MS heads for trouble in Caldera lawsuit

Redmond's motion for summary judgement looks flimsy...

MS on Trial Alongside the big antitrust action, Caldera's lawsuit against Microsoft over anticompetitive action against DR DOS cranks on. Microsoft has moved for summary judgement, and Caldera lawyers will now be studying more than 200 pages of close legal arguments filed by Microsoft in support of this. The tactic Microsoft has used is very interesting. Microsoft evidently feels it has not got much chance of getting the whole action dismissed, so by chopping up Caldera' various claims, it is hoping that at least some of the nine memoranda it has just filed will strike gold, and result in some claims being dismissed. This is important for Microsoft, because then it could then make great claims about winning, even if it were a battle and not the war. Microsoft is well aware that its chance of prevailing before a Salt Lake City jury is very slim indeed. Caldera achieved a spectacular PR advantage when Microsoft was pressed to comment on its original Complaint without having a copy, because Caldera had filed it as the court office was closing before a long weekend. It seems that Microsoft tried the same trick last Friday, as Caldera was slow to react. Another ploy Microsoft has used is to cite as many cases as possible in an attempt to overwhelm the resources of Caldera's lawyers, and to put down markers for the Court of Appeals. As ever, Microsoft is sparing no legal expense. Some of Microsoft's claims are unfounded or on very thin legal ground. A constant refrain is that more than four years passed between the events complained about and Caldera's original Complaint. But could Microsoft have overlooked that the period between the signing of the consent decree and its approval after Judge Sporkin's disapproval does not count towards the statute of limitations? Microsoft makes some amusing arguments: "Even if Microsoft had a duty of 'predisclosure' [of Windows betas under the Sherman [antitrust] Act, Caldera's claim would fail because a crucial element -- DRI's lack of access to the betas -- is missing in this case." Digital Research developed DR DOS in Hungerford, UK. Microsoft says that Tobey Corey, DRI's director of marketing, admitted in a deposition that DRI had access to the betas by the autumn of 1991, and that John Constant, DRI's product development manager, also admitted in a deposition that DRI had access to the betas through Novell. It was in July 1991 that Novell announced it was acquiring DRI, and the deal was completed in November. Further details as to just how dangerous DRI/Novell might have been to Microsoft was disclosed: there were three attempts to unseat Microsoft. DRI tried in its Cutlass project to emulate Windows APIs. Another project involved a strategic alliance with IBM to develop DR DOS with OS/2. The third project was to develop a product with Apple, in a project codenamed Star Trek, a successful but commercially unexplored attempt to put the MacOS on Intel. One of Microsoft's Memoranda refers to a deposition from Theo Lieven, then CEO of Vobis, which should prove very interesting if it gets into the public domain. Willi Dahmen, Vobis' general manager, was punished by Microsoft at the 1995 SoftDev conference in San Francisco by not being allowed to keep a copy of the latest Windows 95 beta, because Vobis had preferred DR DOS to Microsoft-DOS with Windows 3.1. Fred Kampermann, head of sales at Microsoft Germany said that because Vobis did not maintain confidentiality about the contents of contracts, Microsoft did not have the confidence and trust to allow Vobis to participate in the beta test program. Lieven denied this, and threatened Microsoft with a defamation action before the German courts. Microsoft's nerve in claiming that Microsoft's licensing practices for its operating systems were "reasonable" flies in the face of the consent decree, inadequate as it was. Microsoft says that its per processor licenses, banished by the consent decree (but this is not mentioned in the Memorandum) "had obvious benefits for the OEM and Microsoft". The benefit for Microsoft was clear enough: force an OEM to take MS-DOS, so making it rather difficult for it to have DR DOS as well. Microsoft's claim that per processor licensing "was one of several options made available to each OEM, and that it was selected only by those OEMs that found it to be to their economic advantage" does not accord with what OEMs were saying privately (for fear of sanctions) at the time. Microsoft did not in general offer an alternative to per processor licensing. Nor does Microsoft say in its Memorandum that it was prevented by the consent decree from entering into licensing agreements with a duration greater than one year. Two years had been the previous norm, with a discount for a three year term. The amount of redacted material is really quite extraordinary at this stage in the life of MS-DOS. The evidence is that the censorship is to save face rather than for commercial reasons. Microsoft now uses as an excuse for the inordinate delay between the vapourware announcement of MS-DOS 5.0 in April 1990 and its delivery in June 1991 the suggestion that Brad Silverberg had required a third beta, and the addition of new features. This was hardly surprising, because DR DOS 5.0 was a considerable advance over the MS-DOS 3, and the bug-ridden MS-DOS 4. Microsoft's assertion in one of the memoranda that DR DOS 5.0 copied earlier MS-DOS ignores the fact that DR DOS had additional features that Microsoft copied, and that DR DOS was produced in a clean room as Microsoft itself explicitly acknowledged (or it would have taken legal action, no doubt). In each Memorandum, Microsoft presents what it calls an "Statement of undisputed facts" but it is anything but that. Microsoft's documents yet again have incorrect paragraph numbering, which appears to result from Microsoft failing to follow HTML standards. In about half-a-dozen cases, the page images on Microsoft's web site do not render the page correctly, but such inattention to detail is of course a "feature" and a well-known hallmark of Microsoft. A Microsoft press release accompanying the documents claims that "After nearly three more years of investigation, Caldera still has no evidence to support its claims." The fact is that Microsoft has done everything in its power to slow down the case. The evidence available to Caldera includes the documents that Microsoft had to produce to the FTC and the DoJ, and it is pretty damning stuff. With the damage that Caldera suffered as a result of not being allowed the possibility of substituting DR-DOS for MS-DOS in Windows 9x (a new claim allowed by the Salt Lake City court), Microsoft is clearly very worried about the timing of this case in view of its present difficulties in Washington. Although there can be no financial penalty on Microsoft as a result of the Washington case, the prospect for a huge award in the Caldera case, which would be tripled by law, seems high. ® Complete Register trial coverage

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