Microsoft To Pay Novell $536M

But Settlement With Software Rival Only Covers European Union

(AP)  Clearing more legal challenges, Microsoft Corp. announced important settlements Monday with rival Novell Inc. for $536 million and with a Washington-based trade organization that had aggressively backed landmark antitrust cases against Microsoft by the U.S. government and European Union.

Novell and the trade group, the Computer and Communications Industry Association, agreed to pull out of the legal case against Microsoft in the European Union, which earlier this year declared Microsoft guilty of abusing its dominant position in the technology industry. A key ruling on sanctions against Microsoft is expected as early as this month.

But in a surprise move that will extend Microsoft's courtroom headaches, Novell said it intends to file its own antitrust lawsuit against Microsoft in federal court in Utah this week. It alleges that the software giant acted illegally during the mid-1990s when Microsoft's own Office business software eclipsed the popularity of Novell's WordPerfect word processing program.

"We have had extensive discussions with Microsoft to resolve our differences, but despite our best efforts, we were unable to agree on acceptable terms," said Joseph A. LaSala, Jr., Novell's general counsel. "We intend to pursue our claims aggressively toward a goal of recovering fair and considerable value for the harm caused to Novell's business."

Microsoft's general counsel, Brad Smith, said his company was ready for that court fight. Microsoft has spent more than $3 billion in cash, software vouchers and legal fees in recent years to settle antitrust and patent lawsuits.

The WordPerfect lawsuit will seek unspecified damages and will be based partly on facts proven in court during the U.S. government's antitrust case against Microsoft, LaSala said.

Novell said it accepted the $536 million from Microsoft to settle allegations over Microsoft's actions toward its Netware operating system software, which competes with Microsoft's dominant Windows software. LaSala called it a "significant settlement."

The Computer and Communications Industry Association, which has vigorously fought Microsoft on several legal fronts for more than a decade, did not disclose the amount of its payment. It said Microsoft will spend $65,000 to become a member of the trade organization.

"Ten years of litigation is a long time to fight a company like Microsoft," said Ed Black, the group's head and one of Microsoft's most vocal critics in Washington. Black said he will not recant any of his past criticisms of Microsoft.