Update: Judge Sends Microsoft Appeal to Supreme Court

In a widely anticipated move, the federal judge who ordered the breakup of Microsoft(MSFT) sent the company's appeal of his decision to the U.S. Supreme Court Tuesday for its consideration.

The judge also delayed imposing restrictions he ordered on Microsoft's business practices pending the appeal. He had previously stayed the breakup but not the restrictions.

"This court hereby certifies that immediate consideration by the Supreme Court of the appeal taken herein is of general public importance in the administration of justice," U.S. District Court Judge Thomas Penfield Jackson said in a brief filed late Tuesday.

Jackson disclosed his ruling shortly before the stock market closed. Microsoft's shares closed up 1 1/4, or 1.7%, at 74 15/16.

The decision came just hours after the Justice Department reiterated its belief Tuesday that Jackson should send the software company's appeal directly to the Supreme Court. Prosecutors have also argued against staying business restrictions on Microsoft.

"We are very pleased that the district court rejected the government's argument and decided to stay the entire judgement pending appeal," Vivek Varma, a Microsoft spokesman, said. "The district court's decision to certify the case for potential direct appeal by the Supreme Court was not unexpected. The Supreme Court has complete discretion on whether to accept jurisdiction or kick it back to the court of appeals."

Microsoft prefers that the appeal first be heard in the U.S. Court of Appeals for the District of Columbia Circuit. The appellate court, which had recently accepted the case, said it would step aside if the Supreme Court decided to accept the case. Microsoft had wanted its appeal to be heard by the appellate court because the court had previously ruled in its favor in a similar case and has indicated it will grant a sympathetic hearing in this case.

But Jackson has clearly stated his intention to certify the appeal directly to the Supreme Court under an obscure law known as the Expediting Act. The act has been used only twice since its inception in 1974, and both cases involved the AT&T antitrust case.

Microsoft has recently presented arguments against certifying the case to the Supreme Court, saying that the consolidated federal-state case does not meet the Expediting Act's narrow guidelines for pushing appeals to the Supreme Court and that the expedition might actually drag out the case.

Despite Jackson's motion to thrust the case to directly to the highest court, it is unclear at this point whether the Supreme Court will actually hear the case. If the court rejects the case, it could fall back to the appellate court, where Microsoft could get the sympathetic ear it has been counting on. A three-judge panel of the Court of Appeals, in a related case, issued an important ruling in Microsoft's favor two years ago.

A spokesman for the Supreme Court said the court had not yet made a decision on whether it would hear the case and would not speculate when it might do so.

The Justice Department, which has been a strong proponent of sending the appeal to the high court, applauded Jackson's decision.

"We are very pleased," said Justice in a press release. "This is an appropriate case to go directly to the Supreme Court under the Expediting Act because of its importance to the American economy and to all consumers."

Microsoft is appealing Jackson's June 7 decision that Microsoft be split into two companies and restrictions be placed on its business practices to remedy antitrust violations. Jackson immediately stayed the breakup but not the restrictions pending Microsoft's appeal, but appeared to have changed course Tuesday with his request that "the final judgement ... is stayed in its entirety" until the appeal is heard.

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