U.S. District Court dismisses Novell’s claims against Microsoft

On 30 March 2010 the U.S. District Court for the District of Maryland granted Microsoft’s motion for summary judgment on Novell’s claims that Microsoft violated U.S. antitrust laws by engaging in anti-competitive conduct in order to obtain and maintain its monopoly in the operating systems market and by entering into agreements that disadvantaged Novell’s products.

The Court held that Novell does not own the claims anymore, due to an agreement involving the sales of the claims along with its operating systems business. The Court, nonetheless, addressed the substantive antitrust issues and considered that had the claims not been transferred, the monopolization claim would have survived the motion for summary judgment whereas the claim concerning restrictive agreements would not have.

In responding to Microsoft’s argument that Microsoft did nothing beyond refusing to cooperate with Novell, the Court noted that it is not clear whether Microsoft merely refused to cooperate, as Novell presented evidence on Microsoft affirmatively misleading Novell and entering into anti-competitive agreements. Moreover, whether a mere refusal would be anti-competitive would be a question of fact, as Novell presented evidence on the predatory motives of Microsoft to sacrifice short-term profits in exchange of long-term anticompetitive effects. For instance, prior to the conduct alleged by Novell, Microsoft voluntarily cooperated with Novell. The Court was not convinced by Microsoft’s argument that it had legitimate business reasons for its actions, as the Court did not see them as necessary for the alleged purpose of fostering innovation.

The Court, however, was not persuaded that Microsoft’s agreements would have substantially foreclosed competition in the software application market or, more importantly, in the operating system market. These claims would thus not have survived Microsoft’s motion for summary judgment even if Novell still had owned the claim. [Juha Vesala]

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