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Lindows Flaunts Microsoft Ultimatum; Eggs Redmond to Sue It Again

Lindows Flaunts Microsoft Ultimatum; Eggs Redmond to Sue It Again

Microsoft's lawyers sent Lindows.com CEO Michael Robertson a letter lambasting the www.MSfreePC.com Web site that Lindows set up a couple of weeks ago as "deceptive," saying that it "seriously mischaracterizes" the settlement Microsoft signed in the California class action alleging it overcharged for Windows, and that it "misleads the public and encourages class members to submit improper fraudulent claims that will be denied by the Settlement Claims Administrator." They gave Lindows until noon California time on Monday to decide whether to correct the site or take it down or else, they said, "Microsoft will take all appropriate action to protect the integrity of the settlement claims process and the settlement benefits to which the class members and California public schools are entitled as well as its own interests." The deadline came and went without Lindows making a move. Tuesday, Robertson issued a copy of a letter that he said he sent to Bill Gates refusing to do anything about the MSfreePC site "in spite of your threats" and basically said, "See you in court." Presumably Microsoft will oblige. However, its lawyers said they couldn't comment on their "litigation strategy." Lindows set up the site to route as much of the settlement monies into its own coffers as it could. It offers consumers a purportedly "Instant Settlement" and dangles the offer of a free PC to the first 10,000 people who buy $100 worth of its products. Consumers can get a free StarOffice and the Lindows operating system in the process. In an apparent bid for sympathy and to raise the level of invective aimed at Microsoft a notch higher, Lindows.com turned the letter dated September 26 that it got from Heller Ehrman, the law firm representing Microsoft in the California class action - the one that Microsoft recently settled for a nominal $1.1 billion in vouchers - into a press release. Heller Ehrman says Lindows ignores the rules and regulations that the court overseeing the settlement process has preliminarily approved. Apparently Microsoft's lawyers weren't the first to complain. The attorneys for the plaintiffs in the class action beat them to it by sending Lindows a letter voicing their concerns first, but evidently that letter doesn't object quite as much the Heller Ehrman letter - and wasn't from Microsoft's side - so Lindows didn't turn that one into a press release. Heller Ehrman counsel Robert Rosenfeld says in the letter that the claims process that the court has nominally approved disallows electronically submitted claims and requires a claim form be signed with pen and ink, none of this digital signature business. Any Lindows-inspired claims will be invalid, he says, because they're not signed. They will also be missing the settlement notice that's supposed to accompany the claims form "so potential claimants can make an informed decision about whether to file a claim, object or do nothing." Secondly, they will be invalid because the Lindows-inspired claims will be missing the required proof of purchase and the required part of the claims form that reads, "All of the information on this form is true and correct" under penalty of perjury. Thirdly, they will be invalid, Rosenfeld says, because the settlement agreement doesn't allow retailers or vendors of qualifying hardware and software to submit claims on behalf of any claimant. The Lindows Web site, however, as Rosenfeld notes, "purports to authorize Lindows.com to take certain actions to pursue the claimant's claim" and submit the claim and proof of purchase of Lindows software to the Settlement Claims Administrator, modify the claim so that vouchers and checks go to Lindows, open claimants' mail and cash their checks and apparently appeal any claims that are denied. Well, guess what. To avoid a "gray market" in settlement vouchers from developing, the Settlement Agreement that was signed says claims can't be transferred at all and anybody that vouchers are transferred to can't redeem more than $10,000 worth of them. Rosenfeld accuses Lindows of "encouraging people to submit fraudulent claims" He says that the "Web site's clear objective is to encourage claimants to maximize the amount of their claims rather than submit claims that accurately reflect purchases or benefits to which they are entitled. For example, the Web site encourages claimants to submit claims for combinations of products that total exactly $100, and offers a 'free PC' only to claimants who submit claims for only one purchased product, only allows claimants to submit claims for certain combinations of purchased products (with high total values), and does not allow claims that total less than $50. The Web site also offers a prepared list of 'sellers' of software, which encourages claimants to make a hasty, careless or false designation of the seller of their products instead of accurately identifying their software purchases before submitting their claim." Rosenfeld also complains that Lindows doesn't make it clear that vouchers are only available for software bought in California, that California public schools will get two-thirds of whatever is unclaimed, an incentive for people not to make claims, and incorrectly suggests the settlement is based on the decision in Justice Department's antitrust case against Microsoft. Given that there are actually court-approved rules that govern such things, one would judge that the publicity-seeking Mr Robertson can posture all he wants without having his claims recognized as legitimate, maybe even be accused of fraud - unless of course he gets the rules changed. Simplifying the situation, Robertson, who protests that claimants have to use paper forms and snail mail instead of modern technology, told Gates in his letter that "If required, we will be a voice in the courtroom defending a consumer's right to use technology and an online process to secure their settlement claims. I believe your company refers to this as the "right to innovate." Robertson's letter, obviously written for public consumption, calls Microsoft "hypocritical" for using digital signatures to advance its business while it "resists them whenever it may negatively impact your bottom line." It also accuses it of using the "public schools as a smokescreen to hide your true motivations, which is to reduce the payout Microsoft has to perform. As you are aware, Microsoft benefits greatly if consumers do not submit claims or drop out anywhere in the laborious process. One-third of all unclaimed dollars are refunded back to Microsoft....It's undeniable that Microsoft's actual settlement amount will be dramatically less than the $1.1 billion amount trumpeted in the headlines - the complexity of the manual settlement claim process...will see to that. The $1.1 billion number is purely a publicity stunt..."

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Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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