Microsoft's Motion for Continuance.
Re: DOJ v. Microsoft, Case No. 98-1232, 1233.
Date: October 9, 1998.
Source: Microsoft. The caption, signatories, and Certificate of Service have been deleted. Otherwise, this document has been edited for HTML, but not for content.

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DEFENDANT MICROSOFT CORPORATION’S MOTION FOR A CONTINUANCE NEEDED TO ADDRESS TESTIMONY OF PLAINTIFFS’ NEW TRIAL WITNESSES

Last night, just eleven days before the trial of this case is scheduled to begin, the government dropped two witnesses who were going to address matters set forth in the complaints and preliminary injunction motions and replaced them with two new witnesses who apparently are going to address matters that have nothing to do with (i) the alleged "tying" of Internet Explorer technologies with Windows 98, or (ii) Microsoft’s contracts with ISPs, ICPs and OLSs relating to the promotion and distribution of web browsing software. This is just the latest confirmation that the government is walking away from the case it filed and seeking to expand that case by introducing extraneous issues. This tactic has placed Microsoft in the untenable position of having to respond on an extremely compressed schedule to matters about which Microsoft had no notice in the complaints. Such bait-and-switch tactics are particularly inappropriate given that the Sun Microsystems allegations are the subject of pending litigation and the Apple allegations are the subject of a separate government investigation.

Because the government failed to comply with Local Rule 209(b)(5)’s express requirement that it "set forth a brief description of the testimony to be elicited from the witness," Microsoft has no idea what James Gosling of Sun Microsystems will say in his direct testimony. He presumably will mouth the accusation that Microsoft sought to "pollute" the Java programming language by providing software developers with the option of writing Java applications that take advantage of operating system services in Windows. Microsoft will not find out until next Tuesday evening what Mr. Gosling has to say, and Microsoft will need far more than the five days available between then and the start of the trial to prepare to rebut Mr. Gosling’s testimony—whatever it turns out to be.

The accusation that Microsoft sought to destroy the cross-platform nature of Java lies at the center of an action pending in the Northern District of California in which 39 depositions have already been taken and more than 1,000 documents have been marked as exhibits. Based on what has transpired in that case thus far, Microsoft believes it could—if given adequate time to conduct document discovery and depositions of senior Sun Microsystems personnel admissible in this case—show that Java represented a calculated effort by Sun Microsystems to destroy Microsoft’s operating system business by the year 2000. Basic fairness dictates that Microsoft be given an opportunity to conduct such discovery to counter the highly misleading picture of Java being painted by the government here.

Furthermore, what Microsoft has done with Java, namely, (i) create the fastest, most compatible Java virtual machine available in the marketplace and (ii) offer first-rate Java programming tools to software developers, is governed not by antitrust law principles, but by a complicated license agreement that Microsoft entered into with Sun Microsystems in March 1996. The government’s introduction of what is essentially a contract dispute into this case at this late juncture makes no sense, especially given that another federal judge is about to issue a decision interpreting that contract. If the government is going to claim, however, that Microsoft’s efforts regarding Java resulted in something other than a procompetitive increase in consumer choice, Microsoft must be given a chance to respond to that claim.

At the hearing this morning, the government stated that Avie Tevanian of Apple will testify about matters set forth in the government’s opposition to Microsoft’s motion for summary judgment. While such a cryptic description fails to provide Microsoft with the notice to which it is entitled under the Local Rules, it is clear that the potential topics of Mr. Tevanian’s testimony could be wide-ranging. Among the subjects he might address are the following:

• Whether Microsoft sought an agreement from Apple to stop marketing the Windows version of the multimedia playback software in the Macintosh operating system called Quicktime.
• Whether Microsoft designed its Netshow multimedia playback software in Windows to "disable" Quicktime.
• Whether Microsoft threatened to cancel development of the Macintosh version of its Office suite of desktop productivity applications if Apple refused to license Internet Explorer.
• Whether Microsoft sought to enlist Apple’s support in combating efforts by Sun Microsystems and Netscape to undermine Microsoft.

Such matters are unrelated to the allegations of the complaints, which concern Windows 98 and its Internet Explorer technologies.

Forcing Microsoft to deal with a raft of extraneous issues concerning its relationship with Apple, which is the subject of a separate government investigation that has been underway for more than a year, when Microsoft is in the final stages of preparing for trial is simply unfair. Even if the allegations concerning Apple were restricted to Quicktime, Microsoft’s interaction with Apple on that topic is far more complicated than the government’s sloganeering about purported "market division" would suggest. And if Mr. Tevanian intends to address all of the matters raised in the government’s opposition to Microsoft’s summary judgment motion, Microsoft will be required to put on substantial evidence to place its discussions with Apple in proper context, including Apple’s use of a threatened patent infringement action as leverage over Microsoft. Preparing to address Apple-related issues will take time, time that Microsoft does not have under the current schedule.

It is now clear that the basis of the Court’s decision to establish a highly expedited schedule for pretrial proceedings, namely, that the government’s case was narrowly focused, involved few disputed issues of fact and could be ready for trial in a couple of months, has been undercut by the government’s introduction of various extraneous issues into the case. While Microsoft has made every effort to complete the discovery it needs within the short time provided, the government’s last-minute maneuvering has left Microsoft with insufficient time to prepare for trial. As a result, proceeding with a trial on October 19, 1998 will seriously prejudice Microsoft’s ability to mount a defense to the government’s vague and ever-changing allegations.

If the government were able to convert this case into a plenary Section 2 monopolization case, then Microsoft would need an amended complaint and months of additional discovery to prepare for a trial of that scope. But even under the ground rules announced by the Court at the September 17, 1998 hearing—that the Court "would not be making any findings" and "would not predicate any relief on a finding with respect to the matters that [Microsoft] contends are extraneous" (9/17/98 Tr. at 7)—Microsoft must respond to evidence the government adduces for whatever relevance it might have. Microsoft is unable to prepare such a response in the short time available between now and the start of the trial. Fundamental principles of due process, however, require that Microsoft be given a full and fair opportunity to do so.

For the foregoing reasons, Microsoft respectfully requests that the Court grant Microsoft a two-week continuance. Starting the trial on November 2, 1998 will permit the trial to be completed before the end of the year, consistent with the Court’s previously expressed wishes.

Dated:  New York, New York
October 9, 1998

Respectfully submitted,

___________________________
John L. Warden (Bar No. 222083)