By Siobhan Kennedy Attorneys for Microsoft Corp spent the first two days of the software giant’s trial against Bristol Technology Inc approaching it like a contract case, and ignoring the wider antitrust accusations, the company’s CEO said yesterday. Speaking to ComputerWire on Friday at the end of the second day of the trial in Bridgeport, […]
By Siobhan Kennedy
Attorneys for Microsoft Corp spent the first two days of the software giant’s trial against Bristol Technology Inc approaching it like a contract case, and ignoring the wider antitrust accusations, the company’s CEO said yesterday. Speaking to ComputerWire on Friday at the end of the second day of the trial in Bridgeport, Connecticut, Bristol CEO Keith Blackwell said a 1994 contract signed between the two companies was only one component of the trial, yet Redmond’s attorneys have focused on it almost exclusively since the case began last Wednesday. Microsoft has continued to approach it like a contract case, he said, But this is not a contract dispute at all, this is an antitrust trial. Blackwell was speaking after the cross examination of Bristol’s CTO, Ken Blackwell (his brother) on Friday.
During the hearing, Microsoft attorney David Tulchin spent the majority of his time trying to prove that Microsoft had not reneged on its contract with Bristol and that it had been willing to compromise when renegotiating the deal. But he implied that Bristol had already made up its mind to take legal action before a solution could be reached.
As ComputerWire reported last week, Bristol filed its lawsuit against Microsoft last August, accusing the number one software maker of leveraging its position in the operating system market to raise prices and force its partners to sign unfair contracts. Under a three-year licensing deal signed in 1994, Bristol was given rights to the source code of Windows NT 3.0. But when the company came to renew that contract, Microsoft decided not to partner under the same terms, saying Bristol was only allowed access to a subset of the source code.
But Microsoft wasn’t sure exactly which subset to give Bristol access to, so it asked the company to come up with list of the NT technologies it needed to make its Wind/U product, the CEO said. Blackwell maintains that Bristol never went along with the idea and begrudgingly submitted the list to Microsoft in November 1997, whereupon it didn’t hear anything until the following April. Blackwell said the list came back with approval for most of the technologies but that Redmond had removed some other, crucial functionality which Blackwell said Bristol couldn’t do without. We now know the reason it took so long was because Microsoft needed the time to decide what to leave out to throttle Bristol and reduce our competitiveness, he said.
Blackwell said Bristol had two choices: to accept the terms or to take legal action. Given that the company felt it couldn’t carry on its business without full access to the source code, Blackwell decided on the latter and in May began preliminary talks with the company’s attorneys. What Microsoft was going to give us would kill us, so we had no choice, it was anti-competitive behavior, he said. But Tulchin disagreed: There were only two technologies that you asked for that Microsoft said it didn’t want to include, he told the CTO during the cross examination, Isn’t it fair to say that when Microsoft gave you the list in April it wasn’t all that different to one you gave it in November?
The two companies met on June 18 to try and thrash out a solution but Microsoft wouldn’t budge, Blackwell said. Four days later, June 22, he wrote a letter to Microsoft as a last ditch attempt, trying to persuade the software giant to agree to the November 1997 list. But Tulchin was quick to pounce on an anomaly. In its 22 June letter, Bristol was still saying Microsoft could exclude those two technologies? he said. Yet now, in the courtroom, you’re saying you needed all of it? Yes, replied Blackwell. And you didn’t indicate any of this to Microsoft in the meantime, Tulchin said. Yes, Blackwell replied again. Moreover, the attorney said it now turns out that while Microsoft was busy trying to settle the issue, unbeknownst to Redmond, Bristol was quietly preparing a law case against it. You had retained counsel by June but you hadn’t told Microsoft you were preparing a law suit against it.
Tulchin said Microsoft sent a fax to Bristol on July 7, responding to the June letter. The thirty to forty page document included a detailed contract which included some changes Microsoft had made to reflect comments from Bristol, and others he said. Doesn’t that mean Microsoft was happy to discuss a new agreement? he asked. But Blackwell said Bristol had considered the proposal legalese adding it still didn’t give Bristol what it wanted.
During re-cross examination Bristol’s attorney Patrick Lynch jumped on Tulchin’s assertion that Bristol came up with the list of proposals in the first place. Was it ever Bristol’s preference to have less rights than you had in the 1994 agreement? he asked. No said Blackwell. Was it ever Bristol’s preference to have less technologies? he asked again. No the CTO said. Was it not a case of give us a list of something that’s less than all or forget it? Lynch asked. Correct said Blackwell. á