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Microsoft Corp. on Friday settled a series of coordinated class actions for $1.1 billion in vouchers that 13 million plaintiffs in California can use to purchase computer products. The settlement represents a much higher return for California plaintiffs than one proposed by Microsoft a year ago. A federal judge in Baltimore dumped that settlement, which would have ended the California class action and 100 others like it. That deal, too, was worth $1 billion. But the software, reconditioned computers, training and technical support to public schools it provided wasn’t targeted at California alone. That deal “would have sold out California down the river,” said Eugene Crew, a partner at San Francisco-based Townsend and Townsend and Crew and lead counsel in the California case. “We went from zero to $1.1 billion in a year.” The California class action, Lingo v. Microsoft, 301357, was filed in San Francisco Superior Court in 1999. Under the settlement reached Friday afternoon, consumers who purchased Microsoft products over the past seven years will receive vouchers of $16 for every operating system license they own, $5 for word-processing applications, $26 for Excel spreadsheet programs and $29 for Office Production suites. They are not required to use the vouchers to purchase Microsoft products. “For large companies, this could be hundreds of thousands of dollars in claims,” Crew said. “The $1.1 billion in vouchers represents a rebate to consumers of California of almost 30 percent of the prices they paid for products purchased in seven years.” Crew estimated that 80 percent of the damages are likely to go to businesses that bought Microsoft products. Consumers aren’t the only ones who could reap a windfall from the settlement. Townsend has yet to submit its request for fees to the court, but it’s likely to earn the firm millions. The attorney fees will not be paid out of the $1.1 billion, Crew said. “We’ll let the chips fall where they may,” Crew said. “It’s up to the judge.” According to Recorder and law.com affiliate The American Lawyer magazine, plaintiffs represented in Crew’s suit indirectly purchased Microsoft software after May 17, 1994. Indirect purchasers are customers who bought computers from companies that had bought software from Microsoft. The suit alleged that Microsoft’s illegal conduct denied consumers competitive prices and free choice among software products. This, the plaintiffs said, violated California’s unfair competition law and its anti-monopoly statute. Attorneys for Microsoft could not be immediately reached for comment late Friday. But a statement posted on the company’s Web site touted the settlement as a good thing for public schools. Two-thirds of any unclaimed settlement money will go to public schools in the form of software and vouchers for computer equipment. “This is a good resolution for all sides, and we’re especially pleased by the opportunity to help thousands of schools all across California get the computers and software they need,” said Brad Smith, Microsoft general counsel. The settlement comes a month before the case was set to go to trial in San Francisco Superior Court before Judge Paul Alvarado.

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