Microsoft Gives Novell $536M in Antitrust Payout

Microsoft has agreed to pay Novell $536 million in cash in order to settle a longstanding antitrust dispute regarding the company's NetWare operating system. The two companies, however, could not reach a resolution regarding Microsoft's alleged predatory tactics against Novell's WordPerfect software -- now owned by Corel -- in the mid-1990s, and Novell will this week file suit seeking unspecified damages.

In April, Microsoft announced a similar settlement with Sun for $700 million, which was bolstered by another $900 million for patent licenses from Sun. Ostensibly taking a page from Sun's playbook, Novell has left the door open to sue over outstanding patent claims in addition to WordPerfect.

As part of the settlement, Novell has withdrawn from the European Commission's antitrust case against Microsoft. Redmond has struck a similar agreement with the Computer and Communications Industry Association (CCIA) trade association, which will no longer take part in the European proceedings. Microsoft, in turn, will become a member of CCIA.

"We are pleased that we have been able to resolve a portion of our pending legal issues with Microsoft," said Joseph A. LaSala, Jr., Novell's senior vice president and general counsel. "We regret that we cannot make a similar announcement regarding our antitrust claims associated with the WordPerfect business."

Brad Smith, senior vice president and general counsel for Microsoft, echoed Novell's statement, "Today's Netware settlement is a product of that effort and reflects an open dialogue the companies established to address and ultimately resolve this matter. We could not resolve claims related to WordPerfect in any manner we thought appropriate, and we are prepared to turn to the courts to resolve it."

Alongside the settlement announcement, Microsoft disclosed it is facing $950 million in outstanding antitrust complaints.

Jupiter Research senior analyst Joe Wilcox told BetaNews, "Given that the European's Competition Commission already ruled against Microsoft and that record is before the court, it seems to me that the case has plenty of bite, even without CCIA, Novell or Sun." But Wilcox noted the involvement with CCIA will give Microsoft more lobbying power across the pond in Washington.

"Microsoft will now make contributions to advance policies in Washington," said Wilcox. "That's a damn good idea. Legislation like the Induce Act could have widespread computer and consumer electronics industries impact; more legislation may come as Congress and regulators weigh sticky issues like privacy and piracy. Right now a "my enemy is my ally" approach would benefit Microsoft, CCIA and its other members."