Microsoft Settlement Moves Forward

A San Francisco judge is expected later this week to preliminarily approve the $1.1 billion settlement in a class action lawsuit against Microsoft, allowing notices to be sent to California software buyers inviting them to file claims.

San Francisco Superior Court Judge Paul Alvarado said in mid-June he was ready to give the settlement preliminary approval. However, he could not because Microsoft and the plaintiffs, lawyers representing groups of California consumers, were at odds over the notices to computer users that are to appear in the media, in the mail, and online.

The notice issue has now been resolved, albeit with help from the judge. Preliminary approval is now expected to come later this week, said Eugene Crew, partner at Townsend and Townsend and Crew LLP and lead counsel for the plaintiffs.

Working on the Wording

"We addressed the notice issues for the last four weeks. We took some time hammering out the language. When you're sending a letter to millions of consumers and you get only one choice of words, you want to get things right," Crew said on Tuesday.

Microsoft spokesperson Jim Desler confirmed that the notice issues have been worked out. "The vast majority of issues were already agreed upon. There were just these final points that needed to be addressed," he said.

Within two months of the judge's preliminary approval, the media blitz the plaintiffs have planned to alert the 14 million California software buyers they believe are eligible for a voucher under the settlement will start, Crew said. Claims can be filed up to four months after the end of the notice period, he said.

Notices advertising the settlement will appear in magazines, newspapers, and online. Millions of electronic and paper mailings will be sent. The plaintiffs already have a database of millions of e-mail and street addresses and have asked dozens of PC makers and Microsoft resellers for more addresses of software buyers, Crew said.

Making Changes

In making the final decision on two notice issues that the Microsoft and the plaintiffs could not agree on, Judge Alvarado sided with Microsoft twice. He decided against including a simple claim form in the advertisements announcing the settlement, and pulled a line in the e-mail notice urging users to forward the e-mail to friends.

"I don't consider it a defeat," Crew said. "The easy claim form won't be in the newspaper, but you can still get it by calling a free telephone number or going to a Web site. There is a legitimate concern about processing pieces of paper that you get coming in ripped out of newspapers. It was considered to be administratively too difficult and not necessary."

Under the settlement, individuals and businesses who bought Microsoft's operating system or productivity software for use in California between February 18, 1995, and December 15, 2001, can get vouchers worth between $5 and $29 depending on the product bought. These vouchers can be used to buy computer hardware or software. Claims valued up to $100 or for up to five product licenses can be made without any documentation.