Originally created 12/18/97

Microsoft says high-tech companies harmed by judge's order



WASHINGTON - Microsoft Corp. said many technology companies stand to suffer unless a federal appeals court quickly overturns a lower court order that temporarily separates Microsoft's Internet browser from its Windows software.

"It is no exaggeration to say that the public generally has a significant interest in the prompt disposition of this appeal," Microsoft said in papers filed Tuesday with the U.S. Circuit Court of Appeals for the District of Columbia. The documents urge the appeals court to quickly overturn last week's ruling by U.S. District Judge Thomas Penfield Jackson.

Microsoft may be facing legal attack on another front. Some of the nation's largest states held a closed three-day meeting in Chicago last week to consider their own antitrust suit against Microsoft's marketing practices, The New York Times reported today.

The newspaper said attorneys general from states including Florida, Illinois, Minnesota and New York attended the meeting and have subpoenaed information from Microsoft competitors about business practices in the industry. The multistate effort is reminiscent of a similar attack on the tobacco industry for reimbursement for spending on smoking-related illnesses.

In its federal court filing, Microsoft charged Jackson's decision spawned market speculation that the next generation of Windows - Windows 98 - won't be shipped on schedule in the spring. Microsoft said the stock market had been rattled in late June 1995 on a rumor that Windows 95 wouldn't go out on time.

"Indeed, significant segments of the United States economy may be affected by doubt surrounding the release of Windows 98," the court papers said.

Jackson issued a preliminary injunction ordering Microsoft to quit requiring computer-makers to distribute its Internet-browsing program when they install the popular Windows operating system software on their PCs. Microsoft appealed the order Monday.

Jackson's ruling stemmed from a Justice Department lawsuit contending Microsoft violated a 1995 court order aimed at preventing anti-competitive practices. The government sought a $1 million-a-day fine if the company refused to obey a contempt finding.

Despite the injunction, Jackson made no such decision. He appointed a technology law expert to review the highly technical case and present a report by May 31.

Microsoft contended that Jackson's order went far beyond what the Justice Department sought and "radically altered the status quo" by requiring Microsoft to offer to computer-makers a stripped-down version of Windows 95 without the Internet Explorer browser software.

Browsers, such as Explorer and Netscape Communication Corp.'s Navigator, enable computer users to find and retrieve information on the Internet.

The Redmond, Wash.-based software company strongly disputed Jackson's assertion that Microsoft won't face "a significant hardship" by separately selling Internet Explorer and Windows 95 since versions of these products can be bought separately.

Microsoft has long contended that Internet Explorer was an integral feature of Windows 95. In the new court filing, it said Jackson's decision was "an unprecedented judicial intrusion into basic product design."

It added that the court's injunction would create considerable uncertainty about the design and release schedule for Windows 98, the successor to the Windows 95 operating system.

Microsoft said a large number of computer software and hardware companies are "far along in the process" of designing new versions of their products to work with Windows 98. An operating system controls a computer's screen, printer, file storage and other basic functions.