clock menu more-arrow no yes

Filed under:

Microsoft, Novell play blame game on first day of billion-dollar antitrust trial

SALT LAKE CITY — With fanfare rivaling the release of the latest smartphone or gaming device today, Microsoft Corporation launched Windows 95 in Redmond, Wash., on Aug. 24, 1995. Comedian Jay Leno yucked it up with Bill Gates on stage. The company paid the Rolling Stones millions to use its song, "Start Me Up." People lined up for blocks outside stores to buy the new computer operating system and accompanying software.

Novell Inc. anticipated joining the party with the simultaneous release of the latest versions of its newly acquired WordPerfect word processing and Quattro Pro spreadsheet programs designed to run on the revolutionary system.

But that didn't happen. And in a federal antitrust lawsuit Novell blames Microsoft and more specifically its founder Bill Gates.

Opening arguments in what is scheduled to be an eight-week jury trial were made Tuesday in U.S. District Court. Gates is expected to testify as a defense witness in the next several weeks.

"This is a case about fair play," Jeff Johnson, an attorney representing Novell, told jurors. Microsoft, he contends, didn't play fair.

Johnson said Microsoft used "deception" and the "classic bait and switch" when it led Novell to believe it was developing an operating system suited to WordPerfect. He contends Gates removed a key component from and delayed the release of Windows 95 to keep Novell from gaining a foothold in the emerging home computer software market.

"Microsoft severely crippled Novell's ability to produce a competitive product in a timely fashion," he said.

Novell didn't get its PerfectOffice suite out until May 1996, too late to jump on the Windows 95 juggernaut. Meantime, Microsoft Office, containing Word and Excel, took off.

Attorney David Tulchin, who represents Microsoft, said the company did what good companies do.

"Microsoft developed in a way that was best for Microsoft. That's what it's supposed to do. That's what we call competition in our country," he said.

Tulchin told jurors that other than having great products, Microsoft had nothing to do with Novell's failure to launch.

"The blame really lies at the feet of Novell and the feet of WordPerfect Corporation," he said.

Both companies trace their roots to Utah County, Novell in Provo and WordPerfect in Orem. Novell bought WordPerfect in 1994 for $1.5 billion.

Novell, Tulchin said, made a "misjudgment" and paid "much too much" for a company already in decline by then. While WordPerfect was the king of the character-based DOS platform, it was slow to recognize the arrival of Windows, he said.

"WordPerfect was nothing at that time. They weren't ready for that change, that shift in the marketplace," Tulchin said.

Novell sold WordPerfect in 1996 for a tenth of what it paid 22 months earlier, taking a billion-dollar loss. The lawsuit seeks to recoup at least that amount plus interest and lost sales that could total $2.5 billion.

Tulchin said Microsoft contracted with Novell on a beta version of Windows 95 with the understanding it could change before going on the market. The system, he said, was still in the development phase at the time and "many, many" decisions went into the final product.

Gates, he said, determined Windows 95 would not support a small piece of computer code because it could crash the system, be incompatible with future versions and did not function has hoped.

"Bill Gates will be here and he will tell you why he decided to do what he did," Tulchin told the seven-woman, five-man jury.

Johnson contends that bit of code was essential to the WordPerfect program.

Novell, he said, was 80 percent down the road of developing a new product for Windows when Microsoft executives threw up a road block. "Micorsoft forced them, in essence, to build their own road from scratch," he said.

Tulchin noted that Novell didn't complain back in 1994 and sue Microsoft until 10 years later.

"If this decision had been such a killer for Novell … would Novell have remained silent at the time?"

E-mail: Twitter: dennisromboy