Microsoft unleashes last-ditch defence

Software giant says it's still amenable to a DoJ settlement, but the two sides seem as far apart as ever in final arguments invoking John D Rockefeller, GM and the proverbial '800-pound gorilla'
Written by Mary Jo Foley, Senior Contributing Editor

Yesterday, in the final day of the ongoing US Department of Justice antitrust case against Microsoft, the company emphasised that a settlement was still not outside the realm of possibility. However, by the end of the day, after representatives for 19 states and the US government presented their case before US District Judge Thomas Penfield Jackson, and Microsoft's attorneys presented theirs, the two parties seemed as far apart as ever.

Following Tuesday's court appearance, Jackson is expected to issue a ruling in the case. If Microsoft is found to be in violation of antitrust laws, appropriate remedies, if any, will be suggested. If dissatisfied with Jackson's ruling, however, Microsoft can -- and has said it will -- appeal his decision.

It is uncertain when Jackson will rule. As long as the settlement talks, mediated by Judge Richard Posner, continue, Jackson is likely to delay issuing his ruling.

Microsoft attorneys emphasised in a statement before Tuesday's hearing began that the company is continuing to engage in settlement discussions, and that both Microsoft chairman Bill Gates and chief executive and president Steve Ballmer are "personally involved".

Just before the lunch break at the hearing, Microsoft's lead attorney, John Warden, made a hard pitch for the company's copyright and product integration rights. But Jackson repeatedly picked at Warden's definitions. "What evidence of copyright have you given me? What testimony was there?" Jackson asked Warden. "I don't really understand your copyright defense." At that point, Jackson added as an aside, "Mr. Rockefeller had fee-simple control over his oil."

Jackson's remark was interpreted by some court observers as the judge likening Microsoft to Standard Oil, John D Rockefeller's company, which was ruled a monopoly and subsequently broken up by the government nearly a century ago. Warden countered that Microsoft isn't attempting to "claim that antitrust law trumps copyright law or vice versa." Jackson interjected: "I'm not so sure of that."

But Warden replied that Microsoft, contrary to the government's claims, is not attempting to say that copyright gives the company antitrust law exemption.

During the morning's proceedings, neither Warden, nor government lead attorney David Boies, spelled out exactly how copyright protection applies to the current case. Boies did say that Microsoft has attempted to use copyright law as its third defence, but he claimed the company did not use this in its court appearances or in its proposed findings. "Microsoft assumed any modifications they'd need to make for OEMs would involve copyright violations," Boies told the court. "Copyright law doesn't allow you additional contractual restrictions."

At the end of the day, in remarks made to reporters on the steps of the Washington DC courthouse where the trial has been conducted for the past two years, State Attorney General Richard Blumenthal called Microsoft's copyright defense "a red herring". Blumenthal, who represents one of the states suing Microsoft, added that "Microsoft may be the 800-pound gorilla... but there are still laws in the jungle."

Iowa Attorney General Tom Miller had offered similar thoughts moments earlier. "Everybody's subject to the rule of law, no matter how successful they are," Miller said.

Take me to Microsoft unleashes last-ditch defence: Part II.

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