[plorkyeran]

That lawsuit happened in response to Window 2.0, and the fact that they adopted overlapping windows in 2.0 strongly suggests that Microsoft did not think that the change would lead to legal action and was taken by surprise.

[ndiddy]

Apple threatened to sue Microsoft when Windows 1.0 came out in 1985, but Gates responded by threatening to stop developing software for the Macintosh, pull the Macintosh software Microsoft had already developed from shelves, and refuse to renew Apple's license for Applesoft Basic for the Apple II. Sculley backed down and signed an agreement with Microsoft granting them the right to create derivative works of the Macintosh and Lisa UIs and a worldwide, royalty-free, perpetual license to use those derivative works in current and future software. In return all Apple got from Microsoft was a promise to continue supporting Word and Excel on the Mac until October 1986, which they would have done anyway.

This surrender agreement is likely why Microsoft felt confident enough to adopt overlapping windows in Windows 2.0. However, Apple's 1988 lawsuit didn't get dismissed because the judge decided that Windows 1.0 and Windows 2.0 are fundamentally different, and the agreement only covered the aspects of Windows 2.0 that also appear in Windows 1.0. The case ground on for several years before eventually getting dismissed because what Microsoft had licensed from Apple were generic ideas that shouldn't be subject to copyright. For example, Microsoft were free to use a trash can to represent deleted files as long as they didn't use Apple's specific rendering of a trash can.

[WillAdams]

Not just that, he also got MacBasic killed:

https://www.folklore.org/MacBasic.html