Novell v. Microsoft Case Offers Reminder to ISVs

A case involving Windows 95 and WordPerfect that even the judges of the United States Court of Appeals for the 10^th Circuit called a “straggler” may be at an end. The appellate court upheld District Court Judge J. Fredrick Motz’s ruling dismissing the case as a matter of law after a trial jury in Utah failed to reach a verdict. Although the case is old, it still provides an object lesson for ISVs writing applications for a platform where the platform owner also develops first-party applications—the platform owner can always change the rules.

The Rules Can Change

The complicated history of this case is due in part to its lengthy timeline and the multiple changes in ownership of WordPerfect’s assets. For example, although Caldera (Novell’s successor as the owner of WordPerfect) settled its antitrust claims with Microsoft in 1996, in 2011 the 4^th Circuit decided that Novell’s Asset Purchase Agreement with Caldera did not encompass Novell’s claim regarding Windows 95 and WordPerfect.

At the heart of the dispute is access Microsoft gave ISVs to Windows 95 and its APIs in 1994, prior to the general availability of the OS. Prior to releasing the OS, Microsoft withdrew access to some APIs, such as those that work with Windows Explorer and the Recycle Bin. Novell argued to the courts that Microsoft had an affirmative duty to share its intellectual property and that the decision to withdraw that assistance violated Section 2 of the Antitrust Act. However, both the District Court and the Appellate Court judges found Microsoft had legitimate business reasons for withdrawing access to the APIs and that the delay to ISVs caused by the withdrawal was not anticompetitive.