Tit For Tat in 'Vista Capable' Suit
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Microsoft's (NASDAQ: MSFT) cheeks must still be burning from the embarrassing disclosure two weeks ago that some senior executives feared the company's "Windows Vista Capable" sticker program in late 2006 misled some computer buyers.
In a new wave of filings last week, however, the Redmond, Wash.-based software behemoth has gone on the offensive against the suit, challenging a recent ruling that elevated the suit to class action status.
"Because of errors in its approach ... the district court certified a nationwide class with potentially millions of members to pursue claims against Microsoft," the company's lawyers said in their appeal.
Microsoft also filed a request for a stay in the case, which is currently set for trial in October. In that request, it claimed fighting the ongoing suit while amid an appeal unfairly hurts its business and reputation.
"The balance of hardships tips sharply in Microsoft's favor," the company's attorneys wrote.
"Continued proceedings here would cost Microsoft a substantial sum of money ... and divert key personnel from full-time tasks; would intrude on sensitive pricing decisions and strategies by OEMs, wholesalers, and retailers; and would jeopardize Microsoft's goodwill," they added in the filing.
Attorneys for the plaintiffs plan to file their responses next week, they told InternetNews.com. They also expect to re-file the lawsuit to include more parties.
Efforts by Microsoft aim to stem the mounting troubles it has suffered thus far in fighting the year-old lawsuit, which alleges that prior to Vista's official consumer launch, Microsoft tricked customers into buying PCs and laptops that were incapable of running certain editions of the OS -- contrary to what it had been advertising with the sticker program.
The most recent setback erupted two weeks ago, when the judge unsealed previously sealed evidence -- including 158 pages of internal company e-mails and other documents. [cob:Pull_Quote]
In addition to revealing some senior executives' misgivings about the sticker program, the e-mails showed that at least one employee felt the sticker program had been undertaken in part to boost sales for a key Microsoft partner, Intel (NASDAQ: INTC).
John Kalkman, Microsoft's general manager of OEM and embedded worldwide engineering, wrote in one of the e-mails that Microsoft deliberately lessened the sticker program's certification requirements to help Intel sell more of an aging graphics chipset.
Officials at the chipmaker vehemently denied the accusation.
In a later effort at damage-control, Microsoft characterized the e-mails as part of an active discussion about how best to implement the Windows Vista Capable program.
Even so, with claims like Kalkman's now in the open, it's no surprise that Microsoft's image has taken a drubbing -- and that the company is now moving to regain its footing.
While it's waiting to see whether the appeals court will overturn the suit's class-action status, Microsoft's attorneys also are hoping that U.S. Federal Judge Marsha Pechman will grant a stay in the proceedings to keep the lawsuit from moving forward in the meantime. [cob:Special_Report]
Microsoft returns fire
The suit alleges that fears of revenue losses from slow PC sales during the 2006 holiday season prompted Microsoft to allow sub-par PCs -- unable to run Vista's flashy and computationally intensive Aero Glass interface -- to still qualify for the "Vista Capable" sticker.
"If they didn't lower the [hardware] requirements on the 'Vista Capable' program, there weren't going to be very many machines [available at Christmas] that could qualify," Jeffrey Thomas, an attorney representing the plaintiffs, told InternetNews.com.
But in the company's appeal with the Ninth U.S. Circuit Court of Appeals, Microsoft's attorneys blasted the ruling that gave the lawsuit class-action status.