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Microsoft to pay Bristol under settlement

The settlement closes another chapter in Microsoft's ongoing legal battles and signals a recent shift in the company's strategy, legal experts say.

Microsoft and Bristol Technology on Wednesday abruptly ended their long-standing legal battle.

The settlement closes another chapter in Microsoft's ongoing battles and signals a shift in the company's strategy, legal experts say. Last month, Microsoft agreed to pay Sun Microsystems $20 million to settle Sun's Java lawsuit.

"You can only fight so many wars at once, no matter what you think their merits are," said Bob Lande, an antitrust professor with the University of Baltimore Law School. "It looks to me like Microsoft is trying to simplify its life by settling some of these things."

Bristol filed its suit against Microsoft three years ago. Neither side disclosed the amount of the settlement. But Jean Blackwell, Bristol's vice president of sales, said the "sum includes the awards that the judge has made."

In November, U.S. District Judge Janet Hall ordered Microsoft to pay Bristol $3.7 million in legal fees after earlier slapping the company with $1 million in punitive damages.

Blackwell would not say how much Microsoft had paid beyond the $4.7 million. But she explained why Danbury, Conn.-based Bristol settled the case.

"We received an award that could well have been appealed," Blackwell said. "It was important to us to focus on our business."

Microsoft spokesman Jim Cullinan said his company also wants to avoid distractions.

"We are certainly pleased to reach a reasonable settlement and put this issue behind us once and for all," he said. "We prefer to focus our energy on the customer and developing software, and this settlement allows us to do that."

But Cullinan disagreed with Blackwell's interpretation of the financial arrangement. "The $4.7 million had nothing to do with the settlement," he said. "It's a nondisclosed sum, and I can't talk about it."

Bristol brought the case in August 1998, alleging that Microsoft violated Connecticut unfair business laws and state and federal antitrust laws. The six-week trial ended in July 1999, with a jury clearing Microsoft of the antitrust violations but finding the company violated the Connecticut Unfair Trade Practices Act.

Bristol, which makes tools for running Windows applications under Unix, had argued that Microsoft used the company to gain a foothold in technical workstation and server operating systems.

The company licensed Windows source code at a time when Microsoft's Windows NT operating system trailed Unix substantially in market share. Bristol alleged that Microsoft initially gave access to the Windows source code for its Wind/U product but later raised licensing fees after NT found its footing in the workstation and server markets.

Mainsoft, Bristol's largest competitor, continues to license Windows source code from Microsoft. After losing the antitrust portion of the trial, Bristol signed a licensing agreement similar to Mainsoft's in 1999.

Although the settlement dismisses both parties without prejudice, Blackwell emphasized that Bristol stands behind the merits of the lawsuit.

"We believe everything was in our favor," she said. "We would do this lawsuit again 100 percent because we believe we were right and that we had a great case."

But, she added, "This case is over for good. These claims will never be brought again."

Coincidently, unfair competition tripped up Microsoft in the Sun case. U.S. District Judge Ronald Whyte in January 2000 reinstated an injunction restricting Microsoft's use of Sun's Java technology. He based his ruling on California's unfair business laws.

Lande said there is little to read into the Bristol settlement, other than that Microsoft is chucking unwanted legal baggage.

"I think they're tired of the drag on their corporate focus," he said. "Maybe they just want to get back to the software business."

Microsoft's legal challenges are mounting. Besides its ongoing antitrust appeal and private antitrust cases, the Redmond, Wash.-based company now faces several new racial discrimination lawsuits.

In other legal matters, Microsoft goes back to court next week as the company and the government present oral arguments before the U.S. Court of Appeals in the District of Columbia.