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Microsoft plays defense in latest antitrust volley

The company jabs at the Justice Department, filing papers to oppose a motion from the government aimed at directing the appeal in the antitrust case to the Supreme Court.

WASHINGTON--Microsoft jabbed at the Justice Department today, filing papers to oppose a motion from the government aimed at directing the appeal in the antitrust case to the Supreme Court.

The DOJ yesterday asked the U.S. Court of Appeals for the District of Columbia Circuit not to exercise its jurisdiction in the case and to let the appeal travel to the Supreme Court.

Microsoft shot back today in the latest filing in the case: "The DOJ's motion should be denied forthwith."

U.S. District Judge Thomas Penfield Jackson may have ruled in favor of the government last week, but the trial's intensity has increased rather than diminished. At issue now is which appellate court will oversee the next phase of the case.

On Tuesday, the District of Columbia appellate court stated that it has jurisdiction over Microsoft's appeal. The software giant wants the appeals court to hear everything, or at least to hear a motion staying business restrictions set to go into effect within 82 days.

"The DOJ wants to expedite things, but Microsoft does not want to expedite and probably thinks they have a pretty good forum in the court of appeals. They would like to get a ruling out of that forum," said Marc Schildkraut, an antitrust attorney here with Howrey, Simon, Arnold & White.

In its brief today, Microsoft railed at a government statement that it had improperly filed its motion with the appeals court.

In its brief yesterday, the DOJ argued that because Jackson next week is expected to certify the case for direct appeal to the Supreme Court, the appeals court should back off taking any action on the stay motion or any other part of the case. If Jackson certifies the request, the Supreme Court would have jurisdiction until it decides whether to hear the case, something it is not obligated to do.

Schildkraut doesn't believe that will happen. "Does the Supreme Court want to take this case without first getting guidance from the appeals court? Most people doubt it," he said.

Microsoft's brief also attacked the DOJ for delaying Jackson's ruling on the company's stay motion, arguing that the "90-day clock is ticking, and the DOJ's procedural maneuvering in the district court has already consumed seven of those days."

For this reason, Microsoft argues that the appeals court should at least handle the stay request--and soon.

But Schildkraut disagrees. Special coverage: Breakup"There's no reason for anyone to believe that if the Supreme Court wanted to take jurisdiction, they wouldn't act as quickly as the court of appeals," he said.

In its brief today, Microsoft also argued that the Expediting Act, which gives the DOJ authority to petition the Supreme Court to take the case directly, does not apply to the state portion of the case. Originally, the DOJ and 19 states filed separate cases, which Jackson treated as one.

Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley in Menlo Park, Calif., disagrees that the state case doesn't fall under federal jurisdiction.

"It's the Supreme Court that is going to make the decision whether the state claims are in the jurisdiction conferred upon it under the Expediting Act or not," he said. "I think the answer is going to be, 'Since we would have jurisdiction if it came to us through the normal appellate process, we're going to hear them both.'"

The jurisdictional tug-of-war may appear more like legal jockeying than like anything else, but antitrust experts say both sides have a vested interest in which venue hears the case--the appeals court or the Supreme Court. Many trial watchers say the appeals court would be better for Microsoft.

That the appeals court has stepped in to take jurisdiction over the case complicates things for the government.

"The whole concept of the government arguing they don't want to go to the court of appeals and Judge Jackson helping them in the maneuvers to avoid going to the court of appeals is a very dangerous strategy for the government," said John Smith, an antitrust attorney with Nixon Peabody here. "I don't think it will sit particularly well with the court of appeals or with the Supreme Court."