Novell sues Microsoft over WordPerfect

Microsoft accused Novell of 'bad decisions and business mistakes'

Novell Inc. today filed an antitrust lawsuit against Microsoft Corp., accusing the software vendor of unfairly eliminating competition for office productivity applications during the time Novell owned the WordPerfect word processing application and the Quattro Pro spreadsheet application.

Novell had said it planned to move forward with the lawsuit earlier this week, when it announced a settlement with Microsoft on other antitrust claims. In that settlement, Microsoft agreed to pay Novell $536 million, and Novell agreed to resolve all antitrust claims relating to Novell's NetWare product, and any other products it currently owns.

Novell and Microsoft engaged in "extensive" discussions in an attempt to resolve the WordPerfect claims without a lawsuit, according to a Novell statement.

The WordPerfect lawsuit, filed in U.S. District Court in Utah, seeks unspecified damages from Microsoft. Novell's lawsuit accuses Microsoft of withholding critical technical information about Windows from Novell, thus impairing Novell's ability to develop new versions of WordPerfect and other Novell office productivity applications. The complaint also alleges that Microsoft integrated technologies to Windows designed to exclude WordPerfect and other Novell applications.

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 evidence uncovered in the U.S. government's antitrust case against Microsoft, according to Novell.

Although Novell no longer owns WordPerfect and Quattro Pro, the claims are "important and hold considerable value for Novell," Joseph A. LaSala Jr., Novell's senior vice president and general counsel, said in a statement.

Novell merged with WordPerfect Corp. in June 1994. In a related transaction at the same time, Novell purchased Quattro Pro, a spreadsheet product, from the then-Borland International Inc. The combined value of WordPerfect and Quattro Pro at the time of the transactions was more than $1 billion, according to Novell. WordPerfect and Quattro Pro were then sold to Corel Corp. in March 1996 for approximately $170 million.

WordPerfect claimed almost 50% of the word processing market in 1990, but that share fell to less than 10% by the time Novell sold WordPerfect and related applications, according to Novell.

Microsoft disputed Novell's claims that it was responsible for WordPerfect's declining market share. WordPerfect declined to develop products for early versions of Windows, and WordPerfect's market share had already begun to decline before Novell acquired the application, Microsoft said in a statement.

"Through this lawsuit, Novell seeks to blame Microsoft for its own mismanagement and poor business decisions," the statement said. "The record is clear that bad decisions and business mistakes are the reasons WordPerfect fell out of favor with consumers. It's also unfortunate, and surprising, that Novell has just now chosen to litigate over a business it owned for a very short time and that it sold more than eight years ago."

Copyright © 2004 IDG Communications, Inc.

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