Court Opinion

ID: 215950
Source: CourtListenerOpinion
Date Created: 2011-05-03 19:31:16+00
Date Added: 2024-06-11T09:28:59.637209
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 10-1482

NOVELL, INCORPORATED,

                Plaintiff - Appellant,

           v.

MICROSOFT CORPORATION,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     J. Frederick Motz, District Judge.
(1:05-cv-01087-JFM)

Argued:   March 22, 2011                    Decided:   May 3, 2011

Before SHEDD and DUNCAN, Circuit Judges, and HAMILTON, Senior
Circuit Judge.

Reversed and remanded by unpublished opinion.      Judge   Duncan
wrote the majority opinion, in which Judge Shedd joined.   Senior
Judge Hamilton wrote a dissenting opinion.

ARGUED: Charles J. Cooper, COOPER & KIRK, PLLC, Washington,
D.C., for Appellant. David Bruce Tulchin, SULLIVAN & CROMWELL,
New York, New York, for Appellee. ON BRIEF: Jeffrey M. Johnson,
David L. Engelhardt, DICKSTEIN SHAPIRO LLP, Washington, D.C.; R.
Bruce Holcomb, ADAMS HOLCOMB LLP, Washington, D.C.; David H.
Thompson, Howard C. Nielson, Jr., David Lehn, COOPER & KIRK,
PLLC, Washington, D.C., for Appellant.       Richard J. Wallis,
Steven    J.  Aeschbacher,   MICROSOFT   CORPORATION,   Redmond,
Washington; Steven L. Holley, SULLIVAN & CROMWELL, New York, New
York; G. Stewart Webb, VENABLE LLP, Baltimore, Maryland, for
Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                2
DUNCAN, Circuit Judge:

     This appeal arises out of the district court’s grant of

summary judgment in favor of Microsoft Corp. (“Microsoft”) in an

action against it by software company Novell, Inc. (“Novell”).

Although    the   underlying    lawsuit       involves       complex    issues   of

antitrust law, the primary question before us is one of contract

interpretation: whether a 1996 contract between Novell and a

third company divested Novell of its right to bring the present

claim.     Concluding that Novell retained ownership of the claim,

which is not otherwise barred by res judicata, we remand for

further proceedings.

                                       I.

                                       A.

     A   detailed    discussion    of       Novell’s    underlying         antitrust

action can be found in our prior opinion in this case.                           See

Novell, Inc. v. Microsoft Corp., 505 F.3d 302, 305-10 (4th Cir.

2007).     We focus here on those facts necessary to an explication

of the parties’ present dispute.

     Between      1994   and   1996,    Novell    owned       certain       “office-

productivity”     software     applications.           Id.    at    305.      These

applications        included      “WordPerfect,          a         word-processing

                                        3
application, and Quattro Pro, a spreadsheet application.” 1                               Id.

(footnotes omitted).            During this period, Novell also owned a

variety      of   products     comprising        its   desktop        operating      system

(“DOS”) business, 2 including “an operating system known as Novell

DOS.”       Id. at 306 n.10.

       Novell believed, and the Utah Court of Appeals would later

find, that its DOS products were “the target of anticompetitive

practices by Microsoft in the early 1990s.”                            Novell, Inc. v.

Canopy      Group,    Inc.,    92    P.3d    768,   770    (Utah       App.    Ct.   2004).

Novell’s board of directors was concerned, however, that “if

they       brought    suit    against   Microsoft         in    a    private    antitrust

action, Microsoft would retaliate with further unfair practices

that could neutralize the value of any antitrust recovery.”                               Id.

To     guard      against     such    an     eventuality,            Novell    sought     to

effectuate        a   sale   that    would    obligate         the    purchaser      to   sue

       1
         Both   word-processing  applications  and   spreadsheet
applications are computer software. The former “enables an end-
user to create, edit, and print text-based documents,” and the
latter   allows   “an   end-user  to  organize  and   manipulate
quantitative data.” Novell, Inc., 505 F.3d at 305 n.2 & n.3.
       2
        “An operating system is software that controls the
computer’s resources, including memory, disk space, keyboards,
and the central processing unit.      An operating system also
facilitates communication between the computer’s resources and
software applications, including word-processing and spreadsheet
applications.”    Novell, Inc., 505 F.3d at 305 (footnote
omitted).

                                             4
Microsoft,           allow      Novell    to    share         in   the   recovery,         and      also

obscure Novell’s role in the action against Microsoft.                                    Id.

       To that end, on July 23, 1996, Novell executed an Asset

Purchase         Agreement            (“the    Agreement”)             with     Caldera,            Inc.

(“Caldera”).                 Under      the    terms          of   the     Agreement,          Novell

“transfer[red]             to      Caldera     specified           assets      and     liabilities

comprising the DOS Business, including the products associated

with       the       DOS   Business”      and       “assign[ed]          to    Caldera         certain

related       rights         and     agreements.”             J.A.   1963.           In   exchange,

Caldera paid Novell a purchase price of $400,000.

       Novell’s sale of assets was designed to divest the company

of    its     various        DOS      products      and       assign     the    rights         to    any

antitrust litigation related to those products.                                      Specifically,

the    Agreement           provided      that       “Novell        shall      grant,      transfer,

convey, and assign to Caldera all of Novell’s right, title, and

interest in and to any and all claims or causes of action held

by    Novell          at   the       Closing    Date      and      associated         directly       or

indirectly with any of the DOS Products or Related Technology.”

J.A.       1966-67.          As      defined   in       the    Agreement,       “DOS      Products”

included         a    list      of    thirteen      products, 3        consisting         of    “seven

       3
       The thirteen enumerated products were: CP/M, Concurrent
DOS, DR DOS 6.0, DR DOS 5.0, Multiuser DOS, Novell DOS 7.0,
PALMDOS,   GEM,  GEM   Draw,  GEM   Wordchart, GEM Graph, GEM
Programmers Toolkit, and Draw Plus.

                                                    5
versions      of     Novell’s    DOS          operating         system        and    six    DOS-based

software applications.”                  Appellant’s Br. at 12.                      The Agreement

also       defined    “Related      Technology,”                explaining          that    the    term

encompassed        “all    existing           technology         .   .    .    necessary      to    the

performance by the DOS Products of their intended functions or

purposes.”         J.A. 1965.

       As contemplated, Caldera filed suit against Microsoft the

same day the Agreement was signed, alleging harm to “DR DOS and

related PC operating system software.”                               J.A. 1955.             Three and

one-half       years      later,         in     January         2000,         Microsoft       settled

Caldera’s       lawsuit.            In        exchange       for         being      released       from

Caldera’s       claims      against           it,        Microsoft        paid       Caldera       $280

million.        Per    their     agreement,              Caldera         provided      Novell      with

about $35.5 million of this settlement. 4

                                                    B.

       In     November      2004,    Novell             filed    the      six-count         antitrust

action      underlying      this     appeal. 5             As     relevant          here,    Count    I

asserted       that       Microsoft           had       “engag[ed]         in       anticompetitive

       4
        Novell sued Caldera’s successor in interest seeking a
larger share of the settlement and ultimately received an
additional $17.65 million. See generally Novell, Inc., 92 P.3d
at 768.
       5
       The complaint was originally filed in the federal district
court for the district of Utah. In May 2005, the Judicial Panel
on Multidistrict Litigation transferred the suit to the district
of Maryland.

                                                    6
conduct to thwart the development of products that threatened to

weaken    the    applications     barrier         to    entry”    to    the     operating

systems market. 6       J.A. 100.           Specifically, it contended that

Microsoft’s      conduct    had     damaged        “Novell’s      WordPerfect          word

processing      applications      and       its     other    office       productivity

applications      in   violation          of      Section    2    of      the       Sherman

[Antitrust]     Act,   15   U.S.C     §    2.”         Id.   In   Count       VI,    Novell

alleged   that    Microsoft     had       made    exclusionary         agreements      with

original equipment manufacturers, which restricted the licensing

of Novell’s software applications, in unreasonable restraint of

trade.

     In June 2005, the district court granted Microsoft’s motion

to dismiss Counts II, III, IV, and V as untimely.                          However, it

     6
       The “applications barrier to entry” refers to the role
software applications can play in insulating an operating system
marketer from competition.   We discussed this barrier to entry
in detail in our previous decision in this case, explaining,

     the “applications barrier to entry”-stems from two
     characteristics of the software market: (1) most
     consumers prefer operating systems for which a large
     number of applications have already been written; and
     (2) most developers prefer to write for operating
     systems that already have a substantial consumer base.
     This    “chicken-and-egg”  situation    ensures   that
     applications will continue to be written for the
     already dominant Windows, which in turn ensures that
     consumers will continue to prefer it over other
     operating systems.

Novell, Inc., 505 F.3d at 306 (quoting United                                 States     v.
Microsoft Corp., 253 F.3d 34, 55 (D.C. Cir. 2001)).

                                            7
found that Novell had antitrust standing to proceed on Counts I

and VI.        In doing so, the court expressly rejected Microsoft’s

argument that Novell had assigned its claims under Count I to

Caldera as part of the sale of the DOS products.                           The court

explained:

       The fallacy in [Microsoft’s] argument is that the
       claim asserted in Count I, while arising from
       Microsoft’s monopoly in the operating system market,
       is for damage not to DOS or any other operating system
       but for damage to applications software. It is a far
       stretch to infer (and Microsoft has presented nothing
       to establish) that simply because DOS competed in the
       operating system market, such a claim was either a
       “direct”   or   “indirect”   claim  intended   to   be
       transferred from Novell to Caldera.

J.A.   108     (emphasis    added).          The   district   court      subsequently

granted       Microsoft’s     request       that   it   certify    its    ruling   for

interlocutory review.

       In October 2007, we affirmed the district court’s dismissal

of Counts II, III, IV, and V, as well as its determination that

Novell had standing to bring Counts I and VI.                     See Novell, Inc.,

505    F.3d    at   322-23.      In     a   brief   footnote,      we    acknowledged

Microsoft’s assertion that Novell had assigned its claims under

Counts I and VI to Caldera and the district court’s rejection of

that argument.        Id. at 306-07 n.10.           However, because the issue

was not before us, we declined to reach it.                       Id. at 307 n.10

(observing that our narrow grant of interlocutory appeal did not

include issues related to the transfer of Counts I and VI).

                                             8
      Following our decision, the parties completed discovery on

Counts I and VI and filed cross-motions for summary judgment.

On March 30, 2010, the district court granted Microsoft’s motion

for summary judgment.

      As     to    both    Count    I   and       Count    VI,     the    district       court

reversed      its    earlier       interpretation          of     the    Agreement.          It

specifically concluded that its prior determination that Novell

did not assign its claims under these counts to Caldera because

they focused on harm to its software applications rather than

operating        systems   was     wrong.         The     court    now     felt      that   the

reference to “associated” claims encompassed Counts I and VI,

because, inter alia, “the reason Microsoft allegedly engaged in

the conduct causing the damage [asserted in those counts] was to

obtain and maintain its monopoly in the operating system market-

-the market in which the DOS Products competed.”                          J.A. 371.

      However, out of an abundance of caution, recognizing that

we   might    disagree      with    its     new     interpretation,            the   district

court      nonetheless       proceeded         to       “address         the    substantive

viability of Novell’s claims” to facilitate our review of their

merits on appeal.           J.A. 369.         It concluded that, if Novell had

not assigned Counts I and VI to Caldera, only Count I would have

survived     summary       judgment.        The     court       found,        however,      that

Novell     had    failed    to     adequately       plead       harm     to    the   software

                                              9
application “GroupWise” in Count I and so dismissed that portion

of its allegations.        This appeal followed.

                                         II.

       On appeal, Novell renews its argument that the Agreement

did    not   transfer    its    Count    I    claims   related    to    the   office

productivity applications.             Novell further disputes Microsoft’s

assertion     that    Novell’s   participation         in   Caldera’s   settlement

precludes it from litigating Count I under principles of res

judicata.     It also contests Microsoft’s claim that there are, in

any event, no disputed issues of material fact as to Count I.

Finally,     Novell     urges   that    its    complaint    provided    sufficient

notice of its allegations related to GroupWise. 7

       We consider each argument in turn.               In doing so, we review

the grant of summary judgment de novo and affirm only if there

is    no   issue   of   material   fact       and   Microsoft    is    entitled   to

judgment as a matter of law.             Robinson v. Clipse, 602 F.3d 605,

607 (4th Cir. 2010).

       7
       Novell’s opening brief did not argue that the district
court erred by granting summary judgment as to Count VI, and
Novell confirmed in oral argument that it was not pursuing this
claim.

                                         10
                                              A.

        We    first    address   whether          Novell      assigned   the     claims    it

seeks to bring to Caldera.                  As the Agreement specified that it

is “governed in all respects” by Utah law, J.A. 1980, we begin

our analysis by outlining that state’s legal framework.

                                              1.

     When       construing      an    agreement,         Utah   courts    “look    to     the

language of the contract to determine its meaning and the intent

of   the       contracting      parties,”          and   “‘consider       each    contract

provision . . . in relation to all of the others, with a view

toward giving effect to all and ignoring none.’”                          Café Rio, Inc.

v. Larkin-Gifford-Overton, LLC, 207 P.3d 1235, 1240 (Utah 2009)

(quoting Green River Canal Co. v. Thayn, 84 P.3d 1134, 1141

(Utah    2003))       (alteration      in    original).          In   conducting      their

assessment, Utah courts consider “the reasonable expectations of

the parties, looking to the agreement as a whole and to the

circumstances,         nature,       and   purpose       of    the   contract.”       Green

River Canal Co., 84 P.3d at 1142 (quoting Peirce v. Peirce, 994

P.2d 193, 198 (Utah 2000)).

     Utah’s approach to the issue of ambiguity in a contract is

somewhat unique.           See Daines v. Vincent, 190 P.3d 1269, 1276

(Utah        2008)    (citing    the       Utah     Supreme     Court’s     efforts       “to

establish a balanced, ‘better-reasoned’ approach to an analysis

of facial ambiguity that would allow judges to ‘consider the

                                              11
writing     in     the    light     of     the      surrounding       circumstances’”)

(quoting Ward v. Intermountain Farmers Ass’n, 907 P.2d 264, 268

(Utah     1995)).         Utah    courts      employ        a    two-step     approach   to

determine whether a contract is facially ambiguous.                           First, they

assess “any relevant and credible extrinsic evidence offered to

demonstrate       that    there    is    in    fact       an    ambiguity.”       City   of

Grantsville v. Redevelopment Agency of Tooele City, 233 P.3d

461, 470 (Utah 2010) (internal quotations omitted); see also

Ward, 907 P.2d at 268 (reasoning that absent such evidence “the

determination        of    ambiguity      [would          be]    inherently    one-sided,

namely, it [would be] based solely on the extrinsic evidence of

the judge’s own linguistic education and experience” (internal

quotation        marks    omitted)).               They     then    determine      whether

“competing        interpretations        are       reasonably       supported     by     the

language of the contract.”               Daines, 190 P.3d at 1277 (internal

quotation marks omitted).               Although the process allows extrinsic

evidence on the question of ambiguity, the Utah Supreme Court

has cautioned that “a finding of ambiguity will prove to be the

exception and not the rule.”              Id. at 1277 n.5.

                                              2.

        Against     the    backdrop      of    Utah’s          principles   of   contract

interpretation, we now consider the relevant provisions of the

Agreement.        The parties dispute whether the language “associated

directly or indirectly with any of the DOS Products or Related

                                              12
Technology,” J.A. 1967, transferred Novell’s claim of harm to

its office productivity software.         We conclude that it did not.

      Microsoft argues that the phrase “associated directly or

indirectly” is to be read broadly and, consequently, forecloses

Novell’s present claims.       In support of its contention that the

Agreement transferred these claims to Caldera, Microsoft cites

six   “associations”   between      the   DOS   products   and   the    office

productivity    software,    most   prominently     that   Count    I   “links

injury allegedly inflicted by Microsoft on [software products]

with harm to competition in the PC operating system market, and

thus with DR DOS, which competed in that market.” 8                Appellee’s

Br. at 34 (emphasis added).

      Microsoft’s argument is not without some intuitive merit.

The   phrase   “associated   directly      or   indirectly”   can    be   read

      8
       The five additional purported “associations” identified by
Microsoft are: (1) despite Novell’s claim that it was no longer
marketing its operating system when the conduct alleged in Count
I began, the value of its DOS products would still have been
affected   by  Microsoft’s   alleged  efforts   to   bolster  the
applications barrier to entry; (2) despite the limited volume of
sales, Novell sold DOS products during the period at issue, and
the value of those products was affected by the conduct alleged
in Count I; (3) Caldera’s suit against Microsoft sought
injunctive relief in the form of disclosure of technical data
that would have “addressed much of the alleged conduct
underlying Count I,” Appellee’s Br. at 37; (4) the conduct
alleged in Count I was supposed to have occurred in a market
that Microsoft dominated because of anticompetitive behavior
toward Novell’s DOS products; and (5) Microsoft targeted Novell
in part because Novell had entered the DOS business.

                                     13
broadly.         Caldera’s DOS claims and Novell’s software application

claims are certainly “associated” in some sense of the word;

both    sets       of   products       have    roles       to       play--although         distinct

roles       to    be    sure--in       the     operating             systems      market.           The

elasticity of the phrase is not, however, unlimited.

       We        conclude    that       Microsoft’s            argument        fails       for      two

reasons.          First, Utah law mandates that we not read contractual

provisions         in   isolation.            We    instead          consider       the    disputed

language in the context of the agreement in which it appears.

See Café Rio, 207 P.3d at 1240.

       Here, the disputed language is cabined by reference to a

specific          set   of   property,          transferring               claims       “associated

directly or indirectly with any of the DOS Products or Related

Technology.”             J.A.    1967        (emphasis          added).           The     Agreement

precisely          delineated        what     that        property         consisted          of,   by

identifying         thirteen         products,          none    of    which       is    the    office

productivity software that forms the basis of the present claim.

Viewed in this context, Microsoft’s expansive reading of the

disputed         provision      is    antithetical             to    the    carefully         limited

“circumstances, nature, and purpose” of the Agreement.                                        Peirce,

994 P.2d at 198; see also Green River Canal Co., 84 P.3d at

1142; cf. Grynberg v. Questar Pipeline Co., 70 P.3d 1, 8 (Utah

2003) (“[W]hen two statutory provisions appear to conflict, the

more    specific        provision        will       govern          over    the     more      general

                                                   14
provision.”) (quoting Perry v. Pioneer Wholesale Supply Co., 681

P.2d 214, 216 (Utah 1984)).

      More fundamentally, Microsoft’s preferred reading lacks a

logical limiting principle.                  Given operating systems’ ubiquitous

role in personal computing, it is difficult to imagine a piece

of hardware or software that could not be somehow “associated”

with Novell’s DOS products under Microsoft’s capacious theory.

Tellingly,        Microsoft’s        counsel          was        unable     to     articulate

meaningful        boundaries       for       the      company’s         reading        at    oral

argument.        Counsel argued only that the disputed language would

not   extend      to   “causes     of       actions       associated       in    such    a   far-

reaching way that it would be illogical to connect them to DR-

DOS.”       We    agree    that    the      language        of    the    contract       must    be

cabined by the limits of logic.                     However, given the context in

which      the    disputed    phrase         appeared,          we    believe     Microsoft’s

reading exceeds those boundaries.

      As    the    district       court      initially       recognized,         the     express

purpose of the Agreement was to assign to Caldera the rights and

liabilities        associated        with      “the       DOS        Products     or    Related

Technology,”        J.A.     1967,      a    carefully          delineated       term.         The

precise phrasing of the contract entitled Caldera to sue (and

share      the    recovery     with         Novell)       for     claims    involving          its

operating        system    products,        but     did    not       preclude    Novell      from

suing for separate harm to the separate interest in the software

                                               15
applications       it   retained.      Indeed,    our     prior   decision    was

premised on the severability of harms to software from harms to

DOS products, as we anchored our standing analysis in Novell’s

ability to articulate discrete antitrust harms to its office

productivity       applications,      though     those     products     did   not

themselves compete with operating systems.                  See Novell, Inc.,

505   F.3d    at    320.     The     dissent’s    characterization       to   the

contrary, it is the notion that an Agreement that purported to

transfer a specific set of property in fact evinced Novell’s

intent   to    transfer     claims    for   a    wholly    separate     property

interest that, in this context, makes little sense.

      To the extent that Utah law endorses review of extrinsic

evidence, the available materials only reinforce our conclusion

that the Agreement unambiguously supports Novell’s reading.                   As

Novell notes, the record includes affidavits and testimony from

Caldera’s     negotiator,    Novell’s    general    counsel,      and   Novell’s

CEO, which attest to the absence of any intention to convey

Novell’s present claims.            For instance, Caldera’s negotiator’s

affidavit states:

      Neither party contemplated that claims “directly or
      indirectly” related to “the DOS Products or Related
      Technology” would include Novell’s antitrust claims
      for harm to its business applications. Any suggestion
      that the Asset Purchase Agreement conveyed claims for
      harm to Novell’s applications would be contrary to the
      parties’ intentions and what I and my client, Caldera,
      understood was actually being conveyed to it.

                                       16
J.A. 5024 (emphasis added).

       For   its    part,     Microsoft    cites      extrinsic      evidence         that,

prior to its agreement with Caldera, Novell contemplated a jury

“piggyback[ing]” damages in the applications market to a DOS-

related antitrust suit.             J.A. 1443.        Microsoft claims that that

suit   was    ultimately       brought    by     Caldera    as    Novell’s       “proxy.”

Appellee’s Br. at 42.               It further urges that the fact that

Caldera      sought    injunctive       relief      that   would    have     indirectly

benefited Novell’s applications business demonstrates that the

parties’      “assignment       was     intended      to   encompass       all        claims

arising out of Microsoft’s allegedly anticompetitive conduct.”

Id. at 41.

       We do not find Microsoft’s showing persuasive.                             Indeed,

Microsoft’s     extrinsic       evidence       is   equally      susceptible      to     the

opposite      reading,       that   is,   that      Caldera’s      failure       to     seek

damages for harm to office productivity applications indicates

that neither party contemplated the transfer of claims related

to that discrete set of property--a conclusion that is entirely

consistent with the testimony on which Novell relies.                                 Having

considered both parties’ extrinsic evidence in the context of

the contractual provisions discussed above, we do not believe

that    Microsoft’s         “competing    interpretation[]”          is    “reasonably

supported      by     the    language     of    the    [Agreement].”             City     of

Grantsville, 233 P.3d at 471 (quoting Daines, 190 P.3d at 1269).

                                           17
       In short, our reading of the entire Agreement, as well as

the extrinsic evidence persuades us that the district court’s

initial       interpretation       was    correct:          the    Agreement         conveyed

claims     “associated”       with       an    expressly          enumerated         body   of

property      that    did   not     include        Novell’s       office       productivity

applications.         The mere existence of a possible conceptual link

between the DOS products and those applications does not mean

that   the     Agreement    divested      Novell       of    the      claims    alleged      in

Count I.

                                              B.

       Microsoft’s      res    judicata            argument       also       lacks     merit.

Microsoft urges in particular that Novell’s participation in the

Caldera       litigation,     and     acceptance            of    a    portion       of     the

settlement in that case, precludes it from asserting additional

claims, which Microsoft alleges arise out of the same basic core

of operative facts.           See Laurel Sand & Gravel, Inc. v. Wilson,

519    F.3d    156,   162   (4th     Cir.      2008)    (“The         test   for     deciding

whether the causes of action are identical for claim preclusion

purposes is whether the claim presented in the new litigation

arises out of the same transaction or series of transactions as

the claim resolved by the prior judgment.” (internal quotations

omitted)); see also 1616 Reminc Ltd. P’ship v. Commonwealth Land

Title Ins. Co., 778 F.2d 183, 187 (4th Cir. 1985).

                                              18
       Nonmutual claim preclusion is generally disfavored.                              See

18A C.A. Wright, et al., Federal Practice & Procedure § 4464.1,

at 713-15 (2d ed. 2002).               Microsoft nevertheless argues that the

Caldera settlement falls within exceptions to that principle,

which        allow     nonparty      claim      preclusion          when    there       are

“substantive         legal    relationship[s]       between     the     person    to     be

bound and a party to the judgment,” or when the nonparty was

“adequately represented by someone with the same interests who

[wa]s a party to the suit.”                Taylor v. Sturgell, 553 U.S. 880,

894 (2008) (internal quotations omitted) (second alteration in

original).         We disagree.

       Microsoft’s       somewhat       confusing       assertion      that     Novell’s

assignment of some of its claims to Caldera was sufficient to

establish      a     “substantive      legal    relationship”        between     them    is

unpersuasive.           It    relies    entirely       on   easily    distinguishable

caselaw      that     concerns    situations      in    which   a    subsequent      suit

raises “identical issues.”              See Appellee’s Br. at 47-48 (quoting

Pelt    v.    Utah,     539   F.3d     1271,    1290    (10th   Cir.       2008)).       As

discussed      above,     Caldera’s      suit    addressed      a    distinct    set     of

harms from those addressed in Count I: the former concerned DOS

products, the latter software applications.                         Any appearance of

identicality between the claims is a product of the level of

generality at which Microsoft seeks to frame them.                           See, e.g.,

Appellee’s Br. at 50 (“Both suits allege that Microsoft engaged

                                           19
in anticompetitive conduct in the PC operating system market.”);

see also id. (claiming only that the two suits are “strikingly

similar”).          While both suits implicated Microsoft’s desire to

control the operating system market, overlapping motivation for

separate harms is insufficient to render those harms identical

for purposes of claim preclusion.

       We are also not convinced that Caldera could have served as

an   adequate        representative        of     Novell’s        interests.      As     the

district court noted, “Caldera could not have asserted on behalf

of   Novell        claims    Caldera   did      not   possess.” 9       J.A.     376   n.9.

Moreover, as a practical matter, only Novell had the incentive

to recover for damages to its office productivity applications.

On these facts, res judicata simply does not apply.

                                             C.

       Microsoft’s          claim   that   there      are    no     remaining    disputed

issues of material fact is also unavailing.                          Microsoft asserts

that       Count    I’s   antitrust    allegations          are    fatally     flawed,    as

Novell cannot make the required showing that Microsoft’s conduct

       9
       For the same reason, we reject Microsoft’s argument that
Novell’s initiation of a separate action constitutes claim-
splitting.   Caldera could not have sought damages for harm to
the office productivity applications in its initial suit, as it
did not own those applications.     As a result, Novell did not
have a “full and fair opportunity” to litigate its present
claims in that action.    Taylor, 553 U.S. at 892; Pueschel v.
United States, 369 F.3d 345, 356 (4th Cir. 2004).

                                             20
toward    its    office    productivity      applications          helped    maintain

Microsoft’s      monopoly    power.         In   support      of    its     argument,

Microsoft       cites     Novell’s    expert      in    antitrust           economics’

testimony that, in a hypothetical market where Microsoft had

only targeted Novell, “there would have been no adverse effect

of knocking Novell out of the industry.”               J.A. 392.

     Microsoft’s        claim   mischaracterizes         the       impact     of    the

expert’s testimony.         As the district court explained, Novell’s

expert’s opinion about a hypothetical market leaves ample room

for “a finding that Microsoft’s actions toward Novell were a

significant      contributor    to    anticompetitive          harm    in     the     PC

operating system market in light of the weakened state of other

applications      and   [independent    software       vendors].”            J.A.    393

(emphasis added).       That issue is appropriate for trial.

                                       D.

     Finally, we reject Novell’s argument that claims related to

“GroupWise” software were adequately pleaded in Count I.                              To

satisfy the pleading requirements, a “complaint ‘need only give

. . . fair notice of what the claim is and the grounds upon

which it rests.’”          Coleman v. Md. Court of Appeals, 626 F.3d

187, 190 (4th Cir. 2010) (quoting Erickson v. Pardus, 551 U.S.

89, 93 (2007) (per curiam)); see also Fed. R. Civ. P. 8(a)(2)

(noting   that     a    complaint    must    contain     “a    short      and      plain

statement of the claim showing that the pleader is entitled to

                                       21
relief”).      Novell concedes that its complaint does not reference

GroupWise.        It    nonetheless         argues    that       it    should       not    be

penalized for having used the umbrella term “office productivity

applications” to describe the software at issue.                              This claim

lacks merit.

       Given the fairly generous standards of notice pleading, the

fact    that   GroupWise       was    not    mentioned       in       Novell’s      lengthy

complaint is not necessarily dispositive.                        However, Novell did

not simply fail to mention GroupWise in its complaint.                               Rather

its    pleading    expressly        characterized         what    the       term    “office

productivity       applications”            was      intended          to      encompass,

explaining:     “Word    processing      and      spreadsheet         applications        are

sometimes      referred        to     herein         as    ‘office           productivity

applications.’”         J.A.    51.     This       description,         by    its    terms,

excludes GroupWise, which “is a software program that combines

e-mail,   calendar,      appointment        scheduling,      and       task    management

functions.”       Action Tech., Inc. v. Novell Systems, Inc., Nos.

97-1460, 97-1481, 1998 WL 279359, at *2 (Fed. Cir. May 27, 1998)

(unpublished).         We cannot conclude, under these circumstances,

that Microsoft was provided fair notice of GroupWise claims.

       Nor are we persuaded by Novell’s assertion that because

Microsoft included GroupWise in its discovery requests, it was

not prejudiced by any defects in Novell’s pleading.                                 As the

district court found, “[w]hat material is subject to discovery

                                            22
and what conduct may serve as the basis of a claim are two

distinct inquiries with different standards.”     J.A. 383.   We are

disinclined to penalize Microsoft for having prudently sought

broader discovery than may have been necessary.

                              III.

     For the foregoing reasons we reverse the grant of summary

judgment as to Count I and remand for further proceedings.

                                            REVERSED AND REMANDED

                               23
HAMILTON, Senior Circuit Judge, dissenting:

       Between 1994 and 1996, Novell owned WordPerfect, a word

processing software application, and Quattro Pro, a spreadsheet

software application.                   In Counts II through V of its complaint,

Novell      sought      damages          for    Microsoft’s           alleged     monopolization

(and     attempted        monopolization)                 of    the    word      processing       and

spreadsheet software application markets, in which WordPerfect

and Quattro Pro competed.                      These claims, all parties agree, are

barred      by    the    applicable             statute         of    limitations       under    the

Sherman Act.            Count I, which is the subject of this appeal,

seeks damages for the same claims that are time-barred in Counts

II through V.           More specifically, Novell alleges in Count I that

Microsoft’s           antitrust          violations            in    the   operating         systems

market,      which      tolled          the    statute         of    limitations       during    the

pendency         of    the        government’s             case      against     Microsoft       for

antitrust         violations            in     such        market,      damaged        their    word

processing and spreadsheet software applications.                                    The flaw in

Count I is obvious: because the claim is premised on Microsoft’s

anti-competitive conduct in the operating systems market, Count

I   necessarily         is    a    claim        “associated          directly     or    indirectly

with” DR DOS.          (J.A. 1966-67).

       To    be       sure,       the        majority      recognizes         that     the     phrase

“‘associated          directly          or    indirectly’           [contained    in    the     Asset

Purchase     Agreement            (APA)]       can    be    read      broadly”    to    cover    the

                                                     24
claim      asserted      in    Count    I.       Ante     at    13-14.      However,      the

majority ignores the plain, patently broad language in the APA,

choosing instead to craft its own narrow reading of the phrase,

for two reasons.

       First, the majority states that the phrase at issue “is

cabined by reference to a specific set of property” that was

transferred in the APA.                 Ante at 14.             As its reasoning goes,

because word processing and software applications were not part

of this specific set of property, such applications could not be

directly      or   indirectly          related      to    the    specific    set.        Such

reasoning is flawed for the simple reason that it reads out the

word    “indirectly”          from   the     APA.        The    word    “indirectly”      was

inserted into the APA for an obvious reason—to allow Caldera to

proceed with a claim against Microsoft that was not envisioned

by the parties, but nevertheless related in some indirect manner

to the DR DOS operating system.                      Count I fits perfectly under

the APA’s “indirect” umbrella.                      The claim is premised on harm

caused, not in the software applications market in which both

WordPerfect        and    Quattro        Pro     competed,        but    rather     in    the

operations systems market in which both Microsoft’s Windows 95

and DR DOS competed.                 Thus, at the very least, the harm to

WordPerfect and Quattro Pro caused by Microsoft’s monopolization

of   the    operating         systems    market      is    indirectly      (even    perhaps

directly) associated with DR DOS.

                                               25
        And     it     should    come     as      no      surprise        that        the    term

“indirectly” made its way into the APA.                         All encompassing words

such     as     “indirectly”      are    commonly          used    in     asset        purchase

agreements to cover such unforeseen events, and courts should

read such terms broadly to ensure clarification and protection

to the rights of all parties to a contract.                          Yet, the majority

takes     the     opposite      tack,    reading          an    extremely        broad      term

narrowly.        Put simply, common sense tells us that a claim that

only exists by virtue of Microsoft’s alleged monopolization of

the operating systems market is a claim “indirectly” related to

the DR DOS operating system.

        Second,      the    majority    relies       on   certain       flimsy        extrinsic

evidence, which, according to it, “attest[s] to the absence of

any intention to convey Novell’s present claims.”                                Ante at 16.

Such evidence includes the affidavits and testimony of Novell’s

general counsel, Novell’s CEO, and Caldera’s chief negotiator.

Any examination of such evidence must be viewed with extreme

caution, as it is undisputed that: (1) Novell sold DR DOS, in

part,    to     allow      another     party,     such     as     Caldera,       to     proceed

against Microsoft in an antitrust action; and (2) Novell and

Caldera       worked    in    tandem    in     the     Caldera     action        to    litigate

against Microsoft.            More importantly, as the able district judge

handling the case below recognized, such extrinsic evidence is

“ambiguous        and      inconclusive,”       (J.A.      374),     as    neither          party

                                             26
contemplated the existence of the Count I claim until it became

apparent      that    the   claims     in   Counts     II   through    V    were   time-

barred.       However, the absence of such contemplation does not

inject      any   ambiguity     into   the    APA,     because,   as   the     district

judge aptly observed, Novell unmistakably assigned “claims for

damage inflicted upon Novell’s software applications through the

prism of the operating system market,” (J.A. 371), such that the

harm   to    the     software   applications         were   indirectly       associated

with the operating market in which DR DOS competed.                        (J.A. 371).

       In    sum,    because    I   believe      the   district   judge       correctly

granted summary judgment in favor of Microsoft on Count I, in

its thorough and convincingly written opinion, I respectfully

dissent.

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