After 13 months of maneuvers, invective and more than $100 million in combined expenses, Oracle's ( ORCL) bid to scoop up rival software vendor PeopleSoft ( PSFT) is in the hands of a federal judge.

On Tuesday afternoon in San Francisco, U.S. District Court Judge Vaughn Walker heard more than three hours of closing arguments in the government's antitrust suit aimed at blocking the $7.7 billion hostile takeover. Walker probably won't hand down a decision until sometime next month.

The trial ended much the same way it began, with lawyers for Oracle and the Department of Justice making alternate presentations in Walker's windowless courtroom on the 17th floor of San Francisco's Federal Building. The 59-year-old judge, an expert in antitrust law, peppered the attorneys with questions, sounding equally skeptical about arguments raised by both sides.

The government claims an Oracle takeover of PeopleSoft would stifle competition in the software market, leading to higher prices and a slowing of innovation. "Customers are facing huge, huge dangers," Claude Scott, the Justice Department's lead lawyer, argued during a 75-minute presentation.

Scott argued that just three companies -- Oracle, PeopleSoft and SAP ( SAP) -- have the advanced human resources and financial management software needed to automate back-office functions in complex business enterprises.

PeopleSoft CEO Craig Conway was also in court Tuesday, and said: "From the beginning, the case has been all about harm to the customers and the industry."

Conversely, Oracle claimed over and over again during the four-week trial, and again during closing arguments, that numerous software companies and system integrators are significant competitors, and their presence in the market will keep Oracle's pricing power in check. "This is a vibrantly competitive market," Oracle's lead attorney Dan Wall told the judge. "There's no evidence that they customers would pay more rather than turn to a Lawson ( LWSN) or a Sage Group ," he said, referring to the U.K.-based supplier of accounting and business management software.

But Walker did not sound convinced. "The government's definition is unwieldy and awkward, but we had customer witnesses after witness ... and these people all say what SAP PeopleSoft and Oracle sell is different than the other vendors," he said, banging on his bench for emphasis.

The government defines the market in question as a U.S.-only market, a contention that Walker didn't seem to accept. "How could this be anything but a global market?" the judge asked, noting that the vendors as well as the largest customers are global businesses.

If Walker finds for the government, Oracle could appeal, but the company has indicated that it will not. Of course, Oracle also indicated that it would not fight the government in court, but then it did. Should Oracle win, it must still convince a majority of PeopleSoft shareholders to tender their shares, and then it would have to defeat the company's strong poison-pill defenses.

Either side could appeal to the U.S. Supreme Court, but whether the high court would be willing to review the case is unclear -- after all it refused to review the much more significant Microsoft ( MSFT) antitrust case.

Asked what the government will do if it loses, Assistant Attorney General R. Hewitt Pate told reporters he was so confident that the case went well, he has not thought about the prospect of an appeal. When pressed, however, he would not rule one out.

PeopleSoft shares have been on a roller coaster for more than a year as Oracle raised its original $16 a share offer to $19.50 and then $26 before lowering it back down to $21 in mid-May. When some analysts said earlier in July that Oracle seemed to be winning the fight in court, PeopleSoft shares jumped 8% in about a week, despite its warning of disappointing quarterly results.

On Tuesday, PeopleSoft gained 19 cents, or 1%, to $18.59 while Oracle rose 17 cents, or 1.7%, to $10.50.

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