Software Firm Wins A Round Against Microsoft

Caldera Inc., a small Utah-based software company pressing an antitrust suit against Microsoft Corp., has won a court ruling that could open the door to greater damages if it prevails at trial. aldera said Tuesday a federal judge has ruled it can bring new allegations that Microsoft illegally created a technical tie of MS-DOS into its Windows 95 operating system.

The ruling by US District Judge Dee Benson in Salt Lake City allows Caldera to extend its damage claim from Microsoft's historical practices to current practices.

Caldera, mostly owned by longtime Microsoft nemesis Ray Noorda, sued Microsoft in July 1996, shortly after it acquired the rights to the DR-DOS operating system from Novell Inc., which Noorda founded and ran until his retirement in 1994. Caldera contends Microsoft's licensing practices restricted the ability of DR-DOS to compete in the market dominated by Microsoft's MS-DOS until the rise of Windows.

 

Caldera officials said they are expanding their suit to cover Windows 95 based on the argument that Microsoft improperly bundled MS-DOS with the new operating system, shutting out competing versions of DOS.

Caldera officials compared their claim to contentions made by the Department of Justice that Microsoft is tying its Internet browser to Windows 95 and forcing computer makers to install it.

"We believe Windows 95 is a walking antitrust violation," said Caldera Chief Executive Officer Bryan Sparks. "The dominant reason for tying (Windows 95) to DOS was to once and for all kill competitors."

Microsoft spokesman Mark Murray dismissed the importance f the latest ruling, saying Caldera has merely met the minimal requirements needed to submit a claim.

"We don't believe this new allegation has any factual or legal substance whatsoever, and we look forward to proving that in court," Murray said. "This entire case deals with issues that have been investigated and dismissed years ago."

At the time the suit was filed, Caldera executives said any damage calculations would be limited to the estimated $2 billion in revenue generated by MS-DOS in the years it was supported by Microsoft as a separate product.

"Previously I think the assumption was that as a practical matter it would be hard to push damages much past the release of Windows 95," said Stephen Hill, a lawyer for Caldera. "Now damages are opened up on into the future ... for the whole Windows 95 period."

Benson made his ruling orally in a hearing Jan. 28 and was expected to issue a written order this week, Hill said.

Caldera, which continues to sell DR-DOS mainly for devices such as telephones and computer kiosks, has been gathering cartons of documents and has deposed top Microsoft executives including Chairman Bill Gates and Executive Vice President Steve Ballmer.