MICROSOFT - SURPRISE GOOD NEWS!

Judge Thomas Penfield Jackson unexpectedly gave Microsoft a substantial victory by staying the imposition of operating restrictions which flowed from his decision, and simultaneously certified the antitrust case to the Supreme Court.

The restrictions were due to go into effect on Sept. 5, and would have severely hobbled Microsoft, and crippled its new bet-the-company "Net" strategy, even while the appeal was pending.

Although the U.S. Court of Appeals had reached out for the case prior to Judge Jackson's ruling it will now stand back and wait for a Supreme Court decision on whether to hear the case directly, or send it back to the USCA for further briefing and decision.

Certifying the appeal to the Supreme Court by no means assures that the Supreme Court will hear the case since it may wish to have the additional factual information and briefing that would flow from a more orderly appeal through the USCA (see EDP Weekly, June 19).

The Supreme Court will remain in session for another week or so and then will recess until October. However, the DOJ and Microsoft have agreed upon a fast-track briefing schedule which will put their briefs before the Supreme Court by Aug. 22. With the briefs before it, the Supreme Court can then decide whether to hear the case or send it back to the USCA.

Microsoft obviously believes it has a better chance before the USCA and prefers that route. In either case it will be able to continue operations without restrictions until a final decision which may easily take a year or more. However, the world (which includes the government and its competitors) will be watching its actions.

Microsoft was clearly the winner, and the government the loser, in this two-pronged decision since it succeeded in having the restrictions on its operations delayed pending a final decision, while at the same time is still alive on the issue of whether the case will proceed through the U.S. Court of Appeals before it reaches the Supreme Court.