Novell, Inc. v. Microsoft Corp.

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

NOVELL, INCORPORATED, 
Plaintiff-Appellee,
v.  No. 06-1134
MICROSOFT CORPORATION,
Defendant-Appellant.

NOVELL, INCORPORATED, 
Plaintiff-Appellant,
v.  No. 06-1238
MICROSOFT CORPORATION,
Defendant-Appellee.

Appeals from the United States District Court
for the District of Maryland, at Baltimore.
J. Frederick Motz, District Judge.
(1:05-cv-01087-JFM; 1:00-md-01332-JFM)

Argued: December 1, 2006

Decided: October 15, 2007

Before WIDENER1 SHEDD, and DUNCAN, Circuit Judges.

Affirmed by published opinion. Judge Duncan wrote the opinion, in
which Judge Shedd joined.
1
Judge Widener heard oral argument in this case but died prior to the
time the decision was filed. The decision is filed by a quorum of the
panel. 28 U.S.C. § 46(d).
2 NOVELL v. MICROSOFT
COUNSEL

ARGUED: Steven Lyon Holley, SULLIVAN & CROMWELL, New
York, New York, for Appellant/Cross-Appellee. Charles Justin Coo-
per, COOPER & KIRK, P.L.L.C., Washington, D.C., for
Appellee/Cross-Appellant. ON BRIEF: Thomas W. Burt, Steven J.
Aeschbacher, MICROSOFT CORPORATION, Redmond, Washing-
ton; Robert A. Rosenfeld, HELLER, EHRMAN, WHITE &
MCAULIFFE, L.L.P., San Francisco, California; David B. Tulchin,
SULLIVAN & CROMWELL, New York, New York; G. Stewart
Webb, VENABLE, L.L.P., Baltimore, Maryland, for
Appellant/Cross-Appellee. R. Bruce Holcomb, Jeffrey M. Johnson,
Milton A. Marquis, David L. Engelhardt, DICKSTEIN, SHAPIRO,
MORIN & OSHINSKY, L.L.P., Washington, D.C.; David H. Thomp-
son, Howard C. Nielson, David M. Lehn, COOPER & KIRK,
P.L.L.C., Washington, D.C., for Appellee/Cross-Appellant.

OPINION

DUNCAN, Circuit Judge:

We are asked here to review cross appeals from two interlocutory
orders in an antitrust action by Novell, Inc. ("Novell") against Micro-
soft Corp. ("Microsoft"). Novell seeks treble damages under § 4 of the
Clayton Act, 15 U.S.C. § 15, for injuries allegedly suffered as a result
of Microsoft’s anticompetitive conduct in violation of §§ 1 and 2 of
the Sherman Act, 15 U.S.C. §§ 1, 2. In its suit filed in the District of
Utah and transferred by the Judicial Panel on Multidistrict Litigation
to the District of Maryland, Novell made six specific claims for dam-
ages to software applications it owned between 1994 and 1996. Two
of the six claims allege that Microsoft’s conduct injured competition
in the market for PC operating systems, a market in which Novell’s
products did not directly compete. The district court declined to dis-
miss these claims over Microsoft’s objection that Novell, as neither
a consumer nor a competitor in the relevant market, lacks antitrust
standing to bring them. Microsoft appeals the denial of this motion to
dismiss.
 NOVELL v. MICROSOFT 3
The remaining four claims allege harm to competition in the
software-application market, in which Novell did compete. The dis-
trict court dismissed these claims as untimely, and Novell appeals.

For the reasons that follow, we affirm both rulings.

I.

A.

Novell is a software company that owned WordPerfect, a word-
processing application,2 and Quattro Pro, a spreadsheet application,3
from 1994 until 1996.4 WordPerfect and Quattro Pro are "office-
productivity applications," which Novell marketed together as an
office-productivity package called "PerfectOffice." Microsoft is a
software company that owns Windows, a personal-computer ("PC")
operating system, as well as office-productivity applications of its own.5
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, includ-
ing word-processing and spreadsheet applications. United States v.
Microsoft Corp. ("Microsoft II"), 253 F.3d 34, 53-55, 60, 74 (D.C.
Cir. 2001) (en banc); United States v. Microsoft Corp. ("Microsoft I"),
84 F. Supp. 2d 9, 12 (D.D.C. 1999). Therefore, computer users need
an operating system to serve as a "platform" for the applications they
wish to run.6 Microsoft II, 253 F.3d at 53. At one time, PCs were used
2
A word-processing application is software that enables an end-user to
create, edit, and print text-based documents.
3
A spreadsheet application is software that enables an end-user to
organize and manipulate quantitative data.
4
In March 1996, Novell sold its office-productivity applications to
Corel Corporation.
5
Microsoft’s office-productivity suite is called "Microsoft Office" and
includes Word, a word-processing application, and Excel, a spreadsheet
application.
6
Operating systems serve as platforms for software applications by
making available to software developers protocols that perform certain
4 NOVELL v. MICROSOFT
primarily for word-processing, and even today, office-productivity
applications remain among the most widely used types of applications
available for PCs.

Although Microsoft overwhelmingly dominates the PC operating-
systems market,7 other operating systems exist.8 Because these operat-
ing systems work differently from each other, software developers
must create separate versions of their applications for each operating
system in order for the applications to function properly on it. Modi-
fying an application written for one operating system so that it can run
on another is time-consuming and costly. Because of this, a new or
less popular operating system faces significant obstacles to gaining
market share. As the D.C. Circuit has explained,

the "applications barrier to entry"—stems from two charac-
teristics 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.

Microsoft II, 253 F.3d at 55 (internal citations omitted).

widely-used functions. Microsoft II, 253 F.3d at 53. These protocols are
referred to as Application Programming Interfaces ("APIs"). Id. For
example, Windows includes an API that allows users to draw a box on
the computer screen. Id. Software developers wishing to include that
function in their applications for the Windows operating system may uti-
lize the Windows API. Id.
7
In Microsoft II, Microsoft did not challenge the district court’s finding
that Windows controlled greater than 95% of the PC operating-systems
market. 253 F.3d at 54.
8
These other PC operating systems include (or at one time included)
Linux, Unix, and IBM OS/2. See Microsoft II, 253 F.3d at 52. Addition-
ally, Apple’s Macintosh operating system, Mac OS, exists outside of the
PC operating-systems market. See id.
 NOVELL v. MICROSOFT 5
In Microsoft II, the United States government and the governments
of several states challenged activities by Microsoft that allegedly
harmed competition in the PC operating-system market.9 The United
States Department of Justice filed a complaint against Microsoft on
May 18, 1998 (the "DOJ complaint"). The DOJ complaint is based on
allegations of anticompetitive conduct in violation of §§ 1 and 2 of
the Sherman Act, 15 U.S.C. §§ 1, 2, by Microsoft in two product mar-
kets: the market for PC operating systems and the market for Internet
browsers. J.A. 343 (DOJ Compl. ¶ 53). In a per curiam opinion, the
D.C. Circuit, sitting en banc, found that Microsoft was not liable for
attempted monopolization of the market for Internet browsers because
the government had failed to carry its burden in two ways: (1) it failed
to define the relevant market and (2) it failed to demonstrate that such
a market could be monopolized, i.e., "that a hypothetical monopolist
in that market could enjoy market power" because substantial barriers
to entry protect it. Microsoft II, 253 F.3d at 81. Nevertheless, the
court affirmed liability with respect to the claim that Microsoft unlaw-
fully maintained a monopoly in the PC operating-system market. Id.
at 58-80.

The government litigation in Microsoft II forms the basis of Micro-
soft’s statute-of-limitations challenge to two of Novell’s claims, as
discussed below.

B.

Novell pursues six claims on appeal. Four of these, styled Counts
II, III, IV, and V, allege monopolization or attempted monopolization
of the markets for office-productivity applications. Novell’s products,
Word Perfect and Quattro Pro, directly competed in such markets.
The other two claims, Counts I and VI, are based on the same alleged
conduct as Counts II through V and seek recovery for damage to the
9
Since that time, Microsoft has faced a number of private antitrust suits
for allegedly unlawfully monopolizing or otherwise harming competition
in the PC operating-systems market. See, e.g., Kloth v. Microsoft Corp.,
444 F.3d 312 (4th Cir. 2006); Deiter v. Microsoft Corp., 436 F.3d 461
(4th Cir. 2006); In re Microsoft Corp. Antitrust Litig., 355 F.3d 322 (4th
Cir. 2004); In re Microsoft Corp. Antitrust Litig., 333 F.3d 517 (4th Cir.
2003).
6 NOVELL v. MICROSOFT
same Novell products, but are predicated on the theory that Micro-
soft’s conduct injured competition in the market for PC operating sys-
tems, a market in which Novell did not directly compete.10

All six of Novell’s claims arose prior to March 1996, when Novell
sold WordPerfect and Quattro Pro to Corel Corporation. The statute
of limitations for federal antitrust claims is four years. See 15 U.S.C.
§ 15b. Therefore, all of Novell’s claims asserted in its November
2004 complaint are time-barred unless the statute of limitations is
tolled by the filing of the DOJ complaint in May 1998. See 15 U.S.C.
§ 16(i). Section 5(i) of the Clayton Act provides that government anti-
trust proceedings toll the statute of limitations for private antitrust
actions "based in whole or in part on any matter complained of" by
the government. Id.

Novell’s Counts I and VI are indeed based on Microsoft’s anticom-
petitive conduct in the PC operating-systems market, which was at
issue in the DOJ complaint. Novell’s four other Counts, however,
allege Microsoft’s monopolization or attempted monopolization of
the markets for office-productivity applications, which conduct was
not specifically alleged in the DOJ complaint.

Microsoft moved to dismiss all six Counts in the complaint.
Because Counts II through V allege injury that is not specifically
alleged in the DOJ complaint, Microsoft argued these claims were not
tolled by the DOJ complaint and thus were time-barred. Microsoft
sought dismissal of Novell’s claims of injury to competition in the PC
10
Novell does not market an operating system comparable to Microsoft
Windows. Novell did at one time own an operating system known as
Novell DOS, which it sold to Caldera, Inc. ("Caldera") in 1996. Before
the district court, Microsoft argued that Novell sold its claims for monop-
olization and attempted monopolization of the PC operating-system mar-
ket to Caldera along with its PC operating-system business. Therefore,
Microsoft asserted that in addition to lacking antitrust standing as to
Counts I and VI, Novell no longer owned the claims therein.
The district court rejected Microsoft’s argument. However, as noted
above, we granted Microsoft’s petition for interlocutory appeal on the
antitrust-standing issue only, and thus the question of ownership of the
claims is not before us.
 NOVELL v. MICROSOFT 7
operating-systems market (the same market at issue in the DOJ com-
plaint) in Counts I and VI on different grounds. Microsoft contended
that Novell did not have antitrust standing to raise such claims and
also that Novell did not own these claims.

The district court agreed with Microsoft regarding Counts II
through V and dismissed those claims as untimely. However, the dis-
trict court rejected Microsoft’s arguments regarding antitrust standing
and ownership of the claims and declined to dismiss Counts I and VI.

The district court certified its antitrust-standing and ownership rul-
ings on Counts I and VI pursuant to 28 U.S.C. § 1292(b),11 and
Microsoft petitioned this court for leave to appeal. We granted the
petition with respect to the antitrust-standing issue only. Thereafter,
Novell cross-appealed the dismissal of Counts II through V. We
address, in turn, the issues of whether Novell has antitrust standing to
bring Counts I and VI and the timeliness of Novell’s claims in Counts
II through V.

II.

We review de novo the district court’s rulings on a motion to dis-
miss under Rule 12(b)(6). See Holly v. Scott, 434 F.3d 287, 288-89
(4th Cir. 2006). In assessing rulings on dismissals under Rule
12(b)(6), we accept the allegations of the plaintiff’s complaint as true.
Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp., 910 F.2d
139, 143-44 (4th Cir. 1990).
11
28 U.S.C. § 1292(b) provides, in pertinent part:
When a district judge, in making in a civil action an order not
otherwise appealable . . . , shall be of the opinion that such order
involves a controlling question of law as to which there is sub-
stantial ground for difference of opinion and that an immediate
appeal from the order may materially advance the ultimate termi-
nation of the litigation, he shall so state in writing such order.
The Court of Appeals which would have jurisdiction of an
appeal of such action may thereupon, in its discretion, permit an
appeal to be taken of such order . . . .
8 NOVELL v. MICROSOFT
We first review the district court’s ruling that Novell has antitrust
standing to bring Counts I and VI.

A.

Novell concedes that its products did not directly compete in the
market for PC operating systems. Nevertheless, Novell contends that
the technological connection between operating systems and applica-
tions gives rise to a significant barrier to entry into the operating-
systems market and thus protects Microsoft’s Windows monopoly.
Novell maintains that its office-productivity applications could per-
form well on a variety of operating systems and that, during the rele-
vant time period, they were the dominant office-productivity
applications in the market.12 The thrust of Novell’s argument is that
its popular applications, though themselves not competitors or poten-
tial competitors to Microsoft’s Windows, offered competing operating
systems the prospect of surmounting the applications barrier to entry
and breaking the Windows monopoly.13 That is, Novell argues its
products could provide a path onto the operating-system playing field
for an actual competitor of Windows, because a competing operating
system, running the popular Novell software applications, would offer
consumers an attractive alternative to Windows.

Novell relies on certain unique characteristics of technological
markets in making this argument. Courts have recognized that such
markets are "characterized by network effects," and thus behave
somewhat differently from more traditional markets. Microsoft II, 253
F.3d at 49. Because "‘the utility that a user derives from consumption
12
Novell claims that in 1990, WordPerfect controlled 47% of the word-
processing market but that Microsoft’s "assault" on its office-
productivity applications resulted in a precipitous decline in WordPer-
fect’s market share: to 40% in 1993, 30% in 1994, and less than 10% in
1996. Appellee’s Br. at 15-16. At the same time, Microsoft Word’s mar-
ket share skyrocketed from 20% to 90%. Id. at 16.
13
According to Novell, monopolizing the office-productivity- applica-
tions market was "an end in itself for Microsoft" (and the subject of
Counts II through V of Novell’s complaint), but "the primary purpose of
Microsoft’s anticompetitive scheme" was to protect Microsoft’s PC
operating-system monopoly, its "real cash cow." Appellee’s Br. at 8.
 NOVELL v. MICROSOFT 9
of the good increases with the number of other agents consuming the
good,’" one product "‘tends towards dominance.’" Id. (quoting
Michael L. Katz & Carl Shapiro, Network Externalities, Competition,
and Compatibility, 75 Am. Econ. Rev. 424, 424 (1985)). In this way,
then, competition "is ‘for the field’ rather than ‘within the field.’" Id.
(quoting Harold Demsetz, Why Regulate Utilities?, 11 J.L. & Econ.
55, 57 & n.7 (1968) (emphasis omitted)). Put another way, firms com-
pete to dominate the market, and once dominance is achieved, threats
come largely from outside the dominated market, because the degree
of dominance of such a market tends to become so extreme. Indeed,
in Microsoft II, Microsoft did not dispute the finding that Windows
controlled more than 95% of the operating-system market. Id. at 54.

Building on this same theory, the government in Microsoft II
argued that Microsoft preserved its advantage in the PC operating-
system market by targeting certain "middleware" products, specifi-
cally Sun’s Java programming environment and Netscape’s Navigator
web browser.14 253 F.3d at 53-54, 60. Java and Navigator were
defined by the D.C. District Court as outside of the PC operating-
system market, a finding affirmed by the D.C. Circuit. See id. at 53-
54. Notwithstanding the fact that the primary threats at issue in the
government action stood outside of the PC operating-system market,
Microsoft was found to have unlawfully monopolized that market. Id.
at 64, 71, 74, 76, 77.
14
"Middleware" is a term used to refer to software products that have
the capability to serve as platforms for software applications themselves.
Microsoft II, 253 F.3d at 53. They expose, or make available, their own
APIs, see supra note 6, and theoretically, software developers could rely
upon these APIs rather than Windows’s APIs for basic routines. Id.
Because Java and Navigator were written for multiple operating systems,
software developers could potentially use them as platforms for their
applications rather than rewriting them for each operating system. Id.
However, no middleware product could expose nearly enough APIs to
serve as a platform for popular applications or to usurp operating-system
functions. Id. Nor, the district court found and the D.C. Circuit affirmed,
would any middleware product do so in the foreseeable future. Id. Nota-
bly, Microsoft did not challenge these findings, apparently conceding
that Java and Navigator were not present competitors of its Windows
operating system. Id. Microsoft does not argue to this court that Java and
Navigator are now its competitors either.
10 NOVELL v. MICROSOFT
Novell’s present claims echo the government’s theory in Microsoft
II. Just as the middleware threat posed by Java and Navigator came
from outside the Microsoft dominated PC operating-system market,
Novell now argues that its products, though also outside the relevant
market, similarly threatened Microsoft Windows.

Novell alleges three specific unlawful actions on the part of Micro-
soft that harmed its products and also harmed competition in the PC
operating-systems market. First, Novell claims Microsoft withheld
from Novell key technical information necessary to make well-
functioning office-productivity applications for Windows 95, an
updated version of Windows launched by Microsoft during the period
that Novell owned WordPerfect and Quattro Pro. Because PC users
would, upon the launch of Windows 95, upgrade their applications en
masse, Novell’s office-productivity applications would lose critical
market share if Novell did not have viable Windows 95 versions
ready at the time of the launch. Because of the network effects that
favor already popular applications, Novell’s applications’ loss of mar-
ket share could in turn lead to a decrease in demand for the competing
operating systems that support these applications. Thus, WordPerfect
and Quattro Pro’s loss of market share would reduce the potential for
Novell’s products to enable an alternative operating system to sur-
mount the applications barrier to entry and compete with Windows.

Second, Novell argues that Microsoft impeded Novell’s access to
distribution channels, including original equipment manufacturers
("OEMs"). OEMs manufacture PCs and typically preinstall an operat-
ing system and certain commonly used applications. Because Win-
dows’s monopoly in the operating-system market means most
consumers want to buy Windows-equipped PCs, OEMs desire Win-
dows licenses that enable them to install Windows on PCs. Novell
asserts that OEMs’ dependence on Windows licenses furnished
Microsoft with leverage that it used to impose restrictive and exclu-
sionary agreements on OEMs. These agreements rewarded, or
required as a condition of obtaining a Windows license, the preinstal-
lation of Microsoft’s office-productivity suite, and prohibited or pun-
ished the installation of competing applications. As with Microsoft’s
alleged conduct regarding Windows 95 described above, this action
would have the effect of decreasing Novell’s once-dominant market
 NOVELL v. MICROSOFT 11
share and its products’ popularity, hampering Novell’s ability to make
an alternative operating system attractive to PC users.

Finally, because Windows is the dominant operating system serv-
ing as a platform for software applications, software makers seek to
have their products certified as Windows-compatible. Such certifica-
tion is a signal to software consumers that a product is compatible
with the most popular operating system. Novell claims that Microsoft
required it, as a condition of being certified as Windows-compatible,
to use Windows-specific technologies that degraded the performance
of Novell’s office-productivity applications on other operating sys-
tems. This requirement neutralized Novell’s applications’ purported
advantage of working well on a variety of operating systems. Novell
claims that such an advantage, along with Novell’s applications’ pop-
ularity, could have enabled other operating systems to bridge the
"moat" that protected Microsoft’s Windows monopoly.15

B.

We now turn to the legal underpinnings of antitrust standing. In a
private antitrust action, a plaintiff must go beyond a showing that it
meets the Article III standing requirements of injury, causation, and
redressability; it must also demonstrate "antitrust standing." Section
4 of the Clayton Act, 15 U.S.C. § 15, provides:

[A]ny person who shall be injured in his business or prop-
erty by reason of anything forbidden in the antitrust laws
may sue . . . and shall recover threefold the damages by him
sustained, and the cost of suit, including a reasonable attor-
ney’s fee.

Although a literal reading of § 4 is "broad enough to encompass every
15
Microsoft official Jeff Raikes described this "moat" in an email to
investor Warren Buffett:
If we own the key ‘franchises’ built on top of the operating sys-
tems, we dramatically widen the ‘moat’ that protects the operat-
ing system business . . . .
J.A. 91.
12 NOVELL v. MICROSOFT
harm that can be attributed directly or indirectly to the consequences
of an antitrust violation," the Supreme Court has interpreted the provi-
sion more restrictively. See Assoc. Gen. Contractors of Cal., Inc. v.
Cal. State Council of Carpenters ("AGC"), 459 U.S. 519, 529-30
(1983). "Congress did not intend the antitrust laws to provide a rem-
edy in damages for all injuries that might conceivably be traced to an
antitrust violation." Hawaii v. Standard Oil Co., 405 U.S. 251, 262
n.14 (1972). "An antitrust violation may be expected to cause ripples
of harm to flow through the Nation’s economy; but despite the broad
wording of § 4 there is a point beyond which the wrongdoer should
not be held liable." AGC, 459 U.S. at 534 (internal quotation omitted).

A plaintiff sufficiently connected to the violation propagating these
"ripples of harm" is said to have "antitrust standing."16 Id. at 535 n.31.
The Supreme Court has held that a multi-factor analysis is required
to determine whether a private plaintiff has antitrust standing. See id.
at 536-38. These factors "circumscribe and guide" courts’ judgments
on whether plaintiffs have antitrust standing. Id. at 537. The Courts
of Appeals have since relied on the AGC factors to determine antitrust
standing. See Bodie-Rickett & Assocs. v. Mars, Inc., 957 F.2d 287,
291 (6th Cir. 1992); Reazin v. Blue Cross & Blue Shield of Kan., Inc.,
899 F.2d 951, 962-63 (10th Cir. 1990); Crimpers Promotions, Inc. v.
Home Box Office, Inc., 724 F.2d 290, 294-95 (2d Cir. 1983). This
court recently had the occasion to apply the AGC factors, distilling
them to five:

(1) the causal connection between an antitrust violation and
harm to the plaintiffs, and whether that harm was intended;
(2) whether the harm was of a type that Congress sought to
redress in providing a private remedy for violations of the
16
The concept of antitrust standing is narrower than constitutional
standing. "Harm to the antitrust plaintiff is sufficient to satisfy the consti-
tutional standing requirement of injury in fact," but courts must make an
independent determination of whether "the plaintiff is a proper party to
bring a private antitrust action." AGC, 459 U.S. at 535 n.31 (citing Dan-
iel Berger & Roger Bernstein, An Analytical Framework for Antitrust
Standing, 86 Yale L.J. 809, 813 n.11 (1977)). This inquiry requires us to
focus on the multiple factors identified by the Supreme Court in AGC.
Id. at 537-44.
 NOVELL v. MICROSOFT 13
antitrust laws; (3) the directness of the alleged injury; (4) the
existence of more direct victims of the alleged antitrust
injury; and (5) problems of identifying damages and appor-
tioning them among those directly and indirectly harmed.

Kloth v. Microsoft, 444 F.3d 312, 324 (4th Cir. 2006) (internal quota-
tions and citations omitted).17

The first two of these antitrust-standing factors together encompass
the concept of "antitrust injury." See Cargill, Inc. v. Monfort of Colo.,
Inc., 479 U.S. 104, 110 n.5 (1986); Brunswick Corp. v. Pueblo Bowl-
O-Mat, Inc., 429 U.S. 477, 489 (1977). Antitrust injury has been
defined as "injury of the type the antitrust laws were intended to pre-
vent and that flows from that which makes [the] defendants’ acts
unlawful." Brunswick, 429 U.S. at 489.18 The other three AGC factors
focus on the directness or remoteness of the plaintiff’s alleged anti-
trust injury.

Before applying the AGC factors to the facts of this case, however,
we must first consider Microsoft’s argument that Novell’s claims fail
as a threshold matter. Microsoft asks us to adopt a bright-line rule that
only consumers or competitors in the relevant market have antitrust
17
The plaintiffs in Kloth were indirect purchasers of Microsoft’s oper-
ating system; that is, they did not buy the software directly from Micro-
soft. Therefore, we held that they were barred from seeking recovery for
illegal pass-through overcharges under the principles of Illinois Brick Co.
v. Illinois, 431 U.S. 720 (1977). Kloth, 444 F.3d at 317. The holding in
Illinois Brick, that only direct purchasers of products affected by the anti-
trust violations can sue for treble damages under § 4 of the Clayton Act,
see 431 U.S. at 729-30, is generally inapplicable to the instant appeal. In
Kloth, however, we also applied the AGC factors and found that the
plaintiffs lacked standing to seek recovery for injuries other than over-
charges. 444 F.3d at 324-25.
18
In Brunswick, the plaintiff, a retail bowling center, sued the defen-
dant, who acquired several rival retail bowling centers that otherwise
would have closed. 429 U.S. at 488. The plaintiff was denied antitrust
standing because losing profits as a result of enhanced competition is not
the type of injury the antitrust laws were designed to prevent. Id. Award-
ing damages for that type of injury, the Supreme Court noted, "is inimi-
cal to purposes of these laws." Id.
14 NOVELL v. MICROSOFT
standing to bring private treble-damages claims under § 4. Were we
to adopt this proffered rule, Microsoft argues, we would be compelled
to find, before reaching the five-factor analysis, that Novell does not
have standing in this case because its products did not directly com-
pete in the operating-system market.

We must decline to adopt Microsoft’s "consumer-or-competitor"
rule. We note that the Supreme Court has rejected the utility of the
very type of bright-line approach on which Microsoft seeks to rely:
"The infinite variety of claims that may arise make it virtually impos-
sible to announce a black-letter rule that will dictate the result in
every case." AGC, 459 U.S. at 536. In fact, a careful examination of
the cases on which Microsoft relies for support of its proposed rule
reveals that in most instances the claims were defeated by the absence
of an antitrust injury, rather than the plaintiff’s failure to demonstrate
consumer or competitor status.19

For example, in AGC, the plaintiff-union claimed that the
defendant-contractors’ association and its members violated the anti-
trust laws by coercing third parties and some of the association’s
members into doing business with nonunion firms. Id. at 520-21. In
denying standing to the union, the Supreme Court noted that the
plaintiff was "neither a consumer nor a competitor in the market in
which trade was restrained." Id. at 539. But the Court went on to dis-
cuss other factors, and ultimately concluded that the plaintiff-union’s
injury did not flow from a breakdown in competition. Indeed, it was
"not clear whether the Union’s interests would be served or disserved
by enhanced competition in the market" for contractors’ services. Id.
The Court cited Brunswick for the proposition that unions will be
unlikely to have antitrust standing, "especially in disputes with
employers with whom [they] bargain[ ]," because in those instances
the unions’ injuries will most likely not be "of the type the antitrust
statute was intended to forestall." Id. at 540.
19
It may be more likely that a consumer or competitor in the relevant
market will suffer an antitrust injury than a plaintiff who is neither a
competitor nor a consumer. This does not necessarily preclude, however,
a party who is neither from having an antitrust injury. Thus, like the
Supreme Court in AGC, we do not stop our analysis merely because
Novell is neither a competitor nor a consumer.
 NOVELL v. MICROSOFT 15
Significantly, had the Supreme Court in AGC intended that
consumer-or-competitor status be a necessary prerequisite for anti-
trust standing, it need not, after noting that the plaintiff was neither,
have then discussed the other relevant factors and instructed lower
courts to do the same. Id. at 537-38 & n.32 ("[C]ourts should analyze
each situation in light of [these] factors."). That a plaintiff’s status as
a consumer or a competitor in the restrained market is relevant to the
issue of antitrust standing is clear; the cases upon which Microsoft
relies do not compel the conclusion that it is necessary.

Microsoft nevertheless insists that our own precedents rely on its
proposed consumer-or-competitor rule.20 See Thompson Everett, Inc.
v. Nat’l Cable Adver., L.P., 57 F.3d 1317, 1325 (4th Cir. 1995); White
v. Rockingham Radiologists, Ltd., 820 F.2d 98, 101 (4th Cir. 1987).
Careful consideration of those cases, however, reveals that they do
not provide direct support for the position Microsoft advances.
Indeed, the cases are not antitrust-standing decisions on the merits at
all but rather arise in the context of plaintiffs’ appeals from grants of
summary judgment in favor of defendants. Because of the relevant
differences in procedural posture between these two cases and the
case at bar, neither Thompson Everett nor White is supportive of
Microsoft’s position at this stage of the litigation.
20
Microsoft further relies on cases from the Third and Ninth Circuits
which appear to adopt a consumer-or-competitor rule. Barton & Pittinos,
Inc. v. SmithKline Beecham Corp., 118 F.3d 178, 184 (3d Cir. 1997);
Exhibitors’ Serv., Inc. v. Am. Multi-Cinema, Inc., 788 F.2d 574, 579 (9th
Cir. 1986). However, the courts in both circuits later explicitly moved
away from those narrowing decisions. See Carpet Group Int’l v. Oriental
Rug Importers Ass’n, Inc., 227 F.3d 62, 76-77 & n.12 (3d Cir. 2000)
(noting that Barton & Pittino’s’s holding "rest[ed] on an overstated
premise," that, "if construed as an absolute . . ., may in some circum-
stances lead to results that conflict with Supreme Court and other prece-
dent"); Amer. Ad Mgmt., Inc. v. Gen. Telephone Co. of Calif., 190 F.3d
1051, 1058 (9th Cir. 1999) (declaring that limiting antitrust standing to
consumers and competitors would contravene Supreme Court precedent).
For further discussion of the possible myopia of limiting antitrust stand-
ing to consumers or competitors in the relevant market, see Ronald W.
Davis, Standing on Shaky Ground: The Strangely Elusive Doctrine of
Antitrust Injury, 70 Antitrust L.J. 697, 760-65 (2003).
16 NOVELL v. MICROSOFT
Microsoft correctly notes that we found the plaintiff in Thompson
Everett to be neither a consumer nor a competitor.21 57 F.3d at 1325.
The decision to affirm summary judgment in favor of the defendants,
however, was not based on this finding alone. Rather, we focused in
Thompson Everett on the patent lack of any antitrust injury proven by
the plaintiff at the summary-judgment stage. Id. ("[Plaintiff] is not
being denied access to the cable company sales service market by any
act in violation of the antitrust laws."). The plaintiff in Thompson
Everett was a firm that sought to place advertising on cable television
and other media for clients. Id. at 1321. Defendants were traditional
cable representatives, retained by cable-television companies to sell
cable-company air time. Id. Thompson Everett complained that the
traditional cable representatives engaged in a horizontal conspiracy
with one another and a vertical conspiracy with the cable companies
to use their exclusive contracts to exclude independent cable-
representative firms, like the plaintiff, from competition. Id. at 1321-
22. However, at summary judgment, the district court found no evi-
dence to support the plaintiff’s claim of a horizontal conspiracy or
that the short-term exclusive agreements between the cable companies
and traditional cable representatives had an anticompetitive effect. Id.
at 1322. Thus, Thompson Everett could not recover under the antitrust
laws because it failed to show it had suffered antitrust injury, not
because it was neither a consumer nor a competitor.

Similarly, White involved a plaintiff-doctor’s appeal from the dis-
trict court’s grant of summary judgment in favor of a defendant-
hospital. The plaintiff alleged that the hospital had violated antitrust
laws in designating a certain radiology practice as its preferred inter-
preter of CT scans. White, 820 F.2d at 100-01. As in Thompson Ever-
ett, we noted that the plaintiff was "neither a provider nor consumer"
of hospital services. Id. at 104. But we affirmed summary judgment
for other reasons, among them that the defendant-hospital was not a
competitor in the market for interpreting CT scans and therefore could
not be held liable as a monopolist in that market. Id. at 104-05. Addi-
tionally, we found a lack of antitrust injury because there was no evi-
21
Unlike Novell, the plaintiff in Thompson Everett maintained that it
was a competitor of the defendant. However, this court rejected that
characterization. Thompson Everett, 57 F.3d at 1325.
 NOVELL v. MICROSOFT 17
dence of a conspiracy between the hospital and the preferred
radiology practice. Id. at 103.

We find additional support for our understanding that the AGC fac-
tors are not confined by a consumer-or-competitor rule in a Supreme
Court case decided one Term earlier. See Blue Shield v. McCready,
457 U.S. 465, 479-84 (1982). In McCready, the plaintiff challenged
her group health plan’s refusal to reimburse subscribers for psycholo-
gists’ services while reimbursing comparable treatment by psychia-
trists. The Supreme Court affirmed that the plaintiff did have standing
under § 4 of the Clayton Act. Id. at 484-85. Although the plaintiff was
a "consumer" in the relevant market, the Supreme Court focused not
on this status, but rather on the directness of the plaintiff’s injury and
the fact that her loss was of the type the antitrust laws were intended
to prevent. Id. at 478. The Supreme Court stated: "Denying reim-
bursement to subscribers for the cost of treatment was the very means
by which it is alleged that Blue Shield sought to achieve its illegal
ends." Id. at 479. Additionally, the plaintiff’s injury—bearing the
unreimbursed cost of her psychologist’s services—was "inextricably
intertwined with the injury the conspirators sought to inflict on psy-
chologists and the psychotherapy market." Id. at 483-84.

Notably, the Court in a footnote specifically contemplates a party
other than a consumer or competitor having antitrust standing: "If a
group of psychiatrists conspired to boycott a bank until the bank
ceased making loans to psychologists, the bank would no doubt be
able to recover the injuries suffered as a consequence of the psychia-
trists’ actions." Id. at 481 n.21. Even if this footnote is read as dicta,
it provides further evidence that the Supreme Court does not limit the
universe of proper plaintiffs under § 4 as narrowly as would Micro-
soft. The Court’s decision not to adopt a bright-line rule the next year
in AGC bolsters this conclusion. See 459 U.S. at 536.

Finally, the government’s May 1998 antitrust suit against Micro-
soft detailed Microsoft’s anticompetitive activities in the operating-
system market that harmed "middleware" products, Sun’s Java pro-
gramming environment and Netscape’s Navigator web browser,
defined by the D.C. Circuit as outside of the operating-system market.
Microsoft II, 253 F.3d at 52-54. Although standing was not at issue,
an implication of the government action is that Sun or Netscape—
18 NOVELL v. MICROSOFT
neither consumers nor competitors in the PC operating-systems
market—would have had standing to sue Microsoft privately under
§ 4, and Microsoft concedes as much.22
22
Microsoft does not deny that Sun and Netscape would have had
standing for a private suit. Instead, Microsoft focuses on the fact that
middleware products such as Java and Navigator had the technological
potential to compete with operating systems in the future. See Microsoft
II, 253 F.3d at 53-55. The hypothetical future capabilities of Java and
Navigator do not meaningfully distinguish such products from Novell’s
applications, however. Indeed, Java and Navigator, like WordPerfect and
Quattro Pro here, exist outside the market unlawfully monopolized by
Microsoft. As with Novell’s office-productivity applications, the primary
threat that Java and Navigator posed to Windows was not that they were
competitors or potential competitors in the operating-system market
(indeed, the court found that they were not competitors or potential com-
petitors within the relevant time frame) but rather that, from outside that
market, they could enable an alternative operating system to compete
with Windows. Id. at 55, 60, 74-80.
The anticompetitive activities that harmed Java and Navigator are
undeniably similar to those alleged by Novell. For example, the D.C.
Circuit found that provisions in Windows licenses issued to OEMs
restricting them from distributing browsers other than Microsoft’s own
served to reduce Netscape’s browser’s market share:
Therefore, Microsoft’s efforts to gain market share in one market
(browsers) served to meet the threat to Microsoft’s monopoly in
another market (operating systems) by keeping rival browsers
from gaining the critical mass of users necessary to attract devel-
oper attention away from Windows as the platform for software
development.
Id. at 60. Additionally, the D.C. Circuit cited internal Microsoft memo-
randa indicating an objective "to thwart Java’s threat to Microsoft’s
monopoly in the market for operating systems," in which Microsoft
espoused an intent to deceive Java developers into writing applications
that only performed properly on Windows. Id. at 76-77 (citing a Micro-
soft document that stated, "Cross-platform [i.e., multiple operating sys-
tem] capability is by far the number one reason for choosing/using
Java").
As noted above, we are not sufficiently persuaded by Microsoft’s prof-
fered distinction between Novell’s products and middleware to consider
irrelevant the parallels between Novell’s claims and the government’s
claims.
 NOVELL v. MICROSOFT 19
C.

Having rejected Microsoft’s argument that a bright-line consumer-
or-competitor rule strips Novell of antitrust standing, we now con-
sider whether the five AGC factors, as formulated in our decision in
Kloth, compel dismissal of Novell’s claims on antitrust-standing
grounds. The first two factors—"(1) the causal connection between an
antitrust violation and harm to the plaintiffs, and whether that harm
was intended; and (2) whether the harm was of a type that Congress
sought to redress in providing a private remedy for violations of the
antitrust laws"—are closely related. See Kloth, 444 F.3d at 324 (cita-
tions and internal quotations omitted). They ensure that the plaintiff
claims the proper type of injury to be accorded antitrust standing. See
AGC, 459 U.S. at 540 ("[E]ach [plaintiff’s] alleged injury must be
analyzed to determine whether it is of the type that the antitrust statute
was intended to forestall."). The other factors, which involve exami-
nation of the directness or remoteness of the plaintiff’s injury and the
ease or difficulty of apportioning damages, may further constrict the
number of private plaintiffs eligible to bring a treble-damages action
under the federal antitrust laws.23

1.

We begin by reviewing the first two AGC factors. For ease of anal-
ysis, we reverse their order and examine first whether Novell has
alleged an injury that the antitrust laws were intended to prevent, and
then the causal connection between Microsoft’s conduct and Novell’s
injuries. It is helpful in this regard to briefly revisit the purposes of
antitrust laws.
23
The Supreme Court has likened the common-law tort concept of
proximate cause to the directness inquiry required by the additional AGC
factors, emphasizing that both are somewhat elusive. See McCready, 457
U.S. at 477, 478 n.13 ("The traditional principle of proximate cause sug-
gests the use of words such as ‘remote,’ ‘tenuous,’ ‘fortuitous,’ ‘inciden-
tal,’ or ‘consequential’ to describe those injuries that will find no remedy
at law . . . . And the use of such terms only emphasizes that the principle
of proximate cause is hardly a rigorous analytic tool.") (internal citations
omitted).
20 NOVELL v. MICROSOFT
"Antitrust laws . . . are the Magna Carta of free enterprise." United
States v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972). As the
Supreme Court clarified in Brunswick, they "were enacted for the pro-
tection of competition not competitors." 429 U.S. at 488 (internal quo-
tation omitted). Thus, the Sherman Act does not protect competitors
from being destroyed through competition; on the contrary, such
destruction can signal healthy functioning of the free-enterprise sys-
tem. See id. The Sherman Act was enacted to protect the freedom to
compete by curtailing the destruction of competition through anticom-
petitive practices. For example, a firm violates § 2 of the Sherman Act
"when it acquires or maintains, or attempts to acquire or maintain, a
monopoly by engaging in exclusionary conduct ‘as distinguished
from growth or development as a consequence of superior product,
business acumen, or historic accident.’" Microsoft II, 253 F.3d at 58
(quoting United States v. Grinnell Corp., 384 U.S. 563, 571 (1966)).

Taking Novell’s allegations as true, as we must, the injury that
Novell alleges here is plainly an injury to competition that the anti-
trust laws were intended to forestall. Microsoft’s activities, Novell
claims, were intended to and did restrain competition in the PC
operating-system market by keeping the barriers to entry into that
market high.24 Thus, we conclude that Novell has alleged harm of the
type the antitrust laws were intended to prevent.

We now turn to the second facet of antitrust injury: the causal con-
nection between Novell’s injuries and Microsoft’s alleged antitrust
violations. Novell claims that its market share in the office-
productivity-applications market was eroded as a result of Microsoft’s
activity, which was designed to and effectively did elevate the barri-
ers to entry into the PC operating-systems market. As chronicled ear-
lier in this opinion, Novell complains that Microsoft withheld key
technical information from its software designers, disadvantaging
Novell in preparing for the launch of the Windows 95 operating sys-
tem; that Microsoft exploited its monopoly power to require or
encourage OEMs to refrain from installing Novell’s products on their
24
Of course, in the absence of Microsoft’s alleged violations (i.e., in an
unrestrained market), Novell’s products still may have suffered from the
competition from Microsoft’s applications, but damage from competition
is not what the antitrust laws protect. See Brunswick, 429 U.S. at 488.
 NOVELL v. MICROSOFT 21
computers, cutting off Novell’s distribution channels; and that Micro-
soft required Novell to use Windows-specific technologies in order to
be certified as Windows-compatible, degrading Novell’s products’
performance on other operating systems and harming their advanta-
geous compatibility. All of these activities allegedly had the effect of
thwarting the ability of Novell’s products to lower the applications
barrier to entry into the operating-system market, therefore harming
competition in that market.

The analysis of the causal link between these activities and the
decline in Novell’s office-productivity-applications market share is
straightforward. Microsoft’s use of its monopoly power in the
operating-system market to foreclose the distribution channels for
Novell’s applications, for example, would have naturally tended to
decrease Novell’s market share and consequently decrease the value
of its applications. Likewise, withholding crucial data on its soon-to-
be-released Windows 95 operating system would have put Novell at
a competitive disadvantage vis-a-vis Microsoft’s office-productivity
applications, leading naturally to a loss of market share for Novell.
This loss of market share could make a competing operating system
featuring Novell’s office-productivity applications less attractive to
consumers, harming that competing operating system’s potential to
surmount the barrier protecting the Windows monopoly.

In examining causation, we also consider "whether [the] harm was
intended." Kloth, 444 F.3d at 324; see also AGC, 459 U.S. at 537
n.35. While mindful that the defendant’s specific intent to injure the
plaintiff is "not a panacea that will enable any complaint to withstand
a motion to dismiss," we recognize that "there no doubt are cases in
which such an allegation would adequately support a plaintiff’s claim
under § 4." AGC, 459 U.S. at 537 & n.35. Here, Novell alleges that
Microsoft specifically targeted its products for destruction as a means
to damage competition in the operating-systems market. Novell’s
allegations go beyond mere speculation. They are supported by inter-
nal Microsoft communications. For example, Microsoft Chairman
Bill Gates specifically suggested waiting to publish critical technical
specifications of Windows 95 until "we have a way to do a high level
of integration [between Microsoft Office and Windows 95] that will
be harder for [the] likes of . . . WordPerfect to achieve." J.A. 95. Oth-
erwise, Gates noted, "[w]e can’t compete with . . . WordPer-
22 NOVELL v. MICROSOFT
fect/Novell." Id. Additionally, Novell proffers the following email
from senior Microsoft official Jeff Raikes to investor Warren Buffett:

If we own the key ‘franchises’ built on top of the operating
systems, we dramatically widen the ‘moat’ that protects the
operating system business . . . . We hope to make a lot of
money off these franchises, but even more important is that
they should protect our Windows royalty per PC.

J.A. 91. The "moat" protecting Windows to which Raikes refers is the
applications barrier to entry; the email therefore supports Novell’s
assertions that its products were directly targeted.

In sum, the first two AGC factors weigh in favor of granting Novell
antitrust standing. The facts alleged by Novell, taken as true for the
purposes of this appeal, are sufficient to demonstrate that Novell suf-
fered an antitrust injury and that its injury can be traced to Microsoft’s
alleged antitrust violations. While the showing of an antitrust injury
demonstrates that a case is of the type for which antitrust standing is
recognized, such a showing is not necessarily sufficient to demon-
strate that the particular plaintiff has antitrust standing. Thus, we now
turn to an analysis of the remaining AGC factors.

2.

The latter three AGC factors require us to consider "the directness
of the alleged injury; . . . the existence of more direct victims of the
alleged antitrust injury; and . . . problems of identifying damages and
apportioning them among those directly and indirectly harmed."
Kloth, 444 F.3d at 324 (internal quotations omitted). These additional
factors are intended to further restrict entry into the federal courts for
private enforcement of the antitrust laws. "[I]f afforded to every per-
son tangentially affected by an antitrust violation or for all injuries
that might conceivably be traced to an antitrust violation," the treble-
damages remedy would open the door to much mischief, including
the filing of claims that are remote from the forbidden anticompetitive
activity and the risk of duplicative lawsuits. Cargill, 479 U.S. at 111
n.6 (internal quotations omitted). That said, the Supreme Court has
recognized that "in enacting § 4[,] Congress sought to create a private
enforcement mechanism that would deter violators and deprive them
 NOVELL v. MICROSOFT 23
of the fruits of their illegal actions, and would provide ample compen-
sation to the victims of antitrust violations." See McCready, 457 U.S.
at 472. The broad language of the statute, "and the avowed breadth
of the congressional purpose, caution[ ] us not to cabin § 4 in ways
that will defeat its broad remedial objective." Id. at 477.

Considerations of the directness of the plaintiff’s injury and of the
existence of more-directly harmed parties are closely related. Anti-
trust law favors granting standing to the most direct victims of defen-
dants’ anticompetitive conduct and denying standing to more remote
victims on the theory that the direct victims have the greatest motiva-
tion to act as "private attorney[s] general" and "to vindicate the public
interest in antitrust enforcement." AGC, 459 U.S. at 542. Further,
compensating only direct victims avoids duplicative recoveries. Id. at
543-44. Therefore, the existence of an identifiable, more-directly
harmed class of victims with the incentive to sue under the antitrust
laws weighs against granting standing to a more remote plaintiff. If,
however, there is no more-directly harmed party with motivation to
act as a private attorney general than the plaintiff, the "risk of duplica-
tive recoveries on the one hand, or the danger of complex apportion-
ment of damages on the other" is mitigated. AGC, 459 U.S. at 543-44;
cf. Ill. Brick Co. v. Ill., 431 U.S. 720, 735 (1977) (limiting standing
to recover money damages in price-fixing claim to direct purchasers
in order to avoid duplicative recoveries and difficult damage-
allocation problems).

For example, in AGC, the plaintiff-union sued a contractors’ asso-
ciation, alleging that the defendants coerced members of the associa-
tion and certain nonmembers to hire nonunion contractors and
subcontractors. 459 U.S. at 540-41. The Court found that the union’s
injuries were derivative of any harm that may have been suffered by
certain of its members. Id. at 541. By contrast, in McCready, there
was no more direct victim of the defendants’ anticompetitive acts than
the plaintiff-consumer; she had paid for the services of a mental
healthcare provider that itself could not complain of Blue Cross’s
refusal to reimburse McCready.25 457 U.S. at 475.
25
The psychologists harmed by the anticompetitive activity at issue in
McCready had, in fact, already maintained a successful suit against the
insurer. 457 U.S. at 470 n.4. However, their injury (lost profits in selling
their services) was distinct from that of McCready (reduced coverage on
her health insurance policy).
24 NOVELL v. MICROSOFT
Here, Novell alleges that its software applications’ popularity,
quality, and ability to function well on multiple operating systems
posed a potential threat to Microsoft’s Windows monopoly by offer-
ing competing PC operating systems a bridge across the applications
barrier to entry (i.e., the "moat" that protects Windows’s monopoly)
into that market. Novell claims that because of this threat, Microsoft
directly targeted its products. As noted above, Microsoft’s specific
intent with respect to Novell is not the decisive factor, but it is evi-
dence that Microsoft viewed Novell as a threat that could enable com-
petitors to gain a foothold in the operating-systems market.
Furthermore, Microsoft’s withholding of information from Novell’s
software developers relating to Windows 95 clearly has no more
direct victim than Novell. Finally, Microsoft’s exclusive deals with
OEMs that ensured that Novell’s products would not be preinstalled
on new PCs built by those OEMs directly curtailed Novell’s distribu-
tion channels.

Although Microsoft argues that a long list of better-situated plain-
tiffs than Novell exists, it mentions none by name or by category.
Nevertheless, we surmise that such plaintiffs might include poten-
tially competing operating systems, the OEMs who were restrained
from installing Novell’s products on computers they manufactured, or
even consumers who purchased computers installed with Microsoft
products at an inflated price because of a lack of competition. Without
addressing whether plaintiffs representing each of these groups would
have antitrust standing, we note that none of these parties has sued
Microsoft on the theory that Microsoft’s alleged destruction of
Novell’s dominant office-productivity applications harmed competi-
tion in the PC operating-system market. It may be that OEMs, for
example, are too dependent on relationships with Microsoft for their
business livelihood to have the incentive to pursue claims under § 4.
See Berger & Bernstein, An Analytical Framework for Antitrust
Standing, 86 Yale L.J. 809, 879 (1977) (noting some parties "affected
by an antitrust violation may well not sue because of their stake in an
ongoing commercial relationship with the violator."). This suggests
that Novell may be the best-situated plaintiff to assert these claims.
Indeed, today Novell may be one of the few private plaintiffs whose
claims in this regard are neither time-barred26 nor too tenuous to sup-
port antitrust standing.
26
With a November 2002 consent decree ending the government’s suit
and triggering, one year later, the ticking of the statute of limitations’
 NOVELL v. MICROSOFT 25
Certain characteristics of the PC operating-systems market also
weigh in favor of finding Novell to be the most direct victim with
incentive to serve as a private attorney general. As noted earlier in
this opinion, in technologically dynamic markets characterized by
network effects, one dominant product typically reigns supreme. See
supra II.A. Microsoft Windows thus competes more "for the field,"
parrying threats from outside the field instead of from within. See id.
Given the apparent absence of a more-directly harmed party than
Novell outside the filed and the dominance of Microsoft Windows
within the field, we conclude that the AGC directness factors weigh
in favor of finding antitrust standing here.

Finally, we turn to the fifth AGC factor which considers whether
a finding of antitrust standing would lead to "problems of identifying
damages and apportioning them among those directly and indirectly
harmed." Kloth v. Microsoft, 444 F.3d 312, 324 (4th Cir. 2006)(inter-
nal quotations omitted). Cases where this factor has been found to bar
standing often involve potential plaintiffs indirectly injured by the
allegedly anticompetitive behavior, raising the specter of complex
apportionment of damages among, or duplicative recoveries by, direct
and indirect victims of such conduct. See AGC, 459 U.S. at 545
(denying standing to the union in part because damages would have
to be allocated between directly victimized union subcontractors and
their indirectly victimized employees); Ill. Brick, 431 U.S. at 737-38
(prohibiting a plaintiff down a distribution change from bringing a
private treble-damages action for an overcharge that may have been
passed on to it by a middleman). Because we have already deter-
mined, on the record before us, that Microsoft’s allegedly anticompe-
titive conduct was directly aimed at Novell, there is little risk that any
damages Novell might prove would need to be allocated or appor-
tioned among any more-directly injured parties.

We therefore find that the AGC factors favor granting standing to
Novell to assert Counts I and VI. We thus affirm the district court’s

clock, any plaintiff’s similar claims arising before the end of the govern-
ment suit would appear to be untimely. See 15 U.S.C. § 16(i); United
States v. Microsoft Corp., 231 F. Supp. 2d 144 (D.D.C. 2002).
26 NOVELL v. MICROSOFT
denial of Microsoft’s motion to dismiss as to these claims on the
antitrust-standing issue.

D.

We wish to emphasize here that we address the limited issue of
Novell’s antitrust standing on these facts. We do not view our deci-
sion with respect to Novell as unduly expanding the universe of pri-
vate antitrust plaintiffs. We recognize, as has the Supreme Court in
its consideration of the scope of antitrust standing, that treble-
damages suits under § 4 of the Clayton Act are not to be wielded
indiscriminately. We merely hold that Novell, like the owners of the
middleware products at issue in Microsoft II, is a member of a limited
class of plaintiffs for whom the AGC factors support antitrust stand-
ing, even though they are outside the restrained PC operating-systems
market.

III.

A.

Having concluded that Novell does have antitrust standing to assert
Counts I and VI, we now turn to Novell’s argument that the district
court erred in dismissing as untimely Counts II through V, which
allege injury to competition in the office-productivity-applications
market.

As noted earlier, this action was commenced more than eight years
after Novell’s claims arose; therefore, all of the claims are time-
barred, see 15 U.S.C. § 15b (federal antitrust claims barred if brought
more than four years after accruing), unless saved by the tolling pro-
vision of § 5(i) of the Clayton Act. This section provides in relevant
part:

Whenever any civil or criminal proceeding is instituted by
the United States to . . . punish violations of any of the anti-
trust laws . . . the running of the statute of limitations in
respect of every private . . . right of action . . . based in
whole or in part on any matter complained of in said pro-
 NOVELL v. MICROSOFT 27
ceeding shall be suspended during the pendency thereof and
for one year thereafter . . . .

15 U.S.C. § 16(i) (emphasis added).

The tolling statute contemplates an analysis of the relationship
between the violations alleged in the government action and those
alleged in the private action. Leh, 382 U.S. at 59. For the tolling pro-
vision to apply, the private plaintiffs must prove, by "comparison of
the two complaints on their face[s]," a significant overlap of subject
matter between the two actions. Id. at 59, 65. There is no requirement,
however, of complete identity of the means, objectives, or statutory
violations in the public and private lawsuits. Id.; Minn. Mining &
Mfg. Co. v. N.J. Wood Finishing Co., 381 U.S. 311, 323 (1965).

Section 5(i) represents a balance struck by Congress between com-
peting policy objectives. On the one hand, a "grudging interpretation"
of § 5(i) "would collide head-on with Congress’s . . . belief that pri-
vate antitrust litigation is one of the surest weapons for effective
enforcement of the antitrust laws." Minn. Mining & Mfg. Co., 381
U.S. at 318, 320. On the other hand, § 5(i) reflects a "congressional
emphasis on certainty and predictability in the application" of the toll-
ing provision so as to avoid "undue prolongation of [antitrust] pro-
ceedings." Greyhound Corp. v. Mt. Hood Stages, Inc., 437 U.S. 322,
335 (1978) (citing S. Rep. No. 619, 84th Cong., 1st Sess., 6 (1955)).

Beyond these broad principles, the district court here relied upon
the general rule that limitations are not tolled when "the government
and subsequent private suits . . . arose in distinct markets." 2 Philip
E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 321a, at 241 (2d
ed. 2000). Other courts have also applied this rule. For example, in
In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust
Litig., 782 F. Supp. 481 (C.D. Cal. 1991), the markets defined by the
government and the private plaintiffs were the same ("refined oil
products")—except that they covered different geographical areas—
and nearly all of the same producers were active in both areas. Id. at
483-84. Nonetheless, the court rejected tolling because the markets
were not identical, as they covered different geographical areas. See
id. at 486; see also Charley’s Tour and Transp., Inc. v. Interisland
Resorts, Ltd., 618 F. Supp. 84, 86 (D. Haw. 1985) (stating, in a case
28 NOVELL v. MICROSOFT
involving the hotel-room-rental market in the government action and
the charter-bus-use market in the private action, that § 5(i) does not
"mean that a defendant [in a government action] doing business in
different markets [has] the statute of limitations tolled as to all of its
markets").

B.

Novell argues that the tolling provision preserves Counts II through
V because its complaint overlaps significantly with the DOJ com-
plaint. The DOJ complaint, as discussed earlier, was based on allega-
tions of anticompetitive conduct by Microsoft in two product markets:
the market for PC operating systems and the market for Internet
browsers. J.A. 343 (DOJ Compl. ¶ 53). Novell argues that the "core
elements" of its claims "echo allegations made throughout the govern-
ment’s complaint against Microsoft," even though Novell’s claims in
Counts II through V are for harm to a market distinct from those spe-
cifically at issue in the DOJ complaint. Appellee’s Br. at 54. Novell
cites, inter alia, paragraph 5 of the DOJ complaint, which alleges,
"Microsoft’s conduct includes . . . exclusionary agreements preclud-
ing companies from distributing, promoting, buying, or using prod-
ucts of Microsoft’s software competitors . . .," J.A. 327 (DOJ Compl.
¶ 5); paragraph 13 of the DOJ complaint, which avers that Microsoft’s
conduct with respect to browsers is an example of Microsoft’s activi-
ties "with the purpose and effect of maintaining its PC operating-
system monopoly and extending that monopoly to other related mar-
kets," J.A. 330 (DOJ Compl. ¶ 13)(emphasis added); and the govern-
ment’s prayer for relief, which is peppered with references to "other
software products," J.A. 375-76. Novell argues that because the DOJ
complaint references other software markets, the complaint should be
interpreted as "complain[ing] of" harm to office-productivity applica-
tions as well as the two markets to which it clearly did allege harm,
markets for PC operating systems and for Internet browsers. Appel-
lee’s Br. at 53-57.

We cannot accept Novell’s proffered interpretation. Though we are
mindful of the tolling provision’s purpose of providing private plain-
tiffs the opportunity to wait to assert claims that are the subject of a
government action during the pendency of that action, Novell’s read-
ing would require us to look beyond the face of the DOJ complaint,
 NOVELL v. MICROSOFT 29
in contravention of Leh, 382 U.S. at 65. The DOJ complaint only
expressly alleges harm to the markets for PC operating systems and
for Internet browsers. Novell’s allegations of harm to the office-
productivity-applications market, therefore, overlap little with the
subject matter of the DOJ complaint.

A straightforward application of the different-markets rule also
bars application of the tolling provision here. Though Novell charac-
terizes the different-markets rule as merely "a helpful rule of thumb,"
Appellee’s Br. at 63, Novell cites only cases involving either the same
markets in the government and private suits, or markets much more
closely linked than the PC operating-system market and the office-
productivity-applications market. Indeed, the Supreme Court has
accepted tolling only where the private plaintiffs make claims in mar-
kets identical to, or completely encompassed by, those at issue in the
earlier government suit. See Zenith v. Hazeltine Research, Inc., 401
U.S. 321, 323-25, 333-34 (1971) (same markets); Leh, 382 U.S. at 64
(market in government suit was that for distribution of refined gaso-
line in Pacific Coast states, whereas private suit focused on the same
market in Southern California only); Minn. Mining & Mfg. Co., 381
U.S. at 315, 322-23 (same markets).27 Because the office-productivity
market at issue in Counts II through V is neither identical to nor com-
27
Novell points to several lower-court decisions in which statutes of
limitations were tolled when the markets involved in the private suit and
the government suit were not identical. See In re Ariz. Dairy Prods.
Litig., No. CIV 74-569A (D. Ariz. Nov. 5, 1984) (finding limitations
period tolled for filing of claim in private action for price-fixing conspir-
acy in retail milk market based on government suit for price-fixing in
wholesale milk market); In re Antibiotic Antitrust Actions, 333 F. Supp.
317, 320-31 (S.D.N.Y. 1971) (finding limitations period tolled for claim
for damages suffered in a foreign broad spectrum antibiotics market for
agricultural consumption by government suit for conduct in domestic
broad spectrum antibiotics market for human consumption). The markets
in both of the above cases were defined rather specifically, however, and
a broader market definition could have included both that at issue in the
government action and that at issue in the private action (e.g., the "milk
market" or the "broad spectrum antibiotics market"). No reasonably
broader market definition could encompass both the operating-system
market at issue in the government action against Microsoft and the
office-productivity-applications market at issue here.
30 NOVELL v. MICROSOFT
pletely encompassed by the PC operating-system market at issue in
the government action, these cases are of little service to Novell.

Supporting our conclusion regarding the distinct nature of the mar-
kets is the fact that the government’s decision to pursue claims
involving only the operating-system and Internet browser markets
rested on a deliberate choice. The Department of Justice knew that
state Attorneys General originally included a claim in their action
against Microsoft, filed on the same day as the DOJ complaint in the
same court, for harm to a market for office-productivity applications.
See Compl. at ¶¶ 88-95, 98, 117-19, New York v. Microsoft Corp.,
No. 98-1233 (D.D.C. Nov. 12, 2002). This claim was subsequently
dropped in an amended complaint. See First Am. Compl., id.28

On these facts, we do not believe § 5(i) of the Clayton Act should
be construed to permit private plaintiffs to "sit on their rights" and to
assert, years after the traditional statute of limitations has run, "claims
so much broader than those asserted by the government that they open
entirely new vistas of litigation." Novell, Inc. v. Microsoft Corp., Civ.
No. 05-1087, 2005 U.S. Dist. LEXIS 11520, at *14 (D. Md. June 10,
2005). To allow Novell to go forward with Counts II through V now
would have precisely this undesirable effect, in addition to extending
the tolling effect of § 5(i) beyond what the Supreme Court has
accepted or condoned in this area. Such an extension of the tolling
provision would contravene the goals of certainty and predictability
in this area, as well as avoidance of the "undue prolongation of [anti-
trust] proceedings." Cf. Greyhound Corp., 437 U.S. at 334-35 (quota-
tion omitted).

We therefore hold that the tolling provision of § 5(i) of the Clayton
Act does not preserve Counts II through V of Novell’s complaint.
After tarrying with these claims for more than eight years, Novell
cannot now resurrect stale causes of action, and Microsoft is entitled
"to the comfort of repose." Novell, Civ. No. 05-1087, 2005 U.S. Dist.
LEXIS 11520, at *14.
28
Section 5(i) applies only to actions brought by the United States, so
the Attorneys’ General action did not toll the limitations period.
 NOVELL v. MICROSOFT 31
IV.

The judgment of the district court is

AFFIRMED.