Caldera Lawsuit Settled

Settling a lawsuit that alleged anticompetitive practices in the early 1990s, Microsoft paid out approximately US$275 million to Caldera, a Utah-based software company. Microsoft admits no wrongdoing. The settlement was a surprise; the Caldera case was in many respects weaker than the Department of Justice’s (DoJ) antitrust case. However, some questionable business tactics were set to be revealed in court, and if Caldera had won, it would have boosted the class-action suits spawned by the DoJ case. The settlement therefore clears away potential public relations damage as well as a legal problem. The new willingness to settle suggests that a hard lesson has been learned from the heavily negative impact of the DoJ case.

DR-DOS v MS-DOS

The case concerned DR-DOS, a rival operating system to Microsoft’s MS-DOS, the precursor to Windows. DR-DOS was developed by Digital Research, which in 1991 was acquired by Novell. At one time it claimed 20% of the OS market. Caldera—founded and 80%-owned by Raymond Noorda, former CEO of Novell—bought DR-DOS from Novell in 1996 and with it the dispute with Microsoft. Caldera filed suit that year, charging that Microsoft had used illegal means to exclude DR-DOS from the market.