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Court Overturns Microsoft Ruling

An appeals panel says a judge erred in issuing an injunction ordering the giant to carry Sun's Java software.

June 27, 2003|From Reuters

A federal appeals court Thursday overturned a ruling that would have forced Microsoft Corp. to incorporate Sun Microsystems Inc.'s Java programming language in the Windows operating system.

The three-judge panel in Richmond, Va., said a lower court judge had erred by issuing a preliminary injunction ordering Microsoft to carry its rival's software, a penalty the lower court judge said was necessary to make up for Microsoft's misdeeds.

At the same time, the appeals judges upheld a lower court ruling that Microsoft had broken a 2001 legal settlement between the companies and infringed Sun's copyrights. They sent the case back to the lower court judge, U.S. District Judge J. Frederick Motz, for further proceedings.

A date has not been set for the full trial, but Sun executives said Thursday that they expected it to start in 2005.

Motz was assigned cases arising from the landmark government antitrust suit against Microsoft filed in 1998. He concluded in a Dec. 23 ruling that Sun had a good chance of winning its private case against Microsoft.

Santa Clara, Calif.-based Sun accuses Microsoft of trying to sabotage Java, which can run on a variety of operating systems, because it threatens the dominance of the Windows system.

Sun, which is seeking $1 billion in damages, charges that Microsoft's acts against Java include polluting a version of the software and dropping it from Windows XP.

Without the injunction, Motz said, the contest between Java and Microsoft's .Net Web service software could tip in favor of .Net because of Microsoft's antitrust law violations.

But the appeals court judges said the lower court ruling was legally flawed. They said there was not enough evidence to justify a preliminary injunction by proving that Sun would suffer "immediate irreparable harm" without it.

Microsoft responded with a statement calling the court's ruling "a positive step" in the company's efforts to resolve its legal troubles.

Microsoft said it would abide by the court's copyright ruling and already has stopped the practices that Sun has cited as copyright violations.

Sun released a statement saying the company was "disappointed with the delay that results from the court's determination."

Nevertheless, Sun expressed confidence about its chances at trial. Sun legal affairs Vice President Lee Patch said the company might ask Motz to clarify some of his legal reasoning and reissue the must-carry order.

In the meantime, Patch said, the copyright ruling already has prompted computer manufacturers to gravitate toward Sun's Java software.

"We look forward to a speedy trial and our opportunity to more fully address these and significant additional violations when we present our complete antitrust case against Microsoft," Patch said in a statement.

Shares of Redmond, Wash.-based Microsoft rose 49 cents to $25.75. Sun shares fell 10 cents to $4.79. Both trade on Nasdaq.

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