Microsoft settles Caldera lawsuit for $150 million

Just seven days before the case was to go to trial, Microsoft announced it has settled the private anti-trust lawsuit brought against it by Caldera. Although the two companies didn’t specify the amount of the settlement, Microsoft’s disclosure of 3 per cent impact on earnings in the third quarter put the settlement amount at around $150 million.

The settlement is a major moral victory for Caldera founder Ray Noorda, the former Novell chief whose efforts to compete with Microsoft in the desktop OS market were frustrated by Microsoft’s alleged illegal anti-competitive actions to hurt sales of Novel’s DR-DOS operating systems software. Caldera filed the antitrust suit in July 1996, charging Microsoft with illegally maintaining its dominance in operating systems. Caldera has demanded more than $1 billion in damages.

"We have always stated that we would prefer to negotiate a fair and
reasonable solution rather than pursue a costly litigation process,'' said Microsoft legal spokesman Jim Cullinan. The settlement is good for both parties, analysts said. The case had created a lot of bad publicity for Microsoft in the midst of its federal antitrust lawsuit. The settlement will likely make it easier for the company to reach an agreement in the federal case as well. And, for Caldera, which is now pushing the Linux operating system the deal clears the
way for the company to compete head-on with Red Hat Linux. "We now look forward to vigorous competition in the marketplace with our Linux products and strategies," Caldera Chief Executive Bryan Sparks. Caldera Systems immediately filed for a $57.5 million initial stock sale.