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More Disclosures in 'Vista Capable' Lawsuit

A filing by plaintiff's attorneys in the Microsoft "Vista Capable" lawsuit says that newly unsealed documents imply that the software titan's CEO was aware that the company lowered technical requirements for Vista in order to save Intel, and some PC makers, billions of dollars in lost revenues.

The documents were unsealed by federal judge Marsha J. Pechman on Thursday in Seattle, where the case is being conducted.

The lawsuit revolves around claims that Microsoft's so-called "Windows Vista Capable" marketing campaign, promulgated to help keep the bottom from falling out from under the PC market during the 2006 holiday season, was deceptive.

The plaintiffs argue that Microsoft's "Vista Capable" sticker on the boxes deliberately mislead consumers to believe that new PCs that they bought prior to Vista's consumer delivery on January 30, 2007, could be upgraded to run higher-end editions of Vista that feature the Aero Glass user interface and other graphics intensive features of the operating system.

It's no surprise that Microsoft's (NASDAQ: MSFT) lawyers say the recently released materials show exactly the opposite of the plaintiffs' assertions – that Microsoft CEO Steve Ballmer was only privy to the company's agreement to let PCs with down-level graphics chipsets be sold under the "Vista Capable" logo program peripherally and after the fact.

In fact, Microsoft acknowledges that Ballmer had a phone conversation in January 2006 with Intel (NASDAQ: INTC) CEO Paul Otellini, which the software company's attorneys referred to as a "courtesy" call. However, they assert that the entire issue had already been settled by lower level executives and that Ballmer was not aware of any operational details of the deal.

Thus, Microsoft's attorneys claim, there is no reason for Ballmer to take a day out of his busy schedule to provide a day-long deposition in the federal class action suit.

On the other hand, the plaintiffs' attorneys point to an e-mail thread, also released Thursday, that implied Otellini was in the loop and had played a role in convincing Ballmer to lower the logo program's standards.

"I want to acknowledge incredible team work to turn this around … and sending in our #1 sales person Paul [Otellini] to close the deal," Intel executive Renee James said in an e-mail that was addressed to Otellini and other Intel execs.

Microsoft disagrees with that interpretation.

"The e-mails highlighted by the plaintiffs reflect the normal back-and-forth discussion about an internal decision Microsoft made in January 2006, long before it began communicating about the Windows Vista Capable program to consumers in May 2006," said a statement by David Bowermaster, a Microsoft spokesman, e-mailed to InternetNews.com.

"Microsoft CEO Steve Ballmer has no unique knowledge of the facts in this case," Bowermaster continued. "Anything he knows about the Windows Vista Capable program he learned from executives whom he empowered to run the program and make decisions."

Next page: Internal battles at Microsoft.