Microsoft appeal gets no respect

Microsoft's US Supreme Court filing has elicited little respect from legal experts who believe it is unlikely to derail any...

Microsoft's US Supreme Court filing has elicited little respect from legal experts who believe it is unlikely to derail any threat of legal action by the government against the Windows XP operating system due to be sent to PC makers later this month.

In legal papers filed earlier this week, Microsoft asked the high court to throw out a lower court's rulings because of critical comments about the company made to reporters by District Court Judge Thomas Penfield Jackson. The company also asked the US Court of Appeals to halt the transfer of the case to the US District Court for a hearing on remedies. That transfer is due to take place tomorrow, when a new judge could be selected to preside.

Microsoft has "zero chance" of getting the court to stay the transfer, said Steven Newborn, the Federal Trade Commission's litigation chief until 1994 and now an attorney at the law firm of Clifford Chance Rogers & Wells in Washington. He said he also doubts the Supreme Court will consider the company's brief.

"I just don't understand what they can possibly do at this point," Newborn said.

Some legal experts said the Supreme Court is likely to give a wide berth to the Appeals Court on this case. "I don't think the Supreme Court is likely to second-guess the [Appeals] Court on this issue," said Donald Falk, an attorney at Mayer Brown & Platt.

Kenneth Starr, the former independent counsel and a former judge on the US Court of Appeals, doubts the Supreme Court will consider an appeal of a unanimous opinion by "a very respected, intellectually powerful court.

"Eight federal judges have reviewed this on the merits; there is safety in the conclusion that Microsoft indeed violated the law and that the facts are in many respects not even challenged," he said. Starr, now an attorney at Kirkland & Ellis in New York, advises ProComp, a trade group that has been backing the government's case.

The Appeals Court, in its 28 June decision, agreed with the lower court decision that Microsoft used anti-competitive practices to maintain its monopoly. But it rejected a finding that the company illegally attempted to monopolise the browser market.

Microsoft asked the Appeals Court for a rehearing on part of that decision, a request that was rejected earlier this month. Starr said he found it odd that Microsoft did not raise the disqualification issue in its rehearing brief.

Starr believes the Appeals Court could act this week on the company's request for a stay. "If they don't get a stay, this thing returns [to the lower court] and the remedial phase begins with Windows XP looming very large," he said.

Although state attorneys-general involved in the long-running antitrust case have raised concerns about Microsoft's bundling strategy for Windows XP, the government has not said whether it intends to interfere with the planned release. But the government must file a reply to Microsoft's brief.

Critics of Microsoft have said the government has a strong case against the company's plan to integrate messaging and media functions in the new operating system. But the Appeals Court left the tying, or integration issue, unresolved in its 28 June decision. It wants the lower court to re-examine the issue of whether Microsoft illegally tied the browser with the operating system, under a legal standard that also considers the benefits of integration.

"It's not difficult for Microsoft to show that there are benefits to including some of these functions in XP," said Nicholas Economides, an economic professor at New York University's Leonard N. Stern School of Business. He also said it is not inevitable that Microsoft would necessarily be found guilty of violating antitrust law.

In a statement, Connecticut attorney general Richard Blumenthal, an official leading the 18-state coalition that is part of this case, did not comment on the substance of Microsoft's claims. But he said the state officials would respond in legal filings.

The government has 30 days to respond.

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