Novell v. Microsoft Corporation
2013 U.S. App. LEXIS 19463
| 10th Cir. | 2013Background
- Case concerns whether Microsoft’s withdrawal of NSE access in the mid-1990s violated §2 by harming Novell and maintaining Windows OS dominance.
- Novell alleged the NSE withdrawal harmed its WordPerfect/PerfectOffice sales and delayed PerfectOffice release, strengthening Microsoft Office.
- Microsoft initially shared NSEs and APIs with ISVs to spur Windows 95 software development, then withdrew access to maximize profits.
- Novell’s theory sought to link NSE withdrawal to OS monopoly maintenance; district court ruled for Microsoft on §2 grounds.
- Court adopts Aspen/Trinko framework: private plaintiff bears the profit-sacrifice requirement in refusal-to-deal cases; Novell cannot show the requisite short-term profit sacrifice or anticompetitive effect.
- Decision affirms district court’s judgment, holding Microsoft’s conduct not actionable under §2.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether refusal to deal with rivals under §2 was actionable | Novell argues withdrawal of NSEs was an anticompetitive refusal | Microsoft contends refusal-to-deal doctrine requires profit sacrifice and lacks anticompetitive effect | Not actionable; profit-sacrifice test not met |
| Whether Aspen/Trinko framework governs this case | Aspen exception applies due to preexisting relationship and abandonment motives | Aspen is narrow; requires profit sacrifice and anticompetitive purpose | Framework applied; Novell fails to show required sacrifice and anti-competitive end |
| Whether deception theory can sustain a §2 claim | Novell contends deceptive withdrawal harmed competitors and consumers | Deception not the causal link; withdrawal caused the injury | Deception theory rejected; injury tied to refusal to deal, which fails under test |
| Whether profits from applications offset OS concentration | Novell argues OS protections harmed rivals, boosting Office profits | Disaggregating profits from lines of business is inappropriate; overall profits favored Microsoft | Profit-sacrifice analysis not satisfied; overall profits favor Microsoft |
Key Cases Cited
- United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (authority on market power and no duty to aid rivals)
- Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (Supreme Court 1993) (profit sacrifice theory in predatory pricing)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (Supreme Court 1985) (limited exception to unilateral conduct liability; preexisting course of dealing)
- Trinko, U.S., 540 U.S. 398 (Supreme Court 2004) (refusal-to-deal exception limited; beware central planning)
- Christy Sports v. Deer Valley Resort Co., 555 F.3d 1188 (10th Cir. 2009) (discusses Aspen and profit-sacrifice test; not applicable here)
- Four Corners Nephrology Assocs., P.C. v. Mercy Med. Ctr. of Durango, 582 F.3d 1216 (10th Cir. 2009) (refusal-to-deal framework considerations)
- Eastman Kodak Co. v. Image Techs., Inc., 504 U.S. 451 (Supreme Court 1992) (market power and accessories in tech markets)
- United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377 (1956) (market power considerations in antitrust)
- Pac. Bell Tel. Co. v. Linkline Communications, 555 U.S. 438 (Supreme Court 2009) (reiterates unilateral conduct framework and limits of liability)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (Supreme Court 1985) (see above)