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Tech Industry

Judge sends Microsoft case to Supreme Court

Judge Thomas Penfield Jackson sends the appeal directly to the Supreme Court while indefinitely staying business restrictions he ordered.

WASHINGTON--A federal judge this afternoon approved the Microsoft antitrust case for direct appeal to the Supreme Court but surprised observers by also indefinitely staying business restrictions against Microsoft.

U.S. District Judge Thomas Penfield Jackson accepted a government petition that would, at least temporarily, remove the case from jurisdiction of the federal appeals court.

The high court is under no compulsion to accept the case and is expected to make a decision before the first week in October.

Jackson also indefinitely stayed business restrictions against Microsoft that had been set to go into effect on Sept. 5, a move that made the day a mixed victory both for the government and Microsoft.

For Microsoft, the stay removes the immediate threat of radical changes to how it conducts its business. For the Department of Justice (DOJ) and 19 states, it removes a deadline that could have compelled the Supreme Court to kick the case back to the appellate level without having time to review the appeal's merits.

Procedural antitrust experts had been predicting for more than a week that Jackson might choose to stay the conduct remedies, but he went much further than many anticipated. The consensus had been that Jackson would extend the 90-day period from his June 7 judgment; he instead stayed conduct restrictions, as he did with his original breakup order, until the appeals process is completed.

"The sly fox," said Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley in Menlo Park, Calif. "Jackson clearly wants to give the Supreme Court as much time as it needs to review the case."

With the clock Special coverage: Breakup ticking down to Sept. 5, few legal experts believed the Supreme Court could evaluate the direct appeal on its merits. "Just the opposite. This procedural baggage behind the appeals train made it all the more likely the Supreme Court would just send the case back to the appeals court," said Bill Kovacic, an antitrust professor with George Washington University School of Law.

That is one place Jackson and the government have indicated they don't want the case to go, said University of Baltimore Law School professor Bob Lande.

Another scenario could have had Microsoft asking the appellate court to reconsider dealing with its motion for stay. Yesterday, the U.S. Court of Appeals for the District of Columbia Circuit set a briefing schedule for the stay motion, with the understanding it would put the proceeding on hold if Jackson certified the direct Supreme Court appeal.

"Given the lineup that we now know of the appeal court, there is a 99.9 percent probability the first thing they would do is with a sense of outrage stay the conduct order," Lande said. "Psychologically, he doesn't want them to focus on remedy, where he is really weak, instead of liability, where he at least has a good shot."

Today's maneuvering by Jackson almost guarantees the appeals court will not touch the case unless the Supreme Court refuses to hear it.

Gray said he chuckled at Jackson's sidetracking of the appeals court with his handling of the stay motion. "It's interesting to see a judge acting in a strategic matter. There's no other way to explain what he did."

Jackson's actions today had both Microsoft and the government claiming victory.

"We are very pleased with the Court's decision to place the appeal directly in the Supreme Court," the DOJ said in a written statement. "This decision affirms the Department's position that a quick and effective remedy is necessary to resolve this significant case."

That Jackson has stayed his entire judgment against Microsoft is more reason the case should be resolved quickly--and by the high court, the DOJ statement continued. "The sooner a meaningful remedy is in place, the better it will be for consumers and the marketplace?Given the District Court's decision to stay the remedy during the appeal process, the direct appeal to the Supreme Court is of particular importance to the national interest."

"We are pleased our stay motion has been granted, because it would have caused significant harm to Microsoft, consumers and the high-tech industry," said Microsoft spokesman Jim Cullinan. "We look forward to moving ahead with our appeal as quickly as possible, which we believe is most appropriately for the court of appeals, but we will address that with the Supreme Court."

Kovacic said the DOJ's statement foreshadows the argument it will make to the Supreme Court about the urgency of taking the case.

"The government depicted the conduct remedies as crucial, and now they have been suspended for the duration of the appeal," he said. "This means a crucial element of the government's remedial plan is on the sidelines for at least until a year from now. They will tell the court it is essential now, and in the public interest, the appeal is heard immediately."

Jackson certified the direct appeal under the 1974 Expediting Act, which authorizes such action for cases of national importance.

Microsoft pushed to have the case heard in the U.S. Court of Appeals for the District of Columbia Circuit, which had ruled for the software maker in a past related case. The government steadfastly resisted that move.