Novell said today that it has reached agreement with Microsoft to settle "potential" antitrust litigation related to Novell's NetWare operating system in exchange for Redmond shelling out $536m in cash.

Novell issued a statement which explained: "Under terms of the settlement, in exchange for the cash payment, Novell has agreed to a general release of claims that it has, as of the date of the agreement, with certain exclusions that include patent claims and claims associated with Novell's WordPerfect business."

Microsoft stressed that its payment agreement does not obligate it to license or otherwise share any of its technology or intellectual property rights with Novell, nor does it include any admission of wrongdoing by Microsoft.

"The agreement also includes a release by Microsoft of claims that would have been compulsory counterclaims to the NetWare claims asserted by Novell," added Novell.

"Finally, Novell has agreed to withdraw its intervention in the European Commission's case with Microsoft."

Despite this legal rapprochement over Microsoft's alleged uncompetitive behaviour which harmed sales of NetWare, Novell went on to promise that by the end of this week it will file another antitrust suit against Microsoft in the US seeking unspecified damages in connection with alleged harm to Novell's WordPerfect application software business in the mid-1990s.

Joseph LaSala, Novell's senior vice president and general counsel, said: "We regret that we cannot make a similar announcement regarding our antitrust claims associated with the WordPerfect business.

"We have had extensive discussions with Microsoft to resolve our differences but, despite our best efforts, we were unable to agree on acceptable terms.

"We intend to pursue our claims aggressively toward a goal of recovering fair and considerable value for the harm caused to Novell's business."

The WordPerfect suit that Novell will file seeks unspecified damages arising from Microsoft's alleged efforts to crush competition in the office applications market during the time that Novell owned the WordPerfect word-processing application and the Quattro Pro spreadsheet application.

According to Microsoft, the NetWare settlement reflects extra efforts on behalf of the company over past two years to build more constructive relationships with industry partners and competitors.

Brad Smith, senior vice president and general counsel for Microsoft, said: "Today's NetWare settlement is a product of that effort and reflects an open dialogue the companies established to address and ultimately resolve this matter.

"We could not resolve claims related to WordPerfect in any manner we thought appropriate, and we are prepared to turn to the courts to resolve it."