microsoft's efforts to eliminate competition in the office productivity applications market during the time that Novell owned the WordPerfect word processing application and the Quattro Pro spreadsheet application. Novell previously announced its intention to file the lawsuit on Nov. 8.

Among other claims, Novell asserts that Microsoft withheld certain critical technical information about Windows from Novell, thereby impairing Novell's ability to develop new versions of WordPerfect and other Novell® office productivity applications. The complaint also alleges that Microsoft integrated certain technologies into Windows designed to exclude WordPerfect and other Novell applications from relevant markets. In addition, Novell asserts that Microsoft used its monopoly power to prevent hardware partners from offering WordPerfect and other applications to customers. The lawsuit is based in part on facts proved by the United States Government in its successful antitrust case against Microsoft, in which Microsoft was found to have unlawfully maintained a monopoly in the market for personal computer operating systems by eliminating competition in related markets.

Novell acquired the WordPerfect word processing program when Novell and WordPerfect Corporation merged in June of 1994. In a related transaction during the same time period, Novell purchased Quattro Pro, a spreadsheet product, from Borland International. The combined value of WordPerfect and Quattro Pro at the time of the transactions was over $1 billion. Both WordPerfect and Quattro Pro were sold to Corel Corporation in March of 1996 for approximately $170 million.

WordPerfect's 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 Word's share of the word processing market rose from approximately 20 percent prior to 1990 to a monopoly share of approximately 90 percent by 1996.

"While this lawsuit is unrelated to Novell's current business, the claims are important and hold considerable value for Novell," said Joseph A. LaSala, Jr., Novell's senior vice president and general counsel. "We intend to pursue aggressively a goal of recovering fair value for the harm caused to Novell's business by Microsoft's anticompetitive actions."

The lawsuit follows extensive, yet unsuccessful, discussions between Microsoft and Novell to resolve the WordPerfect claims without resorting to litigation. Novell announced on Nov. 8 that it had reached an agreement with Microsoft to settle potential antitrust litigation related to Novell's NetWare operating system in exchange for Microsoft paying Novell $536 million.

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This press release includes statements that are not historical in nature and that may be characterized as "forward-looking statements," including those related to future financial and operating results, benefits and synergies of the company's brands and strategies, future opportunities and the growth of the market for open source solutions. You should be aware that Novell's actual results could differ materially from those contained in the forward-looking statements, which are based on current expectations of Novell management and are subject to a number of risks and uncertainties, including, but not limited to, Novell's ability to integrate acquired operations and employees, Novell's success in executing its Linux strategies, Novell's ability to deliver on its one Net vision of the Internet, Novell's ability to take a competitive position in the Linux industry, business conditions and the general economy, market opportunities, potential new business strategies, competitive factors, sales and marketing execution, shifts in technologies or market demand and the other factors described in Novell's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 2, 2004. Novell disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

About Novell

Novell, Inc. (Nasdaq: NOVL) is a leading provider of infrastructure software and services to over 50,000 customers in 43 countries. With more than 20 years of experience in data center, workgroup and desktop solutions, Novell's 6,000 employees, 5,000 partners and support centers around the world are meeting customer requirements for identity-driven computing and Linux solutions. By providing enterprise-class software and support for commercial and open source software, Novell delivers increased operating flexibility and choice at a lower total cost of ownership. More information about Novell can be found at http://www.novell.com.

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