Microsoft Statement on Novell’s WordPerfect Legal Action

REDMOND, Wash. — Nov. 12, 2004 — Microsoft Corp. has had discussions with Novell Inc. on a number of topics and has made significant progress, as evidenced by the recent settlement regarding NetWare. Unfortunately, despite extensive efforts, Microsoft and Novell were unable to reach a reasonable agreement regarding Novell’s WordPerfect claims, and Novell has now chosen to litigate this matter.

Through this lawsuit, Novell seeks to blame Microsoft for its own mismanagement and poor business decisions. The record is clear that bad decisions and business mistakes are the reasons WordPerfect fell out of favor with consumers. It’s also unfortunate, and surprising, that Novell has just now chosen to litigate over a business it owned for a very short time and that it sold more than eight years ago.

Prior to Novell’s purchase of WordPerfect in 1994, WordPerfect had already begun to decline. Indeed, Novell’s stock dropped 15 percent the day after it announced the acquisition. WordPerfect deliberately chose not to develop a version for early versions of Windows® in the hope that depriving Windows of a key application would limit the success of Windows. This and other missteps led to a decline in WordPerfect popularity that resulted in Novell selling it for approximately one-eighth of what was paid for it only 20 months earlier.

There are other fundamental flaws in Novell’s complaint. Given that Novell hasn’t owned WordPerfect for eight years, their claims should be barred by the legal doctrine called the Statute of Limitations.

It is also surprising that Novell seeks to use the Court’s findings in the Department of Justice case against Microsoft. That case had nothing to do with WordPerfect or any other office productivity software, and focused almost exclusively on other markets and technologies. In fact, Novell was barely mentioned during the U.S. antitrust trial. Moreover, the U.S. antitrust laws do not support Novell’s claims that a company is required to share its inventions and trade secrets with its competitors.

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