S&C Beats Back Novell Appeal in Microsoft Antitrust Case
Microsoft Corp.'s lawyers at Sullivan & Cromwell promised last July that they'd easily preserve their big antitrust defense win against Novell Inc., the sole remaining antitrust plaintiff challenging Microsoft over Windows's market dominance in the 1990s. Sadly for Novell and its lawyers at Boies, Schiller & Flexner and Dickstein Shapiro, the prediction proved thoroughly correct on Monday.
In a 35-page opinion, a panel of the U.S. Court of Appeals for the Tenth Circuit threw out Novell's claims that Microsoft withdrew support for Novell's WordPerfect word processing software between 1994 and 1996 in order to guard its Windows monopoly. Affirming a July 2012 ruling by U.S. District Judge J. Frederick Motz, the panel concluded that "Microsoft's conduct does not qualify as anticompetitive behavior within the meaning of section 2" of the Sherman Antitrust Act.
Barring further appeals, the ruling disposes of the last of roughly 200 civil actions against Microsoft that were filed in the wake of the U.S. government's massive antitrust prosecution of the late '90s.
"This is a hugely gratifying win for Microsoft," S&C's David Tulchin told us Monday. "It's quite clear that although it took nine years, justice has prevailed."
Tulchin squared off at Tenth Circuit oral arguments in May against an old adversary in the Microsoft cases: Boies Schiller's David Boies. Before signing on to represent Novell, Boies served as special trial counsel for the U.S. Department of Justice in the government's antitrust suit, which settled in 2001. A spokesperson for Boies didn't immediately respond to a request for comment. Novell said in a statement that it was disappointed with the ruling and "considering next steps."
In Monday's opinion, Tenth Circuit Judge Neil Gorsuch called the Novell litigation a "straggler of a case" that dates back to "a time before the dot-com boom busted and boomed again, a time when Microsoft was busy amassing a virtual empire—if sometimes in violation of the antitrust laws."
We first wrote about the case three years ago, when Motz ruled that Novell lacked standing to pursue its claims. A divided Fourth Circuit panel flipped that ruling in May 2011 and remanded the case for trial. The case was transferred from Motz's home turf in Baltimore to Salt Lake City, where Motz presided over the trial sitting by designation. The jury deadlocked in December 2011 after eight weeks of trial, with all but one of the jurors agreeing that Microsoft harmed Novell by withdrawing key support for its programs.
Motz granted Microsoft's motion for a judgment as a matter of law last July, finding that that Novell hadn't shown that Microsoft's actions harmed the operating system market or forced a delay in the release of Novell's WordPerfect and Quattro Pro products. We named S&C's Tulchin and his colleague Steven Holley Litigators of the Week for the defense win.
Tulchin noted at the time that Motz offered three different grounds for tossing the case, and vowed that "this one isn't going to be reversed." On Monday, Tulchin pointed out that the Tenth Circuit didn't bother engaging with two aspects of Motz's decision, finding the district court's primary holding sufficient to support the judgment.
"I felt good going in, I felt good at oral argument, and I feel good now," Tulchin said.