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To: Daniel Schuh who wrote (22724)	2/19/1999 12:18:00 AM
From: Gerald R. Lampton	Respond to of 24154

Microsoft Pleased With New Turn In Java Suit Matt Hines, Newsbytes 02/18/99 Newsbytes News Network (c) Copyright 1999 Post-Newsweek Business Information, Inc. All rights reserved. SAN JOSE, CALIFORNIA, U.S.A., 1999 FEB 18 (NB). Microsoft Corp. [NASDAQ:MSFT] recorded a momentary victory in its ongoing federal case against Sun Microsystems Inc. [NASDAQ:SUNW] Inc. today. U.S. District Judge Ronald Whyte told Microsoft a preliminary injunction he issued against the software giant last November does not prohibit the firm from developing breeds of Java not including any of Sun's Java code. The injunction ruled Microsoft could no longer market products which contained an altered version of Java. Sun maintains Microsoft intended to divert the "write once; run anywhere" programming language by streamlining it to perform best with its operating systems and encouraging its partners to adopt its own version of Java. While Microsoft refused to comment whether it has intentions to develop a new independent flavor of Java, Microsoft Associate General Counsel Tom Bert said in a statement, "Microsoft is very pleased with the court's ruling this morning. "This clarification is one step in this overall case, but it is important to the marketplace that innovation not be restrained." Sun Microsystems has yet to comment on the latest development.

To: Daniel Schuh who wrote (22724)	2/20/1999 2:01:00 AM
From: Rusty Johnson	Respond to of 24154

Microsoft Tries to Show That It Didn't Bully Compaq New York Times By JOEL BRINKLEY WASHINGTON -- Burned by a searing cross-examination of a senior Compaq Computer Corp. executive, Microsoft Corp. and Compaq tried Friday to regain ground in federal court, though they may have helped the government as much as themselves. At the Microsoft trial on Thursday, David Boies, the government's lead trial lawyer, used documents from Compaq's files to portray Compaq, the world's largest maker of personal computers, as a fearful vassal of Microsoft. In one case emphasized by Boies, an internal document showed that Compaq executives had worried in 1996 about retaliation from Microsoft for their decision to use another company's operating system for hand-held computers. A few weeks later, Bill Gates, Microsoft's chairman, wrote Compaq a letter congratulating the company for instead choosing Microsoft's product, later known as Windows CE. Friday, when Rick Pepperman, a Microsoft lawyer, got a chance to question the witness, John T. Rose, a Compaq senior vice president, he displayed a memo that had circulated within Compaq after the Gates letter had arrived. It reassured employees that Compaq still had the right to use another company's software if Microsoft was unable to deliver its product, "while keeping our relationship with Microsoft intact." (In the end, Compaq never produced the hand-held computer.) Microsoft held high hopes for Rose's testimony. He is the only witness Microsoft recruited from a computer company, and last November, Gates wrote to "thank Rose for all his trips to Seattle and his willingness to distract a lot of time for the lawsuit." Part of Rose's mission was to counter testimony by executives of Apple Computer and IBM Corp. who, in testimony for the prosecution last year, portrayed Microsoft as a monopolist and an industry bully. Rose was, at best, only partly successful in his mission. Boies showed Thursday that numerous employees who reported to Rose at Compaq both feared and hated Microsoft. But on the stand Friday, Rose insisted: "They have a view on some points that doesn't represent the corporate strategy. As a director of the company, I have that strategy. I know what it is." Compaq's relationship with Microsoft has been "bumpy," he said, "but always focused on benefiting customers." The bulk of Friday's questions dealt with the central assertion of Rose's written testimony: that Microsoft's threat in 1996 to stop selling the Windows operating system to Compaq -- an act that could have been a fatal blow to the company -- was a result of "a communications breakdown" within Compaq. The government contends that the threat was made because Compaq was featuring products from Netscape Communications Corp. on its personal computer. But Rose said that the real problem was that while one part of his company had removed icons for Internet Explorer and the Microsoft Network from computer screens to meet the terms of a contract with America Online, another part was working out an agreement with Microsoft not to tamper with the icons. Pepperman, the Microsoft lawyer, presented documents showing that America Online was in fact trying to enforce a contract requiring Compaq to remove the icons. And he also offered evidence intended to show that Compaq executives did not believe that their agreement with Microsoft prevented them from installing Netscape on their computers. But Boies displayed a deposition taken from Celeste Dunn, who was in charge of buying software for Compaq. She said senior Microsoft officials had been informed of the decision to remove the icons in advance and did not object or indicate that it violated any agreements. Rose said he did not doubt the accuracy of her testimony, leaving the contradiction unexplained. Regardless, Compaq did stop installing Netscape on its computers, at least for a while. Rose said that "there were compatibility problems that eventually Netscape cleared up." But Boies, when he got another turn with Rose, presented excerpts from a 1997 deposition in which a Compaq executive stated that the company had stopped installing Netscape because Microsoft had begun including a browser in the operating system. "That doesn't mention anything about compatibility problems, does it?" Boies asked. "That's correct," Rose said, though he also noted that Compaq does install Netscape in its computers today. Microsoft also released the direct written testimony of Eric Engstrom, a general manager in the Web Essentials division of the Microsoft Network. In his written testimony, he tries to refute the testimony of an Apple Computer executive and others who contended that Microsoft tried to sabotage Apple's QuickTime multimedia software. Engstrom will take the stand sometime next week.