The ruling, issued from the U.S. Court of Appeals for the Ninth Circuit, vacates a preliminary injunction that had required Microsoft to make its Java offerings meet specifications required by Sun. A three-judge appeals panel sent the decision back to the U.S. District Court judge for further consideration.
Sun has billed Java as a revolutionary language that will run on many different computer operating systems with little or no modification. Today's decision comes in a suit Sun brought in October of 1997 accusing Microsoft of intentionally trying to thwart Java's "write once, run anywhere" promise by shipping incompatible versions with its widely distributed Internet Explorer. The Justice Department and 19 states have echoed similar charges in Microsoft's antitrust trial.
In a preliminary injunction issued last November, U.S. District Judge Ronald Whyte of San Jose, California, held that Sun was likely to prove that Microsoft violated a license the software giant signed to use the technology. Whyte found that the omission of a technology known as JNI, or Java native interface, kept Microsoft's Java from passing a compatibility test required in its licensing agreement. The order required Microsoft to immediately add the technology and make other changes while the case continued.
Today's decision agreed that there was "significant evidence" to support a finding that Microsoft violated its Java license, but it said that the determination did not automatically justify the issuance of a preliminary injunction. At issue is whether Microsoft's violation amounts to an infringement of Sun's copyrights or is merely a violation of its contract.
Preliminary injunctions are easier to obtain under copyright law because infringement automatically leads to a presumption that the holder will be irreparably harmed. Violations of contract, on the other hand, are not entitled to the same standard.
On appeal, Microsoft put forth their contention that Whyte's decision ignored the fact that the case was essentially a contract dispute case, an argument that appeared to sway the appeals panel.
"The district court held that this case is a copyright infringement case and not a contract case and therefore presumed irreparable harm," Circuit Judge Mary Schroeder wrote for the unanimous panel. "It is not clear, however, how the district court reached its decision that this case should be analyzed under the copyright infringement standard."
The limited nature of the win means that Microsoft attorneys are not likely to pop any champagne corks tonight. Still, the decision could lessen injunctive relief available to Sun and could also erode some of the Java-related charges pending in the government's antitrust suit, said Rich Gray, a Menlo Park, California, attorney practicing intellectual property law.
"It's at least a path down the road toward the court of appeals ultimately accepting Microsoft's argument that this is just a contract dispute," said Gray. "Acceptance of that argument would make this case far less dangerous in the antitrust wars that Microsoft is fighting with the government."
A finding that Microsoft merely failed to live up to its Java license "is a lot harder to paint as an antitrust violation than the infringement of a competitor's intellectual property," Gray added.
Meanwhile, Microsoft spokesman Adam Sohn said the appeals court decision "reaffirms Microsoft's belief that this has been a contract dispute. We continue to believe that Microsoft has lived up to its contract with Sun and that all the actions we've taken under that contract have been positive to consumers, procompetitive, and have resulted in more choices and better technology to consumers."
How much weight will decision have?
But Sun attorney Lloyd "Rusty" Day downplayed the importance of the ruling, saying its "real effect...is that Judge Whyte has to write another opinion." He added that Whyte has since issued a tentative ruling setting out his reasons for viewing the dispute as a copyright rather than contract case.
The court of appeal said the issue was one "of first impression," meaning it believed a court had never before considered the question. Microsoft argues that requirements that its Java products pass compatibility tests are mere "covenants" that place no limit on its license to use the technology.
Sun, on the other hand, argues the compatibility requirements condition Microsoft's right to use the technology at all. The outcome of the dispute will determine whether the case fundamentally involves questions of copyright or contract.
The court also vacated a separate preliminary injunction that was based on a finding that Microsoft competed unfairly against Sun by forcing business partners to use a Microsoft version of what is known as a Java virtual machine. The appeals court agreed that Sun was likely to prove that the requirement violated California's unfair competition statute, it but said that a finding that the conduct was likely to continue was necessary before Whyte could issue a preliminary injunction forbidding the behavior.
Microsoft has since dropped the requirement.