Lindows-Microsoft legal spat builds

Lindows.com reports that Microsoft proffered legal papers to disavow California class-action settlement claims submitted on the Lindows Web site.

Matt Hines Staff Writer, CNET News.com
Matt Hines
covers business software, with a particular focus on enterprise applications.
Matt Hines
3 min read
Microsoft proffered legal papers seeking to disavow California class-action settlement claims submitted via the Linux distributor's MSfreePC Web site.

In a motion filed earlier this month with the Superior Court of California for San Francisco County, Microsoft asked Judge Paul H. Alvarado to reject all claims processed by the Lindows site, which offers to help people garner benefits from Microsoft's $1.1 billion class-action settlement.

In the latest legal filings, the software giant's attorney, Robert A. Rosenfeld, writes that the Lindows site violates the terms of Microsoft's agreement by using so-called digital signatures to process settlement claims. Digital signatures are online validation agreements used to verify individuals' identities.

Microsoft contends in the motion that the matter of digital signatures was hashed out in previous discussions between its attorneys and counsel representing California's class-action members and written into the settlement itself.

The software maker said it asked for a traditional paper-based verification process in order to help eliminate fraudulent claims and to keep specific vendors from attempting to cash in on the settlement.

A Microsoft representative said the software maker is awaiting advice from the court on how to proceeed in its complaint against Lindows.

"Lindows misuses (the MSfreePC site) as a marketing tool for its products and could be misleading consumers into believing that there is an alternate claims process that differs from the original settlement," the Microsoft representative said.

The company maintains that it is making every effort to ensure that qualified people get their hands on settlement funds, and it restated that it asks for minimal proof-of-purchase information when processing consumer claims. On its own forms, Microsoft asks for a product ID number along with a date of purchase and consumers' retail distributors' information.

Microsoft has created its own site, www.microsoftcalsettlement.com to handle California class?action settlement claims.

In September, Microsoft sent Lindows a cease-and-desist letter regarding the site, in which Rosenfeld said claims submitted using the service would not be honored. At that time, Microsoft also demanded that Lindows remove the site, which the Linux software company continues to operate.

The MSfreePC effort offers California residents qualified for settlement benefits the ability to swap the vouchers they are eligible to receive from Microsoft for Lindows software. The Microsoft vouchers can be used to buy hardware or software products from any manufacturer and typically range in value from $5 to $29.

The site also promises a free personal computer to the first 10,000 people who buy $100 worth of Lindows products via the MSfreePC site. Using the system, participants authorize Lindows to submit a claim on their behalf and receive whatever settlement on Microsoft benefits to which they may be entitled.

Lindows Chief Executive Michael Robertson disputes that anywhere in the settlement it says that digital signatures cannot be used by class-action members to make their claims. Robertson called the motion an "absurd" tactic meant to confuse consumers and keep people from demanding their portion of the settlement.

"This is the same digital signature technology that people use to file their taxes and other federal forms, and which Microsoft has long-used to market its own products," Robertson said. "Microsoft is trying to create a complex system which will keep it from having to pay up."

Robertson said that Microsoft is targeting Lindows for a number of aditional reasons, including trying to spook other technology vendors from offering similar programs. The executive said Lindows will continue to operate the MSfreePC unless it is ordered by the courts to remove the site. The motion is scheduled to be reviewed on Nov. 24.

The Lindows CEO thinks that the settlement allows Microsoft to keep too large a portion of any unclaimed funds through its agreement to award two-thirds of any leftover amount to California schools.

Consumers have until March to file claims, after which time one-third of unclaimed monies will be refunded to Microsoft, and the remaining balance will be given to schools.

Last week, Microsoft agreed to an identical class-action settlement with consumers in the state of North Carolina.