Microsoft trial date: Sept. 8

A federal judge today combined two lawsuits that the Justice Department and 20 state attorneys general filed against Microsoft and set a trial date of September 8.

The trial date--which will address a government request for a preliminary injunction concerning Windows 98, as well as broader issues in the case--is a blow to both sides. Microsoft had sought a preliminary injunction hearing date no earlier than January, 1999, while regulators wanted to meet in court on the matter by mid-June. U.S. District Judge Thomas Penfield Jackson set the date at a scheduling conference in Washington today.

Jackson's decision to hold one court hearing that deals with all the issues in the suit suggests he believes there is an urgency to resolve the case. Although it is not unusual for antitrust cases to drag on for years, typical product cycles in the computer industry are often measured in months.

Despite the compromise, both sides claimed victory.

"The judge clearly recognized the need and the right of Microsoft under due process to have the necessary time," company spokesman Adam Sohn said. "While we had asked for more time in our filings, this is a clear sign that the judge recognized that we need some time to present all the facts."

New York Attorney General Dennis Vacco called Jackson's decision "a major victory" for regulators. "I am very pleased with Jackson's decision to move forward on this matter and to summarily reject Microsoft's delaying tactics," Vacco said in a statement. A Justice Department spokeswoman said the agency was "pleased that the court recognized the need for a speedy trial."

Legal observers said the date may in fact do more harm to regulators than Microsoft. Because the trial date will combine the very narrow issue of a preliminary injunction with much broader issues raised by the case, the government may be forced to show its hand sooner than it would have liked.

"I'm sure [regulators] were planning on first taking a hit at [the preliminary injunction] and then looking at other issues like Windows NT and Java," said Rich Gray, an antitrust attorney with Bergeson, Eliopoulos, Grady & Gray. Under such a scenario, larger issues in the case might not have been entertained until late in the year, giving regulators more time to build their case. "They're clearly not going to be able to do that now," Gray said.

John Steele, a high-tech litigator at Fenwick & West, agreed that the date worked to the slight advantage of Microsoft. "For Microsoft, September is a date that certainly gives them enough time" to respond and allows the company to "get its product on the market for a few months" beforehand, Steele said. "From the government's point of view, it should be mildly disappointed."

He explained that the three months Microsoft will have to entrench Windows 98 into the market will make it harder for the government to obtain a far-reaching preliminary injunction.

As previously reported, the Justice Department on Monday filed a lawsuit accusing Microsoft of engaging in a broad course of anticompetitive conduct designed to maintain its monopoly in the operating system market and to extend that monopoly into the market for Internet software. Attorneys general from 20 states and the District of Columbia filed a lawsuit with almost identical allegations the same day.

Both lawsuits seek a preliminary injunction that would force Microsoft to remove Internet browsing features from Windows 98, or in the alternative, to include rival Netscape Communications' Navigator browser with every copy of the operating system sold. Microsoft has launched a vigorous defense, claiming that the suit has no merit and that a preliminary injunction would harm the computer industry.

In motions filed yesterday, Microsoft asked Jackson to consolidate the two lawsuits because they are "based on the same factual allegations and legal theories." In a move that surprised no one, Jackson granted the request today.

In its court filing yesterday, Microsoft also asked for an "enlargement of time" to respond to the motions for a preliminary injunction, proposing a six-month period for it to gather evidence and another 1-1/2 months for both sides to exchange legal briefs and ultimately debate the matter in court. By contrast, the Justice Department and states filed response briefs today that requested a hearing no later than June 18.

In addition to setting the date for the trial, Jackson also scheduled dates each side must submit court briefs. Microsoft must file its answer to the complaints on July 28 and its opposition to the motions for a preliminary injunction by August 10. Regulators must reply to Microsoft's opposition papers by August 24.