Appeals court lets 'Vista Capable' class action proceed

In a big blow to the case against Microsoft's allegedly confusing "Vista Capable" labeling program for PCs, the US Ninth Circuit Court of Appeals yesterday denied Microsoft's petition to overturn a decision granting the case class action status.

It may be exactly what Microsoft doesn't want right now, even if it ends up winning the case in the end: the symbolism of a mass of consumers taking up arms against the company, in dispute over the very heart of its value proposition for Windows Vista. Yesterday the Ninth Circuit ended the company's hopes of being able to face the plaintiff on the company's terms.

Microsoft legal spokesperson Jack Evans issued this statement to BetaNews late yesterday: "The Ninth Circuit's decision not to accept our request for interim review is not a ruling on the merits of our case. We look forward to presenting all of the facts on what the district court itself said is a novel claim."


That claim, first put forth in April 2007, is that since there were more than one tier of Vista, the bottom one being "Home Basic," it was never made clear to consumers just what a PC bearing the "Vista Capable" logo was capable of doing. Since Home Basic may not be -- at least in some consumers' minds -- an upgrade over Windows XP, a computer marketed as an upgrade and as "Vista Capable" may be misrepresenting the nature of the upgrade as being provided by the operating system.

This despite Microsoft's claim on the day it announced the program that "Vista Capable...does not represent minimum hardware requirements for Windows Vista." It made the case in April 2006 that the logo was merely to help consumers along a path of transition, though lately, the company has been differentiating "transition" from "upgrade" as though one was never supposed to imply the other.

The Washington State district court hearing the case agreed to proceed under the plaintiffs' theory that the Vista Capable program unjustly aided in the artificial inflation of the price of PCs, without actually adding real capability. Microsoft's argument to the Ninth Circuit in its petition for a stay of the class action ruling was first that the plaintiff is suing the wrong party.

"The reasoning of these cases applies with special force here, given the Court's ruling that this case can proceed only on a price inflation theory, i.e., a theory that class members bought PCs at inflated prices," Microsoft's petition read (PDF available here, supplied by the Seattle Times). "Microsoft, as the Court knows, did not set the price of a single PC. Instead, OEMs located outside Washington manufactured and priced their PCs outside Washington, where they also affixed the Windows Vista Capable logo. The OEMs that sold through retail channels then shipped to retailers or wholesalers, mostly outside Washington, who made their own pricing decisions."

That led to the second branch of Microsoft's theory, that the plaintiffs adding their names to the class fall outside the jurisdiction of the district court. Third, it argued, if injury was done to each plaintiff in the class, that plaintiff's case should be heard separately because the information relative to each plaintiff may be different from others, especially since they all bought different PCs from different sources at different times.

"Leaving discovery aside, the failure to grant a stay will require class notice," read Microsoft's petition. "Microsoft has no way of identifying who falls within the class because (a) it does not know which PCs were labeled as Windows Vista Capable, and (b) it has no record of the consumers to whom OEMs and retailers sold labeled PCs."

The Ninth Circuit did not provide any guidance as to why it denied Microsoft's petition; it was not required to. Nonetheless, as the case goes forward, its outcome either way will set precedent as to whether Microsoft is legally responsible for the constitution of the personal computer, by virtue of having created Windows in the first place, and Windows being the principal operating system of PCs.

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