March 17 (Bloomberg) -- The U.S. Supreme Court turned away a Microsoft Corp. appeal, refusing to stop a multibillion-dollar Novell Inc. lawsuit that accuses the world's largest software maker of undermining the market for the WordPerfect program.

The justices, without comment, today left intact a lower court decision that said Novell can sue Microsoft under federal antitrust law. Novell says Microsoft used the dominance of its Windows personal computer operating system to destroy the market for WordPerfect, the word processing program Novell owned during the mid-1990s.

``Microsoft specifically targeted WordPerfect and Novell's other office productivity applications because they threatened Microsoft's Windows monopoly,'' Novell argued in a court filing in Washington.

Microsoft contended in its appeal that Novell can't invoke the U.S. antitrust laws because it didn't compete against Windows in the operating system market.

Microsoft said the ruling allowing the suit, issued by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, ``significantly expands the class of potential plaintiffs permitted to seek treble damages under the antitrust laws.''

Novell says the value of WordPerfect fell from $1.2 billion in May 1994 to $170 million in 1996, when the company sold the program to Corel Corp. Novell, based in Waltham, Massachusetts, is seeking three times its losses.

WordPerfect's share of the word-processing market fell to less than 10 percent in 1996 from almost 50 percent in 1990.

No Roberts

Chief Justice John Roberts, whose most recent financial disclosure report listed Microsoft stock, didn't take part in today's decision.

The suit says Microsoft withheld technical information Novell needed to adapt WordPerfect to run smoothly on Windows 95.

Novell says the evidence includes a 1994 e-mail in which Microsoft Chairman Bill Gates ordered a delay in providing the data to give Microsoft's own Office software ``a real advantage.'' Without the delay, Gates wrote, ``we can't compete'' with ``WordPerfect/Novell.''

Novell also cites an Aug. 17, 1997, e-mail by Microsoft executive Jeff Raikes to billionaire investor Warren Buffett. The memo said, ``If we own the key franchises built on top of the operating system we dramatically widen the `moat' that protects the operating-system business'' from competitors.

WordPerfect's Decline

Microsoft says Novell's own mismanagement and bad business decisions are to blame for the decline of WordPerfect.

``We believe the facts will show that Novell's claims, which are 12 to 14 years old, are without merit,'' Microsoft said in a statement today after the court rejected the appeal.

The lawsuit is a byproduct of the landmark U.S. government lawsuit against Microsoft. That suit led to a federal appeals court ruling that Microsoft illegally protected its Windows monopoly. The company later reached settlements with state and federal antitrust enforcers.

Novell's claim is the largest of a handful of remaining private suits against Microsoft. The company has paid almost $5 billion to settle claims it damaged competitors such as Sun Microsystems Inc., International Business Machines Corp. and RealNetworks Inc.

Microsoft, based in Redmond, Washington, also agreed to issue more than $2.7 billion in vouchers for software to end claims it overcharged consumers for Windows.

In addition, Microsoft is still battling European regulators, who last month fined the company 899 million euros, or about $1.4 billion, for failing to comply with a 2004 antitrust order to stop overcharging for patent licenses that rivals needed to connect applications to Windows. The EU also has started two new investigations into Microsoft's business practices.

The case is Microsoft v. Novell, 07-924.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

Last Updated: March 17, 2008 14:04 EDT