Neither Microsoft Nor the Government Gets Its Way in Court

A federal appellate court Thursday refused Microsoft's(MSFT) request to reconsider one part of an antitrust ruling against the computer giant and also turned down the government's motion to speed the case to its lower court rehearing.

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In a unanimous three-sentence decision, the U.S. Court of Appeals for the District of Columbia refused to re-examine the part of the ruling that found Microsoft had "commingled" software code of Internet Explorer and the Windows operating system to protect its monopoly.

The ruling sets up the option of either a Supreme Court appeal by Microsoft or the rehearing of proposed remedies in the case in U.S. District Court later this month. In June, the appeals court unanimously upheld a lower court's ruling that Microsoft had illegally maintained a monopoly with its Windows operating system. The case was brought in 1998 by the U.S. Justice Department and attorneys general of 20 states. Two states have since dropped out of the case.

Microsoft has said it is interested in settling the case quickly but has also expressed interest in appealing to the U.S. Supreme Court if the rehearing request went against it. Some experts believe the software giant feels it would do better delaying a rehearing of the case until after the scheduled release of its new operating system, Windows XP, on Oct. 25.

Microsoft spokesman Jim Desler did not rule out settlement talks with the government or an appeal to the Supreme Court in light of today's decision.

"We asked the court to look at one piece of its earlier ruling, and we appreciate the court's review of the matter," Desler said. "We remain committed to moving forward promptly in the legal process, and we continue to remain open to resolving any remaining issues in the case as quickly as possible. We continue to review our options with regard to a Supreme Court review."

In an earlier filing, Microsoft said that if its motion for a rehearing was denied and it decided to seek a Supreme Court review, it would do so within seven days.

A spokesman for Iowa Attorney General Tom Miller, who has helped lead the charge among the states against the company, said today's decision denying Microsoft a rehearing was a victory for the government.

"We are pleased with the court's decision denying the petition for rehearing," said spokesman Bob Brammer. "It is important that the court deny Microsoft's petition for rehearing so that the matter is headed back to the district court within just a few days. We have completed the court of appeals stage successfully."

The case is now on track to return to the district court by mid-August.

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