Microsoft's Bill Gates returned to the witness stand Tuesday to defend his company against a $1 billion antitrust lawsuit that claims the software giant tricked a competitor into huge losses and soared onto the market with Windows 95.
Utah-based Novell Inc. sued Microsoft in 2004. The company said Gates duped it into thinking he would include its WordPerfect writing program in the new Windows system, then backed out because he feared it was too good.
Novell said it was later forced to sell WordPerfect for a $1.2 billion loss.
Gates testified Monday that Microsoft was racing to put out Windows 95 when he dropped technical features that would no longer support the rival's word processor because engineers warned it would crash the system.
Windows 95 was a major innovation, and Gates said he had his mind on larger issues.
"We worked super hard. It was the most challenging, trying project we had ever done," the Microsoft co-founder said. "It was a ground-breaking piece of work, and it was very well received when we got it done."
Gates said Novell just couldn't deliver a Windows 95 compatible WordPerfect program in time for rollout, and its own Word program was actually better. He said that by 1994, Microsoft's Word was rated No. 1 in the market above WordPerfect.
WordPerfect once had nearly 50 percent of the market for computer writing programs, but its share quickly plummeted to less than 10 percent as Microsoft's own Office programs took hold.
Microsoft lawyers said Novell's loss of market share was its own doing because the company didn't develop a Windows compatible WordPerfect program until months after the operating system's rollout.
Gates called it an "important win" in an email to executives.
Attorneys for Novell, a wholly owned subsidiary of The Attachmate Group as a result of a merger earlier this year, concede that Microsoft was under no legal obligation to provide advance access to Windows 95 so Novell could prepare a compatible version. The Redmond, Wash.-based company, however, enticed Novell to work on a version, only to withdraw support months before Windows 95 hit the market, Novell attorney Jeff Johnson said.
Microsoft lawyer David Tulchin argued that Novell's missed opportunity was its own fault, and that Microsoft had no obligation to give a competitor a leg up.
U.S. District Judge J. Frederick Motz late Monday denied Microsoft's request to dismiss the case. He said Novell's claims appeared thin but that he would let the case continue another month and allow a jury to decide.
Gates was the first witness to testify Monday in his company's defense after a month-long case by Novell. Cross-examination begins Tuesday.
Gates, a billionaire, began by testifying about Microsoft's history. He was just 19 when he helped found the company. Today, Microsoft is one of the world's largest software makers, with a market value of more than $210 billion.
"We thought everybody would have a personal computer on every desk and in every home," Gates said. "We wanted to be there and be the first."
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