Addamax was a software company founded by Dr. Peter A. Alsberg in 1986. In 1991, the company filed an antitrust lawsuit against the Open Software Foundation (OSF), Hewlett-Packard Company and Digital Equipment Corporation.
In 1987, the company began to develop security software used in Unix operating systems—which is a common operating system used for large computers. The security software restricted the use of sensitive information and blocked outside access.
During the time of development, the company chose to produce primarily B-1 software that is required by government users. From 1988 to 1989, the company developed the B-1 security software for two different versions of Unix.
As the company was developing security software, the inventor of Unix, AT&T, began to restrict the number of licenses it issued because a large amount of software modifications became available through individual licensees. AT&T began to develop a close relationship with Sun Microsystems, and many hardware manufacturers believed that AT&T was attempting to form a single version of Unix to dominate the market.
Large computer manufacturers like Hewlett-Packard and Digital Equipment Corporation decided to form the Open Software Foundation for non-profit research initiatives, and one of the objectives of was to create a competitive operating systems that could compete with the Unix system being developed by Sun Microsystems and AT&T.
OSF-1 was undergoing development in 1989, and OSF decided to include B-1 level security software. Only three companies produced the software at the time: AT&T, Addamax, and SecureWare, Inc. “Request for technology” bids were sent to the companies—except for AT&T—and OSF accepted a bid from SecureWare on December 22, 1989. Even though the security software from Addamax was more sophisticated, they asked for a higher price.
Addamax continued sales of the B-1 software after losing the bid to OSF, but they began to turn away buyers in 1991 in order to devote funds to the development of new security software. The company then filed a complaint against OSF, Hewlett-Packard and Digital in April of 1991 because they stated the companies violated both state and federal antitrust law.
The company accused OSF with horizontal price fixing, boycotting, and other joint ventures that violated the Sherman and Clayton Acts. The claims accused the defendants of driving down the price of security software below the free-market level to restrict competition from Addamax.
The trial lasted for 12 days between November 18 and December 16 of 1996. Witnesses were called including Dr. Alsberg, experts, and a customer. The district court found that OSF and other defendants did not directly cause free-market values to drop, and the defendants were not charged.
Addamax appealed the district court’s findings on the basis that the findings were not detailed and the court failed to address any evidence that was favorable to the prosecution. However, the district court was not required to consider findings on every detail in the case because Addamax was responsible for most of the discovery in the first place. The original findings of the district court were affirmed in the appellate court.
