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A Wallingford, Conn., consumer who bought a computer from Staples containing Microsoft Windows does not have standing to sue Microsoft for antitrust violations, a trial judge concluded. Anthony Vacco will seek an appeal, his lawyers say. He sought to recover the “monopoly pricing” cost of the Windows 98 software that came on his computer, in an antitrust and unfair trade case similar to scores of suits around the nation. But Judge Robert F. McWeeny of Waterbury Superior Court ruled that Vacco lacks standing to sue because he did not buy the software directly from Microsoft. The underlying doctrine stems from the 1977 U.S. Supreme Court case of Illinois Brick v. Illinois. It holds that when a monopolistic supplier’s costs are passed down through layers of distribution, it would be unfair to subject the defendant to repetitive litigation, and it is too difficult to ascertain at which level the cost increase was absorbed. Vacco, represented by New Haven-based Tyler, Cooper & Alcorn, contended that his software license was purchased directly from Microsoft, but McWeeny said the license was simply a function of copyright law that did not change the applicability of Illinois Brick. Furthermore, the fact that Connecticut’s legislature had five opportunities to repeal the effect of Illinois Brick, and declined to do so, is evidence that Connecticut antitrust law still follows the federal rule. Benjamin A. Solnit, of Tyler Cooper, said in an interview that Connecticut’s antitrust statute differs from federal law, and Illinois Brick does not apply. “We respectfully disagree with the learned judge’s opinion,” he said. “The consumer is going to be your paradigmatically indirect purchaser.” Microsoft was defended by New York-based Sullivan & Cromwell and by James Sicilian, of Hartford, Conn.-based Day, Berry & Howard. The software giant contended that two additional counts of unfair trade practices could only be based on antitrust violations, and if Vacco had no antitrust case, he had no claim under the Connecticut Unfair Trade Practices Act. In the case of Bristol Technology v. Microsoft, tried before U.S. District Judge Janet C. Hall of the District of Connecticut, a jury found Microsoft was not a monopolist, but awarded a nominal $1 for violating CUTPA. Hall imposed punitive damages against Microsoft under CUTPA for $1 million, independent of any finding of antitrust violation. Solnit says even without an antitrust violation, his client should have a valid CUTPA action. Vacco’s state case is the sole remaining antitrust litigation pending in state courts against Microsoft, Sicilian confirmed. Several other cases have been consolidated in a federal court claim, Moscowitz v. Microsoft, which is part of a nationwide group of individual antitrust cases. In his complaint, Vacco contended that Microsoft’s practice of including its own Internet browser, developed at a cost of hundreds of millions of dollars, “would only make sense to a predatory monopolist.” The complaint quoted a Microsoft vice president telling industry executives that Microsoft’s browser, Internet Explorer, would prevail over competitor Netscape: “We’re going to cut off [Netscape's] air supply. Everything they’re selling, we’re going to give away for free.” McWeeny, in a footnote, says this is a “counterbalance to the alleged monopolistic countercharge.” Nationally, Microsoft and lawyers for antitrust plaintiffs around the country sought to consolidate federal and state class action claims in a Maryland federal court last week. According to The Industry Standard, Stamford University economist Robert Hall has placed the potential damages Microsoft faces at $7 billion. Vacco’s lawyers at Tyler, Cooper are Solnit and Richard W. Bowerman in its New Haven offices, and William Champlin in Hartford.

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