Judge Hall Concludes Preliminary Injunction Hearing in Bristol v. Microsoft

(October 30, 1998)  U.S. District Court Judge Janet Hall completed protracted hearings and oral argument on Wednesday, October 28, on Bristol Technology's motion for a preliminary injunction in its antitrust suit against Microsoft.  She has not yet ruled, but attorneys in the case expect a prompt decision.  Bristol is seeking immediate access to Windows NT source code.

The evidentiary phase of the hearing was conducted on October 14, 15, 19, and 20.   The Court heard final arguments on October 28.  Attorneys described Wednesday's hearing as "a question and answer session."

Bristol Technology filed its original Complaint against Microsoft on August 18, 1998 alleging that Microsoft refused to grant it a license which includes access to Windows NT 4.0 and 5.0 source code, and that this constitutes a violation of federal and state antitrust law.  Bristol is an 80 employee, Connecticut based, software development company, whose main product is Wind/U.  Wind/U is a set of libraries and utility programs that enable application developers to compile, link, and execute Microsoft Windows-based applications on UNIX, OpenVMS, and OS/390 platforms.

Bristol also alleged that Microsoft has monopolies, not only in the desktop PC operating system market, but also in the network server and technical workstation operating system markets.  It accused Microsoft of monopoly leveraging, refusing to deal, and denial of an essential facility, among other things.

Bristol also filed a Motion for Preliminary Injunction, asking the court to order immediate access to Windows NT 4.0 and 5.0 source code.  This motion was the only subject of the hearing.

Microsoft alleged in its Opposition that an injunction should not be granted, because there is no antitrust law violation.  Microsoft further argued that this suit is really contract negotiations by other means.  That is, Microsoft owns Windows NT, and is willing to license access to source code to Bristol, but Bristol has rejected its terms.  Microsoft contends that Bristol is trying to use claims of antitrust law violation to obtain a court order that essentially writes a license contract that Bristol could not obtain through arms length negotiations, and which would give it a competitive advantage over Bristol's rival, Mainsoft.   Microsoft and Mainsoft entered into a contract a week after Bristol filed suit.

"I think even more so than when we filed our case," said Bristol President Keith Blackwell, "we feel very confident about our case."

Keith Blackwell founded Bristol Technology, along with brother Ken Blackwell, in 1991.   He spoke to Tech Law Journal on October 29.   "It is Microsoft's own internal documents and email that is making our case," said Blackwell.  "We fully expect a favorable ruling."

Of course, Microsoft sees things differently.  "Overall, our take is that  ... they showed no evidence whatsoever to support their contentions," said Tom Pilla, Public Relations Manager, after the conclusion of the evidentiary phase of the hearing.  The relevant markets in this case are for operating systems for technical workstations and servers, Pilla stated.  Yet, "their own expert testified that Microsoft does not have a monopoly in either area."

Pilla further stated that Bristol has to show "harm to competition," but cannot, because Bristol does not compete against Microsoft.  "Wind/U is not a stand alone operating system."  Pilla also emphasized the argument made by Microsoft's attorneys in legal briefs and in court that "Bristol is simply leveraging the courts to get a better contract for themselves."

During the hearing Judge Janet Hall heard testimony from several witnesses.  Keith Blackwell, Ken Blackwell, and Jean Blackwell testified as lay witnesses on behalf of Bristol, while Professor Richard Langois testified as its expert witness.  Microsoft presented Dan Neault, Director of Business Development for Windows, and as its expert, Prof. Schmalensee, of the MIT, Sloan School of Business.

The lead attorneys at the hearing were Pat Lynch, of the law firm of O'Melveny and Myers, for Bristol, and David Tulchin, of the law firm of Sullivan & Cromwell, for Microsoft.  The State of Connecticut has filed an amicus curiae brief supporting Bristol, but it did not participate in the hearing.

In addition to testimony and legal arguments the Court also saw a demonstration.   "One of the things we did was had a side by side demonstration" using Solaris and x86 machines, said John Altieri, one of Bristol's attorneys.  "In some cases the demos ran, and in some cases they did not, where we did not have the underlying code."

The Court also allowed Keith Blackwell to review the confidential contract between Microsoft and Mainsoft.  He signed a sworn declaration about the Mainsoft contract, and the one offered to Bristol.  It was filed with the court under seal on Wednesday.   Microsoft has until next Monday to file an opposing statement, which will also be under seal.   

"The majority of the contracts were essentially the same," Blackwell said in interview.  "The places that they were different was that is was a worse deal than was offered to us."

He also stated that "we didn't think it was coincidence" that Microsoft entered into its contract with Mainsoft just one week Bristol filed suit.  "We thought that it was a little strange ..."

Judge Janet Hall is presiding in the case.  As a recent appointee, she has little track record that can be used to assess her.   "We are quite impressed with the Judge.  She is new to the bench.  She has control of the courtroom," said John Altieri.  "She has some background in antitrust law."

However, Altieri would not predict how Hall will rule. "I think she will rule fairly promptly.  She understands the urgency of the motion."

Microsoft has also filed a Motion to Dismiss and for Summary Judgment on October 8. Bristol filed its opposition memorandum on Thursday, October 29.  "We responded to those today," said Keith Blackwell.   "We obviously don't think that there is any basis for their Motion for Summary Judgment or Motion to Dismiss."