MS: DOJ waffled, judge erred

Microsoft (MSFT) came out swinging in its latest round with the Justice Department, charging in court documents filed today that both the agency and the judge have botched key elements of the case.

In one document filed today appealing a preliminary injunction issued 11 days ago, Microsoft criticized U.S. District Court Judge Thomas Penfield Jackson for improperly engaging in "an extrajudicial investigation" concerning the removal of Internet browser software from Windows 95. It also said it is asking Jackson to revisit his decision to appoint a software and legal expert to sort through the numerous technical questions clouding the matter.

A second document, filed in U.S. District Court in Washington, D.C., took strong exception to Justice Department accusations that Microsoft is making a "mockery" of the court by flouting the court's order. Company attorneys argue that the government's motion demonstrates a major flip-flop in the DOJ's initial stance.

"What threatens to convert this proceeding into a farce is the DOJ's stunning changes of position," the document states. It goes on to explain that when it first took action against Microsoft in late October, the government alleged that Microsoft's Internet Explorer browser and Windows 95 operating system were two separate products and sought and obtained an order requiring the company to separate them completely.

But two days after Microsoft announced a plan to do just that, the company contends, the Justice Department was back in court, arguing the proposal made an end run around Jackson's preliminary injunction. Today's filing contends that the motion to find Microsoft in contempt of court demonstrates a fundamental shift in the agency's arguments.

"Confirming the old adage that you should be careful what you wish for, the DOJ in the span of two weeks has changed its mind completely," the document charges. "Abandoning the argument that Internet Explorer is a 'separate product,' the DOJ now wants the Court to order Microsoft to put the vast majority of the Internet Explorer back into the DOJ-designed version of Windows 95, leaving out only the 'visible means' of gaining access to this feature."

A Justice Department spokesman said the agency stands behind statements it has made earlier in the case but declined to elaborate. He said the agency would offer a more thorough rebuttal when it responds to Microsoft's brief Monday.

After Jackson ordered Microsoft to stop selling operating systems that require browsing software to be licensed or preinstalled, the software giant announced it would comply by allowing customers to choose one of three options: a two-year-old version of Windows 95 that never had browsing capabilities to begin with; the newest version of the operating system that is fully integrated with IE; or a recent version of Windows that Microsoft warned would not work because IE files that are critical to its operation had been removed.

Justice responded by accusing Microsoft of violating Jackson's order by intentionally making browser-free versions of Windows inoperable. Customers, government attorneys reasoned, would not be interested in outdated or dysfunctional versions of Windows 95, making the version with IE fully intact the only real alternative.

Microsoft attorneys see it differently, arguing today that once the Justice Department became convinced that IE files are crucial to the basic functioning of Windows 95, it sought to refashion its request with the court.

"As recently as December 5, the DOJ was insisting that Microsoft give computer manufacturers the option of installing Windows 95 with all of Internet Explorer 3.0 excluded," the brief argues. "Now, the DOJ is singing a different tune, seeking to hold Microsoft in contempt for failing to give computer manufacturers the option of installing Windows 95 with nearly all of Internet Explorer included."

The two sides have presented conflicting evidence concerning just how easily browsing code can be stripped out of Windows without harming the underlying features of the operating system. The Justice Department argues that removing the IE icon and other "visible" traces of the browser is simple and causes no disruption of other features.

Microsoft's latest volley is part of a heated legal dispute in which the Justice Department alleges the software giant violated terms of a 1995 antitrust settlement that forbids the licensing of one product on the condition that another package is also licensed. Microsoft denies the allegation, saying the consent decree expressly permits it to integrate products into its operating system.

Microsoft says that complying with Jackson's preliminary injunction is not as simple as using an "Add/Remove" utility to disable IE. Because the procedure removes only about three percent of the browser files, the company adds, it wouldn't comply with Jackson's order. Moreover, Microsoft maintains that there is no way to remove browser code from Windows without "degrading" it "because the exact same code provides both types of functionality."

Eric Brown, an analyst at Forrester Research, said Microsoft's contentions are true. But he added that asking whether the IE files are an "integral" part of Windows may nonetheless be a smoke screen.

"The better question is, do you need to rip out the code or do you just hide it?" said Brown, who suggested that if the Justice Department's goal simply is to prevent Microsoft from leveraging its browsers with Windows 95's staggering market share, then removing the icon and other "front-end" access points to the browser may suffice.

Microsoft remains steadfastly opposed to such a plan, saying it has the right to improve Windows by integrating new products into it. "We're not prepared to [agree] to anything that is going to balkanize the operating system," Brad Smith, Microsoft's associate general counsel told CNET's NEWS.COM. "We don't think it makes sense to start hiding features from consumers. It's not good for us and it's not good for the industry."

Smith added that integrating IE into Windows in no way prevents Netscape Communications from also preinstalling its competing Navigator on desktops.

In any event, Jackson's preliminary order clearly calls for Microsoft to do more than remove the icon, and Microsoft attorneys argue that the only way to comply with the order is to offer a version that is completely free of IE files.

In the other court brief, Microsoft told an appellate court that an inquiry Jackson made last week into how easily IE can be disabled from Windows 95 was in violation of established courtroom procedure. It was only one of a series of reasons Microsoft cited in arguing that Jackson's preliminary injunction should be overturned.

As previously reported, Jackson said in open court last week that a court-appointed computer consultant was able to remove IE from Windows in under 90 seconds.

"The district court's experiment was conducted without prior notice to counsel and without participation by the parties," stated the brief, filed with the District of Columbia Circuit U.S. Court of Appeals. "This case shows why judges should not engage in such extrajudicial fact-finding."

This argument and others made today demonstrate the no-holds-barred approach with which Microsoft is fighting the preliminary injunction that leave in question the company's plans for Windows 98, due out the second quarter of 1998. But at least one software litigator said Microsoft may be grabbing at straws in arguing Jackson acted improperly in directing a court employee to disable IE.

"Ultimately, Microsoft ought to understand that the court is being called on to make credibility determinations," said Claude Stern, a lawyer at Fenwick & West in Palo Alto, California. He noted that when a particular product is mentioned in court documents, it automatically becomes an exhibit in the case that the judge is free to review.

"The argument that the court was outside its authority is the argument of a desperate person," Stern added.

Microsoft also said it is asking Jackson to review his appointment of a "special master" to collect and sift through technical evidence. When he issued his preliminary injunction, Jackson gave computer law expert Lawrence Lessig broad authority to conduct an intensive fact-finding phase of the trial. Lessig is to submit a final report by May 31.

Lawyers for Microsoft argue that without the consent of both parties in the case, judges may appoint special masters in rare circumstances and then only to perform a limited number of duties.

Smith explained that the company isn't necessarily objecting to the choice of Lessig, but rather to the responsibilities the Harvard Law School professor has been assigned. "We do think that the delegation of responsibility to this master was perhaps more broad than might be considered appropriate," he said, adding that the company also wanted to learn more about Lessig's background before agreeing he is the most appropriate person to conduct discovery in the case.

The document is part of Microsoft's appeal asking the higher court to strike down Jackson's preliminary injunction. Yesterday, Justice Department attorneys said the company's request that the court hear the appeal on a "fast-track" basis was without merit. Microsoft's response today countered that it had good reason to request an expedited appeal.

"We don't think the court of appeals should slow it down," said Smith. "A speedy resolution is in everyone's interest."