Microsoft cleared in Bristol case

A jury has cleared Microsoft of antitrust violations in a lawsuit brought by Bristol Technology. Already, some observers are speculating about the effect the decision could have on the two other anti-trust actions Microsoft is fighting - those brought by Caldera and the US government.

A jury has cleared Microsoft of antitrust violations in a lawsuit brought by Bristol Technology, a small software vendor in Connecticut that claimed Microsoft let a contract lapse to prevent Bristol from creating software that would run on a rival operating system.

The lawsuit, filed last August in US District Court in Bridgeport, Connecticut, charged that Microsoft behaved anticompetitively when it allegedly refused to renew Bristol's Windows NT source-code license on reasonable terms. Bristol prevailed on one count: the jury found that Microsoft violated the Connecticut Unfair Trade Practices Act, but awarded the company just US$1.

In closing arguments last week, Bristol lawyers had asked the jury to award the company up to $263 million.

Opinions varied over the implications of the verdict, with some saying it vindicates the business practices of the software giant, which is fighting other antitrust lawsuits brought against it by the US Justice Department and by Caldera, a developer of software that runs on the Linux operating system.

A Microsoft spokesman said the jury endorsed Microsoft's competitive practices. "We believe the verdict represents an important victory for the entire industry, not only Microsoft, by upholding the rights of companies to license their technology in a fair and equitable manner," said spokesman Jim Cullinan. "While the verdict is positive in this case, it will also have a positive impact on the other cases."

Bristol representatives remained convinced that Microsoft had engaged in improper conduct.

The jury may have been confused by complex technical, legal and economic issues, Bristol Chief Executive Officer Keith Blackwell said in a statement. "We are disappointed with the jury's findings, and we still firmly believe that Microsoft engaged in anticompetitive behavior against Bristol, and that Microsoft is attempting to monopolise additional operating system markets."

"While this ruling is disappointing to Bristol, this is an issue that is not going away," said Patrick Lynch Bristol's lead counsel said in the statement. "Microsoft's abuse of its dominant position has to be addressed. And it was courageous for a company of Bristol's size to take on a company with both Microsoft's size and reputation for hostile behavior toward other companies."

Legal experts differed on whether the remaining cases against Microsoft will be effected.

"It surely takes the wind out of the government sails," said Hillard Sterling, an attorney at Gordon & Glickson PC in Chicago. "The DOJ must be concerned that its own case suffers from the same fatal flaws."

The Bristol verdict may help Microsoft's battered public image. "I think a lot of people in the public arena ... assumed that Bristol's fate and the DOJ's fate would be similar," said Harvey Saferstein, an antitrust lawyer at Fried, Frank, Harris, Shriver & Jacobson in Los Angeles. "There will be some fallout."

Judge Thomas Penfield Jackson, the trial judge in the Justice Department case, is certain to take notice of the Bristol case, as will any appeals court.

The Bristol decision shows that "reasonable decision makers can find an absence of anticompetitive effect, notwithstanding unfair business practices," said Sterling. "Microsoft may be in violation of unfair trade practices, but is still in compliance with general antitrust" laws, he said.

During the trial, Bristol argued that the expiration of the licensing contract in September 1997 drastically reduced sales. Bristol sells cross-platform development products that allow Windows applications to run on other operating systems. Its key product, WIND/U, lets companies port applications from Windows to Unix.

Bristol lawyer Lynch said in closing arguments that Microsoft let the contract lapse to discourage use of the Unix operating system, which rivals Microsoft's Windows NT operating system.

But Microsoft lawyer David Tulchin called Bristol executives greedy for bringing a lawsuit over what he said was a contract dispute.

Microsoft still faces antitrust charges in a lawsuit brought by Caldera, as well as a lawsuit brought by the Justice Department and 19 U.S. states. The Caldera case is slated to go to trial in U.S. District Court in Salt Lake City, Utah, on Jan. 17, 2000. Meanwhile, closing arguments in the high-profile Department of Justice lawsuit in the U.S. District Court for the District of Columbia are scheduled for Sept. 21, with a ruling expected months later.

Bristol Technology, in Danbury, Connecticut, can be reached at +1-203-798-1007, or http://www.bristol.com. Microsoft, in Redmond, Washington, is at +1-425-882-8080, or at http://www.microsoft.com.

(Patrick Thibodeau, a senior writer for Computerworld, contributed to this story)

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