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Microsoft Fails To Win 'Vista Capable' Dismissal

Judge rules consumer fraud lawsuit against the company can proceed, but not as class action.
A federal judge on Wednesday rejected Microsoft's motion for dismissal of a lawsuit that accuses the software maker of misleading consumers through its Vista Capable computer marketing program. In refusing to dismiss the case, Judge Marsha Pechman, of U.S. District Court in Seattle, said Microsoft has yet to prove that the Vista Capable program didn't have "the capacity to deceive."

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In a victory for Redmond, however, Pechman declined to grant the plaintiffs' request that the case be given class-action status. The ruling could potentially save Microsoft millions of dollars in compensatory damages if it loses the case. The judge ruled that the plaintiffs failed to demonstrate that the marketing program resulted in increased sales for Microsoft, a fact necessary to support the class-action claim.

Still, Pechman said that the six plaintiffs in the case can proceed individually against Microsoft.

The case began in 2007, when consumers Dianne Kelley and Kenneth Hansen sued Microsoft for fraud. They contend that Microsoft intentionally duped customers by advertising as "Vista Capable" computers that lacked the horsepower to fully support all of the operating system's features, such as its 3-D Aero interface.

In November, Pechman ruled that Microsoft president and CEO Steve Ballmer must provide a deposition, noting that the plaintiffs "met their burden in demonstrating Mr. Ballmer may have relevant, unique personal knowledge of relevant facts."

Microsoft had asked the court to reject the plaintiff's bid to compel testimony from Ballmer because, the company claimed, Ballmer didn't have operational knowledge of the decisions behind the marketing campaign.

But e-mails entered into evidence indicate Ballmer was well informed about changes to the Vista Capable definition for PCs that allowed inclusion of an underpowered Intel graphics chipset that's not compatible with Aero.

Changes Microsoft made to the Vista Capable definition in early 2006, just a few months before the operating system was finalized, irked hardware maker Hewlett-Packard. HP invested heavily in components designed to meet the original, more stringent definition, according to e-mails.

The case is ongoing.

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