The dispute between the two companies dates back at least 16 years when Microsoft released its Windows 95 operating system along with its Word and Excel programs.
SALT LAKE CITY — Not everyone in the high-tech industry shared Bill Gates' vision for what computer users commonly know as Windows today.
"People thought we were kind of nutty for going in this direction," the Microsoft co-founder said Monday in federal court.
As part of its Windows development in the early 1990s, Microsoft released test copies to software makers including Orem-based WordPerfect, which ruled the word processing market at the time. Gates said Microsoft routinely sent out beta versions to get feedback before shipping the final product and so developers could make their software compatible.
Gates was thrilled in February 1994 when an InfoWorld magazine review gave higher marks to Microsoft Word than WordPerfect for the first time.
"An important win. This is super," he wrote in a company email. "Especially the gap between us and wordperfect!!!!"
"InfoWorld made WordPerfect and this will help unmake WordPerfect."
Gates' reaction shows the rivalry between the two companies. Within two years of that email, it decidedly turned in Microsoft's favor with the launch of Windows 95, which furthered his vision for a computer in every home and office in the world. Micorsoft also released Word and Excel to run on the new operating system.
Now 16 years later, Microsoft and Novell, which bought WordPerfect for $1.4 billion in 1994, are still at it. But the battle has shifted to a federal courtroom.
Novell sued Microsoft in 2004, claiming the Redmond, Wash., company violated antitrust laws through its arrangements with software developers when it launched Windows 95. Novell concluded its case last week and Gates was Microsoft's first witness. He is scheduled to take the stand again Tuesday morning.
Provo-based Novell, using thousands of pieces of computer code provided by Microsoft, also was working on word processing and spreadsheet applications for Windows 95.
Novell contends that in October 1994, Microsoft — specifically Gates — purposefully pulled that code to thwart the company's software development for Windows 95. The decision, Novell argues, delayed its release of WordPerfect and Quattro Pro until May 1996, allowing Microsoft to gain an unfair edge in the burgeoning home and business computer market.
Novell ultimately sold WordPerfect for only $145 million, a $1.2 billion loss.
"Had WordPerfect been on the shelf when Windows 95 came out, we would have a very different world today," said Novell attorney Jeff Johnson.
Microsoft attorneys have argued Novell bought a company already in decline and that it was slow to recognize the emergence of Windows.
Gates, wearing a gray suit and yellow tie, said Windows 95 was "one of the toughest engineering tasks ever done."
"We wanted to get it out," he said. "We we working super hard."
He testified that he in no way decided against using those pieces of code, technically known as "name space extensions," to put Novell at a disadvantage. He said he didn't know Novell was using the extensions, adding they were written for email and system utilities applications.
"They're pretty irrelevant when it comes to word processing and spreadsheets, those types of things," Gates said.
Gates said he decided against using the code because he feared it could cause Windows 95 to crash.
After notifying software makers of the decision, Gates said, he never heard protests from any of them, including Novell.
The billionaire philanthropist was calm and collected on the witness stand. He appeared bemused when Johnson objected to a Microsoft attorney's question saying, "(Gates) may be qualified as an industry expert, but he's not qualified as a technical expert here."
Gates remained unruffled during Johnson's cross examination, which will continue Tuesday.
The Novell attorney hammered Gates about what the perception of Microsoft was nearly 20 years ago.
In a series of questions, Johnson described the company in 1992 as "Machaivellian," "bait-and-switch" and "technology thieves and scavengers."
Gates calmly addressed each description by answering, "No."
"I don't know anything about people characterizing our image that way," he said.
Johnson put those notions before the seven-woman, five-man jury after Gates spent more than four hours on the witness stand tracing the history of Microsoft and explaining why its business practices were not anticompetitive with regard to Novell.
"We were very open with what we were planning to do," Gates testified.
After Gates left the stand and the jury was let go for the day, attorneys argued Microsoft's motion to have the case thrown out, claiming Novell did not prove its case.
Judge J. Frederick Motz denied the motion, saying he would allow it go to the jury with some specific instructions about antitrust law. Microsoft is expected to spend a month putting on it defense.