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Technology Stocks : How high will Microsoft fly?
MSFT 479.20+0.2%Jan 9 9:30 AM EST

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To: John F. Dowd who wrote (37110)1/25/2000 7:30:00 PM
From: John F. Dowd  Read Replies (1) of 74651
 
This decision regarding MSFT and SUNW in their Java dispute seems to be in favor of MSFT. More importantly SUNW is seen to be a corp. seeking to defeat MSFT in the court room and not in the market place. MSFT is seen to be nothing more than a tough competitor. All of these events that have occurred since the DOJ case show that this whole thing is a joke and the DOJ has been used by MSFT,SUNW and NSCP in an effort to defeat MSFT.
Federal District Court Issues Rulings in Sun Microsystems Lawsuit
SAN JOSE, Calif., Jan. 25, 2000 -- The Federal District Court in San Jose issued two orders in the Sun Microsystems vs. Microsoft lawsuit. Sun had asked the court to reinstate the earlier injunction that was overturned by the Ninth District Court of Appeals.

The first order rejected Sun's motion to reinstate the order based on Federal copyright law. The court agreed with Microsoft that this case is a contract dispute and rejected Sun's novel argument that the focus should be on copyright and the contract should be ignored. This strikes fundamentally at the heart of Sun's position in this case and supports Microsoft's often-stated position that this is a contract dispute between two large and sophisticated companies.

"We are pleased that the court acknowledged that this case at its core is a contract dispute. We are also pleased that the court's rulings recognize that Microsoft's innovations with Java offer choice to software developers and benefits to consumers and that this is good for competition," said Tom Burt, Microsoft's General Counsel for Litigation. "We are reviewing our legal options, but we remain fully compliant with the court's order and our customers will not be effected in any way by this ruling."

The second order partially reinstated the court's earlier injunction based on the California Business and Professions Code. This injunction requires Microsoft to support Sun's JNI interface for writing platform-specific applications in Java in addition to the existing native code interfaces, to turn off Microsoft language extensions by default, to alert developers that those extensions will only run the Microsoft virtual machine (or any other virtual machine supporting the Microsoft extensions), and prohibits Microsoft from referring to its virtual machine as the Official Reference Implementation or making any statements implying Sun has approved the Microsoft extensions. This reflects the status quo and Microsoft is already in compliance with the order. The Judge was quite clear that "nothing in this order requires Microsoft to recall any product" and "this order does not prevent any purchaser of Microsoft's products from continuing to use them". The Judge rejected Sun's request to extend injunctive relief to third parties and in particular rejected Sun's effort to restrain independently developed implementations of Java.

The Judge also made clear the unfair competition ruling was a narrow one and Sun must compete on the merits of their technology in a marketplace where the choice to create Windows-specific Java applications is natural and desirable:

"Sun cannot complain that it is "unfair" within the meaning of õ 17200 that, given the large installed base of Microsoft's operating system and virtual machine and the efficient methods of invoking native code, software developers may be naturally motivated to use Microsoft's extensions to the Java Technology when creating Windows-specific applications. Therefore, assuming that software developers are not mislead as to the consequences of using Microsoft's Windows-specific enhancements, it appears that whether Sun's standard Java programming environment succeeds in the market is largely up to the merits of Sun's technology, the range of functionality it offers, the software developers who use it to develop software applications, and, ultimately, consumers."

The next step in this case is awaiting decisions from the court on the pending summary judgment motions -- especially on independent development and copyright infringement. The court issued tentative rulings on these motions in June 1999, and finals rulings could be issued at any time.


JFD
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