Bristol Technology, Inc. v. Microsoft Corp.

114 F. Supp. 2d 59, 2000 U.S. Dist. LEXIS 14319, 2000 WL 1336872
CourtDistrict Court, D. Connecticut
DecidedAugust 31, 2000
DocketCIV. A. 3:98-CV-1657
StatusPublished
Cited by8 cases

This text of 114 F. Supp. 2d 59 (Bristol Technology, Inc. v. Microsoft Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bristol Technology, Inc. v. Microsoft Corp., 114 F. Supp. 2d 59, 2000 U.S. Dist. LEXIS 14319, 2000 WL 1336872 (D. Conn. 2000).

Opinion

RULING ON BRISTOL TECHNOLOGY’S MOTION FOR AWARD OF PUNITIVE DAMAGES [DKT. NO. 433] & MOTION FOR PERMANENT INJUNCTION [DKT. NO. 431]

HALL, District Judge.

Bristol Technology, Inc. (“Bristol”) commenced this action against Microsoft Corp. (“Microsoft”) on August 18, 1998. Its fourteen-count complaint alleged federal and state antitrust claims and other state statutory and common law claims, including violations of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen.Stat. § 42-110a et seq. Bristol also filed a Motion for Preliminary Injunction. After several scheduling conferences and issuance of a preliminary discovery schedule, the court held a four-day evidentiary hearing on that motion in October 1998. In its memorandum of decision dated December 30, 1998, the court denied Bristol’s Motion for Preliminary Injunction, but set the case down for trial in June 1999.

On July 16, 1999, after a six-week trial, the jury found Microsoft had committed a deceptive act or practice in violation of CUTPA. 1 The jury awarded Bristol one dollar in compensatory damages on this count. Bristol now seeks the entry of additional relief, in the form of punitive damages and a permanent injunction under CUTPA. For the following reasons, Bristol’s motion for punitive damages is granted and its motion for injunctive relief is granted in part and denied in part.

I. BACKGROUND

Microsoft is the owner and distributor of computer operating systems, including Windows, Windows 95, Windows 98, Windows for Workgroups, and Windows NT. A computer operating system controls the basic functions of the computer hardware. It also facilitates interaction between the hardware and application programs. Application programs, such as word processing and spread sheet programs, give the computer its functionality by providing the computer with instructions for the performance of a task. To run, an application program must be able to present commands and respond to the operating system in precisely the format and according to the precise protocols used by that operating system. Therefore, independent software vendors (“ISVs”) must write their *64 application programs to be compatible with the operating system’s application programming interfaces (“APIs”). Because different operating systems have different protocols and APIs, application programs written for one operating system usually must be rewritten to work on another operating system. 2

Microsoft has developed operating systems for personal computers, technical workstations and departmental servers. A technical workstation (“workstation”) is a microprocessor-based machine typically used for highly computational, technical applications. A departmental server (“server”) is a microprocessor-based machine that is used to provide or manage common services and functions for other computers that are linked together in a small to medium-sized network.

Beginning in the 1980s with the development of MS/DOS, 3 Microsoft has produced operating systems that now comprise more than 90% of the personal computer operating system market. In 1993, Microsoft entered the departmental server and technical workstation operating systems markets with the introduction of Windows NT (“NT”). In each of those markets, Microsoft’s share has grown dramatically. Microsoft’s share of the market in new NT operating system units, including servers and workstations, grew from a fraction of 1% in 1998 to 4.2% in 1994, almost 20% in 1995, 28% in 1996, and up to almost 44% in 1997. On departmental servers alone, Microsoft’s share of the market in new operating system units grew from almost 21% in 1995 to 29% in 1996 and to 45% in 1997.

Bristol was formed in 1991 by several members of the Blackwell family. Its business plan was to develop a cross-platform product which, when installed on a UNIX-based operating system, 4 would run application programs written for the Windows operating system. 5 Bristol eventually developed such a program, called “Wind/U,” by reverse engineering the Windows operating systems to obtain the necessary source code. 6

After it began marketing Wind/U, Bristol was contacted by Microsoft, which offered to help improve the product by providing Bristol with access to source code *65 for the current and soon-to-be-released product versions of Windows operating systems. Microsoft and Bristol eventually entered into a contract, dated September 21, 1994 (“1994 WISE Agreement”), which contract was part of what Microsoft called the “WISE Program,” 7 a licensing program from Microsoft designed to enable ISVs to translate or run Windows applications on UNIX and Macintosh systems. The WISE Program had been announced by Microsoft earlier in 1994.

Microsoft began creating the program which it eventually called WISE at a time when makers of UNIX-based operating systems had sizeable shares of the server and workstation markets and Microsoft had nearly none. 8 Microsoft contracted with Bristol and others, including MainSoft Corporation, through the WISE Program in order to encourage ISVs to write cross-platform applications on Windows NT 3 (“NT 3”). 9

The 1994 WISE Agreement licensed source code of certain Microsoft operating systems to Bristol to use in developing its cross-platform product, which products are generally known as “Wind/U.” The 1994 WISE Agreement expired on September 21, 1997, although, under the terms of the 1994 WISE Agreement, Bristol was entitled to continue using source code provided to it before that date, with the continuing obligation to pay royalties on the use of that code.

The scope of the 1994 WISE Agreement is a subject of dispute between the parties. This Agreement describes the source code licensed under it as including Windows 3.1 and Windows NT 3.5, and “any Version Releases and Update Releases” thereto during the three-year term of the 1994 WISE Agreement. 1994 WISE Agreement at ¶ l(w)(iv). “Version release” and “update release” were defined in the contract as a change in the product designation number to the right of the decimal period, in the tenths and hundredths digits respectively. For example, a version release of Windows 3.1 would be designated as Windows 3.2, whereas an update release would then be designated as Windows 3.21. “Product releases” were defined in the Agreement as any Windows and NT products with a 3 to the left of the decimal point. Id. at ¶ l(q). For example, if the current product release were designated as Windows 3.1, then a new product release would be designated as Windows 4.0. Thus, Microsoft argues that Windows NT 4 (“NT 4”) was not covered by the 1994 Agreement. However, Bristol argues that it is covered because Microsoft made numerous representations to the effect that NT 4 would be licensed to Bristol.

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Bluebook (online)
114 F. Supp. 2d 59, 2000 U.S. Dist. LEXIS 14319, 2000 WL 1336872, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bristol-technology-inc-v-microsoft-corp-ctd-2000.