Microsoft brief may be to the taste of Appeals Court

The appeals brief filed Monday by Microsoft Corp. in its ongoing antitrust battle with the U.S. Department of Justice (DOJ) may sit well with the U.S. Court of Appeals, legal experts said. However, those same observers weren’t swayed by all of the vendor’s legal arguments.

In its 150-page appeals brief, the software giant was in all-out attack mode, hitting out at the scope of the DOJ’s case, the way the antitrust trial was conducted, and the behavior of the judge who oversaw the case.

One of Microsoft’s key allegations is that Judge Thomas Penfield Jackson, in both his findings of fact and his ruling that Microsoft be broken up into two separate companies, profoundly misunderstood U.S. antitrust laws. That argument didn’t wash with legal experts.

“Microsoft saying there are no dead bodies, therefore it didn’t do anything, is the wrong standard for a monopolization case,” said Richard Gilbert, professor of economics at the University of California at Berkeley. From 1993 to 1995, Gilbert served as the deputy assistant attorney general for economics in the DOJ’s antitrust division.

He said he could understand Microsoft’s concerns about Judge Jackson’s behavior in talking to reporters both during and after the trial – the judge’s comments made during the trial didn’t appear in print until after he had issued his rulings. “The judge did kind of take the publicity trail more than judges usually do,” Gilbert said.

One area where Microsoft may gain the appellate court’s sympathy is over the judge’s decision not to hold hearings on the proposed remedies in the trial, according to Gilbert. Instead of hearings, each side has agreed to submit briefs.

Mark Ostrau, partner in charge of the antitrust practice at the law firm Fenwick & West in Palo Alto, California, said the Microsoft brief might play well in the appellate court. The issues that worked against the company in the district court before Judge Jackson won’t have the same impact in the Court of Appeals, he said.

During the trial, Microsoft appeared to lose ground with the judge over inflammatory remarks made in internal company e-mails submitted as evidence, and through the demeanor of Microsoft Chairman and Chief Software Architect Bill Gates in his videotaped deposition.

At the appellate level “all the emotion is wrung out,” Ostrau said. “It’s about the cold facts of the law … in a rarefied atmosphere devoid of that psychology.”

Another factor working in Microsoft’s favor is the lack of legal cases setting precedents, with U.S. antitrust law effectively having to stretch to fit the IT industry, according to Ostrau.

“There’s nothing (in existing case law) that says if you act like Microsoft, you are guilty,” he said.

Where Microsoft’s appeal falls down, according to one legal expert, is in its attempt to cover all of the bases rather than limiting its focus to the vendor’s strongest arguments against the DOJ’s case.

“They don’t seem to have winnowed anything, which is pretty unusual for appellate counsel, who usually start narrowing issues the higher up they get,” said Don Falk, an antitrust attorney with the law firm Mayer, Brown & Platt in Washington, D.C. “That’s just basic appellate practice; it’s just something you have to do on appeal.”

Falk has written briefs in the Microsoft case on behalf of the Software & Information Industry Association (SIIA), which has supported the DOJ’s arguments. He will also help to write a brief that the SIIA, the Computer and Communications Industry Council, ProComp and America Online Inc. (AOL) will submit jointly in support of the government’s own appeals brief, which is due to be filed Jan. 12.

The DOJ’s January filing will be the next stage in the appeals procedure, and the department appeared in confident mood Monday.

Judge Jackson’s ruling that Microsoft be split into two parts is “well supported by the evidence offered during (the) 78-day trial, including thousands of pages of Microsoft’s own documents,” said Gina Talamona, a spokeswoman for the DOJ. “We are confident in our case and look forward to presenting it to the Court of Appeals.”

The breakup of Microsoft ordered by the judge has been put on hold pending the outcome of the appeals process.

Falk harked back to the inflammatory e-mail messages that haunted Microsoft during the lower court proceedings as an example of unfinished business that wasn’t attended to in the company’s appeals brief.

“They still don’t come to grips with the words that came out of their own executives’ mouths about what their product position and markets were at the time (of the integration of Microsoft’s Web browser Internet Explorer into its Windows operating system),” he said.

While Falk saw the brief as closely resembling others Microsoft has previously filed in the District Court and the U.S. Supreme Court, Fenwick & West’s Ostrau found the emphasis in the brief to be very different. Until now, Microsoft has downplayed the competitive threat of Netscape Communications Corp.’s Navigator Web browser and Sun Microsystems Inc.’s Java technology to its own software, Ostrau said.

“But here in the brief, rather than distancing themselves from that argument they are embracing it, saying, ‘Look, we are not monopolists … all of these things compete with us,'” he said. “They are positioning this as if everything (Microsoft) did was simply in the competitive spirit.”

The arguments Microsoft is now using in the brief represent a “total flip” in its previous position, since the company now says its browser does compete with middleware from the likes of Netscape (now part of AOL) and Sun, according to Ostrau.

Are such arguments likely to move the company farther away from the threat of Judge Jackson’s breakup ruling?

“I was taught never to say never,” quipped Berkeley’s Gilbert, given that there’s still plenty more courtroom drama to go. “Anything is possible in the law,” he added.

Microsoft, based in Redmond, Wash., can be reached at The DOJ, based in Washington, D.C., can be reached at

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