A Race Against Time

Microsoft's Supreme Court petition seen as delay tactic

Microsoft Corp.s attorneys are picking up the pace of their legal maneuvering as the Oct. 25 ship date for Windows XP draws closer.

Legal experts say the Redmond, Wash., companys latest gambit—its petitioning of the U.S. Supreme Court last week to throw out the current judgment in the governments antitrust case—is a delaying game to ensure that XP ships on schedule.

But not taking any chances on that front, Microsoft is also working to enable its PC OEM partners to ship XP even earlier. For instance, IBM and Compaq Computer Corp. have been given permission by Microsoft to ship XP about a month early, sources said. Under that scenario, XP could be available well before the Supreme Court decides whether to accept Microsofts petition. Hewlett-Packard Co. and Dell Computer Corp. officials say they will not ship XP until Oct. 25.

Microsoft spokesman Jim Cullinan said the company is on track to get the gold code to its OEM partners in time for them to make the Oct. 25 launch date. "We have the same agreement in this regard with all OEMs. What they do after the code is released is up to them," Cullinan said.

Many antitrust lawyers and experts feel the chances are slim that the Supreme Court will accept the petition, but the move to petition in the first place may accomplish the job of delaying the case beyond the ship date. It also complicates any possible efforts by Microsoft opponents to try to enjoin the release of XP.

"This is typical Microsoft behavior: delay, delay, delay," said Donald Faulk, an antitrust expert at law firm Mayer Brown & Platt, in Palo Alto, Calif. Faulk added that the Supreme Court probably will not dispose of the petition until early October.

Microsoft last week also filed a motion requesting that the District of Columbia Court of Appeals hold its order that another District Court judge hear the outstanding issues in the case.

"What Microsoft is really afraid of is that a new District Court judge is going to look at the judgment, look at what theyve done since then and allow XP to be enjoined. So, if the appeals court denies the request for a stay, Microsoft will probably appeal to the Supreme Court for this," Faulk said.

If an injunction is filed to delay the launch of XP, Microsoft could counter that it has a pending Supreme Court petition and that any injunction should not be entered until after that is resolved, he added.

Stewart Gerson, a partner at the law firm Epstein, Becker and Green, in the District of Columbia, agreed that the Supreme Court petition could favor Microsoft as it moves to release XP. But all of this becomes moot if Microsoft, the Department of Justice and the 18 attorneys general involved in the case reach a negotiated settlement.

But Peter Vogel, a lawyer at Gardere & Wynne LLP, in Dallas, who specializes in technology disputes, said Microsoft is simply trying to ensure that if it were to go back to trial court, it would do so with no strikes against it. "They are trying to avoid going before the District Court with the preconceived notion that they already have this illegal tie-in," Vogel said.

Regardless of the outcome, legal experts caution that Microsoft is playing a risky legal game by appealing its antitrust case to the Supreme Court for review and could well find itself in a weaker position both in settlement talks and when a new District Court judge considers the matter.

Gerson said that if Microsoft wins a Supreme Court review, the company gets a delay; and, if Microsoft wins, the government will have to retry the case. But, at that point, the government could bring in additional evidence of alleged wrongdoing from the past four years.

The gamble could pay off for Microsoft because the government could be reluctant to start over and retry the case, backing down and settling more easily and with less rigorous conditions.

"Microsoft probably figures that if they get another three years in delay it wont matter," Faulk said.