In a strongly worded ruling, a federal judge ordered Microsoft to pay $1 million in damages to Bristol Technologies for unfair business practices against the small software maker.
U.S. District Judge Janet Hall called Microsoft's actions "wanton and reckless" and imposed what amounted to Connecticut's largest-ever award imposed under the state's Unfair Trade Practices Act. As she issued the order Thursday from her Bridgeport, Conn., court, Hall said the penalty might not be stiff enough to deter Microsoft from future anticompetitive behavior.
Hall's ruling contradicts that of an eight-member jury that awarded damages of only $1 to Bristol. The jury heard the case last year and found last July that Microsoft had not violated antitrust law but had indeed violated Connecticut's fair trade statutes and assessed the nominal penalty.
However, in a 103-page ruling, Hall returned the million-dollar award with strong language against Microsoft, even singling out company Chairman Bill Gates for having a hand in conduct that violated the state law.
"The deceptive conduct engaged in by Microsoft clearly rises to the level of reckless and wanton indifference to the harm it caused Bristol and others, including independent software vendors," Hall wrote in her ruling.
"Microsoft's deceptive acts constitute affirmative acts of misconduct which were designed to injure those to whom they were directed, and wantonly risked serious injury, albeit of a purely economic nature," Hall said in her ruling.
Bristol says it had considered an IPO before the company suffered damage from its dealings with Microsoft. The company initially asked for $263 million during the jury trial. Hall's ruling came in response to the company's request for punitive damages. Bristol says it will seek a new trial and is hoping to recoup $6 million in legal fees.
Bristol, based in Danbury, Conn., sued Microsoft in August 1996, claiming the software giant reneged on promises to share source code for Windows NT after Bristol helped Microsoft gain a foothold in the server space. Bristol sells Unix-to-NT conversion software that Microsoft used to help gain entry in the server space, Bristol says.
Hall ruled that Microsoft engaged in a "classic bait-and-switch" tactic with Bristol and its customers. She cited a 1996 speech Gates gave in which he mentioned Bristol and support for the conversion software, yet Microsoft stopped supporting its partnership with Bristol, Bristol alleges in the lawsuit.
Microsoft says it will appeal the judge's ruling.
Meanwhile, Hall must decide on whether to grant Bristol the $6 million it seeks in legal fees and whether to grant the company a new trial.
Jean Blackwell, Bristol's vice president of sales and marketing, says the judge's ruling vindicates the company. "It was not about the money," she says.
The Bristol award comes as Microsoft awaits word from the Supreme Court on whether it will hear its appeal in its landmark antitrust battle with the U.S. Department of Justice and 19 states. The court could announce its plans for the case on Sept. 8, when it next issues orders for its upcoming session. If not then, the court might reveal its decision when it issues orders on Sept. 25, or on Oct. 2, when the 2000-2001 Supreme Court session begins.
Microsoft has asked the high court to remand its appeal to the U.S. Court of Appeals for the District of Columbia. The DOJ has asked the high court to hear the appeal directly, citing a seldom-used federal law that enables the high court to hear expedited appeals that are of significance to the nation and its economy.