Lawsuits are often time-consuming, expensive, and draining -- especially when the defendant has a deep pocket and an army of attorneys. Yet in the U.S. court system, there is the opportunity to hit pay dirt with a megajudgment.
Yesterday, Novell (NASDAQ:NOVL) announced its settlement with the ultimate deep pocket, Microsoft (NASDAQ:MSFT), for a cool $536 million. It was to remedy the alleged antitrust issues on Novell's NetWare product line. Think of it as the most ideal capital fusion; that is, a non-dilutive sum of cash. Of course, it elated shareholders, and Novell's stock surged 9.48% to $7.51.
Novell is not done with its court battles. The company will also seek damages from Microsoft regarding Novell's former product, WordPerfect.
Basically, Microsoft is cleaning up as much contingent liability as possible, such as with the recent settlement with Sun Microsystems (NASDAQ:SUNW).
For Novell, it will need as much money as possible -- because, well, the company is battling Microsoft's dominance once again by pursuing an aggressive Linux push. For example, the company introduced its Linux Desktop 9, which is meant to help enterprises leverage Linux and is built on SUSE Linux technology. According to Novell, Linux is now ready for the "enterprise desktop."
However, Novell has learned some hard lessons from fighting Microsoft. Linux Desktop 9, for example, is not meant as a replacement for Windows, but for "identifying where and when an open source desktop can be a sensible, cost-effective alternative." Novell has also assembled a top-notch group of alliance partners, such as IBM (NYSE:IBM).
Maybe this time Novell will get it right.
Fool contributor Tom Taulli does not own shares in the companies mentioned in this article.
