Bristol betting all on Microsoft suit

Bristol Technologies filed a federal suit against Microsoft last August, accusing the software giant of illegally withholding Windows source code from the company. Bristol, , which has just 70 employees, makes a product called Wind/U, which lets software makers easily port Windows applications to other operating systems such as Unix. Today the company will take on Microsoft in the courts, aware the whole technology industry is watching.

During the trial, Bristol will show internal Microsoft e-mails and videos in an attempt to support its case. It also will present videotaped depositions of Microsoft CEO Bill Gates, a tactic already used by U.S. Department of Justice attorneys in their case against the company.

CEO Keith Blackwell, 37, never thought he'd be locked in a head-to-head battle with Microsoft. Shortly after he started the company in 1991, Microsoft approached him, offering to license Windows NT code. Bristol agreed, and by 1994 had signed a contract for Windows NT 3 that Blackwell called a "double-edged sword." On one hand, the company was pleased to have the endorsement of Microsoft. On the other hand, Blackwell said, "we knew we were about to build this dependency on Windows source code we would never be able to break." Blackwell said both sides even talked about an acquisition at times, but he said the price was never right.

When the original contract expired, the companies were unable to reach a new agreement. Microsoft offered to license parts of its most recent code for 25 to 400 percent more than the original contract, terms Bristol found unacceptable. Bristol then filed suit, claiming, among other things, that Microsoft was leveraging its monopoly position in the operating system market to raise prices, a practice that violates antitrust laws.

That Bristol was once a Microsoft partner makes the case unique. Though Microsoft is facing litigation on several fronts, the companies involved -- Sun Microsystems Inc., Blue Mountain Arts, and Caldera -- are all Microsoft competitors, if not sworn enemies. For it's part, Microsoft claims it has no obligations to license its code at all, and Bristol will have to work hard to prove that it does. "Frankly, they're trying to use the courts to get something that isn't theirs," Microsoft spokesman Tom Pilla said. Microsoft officials cite Bristol competitor Mainsoft Corp., which signed an agreement similar to the one Bristol is disputing.

Microsoft also plans to present jurors with the original contract, which made no mention of future code. Microsoft will try to show that Bristol filed the suit to take advantage of anti-Microsoft sentiment brought on by other suits such as the DoJ's, and that it's using the lawsuit as a bargaining chip. But Blackwell denies those charges. "There are a lot better negotiating tactics than spending all of your money on a lawsuit," said Blackwell, who estimates he's spent $5m (£3.05m) to $10m preparing the suit, hiring some of the biggest antitrust lawyers around. Patrick Lynch, a partner at O'Melveny & Myers, and Anthony L. Clapes, a former IBM Corp. assistant general counsel, both defended big blue during its antitrust case and now are working for Bristol.

During the trial, Blackwell said Bristol will show internal Microsoft videotapes that will shed light on "what Microsoft thinks of its software vendors and developers and how blatant they are at manipulating those people." Bristol stumbled upon the tapes after asking Microsoft to turn over what it thought would be videos of public speeches by Microsoft executives about the company's OS plans. The company turned over thousands of tapes, including some of internal presentations.

Blackwell said he draws inspiration for his crusade from companies that have stood up to Microsoft and thrived, naming firms such as RealNetworks, whose CEO Robert Glaser testified against Microsoft before the Senate. Blackwell said has no contingency plans if Bristol loses, and said such an outcome would be "devastating" to the company. "If Microsoft is able to win against Bristol, the feds, us and Caldera, the message it'll send to Microsoft and the industry is that there's almost nothing out of bounds for Microsoft to do," he said.

So far, both sides have claimed victory in a battle often described as a David vs. Goliath one (Bristol's revenue is about $8m compared with Microsoft's $17 billion), a characterisation that makes Microsoft officials grimace. In December the judge refused to grant a preliminary injunction requested by Bristol that would have given it access to the disputed source code. But she also refused to toss out or delay the case, as Microsoft had requested.

Lawyers will present opening statements this morning. Then CTO and Bristol founder Ken Blackwell, Keith's brother, will take the stand, followed by tapes of Gates.

The trial is expected to last six weeks.