Novell Antitrust Lawsuit Against Microsoft Revived by Court

Novell Inc. (NOVL)’s antitrust lawsuit against Microsoft Corp., accusing the world’s largest software maker of undermining Novell’s WordPerfect program, was revived by a U.S. appeals court in Virginia.

The federal appeals court in Richmond today said Novell didn’t give up its right to pursue the lawsuit when it transferred its claims related to its personal computer operating system products to Caldera Inc. in 1996.

“Although the underlying lawsuit involves complex issues of antitrust law, the primary question before us is one of contract interpretation: whether a 1996 contract between Novell and a third company divested Novell of its right to bring the present claim,” Judge Allyson Duncan wrote in the 2-1 decision.

Kevin Kutz, a spokesman for Microsoft, said the company doesn’t think Novell’s case has any merit.

“We are disappointed with the Fourth’s Circuit’s decision to reverse in part the district court’s summary judgment ruling which dismissed these very old claims, although we are pleased that at this point only one part of one of Novell’s claims remains,” said in an e-mailed statement.

Ian Bruce, a spokesman for Novell, didn’t immediately return a phone message and an e-mail message seeking comment.

The lawsuit, filed in 2004, is a byproduct the U.S. government’s landmark case against Microsoft that was settled more than eight years ago after the Redmond, Washington-based company was declared an illegal monopolist.

Novell, which briefly owned WordPerfect in the mid-1990s, alleged Microsoft’s anticompetitive tactics undermined the product.

Dissenting Appeals Judge

In a dissent, Judge Clyde Hamilton said U.S. District Judge J. Frederick Motz in Baltimore correctly dismissed the case last year.

WordPerfect’s share of the word-processing market fell to less than 10 percent in 1996 from almost 50 percent in 1990. Its value dropped from $1.2 billion in May 1994 to $170 million in 1996 when it was sold to Ottawa-based Corel Corp., Novell said.

Novell, which was purchased by Seattle-based Attachmate Corp. last month, is seeking three times its losses, or as much as several billion dollars.

Novell settled separate antitrust claims against Microsoft for $536 million in 2004.

The case is Novell Inc. v. Microsoft Corp. (MSFT), 10-1482, U.S. Court of Appeals for the Fourth Circuit (Richmond).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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