Microsoft has another antitrust headache on its hands in the form of Software developer Bristol Technology. The firm filed suit Wednesday against Microsoft in US District Court in Bridgeport, Connecticut, charging Redmond with anti-competitive behavior.
The suit contends that Microsoft injured Bristol by seeking unreasonable terms for access to the source code for its Windows NT operating system. Bristol said the code is key to developing its cross-platform software development tools.
Bristol Technology's chairman and president, Keith Blackwell, says Microsoft is out to undermine an important link between Windows and Unix software that Bristol helped build.
"Our software was a bridge to the server market and [now] they want to tear down the bridge," Blackwell said.
Bristol's software, Wind/U, lets developers write just one version and have it run on computers running both Unix-based and Windows NT operating systems.
The software's success -- Bristol says US$100 million of third-party software has been developed and sold using the tool -- has hinged on a deal with Microsoft that granted Bristol access to the Windows source code.
"The complaint appears to be wholly without merit," said Microsoft spokesperson Heidi Rothauser. "Bristol is seeking to elevate a routine business negotiation over a source code license into a federal lawsuit."
Redmond carefully limits access to its source code, which it considers a closely guarded trade secret.
Microsoft and Bristol were negotiating the license as recently as Tuesday night but had not come to terms on royalties or the scope of the license, according to Rothauser. "Bristol broke off those negotiations and filed a lawsuit without giving Microsoft prior notice."
She said Microsoft plans to defend its position in court but declined comment on specific issues raised in the suit.
Entry to a New Market
Bristol's Blackwell said Microsoft had plenty to gain in making a deal with his company, since it badly needed developer support for the fledgling Windows NT software in the early '90s. At that time, Microsoft had little or no presence in the market for the operating systems that drove servers and high-end workstation computers.
In 1994, Redmond licensed the operating system source code so Bristol could give developers who were writing "middleware" for Unix-based server computers -- software that serves as the glue between the powerful machines -- an effective bridge to the Windows alternative.
Thanks to its access to Windows source code, Bristol was able to create Wind/U, which let developers write one piece of software to work on Unix-based servers as well as Windows NT-based servers. Without Wind/U, extra time and money would have been required to develop completely separate Windows versions of the software.
Accelerating the proliferation of Windows-compatible server and workstation software, the Microsoft-Bristol deal helped build a much bigger presence for Redmond in the server market. In exchange for royalties paid to Microsoft on every sale of Wind/U, Bristol was able to become the predominant bridge for developers between Unix and NT.
Now that Microsoft has a strong foothold in the market, Bristol says the company wants to take away the Wind/U-built bridge that lets developers write for Unix as well as Windows operating systems.
Faced with the increasing dominance and promising momentum of Windows NT, developers, Blackwell says, will be forced to develop their products for just one server operating system: Microsoft's.
Sybase is among the developers who would be affected. The company "had a Windows-based product and had demand on Unix," Blackwell said. "So they used us to get to Unix."
"Sybase has used Bristol's Wind/U to create Unix versions of its PowerBuilder product since 1995," said Mitchell Kertzman, chairman and CEO of Sybase, in a statement.
"We rely on Bristol's ability to offer the entire Windows programming interface now, and into the future."
When Bristol's licensing agreement with Microsoft expired in September 1997, Redmond began making unreasonable demands for renewing it, Blackwell said. Among them: a 400 percent increase in some royalty arrangements and limitations on the access to the Windows code.
"They've offered us terms that we considered a farce," Blackwell said. "They subsetted the technology and increased the royalties."
Bristol's chances
"The mere fact that for years Microsoft turned to [Bristol Technology] to help Microsoft build a bridge when Unix was strong does not mean they have to do that forever," said Stephen Axinn, antitrust attorney at the New York firm of Axinn, Veltrop, and Harkrider. Axinn made his comment after a brief review of Bristol's announcement of its lawsuit.
The law does not forbid a "monopolist," he added, for charging what it wants to charge for copyrighted material. Therefore, if there is no allegation of breach of contract, Bristol may have a difficult case to make.
There is a wrinkle in the legal issues at stake that may work in Bristol's favor, Axinn said. The US Supreme Court has ruled that there is a condition that governs changes in a relationship between a monopolistic company and its competitor.
"Once a monopolist assists a competitor in enabling that competitor to remain a competitor, they may not be able to stop assisting without perfectly good reason. And the reason cannot be to cripple them." Whether Bristol is considered a competitor or not is unclear. Microsoft's Rothausen said she did not believe Microsoft had a product that competed with Wind/U.
Blackwell said that Microsoft's tactics form the basis of his company's suit. He also maintains that they go to the heart of the pending Justice Department case against Redmond.
Microsoft's reluctance to provide open access to its technologies has led the company into other legal entanglements as well, Blackwell said, citing AT&T and Citrix.
Bristol is seeking unspecified damages in the suit, as well as immediate access to Windows NT source code, including Microsoft Windows NT 4 and future versions of the software.
