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Microsoft announced this morning that it has come to terms with Novell, the company generally credited with instigating the antitrust suit that the Justice Department brought against Microsoft in 1998.

Novell has agreed not to sue Microsoft on antitrust grounds in exchange for $536 million in cash.

Novell has also agreed to drop out of the European Commission's case against Microsoft where it has been one of the five primary complainants. Novell figures that at this point "There is simply not much left for us to do."

So has the Computer & Communications Industry Association (CCIA), the trade association that Microsoft's enemies have used to push their agenda.

The CCIA, presumably at the instigation of RealNetworks, dragged Windows XP into the EC mess in February of 2003 complaining that, among other things, the operating system was bundled with the Windows Media Player.

The EC subsequently ordered Microsoft to break with its precious business model and produce a version of Windows for Europe that does not include the Media Player, an order that Microsoft is now appealing in the Court of First Instance in Luxembourg.

Microsoft is obviously hoping that with four of the five companies that originally complained to the EC neutralized, to wit, Sun, Time Warner and now Novell and the CCIA, the EC's case against Microsoft will be weakened and the chances of its order standing undercut.

Microsoft described XP as a "principal obstacle" in trying to negotiate a settle with the EC.

Now it says that there's "less need for the EC to persist with litigation." The president of the Court of First Instance, who's hearing the appeal, has indicated he would prefer a settlement.

With the CCIA withdrawing its 260-page complaint and dropping out as an intervener, the only company left to press the EC is RealNetwork, which Microsoft described as "standing alone."

The Novell deal, which was mediated by Eric Green, who also did the Microsoft-DOJ settlement, only covers NetWare, Novell's network operating system.

It does not cover WordPerfect, the office automation software that Novell owned between June 1994 and March 1996 before selling it on to Corel.

Settlement negotiations between the two companies, which have reportedly been going on for the last year, failed to come to terms on WordPerfect and Novell says it will sue Microsoft in federal court in Utah by the end of the week charging it with monopoly maintenance and anti-competitive behavior against WordPerfect and the Quattro Pro spreadsheet. It will claim unspecified damages.

Its claims will be based on the monopoly maintenance findings made in the DOJ case against Microsoft, much like Time Warner and Sun did. Novell's threatened NetWare private antitrust suit would have read pretty much the same, Novell said.

Novell didn't make out quite as well financially as Sun and Time Warner, which nailed Microsoft for $700 million and $750 million respectively to settle their private antitrust complaints. Of course NetWare was never central to the government's case like Java and Netscape were.

There is also no technology collaboration or patent cross-licenses involved in the Novell-Microsoft settlement either as there were in Sun and Time Warner arrangements.

Microsoft general counsel Brad Smith brushed off the pending WordPerfect suit claiming a statute of limitations on the charges and explaining that whatever case Novell can make doesn't come close to the "magnitude" of its NetWare complaint.

Microsoft has agreed to join the CCIA and to pay the legal bills the CCIA ran up harrying Microsoft. Financial terms were not disclosed.

Smith said the deal finally brings to a close the seven-year-old US antitrust case. As part of their arrangement, the CCIA has agreed to drop its Supreme Court challenge of the Microsoft-DOJ settlement. The CCIA was the last remaining litigant.

Microsoft said it is now going to work with the CCIA on industry- wide issue like the Bush administration's support of R&D, job creation, immigration policies and Internet security.

Microsoft considers it important that the industry look like it can solve its own problems like "thorny antitrust issues" without recourse to the government.

Microsoft estimates its current potential exposure to existing antitrust litigation at $950 million. The figure includes the RealNetworks and Burst.com suits and what remains of the Windows class actions.