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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

January 4, 2009 at 7:38 PM

Expert witness estimates Microsoft Vista Capable revenue at $1.5 billion

Among the flurry of recent filings in the ongoing Vista Capable class action lawsuit is an abbreviated report of an expert witness who says Microsoft may have earned $1.505 billion on Windows XP licenses it sold on computers that were marked “Windows Vista Capable” but not “Premium Ready.” It’s possibly the first time a value for the controversial program has been given publicly.

In an exhibit supporting Microsoft’s attempts to decertify the class and dismiss the case, Keith Leffler, a UW economics professor who is one of the plaintiffs’ expert witnesses, attempts to put a value on the program.

“I have been asked by Plaintiffs’ counsel to estimate the amount of revenue earned by Microsoft from the licensing of Windows XP on Vista Capable but not Vista Premium Ready PCs sold to Plaintiffs. In Microsoft’s Supplemental Responses, it estimates that it received revenue of [redacted] from Windows XP licenses installed on upgradeable PCs sold in the U.S. during the April 2006 through January 2007 period. From the estimates of Windows Capable but not Vista Premium Ready PCs compared to all upgradeable PCs as in Table 1, I estimate that [redacted] of the [redacted] from Windows XP licenses on upgradable PCs were for XP licenses on Vista Capable but not Vista Premium Ready PCs – those PCs purchased by the Plaintiff class. From these figures, I have, therefore, reached the opinion that the Microsoft revenue from the Windows XP licensing on Vista Capable but not Vista Premium Ready PCs sold to Plaintiffs was $1.505 billion.”

This excerpt of Leffler’s report, recently unsealed, appears to be offered as evidence supporting one part of Microsoft’s argument for decertification of the class — that the plaintiffs have not presented a legal theory for how they were damaged that is permissible by the court. From Microsoft’s motion to decertify:

“On Plaintiffs unjust enrichment claim, Dr. Leffler calculates two measures of disgorgement, one pegged to Microsoft’s gross income from Windows XP licenses and the other reflecting Microsoft’s royalty income on the Express Upgrade program. But, like expectation damages, disgorgement assumes that Microsoft obtained a benefit from Plaintiffs as a result of a deceptive act an inherently individual inquiry.”

Hat tip to Joe Tartakoff who spotted this earlier today.

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