Novell Files WordPerfect Antitrust Lawsuit against Microsoft
- Seeks damages for anticompetitive Microsoft business practices in 1994-96 period
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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