Appeals Court Rules Microsoft Can Contest Facts In Antitrust Case

The ruling makes it moderately more difficult for Sun's antitrust lawsuit, although the appeals court did not dismiss the case or any key findings.

In a 14-page published opinion, a three-judge panel of the 4th U.S. Circuit Court of Appeals reversed a 2002 pretrial motion by U.S. District Judge Frederick W. Motz in Baltimore.

That ruling prevented the software giant from rearguing 356 of 412 facts. The appeals court in Virginia said Motz erred by broadly accepting the facts argued in the federal government's case against Microsoft.

The broad standards used in the case limited the software giant's ability to defend itself, the 4th Circuit judges said, telling Motz to re-examine the issue under a different standard.

Lee Patch, vice president for legal affairs at Santa Clara, Calif.-based Sun, said the company was disappointed by the ruling. But she said it would not affect the case's pace. The suit is scheduled for trial in January 2006.

In April 2002, Sun, Netscape Communications, Bust.com and a group of customers sued Microsoft, claiming the Redmond, Wash.-based company had illegally monopolized the software industry.

The lawsuit came four years after the federal government sued Microsoft, proving that the company violated the antitrust Sherman Act by monopolizing the market for PC operating systems.

On Thursday, the appeals court said Motz misapplied the doctrine that allows antitrust suits to accept findings from other cases.

"While the district court correctly stated this criterion, it interpreted and applied it to foreclose relitigation of any fact that was 'supportive of' the prior judgment," the 4th Circuit panel said. "We believe that this interpretation changes the criterion, rendering it too broad to assure fairness in the application of the doctrine."

The 4th Circuit judges ordered the case sent back to the lower court, with instructions to narrow the findings that were in the antitrust case.

Microsoft spokesman Jim Desler said the company was pleased with the decision. It came the same day Microsoft agreed to change its Windows software to resolve complaints with the Justice Department that it unfairly influenced how customers buy their music online.

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