Volume IV

Issue : 2: January 26, 2006

• Importation Held to Infringe Copyright Despite the Absence of Initial Infringement
• Nevada Court Rules Google Cache Feature Constitutes "Fair Use"
• Google Resists U.S. Government Motion to Compel Disclosure of Search Information
• Yahoo Loses Nazi Memorabilia Free Speech Case
• Ontario Court Finds Collaboration Necessary to Facilitate Document Production in the Electronic Age
• U.K. Plans to Host Global Online Gambling Summit
• Korea Will Not Prosecute Personal Downloaders
• Australian Online Bookie First to Get Licence
• Utah Fines B.C. Based Pornography Website
• California Court of Appeal Upholds Microsoft Class Action Settlement
• Alberta Court of Appeal Asserts that Corporations Cannot Hide Behind Privacy Laws
• U.S. Patent Office Upholds Microsofts File System Patents
• Sony Obtains $6 Million in Statutory Damages for Mod Chip Sales

Home > Volume IV > Issue 2: January 26, 2006 > California Court of Appeal Upholds Microsoft Class Action Settlement

California Court of Appeal Upholds Microsoft Class Action Settlement

In February 1999, various plaintiffs launched a class action lawsuit against Microsoft in California’s superior courts, alleging that Microsoft’s “exclusionary and restrictive” practices had resulted in software overcharges on Microsoft products. The parties reached a settlement in January 2003, and after further negotiation executed a settlement agreement in June 2003.

Under the settlement agreement, Microsoft will make consumer vouchers (totalling approximately US $1.1 billion) available to all class members as direct compensation for the alleged overcharges; these vouchers can be redeemed within a set period through the purchase of specified hardware or software. The agreement also holds that if the face value amount of the settlement is not exhausted, or not all issued vouchers are redeemed within the specified period, Microsoft will retain one-third of the residual amount and two-thirds will be distributed to eligible public schools in California.

The California trial court granted preliminary approval of the settlement agreement in July 2003. Various class members objected, but in July 2004 the trial court decided that the settlement agreement was fair, reasonable and adequate. The final judgment was issued in November 2004.

Charles Jakob, one of the class members, appealed the final judgment to the California Court of Appeal. His appeal challenged the method in which residual settlement funds are to be distributed to Microsoft and public schools rather than class members. The Court of Appeal affirmed the trial judgment on the grounds that the trial court did not abuse its discretion in determining that the residual distribution provisions are fair, adequate and reasonable.

For a copy of the decision, visit:

Re Microsoft