The Microsoft Files: Microsoft paints Apple as hardball player

As part of its defense tactic in the US government's antitrust lawsuit against it, Microsoft yesterday painted Apple as a hardball competitor that threatened the company with a $US1.2 billion patent-infringement lawsuit.

Microsoft, in the third week of its antitrust trial, used the patent dispute to offset Apple's claim that the software giant intended to cancel upgrades of Microsoft Office for Macintosh if Internet Explorer wasn't the default browser on Apple computers.

Avadis Tevanian, a senior vice president at Apple and the third government witness, said the $US1.2 billion claim against Microsoft was based on the value of the patents.

In a letter sent in April 1997, Apple detailed what Microsoft could do to settle the claim. The letter, introduced in court by Microsoft, said Microsoft could resolve the issue by agreeing, among other things, to the simultaneous release of Microsoft applications for PCs and Macintosh systems, and to a software implementation that permits a Macintosh system to run on Windows NT.

But Tevanian disputed Microsoft attorney Theodore Edelman's characterization of the letter as a list of demands.

"We were perfectly happy just to take cash," Tevanian said.

The two companies ultimately signed an agreement on August 5, 1997 that settled the patent dispute. The agreement called for continued development of Office for Macintosh, and set Internet Explorer as the default browser on Apple computers. It also included a $US150 million investment in Apple and an unspecified cash payment.

Edelman also pointed out that Tevanian had, in published reports, said he was "totally happy" with the agreement. But Tevanian qualified that yesterday by saying it was the best deal Apple could get when faced with the loss of Office for Macintosh.

Microsoft also wanted to show the court the ease with which a user could change default browsers -- but on this point it may have stumbled.

After producing a series of screen shots that showed how the default could be changed, Judge Thomas Penfield Jackson said he was still confused. "It certainly doesn't tell me how to do it," he said.

In courtroom testimony, Tevanian alleged that Microsoft introduced a number of incompatibilities with its operating system running Internet Explorer 4.0 -- not present on an earlier version of the browser -- that caused QuickTime to fail and generate misleading error messages.

Tevanian characterized the problem as sabotage on Microsoft's part.

"Don't you think that the use of the word 'sabotage' is something of an exaggeration?" said Edelman.

Tevanian paused, then said evenly: "It sounds fine to me."

"What other goal could there have been other than to disadvantage QuickTime," said Tevanian, at one point.

But Tevanian also acknowledged that he had no personal knowledge or any evidence that Microsoft was acting deliberately.

"I do not know the individual motivations," he said.