Microsoft Corp. did not break antitrust laws in its dealings with a small Connecticut technology company, a federal jury decided yesterday after 13 hours of deliberations. The jury did find that Microsoft violated a state law that bars deceptive and misleading statements in business affairs, but for that transgression the nine-person panel awarded the company, Bristol Technology Inc., just $1.
The closely watched verdict hands the software giant a significant victory in a chain of private and government antitrust suits it is fighting. It could dissuade other firms that feel wronged by Microsoft from filing similar private lawsuits, legal specialists said.
Legal experts do not expect the decision to affect the government's antitrust case against Microsoft, which is proceeding in federal court in Washington. If Bristol had won, however, government attorneys could have introduced some evidence from the Connecticut case in Washington to support stiff sanctions against Microsoft.
Microsoft cheered the verdict, calling it "an important victory for the software industry as a whole." A Microsoft official predicted the verdict would have "a ripple effect" that "communicates to those who think it's fashionable to pursue the big, successful company that you still need proof in the courtroom."
Bristol, a 70-person operation based in Danbury, alleged that Microsoft illegally restricted its access to crucial technical details of Microsoft's dominant Windows operating system out of fear that Bristol's software could help promote the use of Unix, a rival operating system.
Bristol had asked the jury for $263 million in damages, roughly 32 times its revenue last year, a figure that a Bristol economist estimated as the sum the company would lose over the next 10 years due to Microsoft's actions.
Bristol makes a product called Wind/U that allows programs written to run on Windows also to operate on Unix machines. From 1994 to 1997, Microsoft provided Bristol with the "source code" for Windows -- the software's secret blueprints -- so Bristol could develop its product. But last year, Microsoft told Bristol it was raising the fee for the source code and it would no longer part with all of the code.
Claiming a "bait-and-switch," Bristol argued that Microsoft had promised to provide technical support over the long run. Microsoft maintained that it had no obligation under the antitrust laws to share new versions of its Windows technology with Bristol.
The software giant called the lawsuit "a contract dispute," saying that Bristol sued after it was told it would have to pay more to license the code. Microsoft's attorneys noted that one of Bristol's rivals, a Silicon Valley firm called MainSoft Inc., agreed to Microsoft's contract terms.
The verdict "upholds the rights of a company that creates intellectual property to license it in a fair and equitable way," said Microsoft attorney Steven J. Aeschbacher.
Bristol's chief executive, Keith Blackwell, said he was "extremely disappointed" with the verdict and that the company would be exploring its legal options, including an appeal.