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Guns Drawn in Microsoft's Battle with State

Minnesota's lawyers are expected to press forward with the state's five-year-old antitrust class-action lawsuit against Microsoft when testimony continues next week.

The state is attempting to prove that Microsoft engaged in predatory business practices that drove competitors out of business, then overcharged end-users for its products. Lawyers from Zelle, Hofmann, Voelbel, Mason & Gette are representing the state in the case of Gordon, et al. v. Microsoft. The same firm helped negotiate a $1.1 billion settlement with Microsoft on behalf of California residents in January 2003.

E-mail correspondence unveiled in court this week provides juicy details of the fight for market share between Microsoft's MS-DOS and Novell's DR-DOS; both were based on CP/M , the original PC OS developed by Digital Research. Analysts say the e-mails also give insight into what the state's strategy might be.

Pages of e-mails and memos filed by the state and published by the Fourth Judicial District Court are filled with tidbits that could show Microsoft chose to break Windows unless it ran on MS-DOS. For example, one September 1988 e-mail from "billg" asks, "You never sent me a response on the question of what things an app would do that would make it run with MSDOS and not run with DR-DOS. Is there any version check or API that they fail to have? Is their feature (sic) they have that might get in our way? I am not looking for something they can't get around. I am looking for something that their current binary fails on."

The e-mails filed as evidence also show there was much back-and-forth about whether an application could identify the flavor of DOS on the PC. According to another e-mail, "Bill Gates ordered ... if it is non MS-DOS (such as DR-DOS), application will display messages saying 'Since you use different environment, this application may not work correctly.'" In a July 1991 e-mail, davidcol (David Cole, now vice president of the MSN and personal services group) writes, "We should not consider things that stop Windows from working on Netware. (Netware here = netware + DR-DOS.) If it was just DR-DOS alone, then we should prevent Windows from working there."

In a September 1991 e-mail, philb (former Microsoft engineer Phil Barrett) responds to a developer's question sbout how to make Windows 3.1 run on DR-DOS 6 by writing, "The approach we will take is to detect dr6 and refuse to load."

The same e-mail shows Microsoft's early decision process of moving functions out of applications and into the Windows operating system.

"When the user starts Windows, they get the Microsoft OS (including networking) and all the other cool features that go with that. When they quit, they get Netware and Dr DOS and no Windows apps. The key is getting a piece of MS system software on that client so we can deliver our strategy and vision," the e-mail read.

Caldera (now the SCO Group), which purchased DR-DOS from Novell in 1996, sued Microsoft for anti-competitive practices it claimed cut DR-DOS out of the market. Microsoft settled the case in January 2000, before it went to trial, for a reported $155 million.

For their part, the Microsoft defense team entered into evidence a book and a memo. The 1992 e-mail memo from "stephanir" details negotiations with Vobis, an OEM that was getting pitched to pre-install applications by Microsoft, Borland, Novell and Lotus. According to the memo, Vobis offered to stop offering DR-DOS and Lotus to customers in return for a strategic alliance with the Redmond, Wash.-based company's team. The book -- "How the Web Was Won," by Paul Andrews -- was highlighted by Microsoft as a publication that the New York Times called "an exemplary tale of corporate resilience."

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