In 2004, Novell sued Microsoft, claiming that the software giant had illegally engaged in anticompetitive practices, unfairly hurting the WordPerfect word processor and Quattro Pro spreadsheet in order to protect its Windows monopoly. Of the six claims made by Novell, four were barred by the statute of limitations in the Sherman Act in 2005. The remaining two were allowed to continue until March 2010, when courts handed down summary judgement in Microsoft's favor. Novell duly appealed that decision, and on Tuesday the Fourth Circuit Court of Appeals overturned that judgement in a two-to-one decision, allowing the company to resume its action.

Novell's ownership of WordPerfect and Quattro Pro lasted for less than two years during the 1990s. The company bought WordPerfect in June 1994 for $885 million, and ended up selling it to Corel in January 1996 for just $115 million. Once the de facto standard for word processing software, the application lost its way in the 90s. In particular, the failure to provide a timely Windows version allowed Microsoft to market Word for Windows 2.0 without any real competition from WordPerfect.

However, Novell claims that anticompetitive action by Microsoft damaged WordPerfect's market position further still. In the run up to the launch of Windows 95, Microsoft worked with third-party software vendors, Novell included, to give them documentation and guidance on how best to produce Windows 95-compatible software. Novell asserts that it was deliberately misled and impeded by Microsoft during this period in five separate ways:

Microsoft encouraged developers to use a new Windows 95 feature, shell extensions, and then removed shell extensions at the last minute, wasting Novell's time and delaying the product launch. Microsoft misrepresented Windows 95's printing capabilities, leading WordPerfect to be less capable than Novell believed it would be. Microsoft refused to grant WordPerfect a "Designed for Windows 95" logo, due to incompatibilities with Windows NT 3.5, even though Novell believes WordPerfect to qualify for an exemption to the Windows NT 3.5 requirements. Microsoft refused to properly document or integrated the MAPI mail API into Windows 95, disadvantaging Novell's GroupWise e-mail client. Microsoft entered into agreements with OEMs that discouraged them from bundling WordPerfect.

For its part, Microsoft asserts that WordPerfect's market share slump was the result of WordPerfect and Novell's own managerial mistakes, not anti-competitive action.

The circumstances of the case are made more complex by arrangements between Novel and Linux company Caldera (which was to later rename itself The SCO Group and engage in a campaign to sue companies including IBM and Novell itself over Linux). Another of Novell's acquisitions was MS-DOS alternative DR-DOS. Novell wanted to initiate an antitrust suit against Microsoft over DR-DOS, too, but was concerned that retaliation from Redmond would damage WordPerfect further still. The sale to Caldera was the solution to this predicament: the terms of the sale obliged Caldera to engage Microsoft in antitrust warfare, and required the Linux company to return a portion of any damages awarded to Novell.

Microsoft asserts that in selling DR-DOS to Caldera, Novell also sold the right to bring antitrust claims against Microsoft over any antitrust lawsuits related to Microsoft's operating system monopoly. Specifically, the sale agreement between Novell and Caldera assigns to Caldera the right to make any claims "associated directly or indirectly with any of the DOS Products" (in contrast, when selling WordPerfect to Corel, Novell's sale agreement expressly retained "the antitrust claims for harm that Microsoft caused" to that software). Microsoft argued that the WordPerfect claims were "indirectly" associated with the DOS products, and as such that Novell had no standing to bring suit.

The earlier summary judgement agreed with this argument. In appealing, Novell's lawyers argued for a much narrower interpretation of "indirectly", saying that it was not intended to encompass WordPerfect-related lawsuits, and that neither Caldera nor Novell understood it to do so at the time. The appeals court agreed, and so reversed the lower court's decision. Novell did not prevail in all matters; the GroupWise allegations were dismissed as Microsoft was not given fair notice of those claims. Only "office productivity" software is under consideration, and the court maintained that it was unreasonable to include claims relating to an e-mail client in that category.

Whether the case ever makes it in front of a jury is another matter. Novell is now privately held by mainframe interoperability and security software developer Attachmate. The sale completed at the end of last month, and one of Attachmate's first acts was to lay off some 800 Novell employees, including the developers of Mono, the .NET implementation for Linux, and many members of the company's legal department. Attachmate is also involved in a deal to sell some 882 Novell patents to CPTN Holdings for $442 million, a consortium organized by Microsoft that also includes Apple, EMC, and Oracle.

With its depleted legal resources and important dealings with Microsoft, some observers are speculating that Attachmate may not want to proceed through the courts, and will instead quietly settle the issue.