Microsoft Keeps Up Pace on Antitrust Appeal - TheStreet


(MSFT) - Get Report

kept up the quick pace of the battle over which court will hear the appeal in the antitrust case against the company, offering Wednesday to respond within four days to prosecutors' request to take the appeal directly to the U.S.

Supreme Court


Citing local court rules, the company said it technically has 11 days but will not take that much time.

The battle over jurisdiction moved quickly since Judge Thomas Penfield Jackson last week issued harsh remedies that include splitting the company in two. The software company's two-page filing even cites the approximate time (8 p.m. EDT Tuesday) of the latest filing by the

Department of Justice


Microsoft opposes a direct appeal to the Supreme Court. A three-judge panel of the court of appeals, in a related case, issued an important ruling in Microsoft's favor two years ago, and Microsoft wants its appeal to go there. Even if that court did not exonerate Microsoft, it might winnow the case before an ultimate appeal to the Supreme Court.

"We agree with the government that we want to move this appeal ahead as quickly as possible, but we believe the most appropriate venue is the court of appeals," said Jim Cullinan, a spokesman for Microsoft, in an electronic message. "Microsoft does not believe that the government should try to evade the court of appeals, but we are confident of our appeal regardless of which court hears the case."

Shares of Microsoft closed up 2 5/8, up 4%, or 70 1/2.

The federal appeals court agreed Tuesday evening to hear the company's appeal of a judge's ruling that the giant software maker be split into two for violating antitrust law.

The Justice Department responded by saying it would ask Judge Jackson to send it the Supreme Court for immediate review.


U.S. Court of Appeals for the District of Columbia Circuit

acted on a formal notice of appeal that Microsoft filed late Tuesday afternoon. The court said it had decided to hear the appeal "in view of the exceptional importance" of the case, instead of having the usual appellate panel of three judges consider it first.

Microsoft filed both the notice of appeal and a request that the appeals court stay all provisions of Judge Jackson's breakup ruling, including restrictions on the company's business practices. In his ruling last week, Jackson had stayed the breakup order pending Microsoft's appeal, but he did not stay those restrictions and has been expected to reject the company's request that he do so.

In seeking an appeal, Microsoft argued that Jackson's order to split up the company was "based on an array of serious substantive and procedural errors." The company said in a statement that "many of the district court's factual findings are clearly erroneous and the court has ignored unchallenged evidence presented by Microsoft on many key issues."

The company went on to challenge the court's fundamental understanding of antitrust law, saying the court "confused anticompetitive conduct with pro-competitive conduct."

The Justice Department, in turn, said late Tuesday that it would ask Judge Jackson to certify the case to the Supreme Court.

"Immediate Supreme Court review of this case is in the public interest because of its importance to the American economy," the department said in a statement.

A law known as the Expediting Act allows antitrust cases "of general public importance" to be sent directly to the Supreme Court for review, and Judge Jackson has said he favors such a step.

Earlier Tuesday, Jackson gave prosecutors an initial victory after each side accused the other of trying to manipulate the judicial process.

The judge said he would not rule on the company's request for a stay on the restrictions that he ordered placed on the company's business practices until Microsoft filed its formal notice of appeal.

Last Wednesday, Judge Jackson ended the long-running antitrust trial with an order that Microsoft be broken into two separate companies to remedy antitrust violations and foster competition in the markets for computer operating systems and software applications.

In harsh, scolding and distrustful language, Jackson said the company's arrogance left him no choice but to throw a roadblock at Microsoft in the form of a hurriedly delivered harsh structural remedy.

The breakup, the linchpin of the ruling, would place the ubiquitous Windows operating system in one company and create a second business for everything else, including software applications, the Internet Explorer Web browser and the Microsoft Network Internet service provider and network of Web sites.

The behavioral remedies take effect within 90 days of a ruling. These remedies include publishing the so-called source code used by programmers to design software applications for Windows and placing guidelines on Microsoft's relations with both computer makers and other software companies.