Court overturns Microsoft injunction in antitrust case

Friday, June 27, 2003

RICHMOND, Va. -- Microsoft does not have to include a rival's software in its Windows operating system, a federal appeals court ruled Thursday in overturning a judge's order.

The unanimous decision by the three-judge panel of the 4th U.S. Circuit Court of Appeals represents an overall victory for Microsoft in its drawn-out legal battle with Sun Microsystems over the Java software.

The panel also upheld a preliminary injunction barring Microsoft from distributing its own version of Java, but that requirement will have limited effect because Microsoft already has started phasing it out under a previous settlement with Sun.

Sun developed Java, the technology designed to let programmers write software to run on all types of computers, regardless of the operating system or Web browser. Users may run into Java without knowing it when they visit Web sites that feature games or other applications.

Sun's case is one of four private antitrust lawsuits brought after a federal judge ruled in a lawsuit filed by the Justice Department and 18 states that Microsoft acted as an illegal monopoly based on its dominance in desktop operating systems.

It is also one of the highest-profile antitrust cases remaining against Microsoft. Last month, Microsoft and AOL Time Warner settled AOL's January 2002 lawsuit that contended Microsoft relied on illegal, anticompetitive tactics to make its Internet Explorer the dominant Web browser, displacing AOL's Netscape.

In that settlement, Microsoft agreed to pay AOL Time Warner $750 million.

Sun, based in Santa Clara, Calif., had argued that Microsoft gained an unfair advantage by shipping Windows -- used on more than 90 percent of the world's personal computers -- with an outdated version of Java that is inconsistent for its users.

U.S. District Judge J. Frederick Motz in Baltimore accepted Sun's argument that waiting until the antitrust case is resolved could permanently kill Java.

So he ordered Redmond, Wash.-based Microsoft to include the latest version of Java in the Windows XP operating system.

The appeals court struck down the order, saying Sun failed to demonstrate the "immediate irreparable harm" to the company.

But the court upheld Motz's order "prohibiting Microsoft from distributing products that infringe Sun's copyright interests," including Microsoft's own version of Java.

Michael Gartenberg, research director for Jupiter Research, termed it "a bit of a rebuke that if you are going to include Java it has to be what Sun defines as Java, not what Microsoft defines as Java. You can't co-opt someone else's work."

Lee Patch, Sun's vice president for legal affairs, said the copyright ruling "confirms that Microsoft violated our prior settlement agreement, and that it did so in a way that continued to fragment the Java platform on PCs."

Patch said the decision on the other injunction will prolong its antitrust case against Microsoft.

Microsoft spokesman Jim Desler said the company was pleased with the ruling and noted that the company has already started phasing out its own version of Java.

"Our focus really has been to move beyond these conflicts and to work collaboratively with the rest of the industry," he said.


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