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Microsoft Wins Conn. Antitrust Case

July 17, 1999

BRIDGEPORT, Conn. (AP) _ The founders of tiny Bristol Technology Inc. knew they had their work cut out for them when they took on Microsoft Corp. in an antitrust lawsuit. But this time around, David didn’t get the best of Goliath.

The Danbury, Conn.-based company, with just 70 employees and $8.7 million in revenues last year, sued Microsoft in August, claiming that the industry leader was trying to crush competition by preventing access to its source code _ the software blueprints _ for Windows NT. Bristol spent more than $1 million to prepare its case for trial.

After a federal jury in Bridgeport rejected Bristol’s antitrust claims Friday, the company’s lawyers were crestfallen.

``We’re extremely disappointed and surprised, and will be exploring all of our options,″ said attorney John Altieri.

``We still firmly believe that Microsoft engaged in anticompetitive behavior against Bristol, and that Microsoft is attempting to monopolize additional operating system markets,″ said Bristol Chief Executive Officer Keith Blackwell.

The jury did find that Microsoft committed a deceptive act that violated the Connecticut Unfair Trade Practices Act. The panel didn’t specify what the act was, and awarded Bristol just $1 in damages.

Steven Aeschbacher, senior corporate attorney for Microsoft, called the verdict ``an important victory for the whole software industry.″

``This protects the rights of people who developed intellectual property to be able to license it in a fair and equitable way,″ he said.

Antitrust experts said Microsoft’s victory was clearly important but was expected to have little impact in the much larger antitrust case in Washington, D.C., brought by the Justice Department and 19 states.

The government contends that Microsoft illegally wielded monopoly power from its dominant Windows product to expand into new markets, such as Internet software, and thus crush competitors.

``It’s a boost to the company principally because it’s going to discourage other private parties from taking a swing at it for the same type of behavior,″ said William Kovacic of George Washington University. ``It will slow down others who thought it was time to pile on.″

Connecticut Attorney General Richard Blumenthal said the verdict has no bearing on the legal claims made by the states in the Justice Department case. He said Microsoft’s ``monopolistic abuses″ have ``shortchanged customers and stifled competition in the industry.″

``We continue to be optimistic about prevailing in our action,″ Blumenthal said.

Microsoft is also facing an antitrust suit filed by Caldera Inc. of Orem, Utah. That case is scheduled to go to trial in January.

Bristol makes a software product called Wind/U, which allows programs written specifically for Windows to be converted to run on computers with different operating systems such as UNIX.

From 1994 to 1997, the two companies had a contract under which Microsoft provided Bristol access to source code for an earlier version of Windows NT. Bristol filed its lawsuit after they were unable to reach an agreement on a contract for the newest versions.

The six-week trial in U.S. District Court pitted Bristol, a little-known company, against the Redmond, Wash.-based Microsoft with 27,000 employees and $14.48 billion in fiscal 1998 revenues.

Bristol made two antitrust claims, first, that Microsoft refused to negotiate a new contract. Secondly, Bristol asserted that Microsoft illegally leveraged its monopoly power in personal computer operating systems to monopolize markets for operating systems for computer servers and technical workstations.

Bristol’s lawyers did not ask the jury to award a specific amount of money, but in closing arguments suggested a range of $130 million to $263 million. That range was given by an economic damages expert testifying for Bristol who said the company would lose that amount in profits from 1996 to 2006 because it lost the latest Windows source code for more than two years.

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