Microsoft has asked Richard Urowsky, the Sullivan & Cromwell lawyer, to begin building a possible appeal, the paper reported.
At the same time, rumors of Microsoft seeking a possible settlement in the case sent its stock up yesterday.
Microsoft spokesman Greg Shaw wouldn't directly comment on whether there were talks with the DOJ and 19 states that have sued the company. "We are always willing to listen to the government, but there are fundamental principles at stake for us," he said, including Microsoft's refusal to negotiate away its right to integrate Web browsing technology into Windows 98, a key element of the case.
At the same time, people familiar with the case said there have been no discussions or any proposals from the software giant to settle the lawsuit, which government lawyers contend must be the first step taken. The trial of Microsoft, which began in October, is in a six-week recess and is due to resume April 12.
Bloomberg contributed to this report.