On July 23, 1996, Novell sold the intellectual property of Digital Research to Linux vendor Caldera. The common thread the two companies had was Ray Noorda. Noorda had been CEO of Novell and was Novell’s largest shareholder, and Caldera was part of Noorda’s Canopy Group, where he incubated startups. The very next day, Caldera filed a lawsuit against Microsoft, accusing it of violating sections 1 and 2 of the Sherman Anti-Trust Act.
Caldera Open DOS and DR DOS
Caldera was one of the leading Linux distributors at the time. The reason they said they wanted DR DOS was they wanted to bundle better DOS compatibility in their Linux products than competitors like Red Hat would be able to deliver.
The initial product was called Caldera Open DOS. Along with it, Caldera released the source code with a limited license. Critics said the product was neither open nor free. You could download it without paying for it. But you were restricted in what you were allowed to do with it. Soon Caldera reverted back to the older, more familiar name.
Several other Digital Research products saw release under more permissive licenses, including CP/M and GEM.
Speculation regarding Caldera’s lawsuit with Microsoft
At least one influential journalist at the time thought it was a revenge mechanism for Ray Noorda. In the February 4th, 1997 issue of PC Magazine, John C Dvorak speculated about the deal, including the following:
I know one writer who claims that he has an original version of MS-DOS, version 1.0, which was created by Seattle Computer Products and bought by Microsoft for $50,000. The writer claims that if you hit a specific series of keys, you’ll get Gary Kildall’s name and some other indications that some of the code was actually lifted from CP/M. Apparently this was fixed rather quickly and certain secret deals were made between Digital Research, IBM, and Microsoft regarding CP/M, CP/M-86, and the product that eventually became MS-DOS.
I wondered if the anonymous writer Dvorak was writing about might be Jerry Pournelle. Sometime in the fall of 1998 I had the opportunity to ask him. Pournelle confirmed it but would not elaborate, only saying, “I know that story.”
Pournelle did speak about it on Leo Laporte’s This Week in Tech podcast, episode 73, in October 2006.
I can tell you, I saw Gary Kildall take a copy of DOS 1, 1.1 or 1.2, and I have written down what he did to get it, and it brings up “copyright Digital Research Corporation, Gary Kildall programmer.” I am not kidding. It was in the code. I’ve seen it! This is not somebody-told-me-this. Gary showed it to me.
I’m not telling you what I’ve heard. This I saw. I was up there at Pebble Beach. Bill Godbout said you’ve gotta come up here, Gary will show you something but he’s only going to show it to you in person, he’s not going to talk about it on the phone. And I come up there, and by [golly], there it was, and it really popped it up. Which is why DOS 2 is so different from DOS 1. DOS 2 was written in a clean room. It’s also why if you own DR-DOS, you will never be sued for look and feel. I don’t know all the terms of the settlement with Kildall, but I know that was in it.
As a writer, I want to believe the story. Efforts to disprove the existence of that keystroke have their problems. But then again, early versions of DOS have been thoroughly disassembled and studied at this point, with no trace of the keystroke.
Pournelle would have been in his late 40s when he observed this, and in his 60s when he told the story. Is it possible that he conflated the Easter egg Microsoft put in Basic when you typed the command wait 6502, 1 with MS-DOS and misremembered? Pournelle said Bill Godbout was there when Kildall showed it to him, but Pournelle died in 2017 and Godbout in 2018, so the detail died with them. Kildall died in 1994.
Why Caldera sued Microsoft
Dvorak had a good story, but the legal case Caldera brought against Microsoft was less interesting. Caldera didn’t bring up any potential copyright infringements from the past. This lawsuit was all about Windows.
Microsoft had infamously put cryptic error messages in a beta version of Windows 3.1 that only appeared when running it under DR DOS. Novell issued a patch April 7, 1992 to defeat the check, and Microsoft disabled the code in shipping version of Windows 3.1, but arguably the damage was done.
And then with Windows 95, Microsoft took things a step further. DOS and Windows were no longer separate products. Instead, Windows 95 bundled MS-DOS 7.0 with the new 32-bit GUI. It wasn’t really removing DOS from Windows, it just looked like it.
That’s why Caldera sued. Caldera said this bundling was unnecessary and served only to lock competitors like DR DOS and IBM PC DOS out of the market and limit consumer choice. And to prove Windows 95 had DOS running underneath, Caldera demonstrated Windows 95 running on top of DR DOS instead of the bundled MS-DOS 7.0.
Microsoft’s surprise settlement with Caldera
The case was scheduled to go to trial February 1, 2000. Microsoft tried to get the case dismissed or moved from Utah, without success. On January 7, 2000, Microsoft requested a meeting at a mediator’s office in Seattle. By day’s end, Microsoft and Caldera reached an agreement. They didn’t disclose the terms except to say it was a substantial amount of money. At the time, the BBC speculated it was several hundred million dollars.
After Microsoft and Caldera settled, Novell sued Microsoft regarding anticompetitive behavior against its Netware product and its Wordperfect and Quattro Pro applications products. In its defense of the latter case, Microsoft revealed in a court filing dated November 13, 2009 that Caldera received $280 million, and Novell had received $35.5 million of the money. Dissatisfied with the amount, Novell sued Caldera in June 2000 and received an additional $17.7 million in February 2003.
The same filing also stated Novell was coaching Caldera and using Caldera as a proxy, but hiding its involvement in the case from both Microsoft and the public.
Even before the case settled, Caldera had split its Linux business and its DOS business. In an interview with Doc Searls, Caldera CEO Ransom Love said, “[That Microsoft thing]’s not us, it’s Caldera, Inc.”
Caldera, Inc’s DOS business carried on as Lineo until 2002, at which point the Canopy Group sold DR DOS to Devicelogics, a company backed by Caldera cofounder Bryan Sparks. Devicelogics’ web site went offline in 2018.
What happened to Caldera
Caldera’s Linux business eventually merged with UNIX vendor SCO, and even took on that name. SCO became infamous for suing IBM over its contributions to the Linux kernel, in spite of its history as a Linux vendor itself. Eventually it fired the CEO who made the decision, but it was too late.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.