Microsoft opposes accelerated appeal

The Justice Department and 18 states last week asked the U.S. Court of Appeals for the District of Columbia Circuit to forgo the normal waiting period before returning the case to a lower court. Otherwise, the government would have to wait 52 days from the appellate court's June 28 decision.

The move was seen as possibly clearing the way for the government to seek injunctions that could delay the scheduled Oct. 25 release of Windows XP, the company's new operating system.

In a related matter Friday, the Justice Department retained a new lead attorney in the Microsoft case. Philip Beck, a founding partner at Bartlit Beck Herman Palenchar & Scott of Chicago, will be assisted by DOJ staff attorneys M.J. Moltenbrey and Phillip R. Malone. The Justice Department will retain Beck on July 23.

"Phil Beck is an extraordinarily talented and highly regarded trial attorney," Charles James, assistant attorney general for antitrust, said in a statement. "His extensive litigation experience and ability to deal with complex issues make him a perfect choice to lead the litigation team as the case moves back to the District Court for further proceedings as ordered by the Court of Appeals."

David Boies prosecuted the case for the Justice Department but left after the election of President Bush. Beck's role will be different as he navigates the case through the appeals process.

Boies' role in the Florida vote recount on behalf of former Vice President Al Gore effectively ensured "he would not return to the case under the Bush administration," said Bob Lande, an antitrust professor with the University of Baltimore School of Law.

Interestingly, Beck and fellow attorney Fred Bartlit championed the GOP case during the Florida recount.

Beck joins the government team as the DOJ and states prepare for the next phase of the trial.

"If the case isn't settled, the government is going to have to go to a trial-type hearing on remedies, and they need to have an experienced trial lawyer to do that," said Glenn Manishin, an antitrust attorney with Patton Boggs of McLean, Va. "Traditionally, the Justice Department has gone outside for that."

Manishin said it is important not to read too much into the timing of the announcement. "I don't think it reflects anything about how stiff or not stiff the remedies they are going to seek are," he said.

On Wednesday, Microsoft asked the Court of Appeals for a rehearing related to one of the eight antitrust violations the seven judges upheld. The court on Thursday gave the government until Aug. 3 to respond to Microsoft's rehearing request.

In Friday's filing, Microsoft asked the Court of Appeals to "deny plaintiffs? motion for immediate issuance of the mandate"--the order returning the case to the lower court. The Redmond, Wash.-based company asked that the court stay for seven days action in that case after rendering a decision on the petition for rehearing.

Microsoft said it is still considering whether to seek a Supreme Court review of the case. The government in its legal brief last week said that, at this juncture, it would not seek Supreme Court review of the case.

Microsoft spokesman Vivek Varma said settlement is Microsoft's top priority.

"As we move forward with the logical next steps in the legal process, we remain committed to working with the government to resolve the remaining issues in this case through settlement," Varma said. "This filing asks for a limited time period for Microsoft to address legal issues related to the Court of Appeals decision."

Rich Gray, a Silicon Valley lawyer watching the trial, described Microsoft's petition as "smart lawyering."

But Manishin disagreed. "It's just pure posturing," he said.

Still, Microsoft's legal brief indicates the software giant is weighing its next move carefully and not ruling out an attempt at getting the Supreme Court to review the case.

"But I've got to tell you that's pretty unlikely with a unanimous decision from the Court of Appeals," Lande said.

In the meantime, the appellate panel must decide whether to rehear part of the case. Although the court upheld eight separate violations of the Sherman Antitrust Act, Microsoft is asking for rehearing on just one: commingling. The Court of Appeals found that Microsoft's commingling of Internet Explorer browser code with that of Windows 95 and 98 constituted an anti-competitive act to maintain its monopoly in Intel-based operating systems.

"One is their best shot, but it's a long one," said Emmett Stanton, an antitrust lawyer with Fenwick & West in Palo Alto, Calif.

"In that part of the ruling, the Court of Appeals said there are times when it has the right to second-guess technology design decisions, and this is one of those times," Gray said.

No matter what happens next, the drafting of Beck to lead the case shows the government means business.

"If Microsoft thought the government was going to be a pushover because Boies wasn't coming back, they were wrong," Stanton said. "The government replaced the winning Florida lawyers for the losing Florida lawyers."