Author Tries to Wiggle Way into Microsoft Case

By Peter Galli  |  Posted 2002-02-05 Print this article Print

The author of an economic method for preventing collusion has filed motions asking the District Court to allow his firm to be a "friend of the Court." Microsoft and the DOJ, however, are against it.

In an unusual twist to the Department of Justices antitrust case against Microsoft Corp., the author and inventor of an economic method for preventing collusion has used his company, Relpromax Antitrust Inc., to file motions asking the Washington D.C., District Court Judge Coleen Kollar-Kotelly to allow the firm to participate as a "friend of the Court" and for an extension of time in the Tunney Act proceedings. Both Microsoft and the DOJ this week opposed the motions and asked the Judge to deny them.
At issue for the DOJ is that Carl Lundgren, president of Relpromax, had failed to inform the court that he had developed a new economic method for preventing collusion, which is the subject of a pending patent application. The method has also been published in a refereed academic journal.
In its filing this week the DOJ said that in both the Motion for Limited Participation as an Amicus Curiae (friend of the Court) and the Extension of Time filed on January 24 and January, 28, Relpromax simply described itself as an "interested person" without detailing its interest in the matter. "Nowhere is the interest of the proposed amicus specified, as is conventional in amicus practice, nor are we aware of any case in which an amicus has been permitted to remain anonymous," the DOJ said in its five-page filing. But a letter received on January 28, 2002 from Relpromax concerning the Revised Proposed Final Judgment pending in the case shed some light on the matter. Although that letter did not further identify Relpromax or its interest, it was signed by Carl Lundgren as President of Relpromax. But as the DOJ would prove, this was not Lundgrens first contact with the Court in the landmark antitrust case. On May 23, 2000, a company known as "Valmarpro Antitrust" filed a brief to intervene in the original trial. But Judge Thomas Penfield Jackson denied the motion the same day. That docket sheet listed Carl Lundgren in the column normally reserved for counsel. Lundgren then filed an amicus brief in the appeal of this matter, in which he said he was the author and inventor of a new economic method for preventing collusion. "If Microsoft is split into two or more parts, this economic invention has possible application to Microsoft," the DOJ said in its filing. "Mr Lundgren had previously explained that in the event that extensive remedy hearings would be held in this case and in the event that Carl Lundgren or his businesses were permitted to participate, Carl Lundgren would be prepared to argue that use of his invention would provide a better remedy in this case than would any other remedy. If Carl Lundgren should prevail in a fair contest to select the best remedy, he could earn a fortune." Denied The Court had denied that motion last September, saying that the proposed participation would be unhelpful and would likely impose an unacceptable burden on it. "In light of this prior history, and in light of Relpromaxs failure to disclose that history (and its, or Mr. Lundgrens, potential intellectual property interest in the outcome of this case), we suggest that Relpromax is an unpromising candidate for the role of friend of the court, and we recommend that the Court deny the Relpromax motions summarily," the DOJ said in its filing. For its part, Microsoft said Relpromaxs motion to appear as a friend of the court was "a would-be Trojan horse in which Relpromax attempts to disguise what is in substance an attempt to intervene in this case without complying with the Federal Rules of Civil Procedure … As is typical in such cases, Relpromax already is seeking to complicate and delay this proceeding by requesting an extension of time to seek discovery," it said in a seven-page filing of its own. The Microsoft response went on to say that Relpromax had no legally cognizable interest in this litigation and failed to meet the substantive requirements to participate as an amicus. "Allowing Relpromax to participate would also open the floodgates to every other person or organization who thinks he, she or it can do a better job in securing compliance with the antitrust laws than the United States," it said. Allowing such intervention would further unnecessarily burden the Court and parties and result in "exactly the kind of unmanageable litigation that the Tunney Act was designed to prevent," Microsoft said. Furthermore, Relpromax had 60 days to submit comments in this proceeding and may have done so. There was no basis for a special extension of time for Relpromax, and any extension would be contrary to legal precedent, the policy of the Tunney Act, and the policy stated by the D.C. District Court in its Scheduling Order dated Sept. 28, 2001, which said that "Motions for extensions of time are strongly discouraged….[and] will be granted only in truly exceptional or compelling circumstances." No such exceptional or compelling circumstances existed here, Microsoft said and, as such, asked the Court to deny Relpromaxs motion. But Relpromax is not alone in asking for an extension of the Tunney Act proceedings. The American Antitrust Institute Inc. in Washington has also asked the U.S. District Court for the District of Columbia for a preliminary injunction to prevent the Department of Justice from closing the public comment period in the Microsoft Corp. antitrust settlement case. The 60-day comment period originally was scheduled to close Jan. 28, but AAI charges that Microsoft and the DOJ did not fully comply with disclosure requirements under the Tunney Act. On Jan. 24, AAI filed a complaint claiming that the parties had not complied with the disclosure requirements. Injunctive relief was necessary to preserve the status quo until the court could determine whether the parties did comply, the institute said.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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