Federal Judge Blasts Microsoft -- Company Accused Of Defaming Expert, Acting In Bad Faith

WASHINGTON - The federal judge in the government's case against Microsoft has accused the software giant of defaming an expert he appointed to oversee the case and acting in bad faith in his court.

In a three-page order, Judge Thomas Penfield Jackson said yesterday that Microsoft's attempts to disqualify a special master by "questioning (his) integrity and impartiality" were based only on innuendo.

These tactics led the judge to consider imposing contempt sanctions on the company's lawyers.

Jackson stopped just short of accusing the company of deceiving the court, saying he found it significant that Microsoft had elected not to make any of its claims about the special master under oath.

The judge denied Microsoft's request to dismiss Harvard professor Laurence Lessig, who was appointed by Jackson last month to prepare a report on the "complex issues of cybertechnology" and contract law in the case.

Based on e-mail notes with a Netscape attorney last summer, in which Lessig appeared to bash Microsoft, Microsoft attorneys had accused Lessig of "extreme bias" against the company and asked that he be removed.

A Microsoft spokesman said the company is disappointed with yesterday's ruling, and that no decision has been made yet whether to appeal.

"Obviously, we'll work with Professor Lessig," said Adam Sohn of Microsoft corporate public affairs. "We're not going to get into commenting specifically on the language in the judge's ruling."

It may be too late

Privately, Microsoft officials say they don't want to issue any critical comments in the press about a judge who has consistently sided against them in his legal rulings, and who now appears to be expressing open hostility.

But a legal expert said yesterday's harshly worded order indicates it may be too late.

"Things are obviously getting pretty personal here," said Eugene Meigher, an antitrust specialist at the Washington law firm Arent Fox. "What he's saying is that he's beginning to think about whether he can trust what he's hearing from Microsoft's lawyers, and for Microsoft that is not a good place to be in a case like this."

Yesterday's ruling came after the judge held two days of hearings on an unrelated matter - whether Microsoft is obeying an injunction he issued in December requiring the company to stop bundling its Internet Web browser with its Windows operating system.

During those hearings, the judge at times seemed miffed at Microsoft. When the special master's e-mail communications were revealed last week, Microsoft officials crowed that the messages demonstrated a degree of bias that surely would disqualify Lessig from the case.

Microsoft lawyers were rankled when the special master was appointed in December because the judge did not consult either the company or the Department of Justice about the move.

Lessig was appointed to gather facts in the government case contending Microsoft is illegally using its near-monopoly in operating-system software to force computer-makers to also install its Internet Explorer Web browser, a device that navigates the Internet.

The company is in competition with Netscape Communications over who will control the market for Web browsers. The software programs are currently the primary means by which computers sift material on the Internet's World Wide Web.

Months before he was appointed, Lessig apparently wrote to a lead Netscape lawyer and lobbyist to complain about his own experience with Microsoft's Internet Explorer.

"OK, now this is really making me angry," Lessig wrote last summer, adding that a fellow Harvard law professor "thinks we should file a lawsuit." Lessig went on to say that when he installed Internet Explorer, he lost his Netscape "bookmarks," a list of favorite Web sites he had collected with his Netscape Web browser.

Sold his soul?

He also said he installed Internet Explorer only to enter a sweepstakes contest Microsoft was sponsoring, and he referred to the move as having "sold my soul." The last line of his note, to Netscape counsel Peter Harter, implied a friendship between the two.

Harter referred Lessig's browser question to a Netscape colleague, who offered an answer in another e-mail before offering his own horror story about installing Microsoft software. The colleague, Eric Bradley, signed off, "I really do hate that company. Sorry for the ranting at the end, but it's just so typical of MS."

Microsoft also complained that Lessig was a participant last year in an Internet and business forum at Harvard, in which one session was entitled "Should Microsoft Be Allowed to Swallow the Net?"

Microsoft lawyers quoted a student as saying that in the forum, Lessig asked Silicon Valley attorney and noted Microsoft critic Gary Reback "what sort of solution he would like to see embodied in a decree against Microsoft."

No supporting evidence

Jackson said Microsoft offered no supporting evidence for any of these allegations, and that the company had failed to "give substance or credence to its innuendo of bias or prejudice." He added in a footnote that he found it "significant that Microsoft has not made those accusations under oath."

Further, Jackson said he asked Lessig to defend himself in a declaration to the court, and that Lessig adequately explained the "facts bearing on the circumstances in which the allegedly compromising utterances were made."

Lessig said in a statement yesterday that Harter indeed is a friend, but that the e-mail, one of "at least 4,000 he has sent in the past year, was misinterpreted by Microsoft.

He said he expected to be teased by his Netscape friend for installing a Microsoft browser, so he kidded back: the "selling his soul" comment was a quote from a song titled "Sold My Soul" by Jill Sobule, making it a "facetious response to an anticipated tease, not the confession of some profound `Faustian bargain,' " Lessig said.

Jackson did not specify what sanctions he might have hit Microsoft with, but legal experts said the citation in the order indicates they would have been similar to civil contempt of court, penalties that usually carry a monetary fine.

Lessig was in Jackson's courtroom yesterday, listening to Microsoft Vice President of Internet Technology David Cole attempt to explain that the company cannot separate the Web browser from the operating system because they are inseparably linked.

Consequently, the judge's order that the products be separated forced Microsoft to delete so much computer code that the company claims it had to offer a product at retail that would not work.

Jackson seemed incredulous at this.

". . . You thought I had entered an order that required that you distribute a product that would not work? Is that what you're telling me?" he asked Cole.

"In plain English, yes. . . . We followed that order. It wasn't my place to consider the consequences," Cole replied.

The hearings will resume next Thursday.

Lessig, meanwhile, is scheduled to issue a report on his findings by May 31. He has been asked by Jackson to include a recommendation on how the judge should rule on the overriding legal question in this case: Whether Microsoft is violating a 3-year-old consent decree it signed essentially agreeing not to use its dominance in the Windows operating system to gain market share in other products.

Also yesterday, the Court of Appeals in the District of Columbia announced a schedule for Microsoft's overall appeal of Jackson's temporary injunction issued Dec. 11. Oral arguments are set for April 21 before Judges Stephen Williams, Raymond Randolph and Laurence Silberman.

Danny Westneat's phone-message number is 206-464-2772. His e-mail address is: dwes-new@seatimes.com