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Microsoft Corp. will pay up to $241.4 million to settle a class action lawsuit brought by Minnesota computer users who claimed the software company overcharged them. The settlement outlined in court for the first time on Thursday provides millions of dollars for consumers, school districts, the University of Minnesota and legal assistance for the poor. The biggest portions include $174.5 million in vouchers for individuals and businesses and as much as $59.4 million in attorney fees. The attorneys’ final take will have to be approved by Hennepin County District Court Judge Bruce Peterson, who gave preliminary approval to the rest of the settlement. Microsoft admitted no wrongdoing in the settlement, which was reached seven weeks into a jury trial that began in March. “It’s a great settlement. We did some good here,” said plaintiffs attorney Daniel Hume. The plaintiffs have claimed that at least 1 million Minnesota consumers and businesses will benefit from the settlement. Separately, Microsoft also said Thursday that it would pay up to $9.7 million to settle charges that it violated Vermont’s consumer fraud act. As part of the proposed settlement, the company will provide vouchers for Vermont residents who purchased certain Microsoft products between March 31, 1995, and Dec. 31, 2002. Half the money left over after the consumer vouchers have been paid out will be given to Vermont schools, also in the form of vouchers for hardware or software. In the Minnesota case, consumers who qualify will be notified starting Tuesday about the vouchers, which they can use to buy computer software and equipment — from Microsoft or any other company. The voucher for someone who bought Microsoft Office, for instance, will be $23. Besides consumers, Minnesota school districts stand to gain the most from the settlement. Half of the money not claimed by consumers will go to the state Education Department for distribution to districts for technology programs. The settlement also earmarks $2.5 million in cash each for the Minnesota Legal Aid Society and the University of Minnesota’s Institute of Technology, and another $2.5 million in vouchers for the institute. The six plaintiffs who brought the case forward will receive $5,000 each. “The major beneficiaries of this agreement are consumers and Minnesota public schools,” said Richard Hagstrom, the lead plaintiffs attorney. Microsoft’s total payout will be less than the amount outlined in the settlement, said David Tulchin, the company’s lead attorney. Attorney fees will be determined later, and only a fraction of consumers — perhaps as few as 20 percent, based on figures from other settlements — will likely claim their vouchers, he said. The lawsuit alleged that Microsoft had violated state antitrust law by overcharging for its Windows operating system and its Excel and Word programs. The company had denied overcharging, saying the prices on its products had dropped. Microsoft recently settled with two major rivals, agreeing to pay $440 million to InterTrust Technologies Corp. to settle a patent infringement lawsuit and $1.6 billion to Sun Microsystems to settle a private antitrust lawsuit and resolve patent claims. The company also faces class action cases in several other states. The Minnesota case was the first state-level class action suit against Microsoft to go to trial. Tulchin said on Thursday that the company had a solid case. He said chairman Bill Gates “wanted to be here. He wanted to tell the jury about Microsoft and what is good about it.” But he said the company settled to avoid the potential of a jury verdict that favored the plaintiffs, and to avoid disruption at the company. “How much is a week’s worth of Bill Gates’ time to shareholders? A lot,” he said. Neither Hagstrom nor Tulchin would say which side initiated the talks that led to the settlement. “We felt the evidence was strong, and we were counting on a jury verdict. But you just don’t know,” Hagstrom said. Consumers and businesses will be able to collect on each copy of Microsoft software purchased between May 18, 1994 and March 17, 2003, according to the agreement. The amount per copy is $15 for Windows or MS-DOS, $23 for Microsoft Excel, $23 for Microsoft Office and $9 for Microsoft Word, Works and Home Essential software. Microsoft shares closed up 7 cents at $28.63 on the Nasdaq. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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