Microsoft Settles with Novell, CCIA Trade Group

In a surprise move, Microsoft Corp. announced on Monday that it is paying $536 million to end an antitrust battle with Novell Inc. and that it has resolved some long-standing disagreements with trade group Computer & Communications Industry Association.

Because of these agreements, Novell and the CCIA have agreed to pull out of the legal case against Microsoft in the European Union.

Specifically, the Microsoft/Novell agreement settles Novell claims over Microsoft’s antitrust actions regarding its NetWare operating system. However, “We could not resolve claims related to WordPerfect in any manner we thought appropriate, and we are prepared to turn to the courts to resolve it,” said Brad Smith, Microsoft senior vice president and general counsel, in a statement.

“We are pleased that we have been able to resolve a portion of our pending legal issues with Microsoft,” said Joseph LaSala Jr., Novell’s senior vice president and general counsel, in a statement.

But, LaSala continued, “We regret that we cannot make a similar announcement regarding our antitrust claims associated with the WordPerfect business. We have had extensive discussions with Microsoft to resolve our differences, but despite our best efforts, we were unable to agree on acceptable terms. We intend to pursue our claims aggressively toward a goal of recovering fair and considerable value for the harm caused to Novell’s business.”

In an interview, Smith said that the Novell deal would not be collaborating in the licensing and intellectual property ways that Microsoft has with Sun Microsystems Inc. when those two bitter rivals recently buried in the hatchet.

For more on the Microsoft/Sun settlement, click here.

As for the CCIA, in addition to its EU move, the group has also agreed that it will no longer challenge the District Court’s Final Judgment in the United States v. Microsoft antitrust case. According to a CCIA statement, this “effectively ends the seven-year-long [DOJ vs. Microsoft] antitrust case in the United States.”

Specific financial terms of the CCIA agreement are confidential, but in a statement, the CCIA said Microsoft “will compensate CCIA for certain legal-related expenditures it has incurred, in some cases over the past decade, and provide substantial institutional support for new and important policy undertakings on which CCIA will take a leadership role.” In addition, Microsoft will join the CCIA.

‘Life is a constant reordering of priorities, and for important and pragmatic reasons, we are choosing to move on with regard to this matter,” Ed Black, CCIA’s president, said in the statement.

“Today’s agreement demonstrates that we will meet halfway to see if we can resolve our differences,” Smith said. “The fact that we can find common ground [with these two foes] demonstrates that we are prepared to sit down with everyone to find common ground.”

When asked if these agreements will help Microsoft with its EU legal battles, Smith said, “It certainly doesn’t hurt and that Microsoft remains open for a settlement with the EU.”

Smith also said the Redmond, Wash., company has $950 million in reserve for any remaining antitrust claims, up about $200 million from its most recent filing with the Securities and Exchange Commission.

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