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A federal judge in Utah ordered Microsoft on Tuesday to hand the Windows 95 source code over to Caldera, a move that could help it to demonstrate claims of unfair competition by the world's biggest PC software company.
The decision by US District Court Judge Ron Boyce is an important victory for Caldera. The Orem, Utah, software company bought the DR-DOS operating system in 1996 from Novell Inc. (NOVL). Access to Microsoft's source code -- the secret lines of programming that make up any software -- will let Caldera's cadre of expert witnesses demonstrate that Windows 95 can run on top of DR-DOS, an operating system that competes with Microsoft's MS-DOS.
In a related ruling, Boyce ordered Novell, the previous holder of DR-DOS, to hand over to Microsoft its papers regarding possible strategies for a lawsuit that was never filed against the software giant.
Caldera was co-founded by Ray Noorda, former chairman of Novell and long-time critic of Microsoft (MSFT). When Caldera purchased DR-DOS it inherited the right to sue Microsoft, which it exercised soon after the purchase.
In its suit, Caldera alleged that Microsoft's practice of requiring computer makers to bundle Windows 95 with MS-DOS unfairly excluded competitors like DR-DOS. The suit also charged that Microsoft's action violated the 1995 consent decree issued by the US Department of Justice.
By proving that DR-DOS is interchangeable with MS-DOS, Caldera's legal team hopes to show that Microsoft continued to violate the consent decree, which stopped the software giant from collecting royalty payments for each PC sold by computer makers. The fee was paid to Microsoft in any case; it did not matter whether the computer shipped with MS-DOS or some other operating system. That meant computer makers had no incentive to include any other operating system besides MS-DOS, putting competing software such as DR-DOS at a disadvantage.
"[Proof that Windows 95 runs on DR-DOS] will give us more information to withstand Microsoft's barrage of cross examination," and also prove that Microsoft has continued its anti-competitive behavior, said Bryan Sparks, president and co-founder of Caldera.
"It's the ultimate illegal act. Can [a computer maker] buy Windows 95 without MS-DOS? The answer is no," Sparks explained.
If Caldera is successful in its suit, it hopes to collect damages based on lost market share, Sparks said. "Let's say DR-DOS had market share in the teens when Windows 95 was released," he hypothesized. "If you carry this out to today, you could say that we would have had a very substantial portion of the market now."
Although the amount of damages is yet to be determined, Sparks said, "The number is a very large number."
Microsoft said it will not hand over the entire code behind Windows 95, only the specific part that relates to the lawsuit. "We will work with the court to see that the information is used in the proper way," said Jim Cullinan, a Microsoft spokesman.
The decision by Boyce is not the first time Microsoft has been forced to hand over portions of its Windows source code. "We've had to show the Justice Department some of the [Windows] code," Cullinan said testily. The spokesman would not elaborate on all the parties who have been able to peek at the code.
But Cullinan sounded an optimistic chord over the decision to grant Microsoft access to the Novell papers. The documents cover a wide range of information surrounding Novell's cooperation with the Federal Trade Commission and later the US Department of Justice, including the strategy for a possible private lawsuit against Microsoft over DR-DOS.
Microsoft hopes to use the documents as part of its defense against the Justice Department and the attorneys general of 20 states, all of whom are pursuing antitrust cases against the software firm, based in Redmond, Washington. The company also hopes the papers will prove useful in defending itself against Caldera's charges, Cullinan said.
Under the terms of the judgment, Microsoft has five days to bring the source code for Windows 95 and earlier operating systems to Caldera officials, Sparks said. The lawsuit is scheduled to go to trial in June 1999.
