Novell, Incorporated v. Microsoft Corporation ( 2011 )


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  •                             UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 10-1482
    NOVELL, INCORPORATED,
    Plaintiff - Appellant,
    v.
    MICROSOFT CORPORATION,
    Defendant - Appellee.
    Appeal from the United States District Court for the District of
    Maryland, at Baltimore.     J. Frederick Motz, District Judge.
    (1:05-cv-01087-JFM)
    Argued:   March 22, 2011                    Decided:   May 3, 2011
    Before SHEDD and DUNCAN, Circuit Judges, and HAMILTON, Senior
    Circuit Judge.
    Reversed and remanded by unpublished opinion.      Judge   Duncan
    wrote the majority opinion, in which Judge Shedd joined.   Senior
    Judge Hamilton wrote a dissenting opinion.
    ARGUED: Charles J. Cooper, COOPER & KIRK, PLLC, Washington,
    D.C., for Appellant. David Bruce Tulchin, SULLIVAN & CROMWELL,
    New York, New York, for Appellee. ON BRIEF: Jeffrey M. Johnson,
    David L. Engelhardt, DICKSTEIN SHAPIRO LLP, Washington, D.C.; R.
    Bruce Holcomb, ADAMS HOLCOMB LLP, Washington, D.C.; David H.
    Thompson, Howard C. Nielson, Jr., David Lehn, COOPER & KIRK,
    PLLC, Washington, D.C., for Appellant.       Richard J. Wallis,
    Steven    J.  Aeschbacher,   MICROSOFT   CORPORATION,   Redmond,
    Washington; Steven L. Holley, SULLIVAN & CROMWELL, New York, New
    York; G. Stewart Webb, VENABLE LLP, Baltimore, Maryland, for
    Appellee.
    Unpublished opinions are not binding precedent in this circuit.
    2
    DUNCAN, Circuit Judge:
    This appeal arises out of the district court’s grant of
    summary judgment in favor of Microsoft Corp. (“Microsoft”) in an
    action against it by software company Novell, Inc. (“Novell”).
    Although    the   underlying    lawsuit       involves       complex    issues   of
    antitrust law, the primary question before us is one of contract
    interpretation: whether a 1996 contract between Novell and a
    third company divested Novell of its right to bring the present
    claim.     Concluding that Novell retained ownership of the claim,
    which is not otherwise barred by res judicata, we remand for
    further proceedings.
    I.
    A.
    A   detailed    discussion    of       Novell’s    underlying         antitrust
    action can be found in our prior opinion in this case.                           See
    Novell, Inc. v. Microsoft Corp., 
    505 F.3d 302
    , 305-10 (4th Cir.
    2007).     We focus here on those facts necessary to an explication
    of the parties’ present dispute.
    Between      1994   and   1996,    Novell    owned       certain       “office-
    productivity”     software     applications.           
    Id. at 305
    .      These
    applications        included      “WordPerfect,          a         word-processing
    3
    application, and Quattro Pro, a spreadsheet application.” 1                               
    Id.
    (footnotes omitted).            During this period, Novell also owned a
    variety      of   products     comprising        its   desktop        operating      system
    (“DOS”) business, 2 including “an operating system known as Novell
    DOS.”       
    Id.
     at 306 n.10.
    Novell believed, and the Utah Court of Appeals would later
    find, that its DOS products were “the target of anticompetitive
    practices by Microsoft in the early 1990s.”                            Novell, Inc. v.
    Canopy      Group,    Inc.,    
    92 P.3d 768
    ,   770    (Utah       App.    Ct.   2004).
    Novell’s board of directors was concerned, however, that “if
    they       brought    suit    against   Microsoft         in    a    private    antitrust
    action, Microsoft would retaliate with further unfair practices
    that could neutralize the value of any antitrust recovery.”                               
    Id.
    To     guard      against     such    an     eventuality,            Novell    sought     to
    effectuate        a   sale   that    would    obligate         the    purchaser      to   sue
    1
    Both   word-processing  applications  and   spreadsheet
    applications are computer software. The former “enables an end-
    user to create, edit, and print text-based documents,” and the
    latter   allows   “an   end-user  to  organize  and   manipulate
    quantitative data.” Novell, Inc., 
    505 F.3d at
    305 n.2 & n.3.
    2
    “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, including word-processing and spreadsheet
    applications.”    Novell, Inc., 
    505 F.3d at 305
     (footnote
    omitted).
    4
    Microsoft,           allow      Novell    to    share         in   the   recovery,         and      also
    obscure Novell’s role in the action against Microsoft.                                    
    Id.
    To that end, on July 23, 1996, Novell executed an Asset
    Purchase         Agreement            (“the    Agreement”)             with     Caldera,            Inc.
    (“Caldera”).                 Under      the    terms          of   the     Agreement,          Novell
    “transfer[red]             to      Caldera     specified           assets      and     liabilities
    comprising the DOS Business, including the products associated
    with       the       DOS   Business”      and       “assign[ed]          to    Caldera         certain
    related       rights         and     agreements.”             J.A.   1963.           In   exchange,
    Caldera paid Novell a purchase price of $400,000.
    Novell’s sale of assets was designed to divest the company
    of    its     various        DOS      products      and       assign     the    rights         to    any
    antitrust litigation related to those products.                                      Specifically,
    the    Agreement           provided      that       “Novell        shall      grant,      transfer,
    convey, and assign to Caldera all of Novell’s right, title, and
    interest in and to any and all claims or causes of action held
    by    Novell          at   the       Closing    Date      and      associated         directly       or
    indirectly with any of the DOS Products or Related Technology.”
    J.A.       1966-67.          As      defined   in       the    Agreement,       “DOS      Products”
    included         a    list      of    thirteen      products, 3        consisting         of    “seven
    3
    The thirteen enumerated products were: CP/M, Concurrent
    DOS, DR DOS 6.0, DR DOS 5.0, Multiuser DOS, Novell DOS 7.0,
    PALMDOS,   GEM,  GEM   Draw,  GEM   Wordchart, GEM Graph, GEM
    Programmers Toolkit, and Draw Plus.
    5
    versions      of     Novell’s    DOS          operating         system        and    six    DOS-based
    software applications.”                  Appellant’s Br. at 12.                      The Agreement
    also       defined    “Related      Technology,”                explaining          that    the    term
    encompassed        “all    existing           technology         .   .    .    necessary      to    the
    performance by the DOS Products of their intended functions or
    purposes.”         J.A. 1965.
    As contemplated, Caldera filed suit against Microsoft the
    same day the Agreement was signed, alleging harm to “DR DOS and
    related PC operating system software.”                               J.A. 1955.             Three and
    one-half       years      later,         in     January         2000,         Microsoft       settled
    Caldera’s       lawsuit.            In        exchange       for         being      released       from
    Caldera’s       claims      against           it,        Microsoft        paid       Caldera       $280
    million.        Per    their     agreement,              Caldera         provided      Novell      with
    about $35.5 million of this settlement. 4
    B.
    In     November      2004,    Novell             filed    the      six-count         antitrust
    action      underlying      this     appeal. 5             As     relevant          here,    Count    I
    asserted       that       Microsoft           had       “engag[ed]         in       anticompetitive
    4
    Novell sued Caldera’s successor in interest seeking a
    larger share of the settlement and ultimately received an
    additional $17.65 million. See generally Novell, Inc., 92 P.3d
    at 768.
    5
    The complaint was originally filed in the federal district
    court for the district of Utah. In May 2005, the Judicial Panel
    on Multidistrict Litigation transferred the suit to the district
    of Maryland.
    6
    conduct to thwart the development of products that threatened to
    weaken    the    applications     barrier         to    entry”    to    the     operating
    systems market. 6       J.A. 100.           Specifically, it contended that
    Microsoft’s      conduct    had     damaged        “Novell’s      WordPerfect          word
    processing      applications      and       its     other    office       productivity
    applications      in   violation          of      Section    2    of      the       Sherman
    [Antitrust]     Act,   15   U.S.C     §    2.”         Id.   In   Count       VI,    Novell
    alleged   that    Microsoft     had       made    exclusionary         agreements      with
    original equipment manufacturers, which restricted the licensing
    of Novell’s software applications, in unreasonable restraint of
    trade.
    In June 2005, the district court granted Microsoft’s motion
    to dismiss Counts II, III, IV, and V as untimely.                          However, it
    6
    The “applications barrier to entry” refers to the role
    software applications can play in insulating an operating system
    marketer from competition.   We discussed this barrier to entry
    in detail in our previous decision in this case, explaining,
    the “applications barrier to entry”-stems from two
    characteristics 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.
    Novell, Inc., 
    505 F.3d at 306
     (quoting United                                 States     v.
    Microsoft Corp., 
    253 F.3d 34
    , 55 (D.C. Cir. 2001)).
    7
    found that Novell had antitrust standing to proceed on Counts I
    and VI.        In doing so, the court expressly rejected Microsoft’s
    argument that Novell had assigned its claims under Count I to
    Caldera as part of the sale of the DOS products.                           The court
    explained:
    The fallacy in [Microsoft’s] argument is that the
    claim asserted in Count I, while arising from
    Microsoft’s monopoly in the operating system market,
    is for damage not to DOS or any other operating system
    but for damage to applications software. It is a far
    stretch to infer (and Microsoft has presented nothing
    to establish) that simply because DOS competed in the
    operating system market, such a claim was either a
    “direct”   or   “indirect”   claim  intended   to   be
    transferred from Novell to Caldera.
    J.A.   108     (emphasis    added).          The   district   court      subsequently
    granted       Microsoft’s     request       that   it   certify    its    ruling   for
    interlocutory review.
    In October 2007, we affirmed the district court’s dismissal
    of Counts II, III, IV, and V, as well as its determination that
    Novell had standing to bring Counts I and VI.                     See Novell, Inc.,
    
    505 F.3d at 322-23
    .      In     a   brief   footnote,      we    acknowledged
    Microsoft’s assertion that Novell had assigned its claims under
    Counts I and VI to Caldera and the district court’s rejection of
    that argument.        
    Id.
     at 306-07 n.10.           However, because the issue
    was not before us, we declined to reach it.                       
    Id.
     at 307 n.10
    (observing that our narrow grant of interlocutory appeal did not
    include issues related to the transfer of Counts I and VI).
    8
    Following our decision, the parties completed discovery on
    Counts I and VI and filed cross-motions for summary judgment.
    On March 30, 2010, the district court granted Microsoft’s motion
    for summary judgment.
    As     to    both    Count    I   and       Count    VI,     the    district       court
    reversed      its    earlier       interpretation          of     the    Agreement.          It
    specifically concluded that its prior determination that Novell
    did not assign its claims under these counts to Caldera because
    they focused on harm to its software applications rather than
    operating        systems   was     wrong.         The     court    now     felt      that   the
    reference to “associated” claims encompassed Counts I and VI,
    because, inter alia, “the reason Microsoft allegedly engaged in
    the conduct causing the damage [asserted in those counts] was to
    obtain and maintain its monopoly in the operating system market-
    -the market in which the DOS Products competed.”                          J.A. 371.
    However, out of an abundance of caution, recognizing that
    we   might    disagree      with    its     new     interpretation,            the   district
    court      nonetheless       proceeded         to       “address         the    substantive
    viability of Novell’s claims” to facilitate our review of their
    merits on appeal.           J.A. 369.         It concluded that, if Novell had
    not assigned Counts I and VI to Caldera, only Count I would have
    survived     summary       judgment.        The     court       found,        however,      that
    Novell     had    failed    to     adequately       plead       harm     to    the   software
    9
    application “GroupWise” in Count I and so dismissed that portion
    of its allegations.        This appeal followed.
    II.
    On appeal, Novell renews its argument that the Agreement
    did    not   transfer    its    Count    I    claims   related    to    the   office
    productivity applications.             Novell further disputes Microsoft’s
    assertion     that    Novell’s   participation         in   Caldera’s   settlement
    precludes it from litigating Count I under principles of res
    judicata.     It also contests Microsoft’s claim that there are, in
    any event, no disputed issues of material fact as to Count I.
    Finally,     Novell     urges   that    its    complaint    provided    sufficient
    notice of its allegations related to GroupWise. 7
    We consider each argument in turn.               In doing so, we review
    the grant of summary judgment de novo and affirm only if there
    is    no   issue   of   material   fact       and   Microsoft    is    entitled   to
    judgment as a matter of law.             Robinson v. Clipse, 
    602 F.3d 605
    ,
    607 (4th Cir. 2010).
    7
    Novell’s opening brief did not argue that the district
    court erred by granting summary judgment as to Count VI, and
    Novell confirmed in oral argument that it was not pursuing this
    claim.
    10
    A.
    We    first    address   whether          Novell      assigned   the     claims    it
    seeks to bring to Caldera.                  As the Agreement specified that it
    is “governed in all respects” by Utah law, J.A. 1980, we begin
    our analysis by outlining that state’s legal framework.
    1.
    When       construing      an    agreement,         Utah   courts    “look    to     the
    language of the contract to determine its meaning and the intent
    of   the       contracting      parties,”          and   “‘consider       each    contract
    provision . . . in relation to all of the others, with a view
    toward giving effect to all and ignoring none.’”                          Café Rio, Inc.
    v. Larkin-Gifford-Overton, LLC, 
    207 P.3d 1235
    , 1240 (Utah 2009)
    (quoting Green River Canal Co. v. Thayn, 
    84 P.3d 1134
    , 1141
    (Utah    2003))       (alteration      in    original).          In   conducting      their
    assessment, Utah courts consider “the reasonable expectations of
    the parties, looking to the agreement as a whole and to the
    circumstances,         nature,       and   purpose       of    the   contract.”       Green
    River Canal Co., 84 P.3d at 1142 (quoting Peirce v. Peirce, 
    994 P.2d 193
    , 198 (Utah 2000)).
    Utah’s approach to the issue of ambiguity in a contract is
    somewhat unique.           See Daines v. Vincent, 
    190 P.3d 1269
    , 1276
    (Utah        2008)    (citing    the       Utah     Supreme     Court’s     efforts       “to
    establish a balanced, ‘better-reasoned’ approach to an analysis
    of facial ambiguity that would allow judges to ‘consider the
    11
    writing     in     the    light     of     the      surrounding       circumstances’”)
    (quoting Ward v. Intermountain Farmers Ass’n, 
    907 P.2d 264
    , 268
    (Utah     1995)).         Utah    courts      employ        a    two-step     approach   to
    determine whether a contract is facially ambiguous.                           First, they
    assess “any relevant and credible extrinsic evidence offered to
    demonstrate       that    there    is    in    fact       an    ambiguity.”       City   of
    Grantsville v. Redevelopment Agency of Tooele City, 
    233 P.3d 461
    , 470 (Utah 2010) (internal quotations omitted); see also
    Ward, 907 P.2d at 268 (reasoning that absent such evidence “the
    determination        of    ambiguity      [would          be]    inherently    one-sided,
    namely, it [would be] based solely on the extrinsic evidence of
    the judge’s own linguistic education and experience” (internal
    quotation        marks    omitted)).               They     then    determine      whether
    “competing        interpretations        are       reasonably       supported     by     the
    language of the contract.”               Daines, 190 P.3d at 1277 (internal
    quotation marks omitted).               Although the process allows extrinsic
    evidence on the question of ambiguity, the Utah Supreme Court
    has cautioned that “a finding of ambiguity will prove to be the
    exception and not the rule.”              Id. at 1277 n.5.
    2.
    Against     the    backdrop      of    Utah’s          principles   of   contract
    interpretation, we now consider the relevant provisions of the
    Agreement.        The parties dispute whether the language “associated
    directly or indirectly with any of the DOS Products or Related
    12
    Technology,” J.A. 1967, transferred Novell’s claim of harm to
    its office productivity software.         We conclude that it did not.
    Microsoft argues that the phrase “associated directly or
    indirectly” is to be read broadly and, consequently, forecloses
    Novell’s present claims.       In support of its contention that the
    Agreement transferred these claims to Caldera, Microsoft cites
    six   “associations”   between      the   DOS   products   and   the    office
    productivity    software,    most   prominently     that   Count    I   “links
    injury allegedly inflicted by Microsoft on [software products]
    with harm to competition in the PC operating system market, and
    thus with DR DOS, which competed in that market.” 8                Appellee’s
    Br. at 34 (emphasis added).
    Microsoft’s argument is not without some intuitive merit.
    The   phrase   “associated   directly      or   indirectly”   can    be   read
    8
    The five additional purported “associations” identified by
    Microsoft are: (1) despite Novell’s claim that it was no longer
    marketing its operating system when the conduct alleged in Count
    I began, the value of its DOS products would still have been
    affected   by  Microsoft’s   alleged  efforts   to   bolster  the
    applications barrier to entry; (2) despite the limited volume of
    sales, Novell sold DOS products during the period at issue, and
    the value of those products was affected by the conduct alleged
    in Count I; (3) Caldera’s suit against Microsoft sought
    injunctive relief in the form of disclosure of technical data
    that would have “addressed much of the alleged conduct
    underlying Count I,” Appellee’s Br. at 37; (4) the conduct
    alleged in Count I was supposed to have occurred in a market
    that Microsoft dominated because of anticompetitive behavior
    toward Novell’s DOS products; and (5) Microsoft targeted Novell
    in part because Novell had entered the DOS business.
    13
    broadly.         Caldera’s DOS claims and Novell’s software application
    claims are certainly “associated” in some sense of the word;
    both    sets       of   products       have    roles       to       play--although         distinct
    roles       to    be    sure--in       the     operating             systems      market.           The
    elasticity of the phrase is not, however, unlimited.
    We        conclude    that       Microsoft’s            argument        fails       for      two
    reasons.          First, Utah law mandates that we not read contractual
    provisions         in   isolation.            We    instead          consider       the    disputed
    language in the context of the agreement in which it appears.
    See Café Rio, 207 P.3d at 1240.
    Here, the disputed language is cabined by reference to a
    specific          set   of   property,          transferring               claims       “associated
    directly or indirectly with any of the DOS Products or Related
    Technology.”             J.A.    1967        (emphasis          added).           The     Agreement
    precisely          delineated        what     that        property         consisted          of,   by
    identifying         thirteen         products,          none    of    which       is    the    office
    productivity software that forms the basis of the present claim.
    Viewed in this context, Microsoft’s expansive reading of the
    disputed         provision      is    antithetical             to    the    carefully         limited
    “circumstances, nature, and purpose” of the Agreement.                                        Peirce,
    994 P.2d at 198; see also Green River Canal Co., 84 P.3d at
    1142; cf. Grynberg v. Questar Pipeline Co., 
    70 P.3d 1
    , 8 (Utah
    2003) (“[W]hen two statutory provisions appear to conflict, the
    more    specific        provision        will       govern          over    the     more      general
    14
    provision.”) (quoting Perry v. Pioneer Wholesale Supply Co., 
    681 P.2d 214
    , 216 (Utah 1984)).
    More fundamentally, Microsoft’s preferred reading lacks a
    logical limiting principle.                  Given operating systems’ ubiquitous
    role in personal computing, it is difficult to imagine a piece
    of hardware or software that could not be somehow “associated”
    with Novell’s DOS products under Microsoft’s capacious theory.
    Tellingly,        Microsoft’s        counsel          was        unable     to     articulate
    meaningful        boundaries       for       the      company’s         reading        at    oral
    argument.        Counsel argued only that the disputed language would
    not   extend      to   “causes     of       actions       associated       in    such    a   far-
    reaching way that it would be illogical to connect them to DR-
    DOS.”       We    agree    that    the      language        of    the    contract       must    be
    cabined by the limits of logic.                     However, given the context in
    which      the    disputed    phrase         appeared,          we    believe     Microsoft’s
    reading exceeds those boundaries.
    As    the    district       court      initially       recognized,         the     express
    purpose of the Agreement was to assign to Caldera the rights and
    liabilities        associated        with      “the       DOS        Products     or    Related
    Technology,”        J.A.     1967,      a    carefully          delineated       term.         The
    precise phrasing of the contract entitled Caldera to sue (and
    share      the    recovery     with         Novell)       for     claims    involving          its
    operating        system    products,        but     did    not       preclude    Novell      from
    suing for separate harm to the separate interest in the software
    15
    applications       it   retained.      Indeed,    our     prior   decision    was
    premised on the severability of harms to software from harms to
    DOS products, as we anchored our standing analysis in Novell’s
    ability to articulate discrete antitrust harms to its office
    productivity       applications,      though     those     products     did   not
    themselves compete with operating systems.                  See Novell, Inc.,
    
    505 F.3d at 320
    .     The     dissent’s    characterization       to   the
    contrary, it is the notion that an Agreement that purported to
    transfer a specific set of property in fact evinced Novell’s
    intent   to    transfer     claims    for   a    wholly    separate     property
    interest that, in this context, makes little sense.
    To the extent that Utah law endorses review of extrinsic
    evidence, the available materials only reinforce our conclusion
    that the Agreement unambiguously supports Novell’s reading.                   As
    Novell notes, the record includes affidavits and testimony from
    Caldera’s     negotiator,    Novell’s    general    counsel,      and   Novell’s
    CEO, which attest to the absence of any intention to convey
    Novell’s present claims.            For instance, Caldera’s negotiator’s
    affidavit states:
    Neither party contemplated that claims “directly or
    indirectly” related to “the DOS Products or Related
    Technology” would include Novell’s antitrust claims
    for harm to its business applications. Any suggestion
    that the Asset Purchase Agreement conveyed claims for
    harm to Novell’s applications would be contrary to the
    parties’ intentions and what I and my client, Caldera,
    understood was actually being conveyed to it.
    16
    J.A. 5024 (emphasis added).
    For   its    part,     Microsoft    cites      extrinsic      evidence         that,
    prior to its agreement with Caldera, Novell contemplated a jury
    “piggyback[ing]” damages in the applications market to a DOS-
    related antitrust suit.             J.A. 1443.        Microsoft claims that that
    suit   was    ultimately       brought    by     Caldera    as    Novell’s       “proxy.”
    Appellee’s Br. at 42.               It further urges that the fact that
    Caldera      sought    injunctive       relief      that   would    have     indirectly
    benefited Novell’s applications business demonstrates that the
    parties’      “assignment       was     intended      to   encompass       all        claims
    arising out of Microsoft’s allegedly anticompetitive conduct.”
    Id. at 41.
    We do not find Microsoft’s showing persuasive.                             Indeed,
    Microsoft’s     extrinsic       evidence       is   equally      susceptible      to     the
    opposite      reading,       that   is,   that      Caldera’s      failure       to     seek
    damages for harm to office productivity applications indicates
    that neither party contemplated the transfer of claims related
    to that discrete set of property--a conclusion that is entirely
    consistent with the testimony on which Novell relies.                                 Having
    considered both parties’ extrinsic evidence in the context of
    the contractual provisions discussed above, we do not believe
    that    Microsoft’s         “competing    interpretation[]”          is    “reasonably
    supported      by     the    language     of    the    [Agreement].”             City     of
    Grantsville, 233 P.3d at 471 (quoting Daines, 190 P.3d at 1269).
    17
    In short, our reading of the entire Agreement, as well as
    the extrinsic evidence persuades us that the district court’s
    initial       interpretation       was    correct:          the    Agreement         conveyed
    claims     “associated”       with       an    expressly          enumerated         body   of
    property      that    did   not     include        Novell’s       office       productivity
    applications.         The mere existence of a possible conceptual link
    between the DOS products and those applications does not mean
    that   the     Agreement    divested      Novell       of    the      claims    alleged      in
    Count I.
    B.
    Microsoft’s      res    judicata            argument       also       lacks     merit.
    Microsoft urges in particular that Novell’s participation in the
    Caldera       litigation,     and     acceptance            of    a    portion       of     the
    settlement in that case, precludes it from asserting additional
    claims, which Microsoft alleges arise out of the same basic core
    of operative facts.           See Laurel Sand & Gravel, Inc. v. Wilson,
    
    519 F.3d 156
    ,   162   (4th     Cir.      2008)    (“The         test   for     deciding
    whether the causes of action are identical for claim preclusion
    purposes is whether the claim presented in the new litigation
    arises out of the same transaction or series of transactions as
    the claim resolved by the prior judgment.” (internal quotations
    omitted)); see also 1616 Reminc Ltd. P’ship v. Commonwealth Land
    Title Ins. Co., 
    778 F.2d 183
    , 187 (4th Cir. 1985).
    18
    Nonmutual claim preclusion is generally disfavored.                              See
    18A C.A. Wright, et al., Federal Practice & Procedure § 4464.1,
    at 713-15 (2d ed. 2002).               Microsoft nevertheless argues that the
    Caldera settlement falls within exceptions to that principle,
    which        allow     nonparty      claim      preclusion          when    there       are
    “substantive         legal    relationship[s]       between     the     person    to     be
    bound and a party to the judgment,” or when the nonparty was
    “adequately represented by someone with the same interests who
    [wa]s a party to the suit.”                Taylor v. Sturgell, 
    553 U.S. 880
    ,
    894 (2008) (internal quotations omitted) (second alteration in
    original).         We disagree.
    Microsoft’s       somewhat       confusing       assertion      that     Novell’s
    assignment of some of its claims to Caldera was sufficient to
    establish      a     “substantive      legal    relationship”        between     them    is
    unpersuasive.           It    relies    entirely       on   easily    distinguishable
    caselaw      that     concerns    situations      in    which   a    subsequent      suit
    raises “identical issues.”              See Appellee’s Br. at 47-48 (quoting
    Pelt    v.    Utah,     
    539 F.3d 1271
    ,    1290    (10th   Cir.       2008)).       As
    discussed      above,     Caldera’s      suit    addressed      a    distinct    set     of
    harms from those addressed in Count I: the former concerned DOS
    products, the latter software applications.                         Any appearance of
    identicality between the claims is a product of the level of
    generality at which Microsoft seeks to frame them.                           See, e.g.,
    Appellee’s Br. at 50 (“Both suits allege that Microsoft engaged
    19
    in anticompetitive conduct in the PC operating system market.”);
    see also 
    id.
     (claiming only that the two suits are “strikingly
    similar”).          While both suits implicated Microsoft’s desire to
    control the operating system market, overlapping motivation for
    separate harms is insufficient to render those harms identical
    for purposes of claim preclusion.
    We are also not convinced that Caldera could have served as
    an   adequate        representative        of     Novell’s        interests.      As     the
    district court noted, “Caldera could not have asserted on behalf
    of   Novell        claims    Caldera   did      not   possess.” 9       J.A.     376   n.9.
    Moreover, as a practical matter, only Novell had the incentive
    to recover for damages to its office productivity applications.
    On these facts, res judicata simply does not apply.
    C.
    Microsoft’s          claim   that   there      are    no     remaining    disputed
    issues of material fact is also unavailing.                          Microsoft asserts
    that       Count    I’s   antitrust    allegations          are    fatally     flawed,    as
    Novell cannot make the required showing that Microsoft’s conduct
    9
    For the same reason, we reject Microsoft’s argument that
    Novell’s initiation of a separate action constitutes claim-
    splitting.   Caldera could not have sought damages for harm to
    the office productivity applications in its initial suit, as it
    did not own those applications.     As a result, Novell did not
    have a “full and fair opportunity” to litigate its present
    claims in that action.    Taylor, 
    553 U.S. at 892
    ; Pueschel v.
    United States, 
    369 F.3d 345
    , 356 (4th Cir. 2004).
    20
    toward    its    office    productivity      applications          helped    maintain
    Microsoft’s      monopoly    power.         In   support      of    its     argument,
    Microsoft       cites     Novell’s    expert      in    antitrust           economics’
    testimony that, in a hypothetical market where Microsoft had
    only targeted Novell, “there would have been no adverse effect
    of knocking Novell out of the industry.”               J.A. 392.
    Microsoft’s        claim   mischaracterizes         the       impact     of    the
    expert’s testimony.         As the district court explained, Novell’s
    expert’s opinion about a hypothetical market leaves ample room
    for “a finding that Microsoft’s actions toward Novell were a
    significant      contributor    to    anticompetitive          harm    in     the     PC
    operating system market in light of the weakened state of other
    applications      and   [independent    software       vendors].”            J.A.    393
    (emphasis added).       That issue is appropriate for trial.
    D.
    Finally, we reject Novell’s argument that claims related to
    “GroupWise” software were adequately pleaded in Count I.                              To
    satisfy the pleading requirements, a “complaint ‘need only give
    . . . fair notice of what the claim is and the grounds upon
    which it rests.’”          Coleman v. Md. Court of Appeals, 
    626 F.3d 187
    , 190 (4th Cir. 2010) (quoting Erickson v. Pardus, 
    551 U.S. 89
    , 93 (2007) (per curiam)); see also Fed. R. Civ. P. 8(a)(2)
    (noting   that     a    complaint    must    contain     “a    short      and      plain
    statement of the claim showing that the pleader is entitled to
    21
    relief”).      Novell concedes that its complaint does not reference
    GroupWise.        It    nonetheless         argues    that       it    should       not    be
    penalized for having used the umbrella term “office productivity
    applications” to describe the software at issue.                              This claim
    lacks merit.
    Given the fairly generous standards of notice pleading, the
    fact    that   GroupWise       was    not    mentioned       in       Novell’s      lengthy
    complaint is not necessarily dispositive.                        However, Novell did
    not simply fail to mention GroupWise in its complaint.                               Rather
    its    pleading    expressly        characterized         what    the       term    “office
    productivity       applications”            was      intended          to      encompass,
    explaining:     “Word    processing      and      spreadsheet         applications        are
    sometimes      referred        to     herein         as    ‘office           productivity
    applications.’”         J.A.    51.     This       description,         by    its    terms,
    excludes GroupWise, which “is a software program that combines
    e-mail,   calendar,      appointment        scheduling,      and       task    management
    functions.”       Action Tech., Inc. v. Novell Systems, Inc., Nos.
    97-1460, 97-1481, 
    1998 WL 279359
    , at *2 (Fed. Cir. May 27, 1998)
    (unpublished).         We cannot conclude, under these circumstances,
    that Microsoft was provided fair notice of GroupWise claims.
    Nor are we persuaded by Novell’s assertion that because
    Microsoft included GroupWise in its discovery requests, it was
    not prejudiced by any defects in Novell’s pleading.                                 As the
    district court found, “[w]hat material is subject to discovery
    22
    and what conduct may serve as the basis of a claim are two
    distinct inquiries with different standards.”     J.A. 383.   We are
    disinclined to penalize Microsoft for having prudently sought
    broader discovery than may have been necessary.
    III.
    For the foregoing reasons we reverse the grant of summary
    judgment as to Count I and remand for further proceedings.
    REVERSED AND REMANDED
    23
    HAMILTON, Senior Circuit Judge, dissenting:
    Between 1994 and 1996, Novell owned WordPerfect, a word
    processing software application, and Quattro Pro, a spreadsheet
    software application.                   In Counts II through V of its complaint,
    Novell      sought      damages          for    Microsoft’s           alleged     monopolization
    (and     attempted        monopolization)                 of    the    word      processing       and
    spreadsheet software application markets, in which WordPerfect
    and Quattro Pro competed.                      These claims, all parties agree, are
    barred      by    the    applicable             statute         of    limitations       under    the
    Sherman Act.            Count I, which is the subject of this appeal,
    seeks damages for the same claims that are time-barred in Counts
    II through V.           More specifically, Novell alleges in Count I that
    Microsoft’s           antitrust          violations            in    the   operating         systems
    market,      which      tolled          the    statute         of    limitations       during    the
    pendency         of    the        government’s             case      against     Microsoft       for
    antitrust         violations            in     such        market,      damaged        their    word
    processing and spreadsheet software applications.                                    The flaw in
    Count I is obvious: because the claim is premised on Microsoft’s
    anti-competitive conduct in the operating systems market, Count
    I   necessarily         is    a    claim        “associated          directly     or    indirectly
    with” DR DOS.          (J.A. 1966-67).
    To    be       sure,       the        majority      recognizes         that     the     phrase
    “‘associated          directly          or    indirectly’           [contained    in    the     Asset
    Purchase     Agreement            (APA)]       can    be    read      broadly”    to    cover    the
    24
    claim      asserted      in    Count    I.       Ante     at    13-14.      However,      the
    majority ignores the plain, patently broad language in the APA,
    choosing instead to craft its own narrow reading of the phrase,
    for two reasons.
    First, the majority states that the phrase at issue “is
    cabined by reference to a specific set of property” that was
    transferred in the APA.                 Ante at 14.             As its reasoning goes,
    because word processing and software applications were not part
    of this specific set of property, such applications could not be
    directly      or   indirectly          related      to    the    specific    set.        Such
    reasoning is flawed for the simple reason that it reads out the
    word    “indirectly”          from   the     APA.        The    word    “indirectly”      was
    inserted into the APA for an obvious reason—to allow Caldera to
    proceed with a claim against Microsoft that was not envisioned
    by the parties, but nevertheless related in some indirect manner
    to the DR DOS operating system.                      Count I fits perfectly under
    the APA’s “indirect” umbrella.                      The claim is premised on harm
    caused, not in the software applications market in which both
    WordPerfect        and    Quattro        Pro     competed,        but    rather     in    the
    operations systems market in which both Microsoft’s Windows 95
    and DR DOS competed.                 Thus, at the very least, the harm to
    WordPerfect and Quattro Pro caused by Microsoft’s monopolization
    of   the    operating         systems    market      is    indirectly      (even    perhaps
    directly) associated with DR DOS.
    25
    And     it     should    come     as      no      surprise        that        the    term
    “indirectly” made its way into the APA.                         All encompassing words
    such     as     “indirectly”      are    commonly          used    in     asset        purchase
    agreements to cover such unforeseen events, and courts should
    read such terms broadly to ensure clarification and protection
    to the rights of all parties to a contract.                          Yet, the majority
    takes     the     opposite      tack,    reading          an    extremely        broad      term
    narrowly.        Put simply, common sense tells us that a claim that
    only exists by virtue of Microsoft’s alleged monopolization of
    the operating systems market is a claim “indirectly” related to
    the DR DOS operating system.
    Second,      the    majority    relies       on   certain       flimsy        extrinsic
    evidence, which, according to it, “attest[s] to the absence of
    any intention to convey Novell’s present claims.”                                Ante at 16.
    Such evidence includes the affidavits and testimony of Novell’s
    general counsel, Novell’s CEO, and Caldera’s chief negotiator.
    Any examination of such evidence must be viewed with extreme
    caution, as it is undisputed that: (1) Novell sold DR DOS, in
    part,    to     allow      another     party,     such     as     Caldera,       to     proceed
    against Microsoft in an antitrust action; and (2) Novell and
    Caldera       worked    in    tandem    in     the     Caldera     action        to    litigate
    against Microsoft.            More importantly, as the able district judge
    handling the case below recognized, such extrinsic evidence is
    “ambiguous        and      inconclusive,”       (J.A.      374),     as    neither          party
    26
    contemplated the existence of the Count I claim until it became
    apparent      that    the   claims     in   Counts     II   through    V    were   time-
    barred.       However, the absence of such contemplation does not
    inject      any   ambiguity     into   the    APA,     because,   as   the     district
    judge aptly observed, Novell unmistakably assigned “claims for
    damage inflicted upon Novell’s software applications through the
    prism of the operating system market,” (J.A. 371), such that the
    harm   to    the     software   applications         were   indirectly       associated
    with the operating market in which DR DOS competed.                        (J.A. 371).
    In    sum,    because    I   believe      the   district   judge       correctly
    granted summary judgment in favor of Microsoft on Count I, in
    its thorough and convincingly written opinion, I respectfully
    dissent.
    27