Microsoft Files Reply Brief

(September 9, 1998)  Microsoft filed its Reply to the DOJ's Opposition to Microsoft's Motion for Summary Judgment with the U.S. District Court in Washington DC on Tuesday, September 8.  The next step in this summary judgment proceeding is oral argument before Judge Thomas Jackson on September 11.

The Reply Brief is 48 pages long.   Like Microsoft's original filings, and the Department of Justice (DOJ) Opposition, its is heavily redacted.  In fact, much of the evidence and legal arguments in this summary judgment proceeding is under seal, and can only be reviewed by the Court and the attorneys.

The Reply Brief argues that the new allegations raised by the DOJ in its Opposition Brief are irrelevant to the legal claims alleged in the Complaint.  It argues that the allegations regarding Microsoft's dealing with Intel, Apple and Real Networks over streaming software, and its actions regarding DR-DOS and Java are a "last-minute effort to refashion their case" and "do nothing to remedy the fatal defects in plaintiffs’ claims."  The Reply Brief concludes that:

"Revealing a profound lack of confidence in the case they filed in May, plaintiffs begin their joint response not by discussing their tying claim or their challenge to Microsoft’s agreements with ICPs, ISPs, OLSs and OEMs, but by making a number of unfounded accusations that Microsoft has engaged in other vaguely defined bad acts. Those accusations do nothing to remedy the fatal defects in plaintiffs’ claims. A plaintiff cannot create a genuine issue of material fact where none exists simply by heaping abuse on the defendant and its CEO."

Oral argument on the Microsoft Motion for Summary Judgment (MSJ) is scheduled for Friday, September 11, in Washington, DC, before U.S. District Court Judge Thomas Penfield Jackson.  There is also a pretrial conference scheduled for September 17.  It is likely, but not certain, that Judge Jackson will rule on the Motion for Summary Judgment prior to the pretrial conference.

If Microsoft prevails, some or all of the government's case would be dismissed.   If Judge Jackson rules against Microsoft, all issues would be tried.  The Court has scheduled to start the trial on September 23.  However, since there are pending motions, and since Microsoft will almost certainly move for a continuance if Judge Jackson does not limit the factual issues at trial to those alleged in the Complaint, it is quite likely that the start of the trial will be delayed.

Summary judgment, generally, is a pre-trial remedy sought where, based upon facts not in dispute, and an application of the law to those facts, a party is entitled to a judgment on a claim.  A judge cannot decide disputed facts in a summary judgment proceeding.  If any facts material to a claim are disputed, then summary judgment cannot be granted on that claim.

William Neukom, Microsoft’s SVP for law and corporate affairs, stated in a press release that the "central facts of the case and the overwhelming body of law support Microsoft’s position. Based on the facts and the recent appeals court decision, we believe the case should be dismissed now, without a long and costly trial."

"Nothing shown at trial can change the fact that customers benefit from Microsoft’s efforts to make Windows work well with the Internet. And nothing shown at trial can change the fact that Netscape has been enormously successful at distributing its Web browsing software to consumers. These facts undercut all of the government’s claims," Neukom added.

"By trying to rewrite and expand their case in the past month, the government has shown a lack of faith in the case they filed last May, after nearly two years of investigation," Neukom said. "Given the appeals court decision and the factual record, we are asking the court, at a minimum, to dismiss the government’s claims against Microsoft’s decision to build Internet features into the Windows operating system. If the government wants to make new accusations, they should be required to file a new complaint, rather than inflating and complicating this case."

Microsoft's Reply Brief asserts that the DOJ's and States' Opposition Briefs fail to refute the facts that entitle Microsoft to summary judgment; their briefs,

"never really address, let alone genuinely dispute, the three basic facts that fatally undermine their claims in this case: (i) the software code in Windows 98 that provides web browsing functionality cannot be removed without seriously degrading the operating system, (ii) the inclusion of Internet Explorer technologies in Windows 98 produces clear technological benefits for consumers and software developers that could not otherwise be achieved, and (iii) Microsoft has not foreclosed Netscape or any other competitor from distributing web browsing software broadly to consumers. These three basic facts enable the Court to dispose of the case without ever reaching the question of whether Microsoft has "monopoly power ..."

Microsoft argues that much of what is raised by the DOJ Opposition Brief is irrelevant to the claims raised by the Complaint.

"In a further effort to obscure the fatal shortcomings of their claims, plaintiffs argue that this case is not limited to the specific allegations of their complaints, but rather involves a "broad series of anticompetitive acts" that range far beyond the acts to which their complaints advert. Plaintiffs thus devote the first part of their brief not to responding to Microsoft’s summary judgment motion, but to leveling a variety of new accusations (found nowhere in their complaints) and to a baseless personal attack on the credibility of Microsoft’s CEO. ...

Whether or not the new matters raised by plaintiffs are disputed, they are not relevant, let alone material, to plaintiffs’ claims. For example, plaintiffs refer to Microsoft’s routine interaction with companies such as Intel, Apple Computer and Real Networks as purported evidence of "a pattern of anticompetitive conduct", even though none of those companies or Microsoft’s alleged discussions with them are even mentioned in plaintiffs’ lengthy complaints and preliminary injunction papers."   (Parentheses in original; citations omitted.)

The Microsoft Reply Brief also criticizes the Opposition Brief for raising allegations about Java and DR-DOS issues:

"Plaintiffs also spend several pages discussing allegations that Microsoft "entered into a series of anticompetitive agreements with customers and competitors to restrict the use of Java" and that Microsoft included software code "designed to disrupt the use of DR-DOS," a competitor of Microsoft’s MS-DOS operating system in the late 1980s and early 1990s, in a beta test version of Windows 3.1 released in December 1991.   Those allegations, which are utterly baseless, are the subject of entirely different lawsuits pending in other courts. See Sun Microsystems, Inc. v. Microsoft Corporation, No. C-97-20884-RMW (N.D. Cal.); Caldera, Inc. v. Microsoft Corporation, No. 2:96 CV 0645B (D. Utah). Plaintiffs may wish that they had brought a different lawsuit against Microsoft, but all that is at issue here are the claims alleged in their complaints."

The brief concludes that "plaintiffs have done exactly what all plaintiffs do when confronted with a meritorious summary judgment motion. They attempt to distract the Court from the fatal defects in their claims by slinging as much mud as they can at the defendant and by giving prominence to numerous irrelevant facts in a desperate attempt to cloud the issues."