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Tech Law Journal |
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IN THE UNITED STATES DISTRICT COURT
DEFENDANT MICROSOFT CORPORATION’S Defendant Microsoft Corporation ("Microsoft") has moved for summary judgment dismissing the complaints that plaintiffs brought on May 18, 1998. Those lengthy complaints stated in detail the claims being asserted against Microsoft, going so far as to plead substantial amounts of evidence allegedly supporting the claims. Briefing on Microsoft’s summary judgment motion will be completed on Tuesday, September 8, and oral argument is scheduled for Friday, September 11. Should, contrary to Microsoft’s expectation, that motion be denied in whole or in part, trial is to commence on Wednesday, September 23. If a trial is necessary, Microsoft is prepared to proceed on September 23 with an evidentiary presentation addressing the matters placed in issue by plaintiffs three months ago in their complaints. But in the course of just the last few weeks, plaintiffs have gradually made clear their intention to broaden this case far beyond the "surgical strike" they started out with¾ and with which they apparently have become disenchanted¾ by injecting a whole range of additional issues. All of these new issues are factually complicated, and Microsoft has not been given fair notice of, or a reasonable opportunity to prepare a defense to, any of them, through discovery or otherwise. Plaintiffs said at the start of the case that their focus was on Microsoft’s inclusion of Internet Explorer technologies in Windows 98 and the promotion and distribution of those technologies to the installed base of Windows 98 users. The Court relied on that representation in determining the nature and duration of pre-trial proceedings, and Microsoft relied on that representation in deciding what discovery to conduct and how to prepare for trial. It is neither fair nor appropriate for plaintiffs to change course at this late stage and pursue a different case than the one they brought. Most importantly, the new issues that plaintiffs seek to inject into the case at this late date cannot be encompassed within the framework established by the Court for trial: 12 witnesses plus two rebuttal witnesses per side in an abbreviated proceeding in which all direct testimony is submitted in writing. It is challenging for Microsoft to respond to plaintiffs’ initial allegations with just 12 witnesses; the situation will become impossible if Microsoft is forced to respond to a raft of additional issues while operating under that same constraint. Indeed, several of the newly advanced issues could easily require a trial of that dimension all by themselves, following full development of relevant facts in discovery—which Microsoft has had no opportunity to conduct. Some of the matters plaintiffs belatedly seek to include in this case are the subject of entire, separately pending, lawsuits, as detailed below. Plaintiffs are seeking to head down a path that would either transform this case into an IBM-like "kitchen sink" monstrosity, with a greatly expanded (and therefore necessarily delayed) trial, or would deny Microsoft procedural due process by permitting plaintiffs to expand the scope of their claims without warning on the eve of trial. Microsoft accordingly moves for an order excluding the new matters raised by plaintiffs from the issues to be tried. These new matters were formally advanced for the first time in plaintiffs’ answering papers on Microsoft’s summary judgment motion. None of them is directly related to the claims that plaintiffs asserted back in May , i.e., (1) alleged tying of standalone web browsing software to Microsoft’s Windows 98 operating system, (2) allegedly unlawful provisions in Microsoft’s contracts with Internet Service Providers, Internet Content Providers, Online Services and Independent Software Vendors regarding the promotion and distribution of web browsing software, and (3) allegedly unlawful provisions in Microsoft’s license agreements with computer manufacturers prohibiting the removal of features or functionality from Windows 98. The new matters are as follows: 1. Allegations about dealings between Apple and Microsoft regarding their respective software used to process streaming audio and video data. In addition to exceeding the scope of the complaints and preliminary injunction motions, these allegations are the subject of an ongoing investigation by the DOJ under the Antitrust Civil Process Act, 15 U.S.C. §§ 1311-1314, in which the DOJ was taking depositions in late May, after the complaints were filed. (See Exhibit A hereto.) The statute expressly states that information obtained under Civil Investigative Demands ("CIDs") is only to be used to determine whether there is a sufficient factual basis to file a complaint, not as a substitute for discovery after a complaint has been filed. See 15 U.S.C. § 1312(a). 2. Allegations about dealings between Microsoft and Intel with respect to (1) Intel’s development of "native signal processing" software that would provide capability for real-time processing of audio and video data for computers using Windows 3.1, and (2) Intel’s laboratory involved in developing applications written in the Java programming language. These issues are beyond the scope of the case plaintiffs chose to bring, and have the added difficulty of being extremely complicated. 3. Allegations about dealings between Microsoft and Real Networks regarding their respective software used to process streaming audio and video data. These allegations are, again, outside the scope of the case as originally formulated and are the subject of an ongoing CID investigation. (See Exhibit B hereto.) 4. Allegations regarding Microsoft’s development of its own licensed tools for the Java programming language (originally developed by Sun Microsystems), as well as a so-called Java virtual machine used to run Java programs. While alluded to in the complaints, allegations that Microsoft has sought to "pollute" Java have nothing to do with plaintiffs’ basic assertion that Microsoft foreclosed distribution of competing web browsing software. Moreover, such allegations—which involve extremely complicated matters—are the subject of a separate lawsuit between Microsoft and Sun Microsystems pending in the Northern District of California. A preliminary injunction hearing is scheduled to begin in that case next week, following months of extensive discovery. 5. Allegations concerning DR-DOS, a clone of Microsoft’s MS-DOS operating system now owned by Caldera, which predate the Consent Decree and were explored in detail during the FTC and DOJ investigations that resulted in the Consent Decree. These allegations were, as to the DOJ, resolved by the Consent Decree. They are also the subject of a separate lawsuit between Microsoft and Caldera now pending in the District of Utah scheduled for trial in June of next year. That trial is expected to last for more than six weeks. 6. Not mentioned in the summary judgment answering papers, but the subject of pending discovery by plaintiffs are allegations relating to still another lawsuit, this one filed in the District of Connecticut on August 18, 1998 by Bristol Technologies. Expedited discovery is currently underway in that case in anticipation of a preliminary injunction hearing. This contract dispute relates to a source code license for Windows NT used to port applications to the UNIX operating system. It has nothing to do with the claims asserted by plaintiffs in their complaints. ARGUMENT All of the new issues enumerated above should be excluded from the trial of this case. The Court established the pre-trial procedures it did, and Microsoft conducted the discovery it did, based on plaintiffs’ representations about the narrow scope of their claims, which are tightly focused on web browsing software. It is too late for plaintiffs to change the rules of the game and add a variety of other matters to the case, which will transform it beyond recognition. Plaintiffs’ efforts to shift the focus of this litigation dramatically on the eve of trial is "too much, too late," threatening to convert this proceeding into a trial by ambush. Plaintiffs’ new-found reliance on issues not included in their complaints seeks to effectuate a de facto amendment of those complaints. "[W]here the amendment significantly changes the complaint, thereby necessitating substantial additional discovery, leave to amend should be denied." McCann v. Frank B. Hall & Co., 109 F.R.D. 363, 367 (N.D. Ill. 1986) (citing cases). That is particularly true, where, as here, discovery has been substantially completed and it would be necessary for Microsoft to take extensive additional discovery in order to defend itself against the matters belatedly sought to be introduced. See, e.g., Maduff v. Life Ins. Co. of Va., No. 86 C 9826, 1988 WL 116855, at *2 (N.D. Ill. Oct. 26, 1988); McCann v. Frank B. Hall & Co., 109 F.R.D. at 367. In addition, plaintiffs’ attempt to reorient their case should be denied because they have failed to provide any explanation for their delay in seeking to introduce the new matters, which they have, in several instances, been investigating for many months. See Maduff v. Life Ins. Co. of Va., No. 86 C 9826, 1988 WL 116855, at *3. Even if plaintiffs’ gambit is not equated with an attempt to amend their complaints, the issues they now seek to introduce should be excluded as a matter of fundamental fairness. Under the procedure applicable here, Microsoft is required to designate its trial witnesses concurrently with plaintiffs’ designations. That simultaneous exchange threatens to deprive Microsoft of a defense if, at this late date, the matters at issue remain enshrouded in mystery. Indeed, the deadline for identification of witnesses is two days away—far too late for Microsoft to reorient its entire defense if it is now the case that plaintiffs are no longer focusing on web browsing software. Nor can the serious prejudice to Microsoft be remedied by the two rebuttal witnesses it is allowed under the current procedure. It would take many more witnesses and a much more complete development of the record—through both fact and expert discovery—for Microsoft to have a meaningful chance to rebut the laundry list of issues plaintiffs now seek to introduce. If the Court is not inclined to hold the plaintiffs to the case they brought, trial should be delayed for at least six months to permit Microsoft to conduct essential discovery, and no limitation should be placed on the number of witnesses to be called by each side. With respect to such a delay, it is noteworthy that plaintiffs’ answering papers filed yesterday (which were also their reply papers on the preliminary injunction motions) make no pretense that the conditions of urgency and supposed threat of irreparable injury they urged in May, and which led the Court to adopt its highly expedited trial schedule, exist today. Such a pretense is impossible given Netscape’s continued ability to distribute huge quantities of its web browsing software through multiple channels of distribution even after the successful release of Windows 98. Dated: New York, NewYork
CERTIFICATE OF SERVICE I hereby certify that on this 2nd day of September , 1998, I caused a true and correct copy of the foregoing Defendant Microsoft Corporation’s Motion to Limit the Issues at Trial to be served by facsimile and by hand upon: A. Douglas Melamed, Esq. Stephen D. Houck, Esq. And by facsimile and overnight courier upon: Phillip R. Malone, Esq. Christine Rosso, Esq. ______________________
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