Grounds For Appeal

Could Bill Gates still have the last laugh? Microsoft's boss reportedly boasted to Intel employees back in 1995 that "this antitrust thing will blow over." Those words have echoed hollowly on each of the Judgment Days since, as Microsoft steadily descended into Judge Thomas Penfield Jackson's three circles of hell--branded a monopoly, found in violation of antitrust law and, finally, last week ordered to perform self-dismemberment. But Gates has at least one, and more likely two, lives left in this game--one if the U.S. Supreme Court takes the case immediately, as the Justice Department and Judge Jackson want, and two if the high court declines to hear the case until it goes through the U.S. Court of Appeals. Maybe--just maybe--it will blow over yet.

For months now, Microsoft has been investing its entire stock of faith in the Court of Appeals. Ask the company's attorneys, and they will tell you with unshakable confidence that the three-judge review panel of the appeals court, whoever those judges may be, will see the flaws in Jackson's reasoning and strike down all elements of his decision--not just the split-'em-up remedy but the findings of law and fact too.

But such total vindication is about as likely as the Cubs' winning the World Series this fall. "It's not a question of total reversal," says Washington antitrust lawyer Joseph Kattan, "but [of] whether the company gets broken up." Nevertheless, there are a number of factors that could help the company slip its noose at the 11th hour. Some are more persuasive than others:

Friendlier Courts

At first glance, the higher courts seem considerably more sympathetic to Microsoft than was Judge Jackson. In 1998 the Court of Appeals dealt the Department of Justice a body blow by reversing Jackson's injunction ordering Microsoft to quit tying its Web browser to Windows. That decision has since been glorified by Microsoft attorneys, who see it as their salvation. But as Assistant Attorney General Joel Klein points out, "The court said it was writing without the benefit of a factual record." Now they've got 78 days' worth of testimony, much of it arguing that Microsoft's motivation was more to hurt competitors than to help consumers.

Moreover, just because the pool of judges in the appeals court contains more Reagan-Bush appointees than Carter-Clinton appointees doesn't mean that it will automatically take Microsoft's side. Judge Robert Bork, a former conservative member of the court, is now retained by Microsoft's opponents. "I looked at the case and went with the other side," he says. So did one other prominent G.O.P.-appointed judge--Thomas Penfield Jackson.

Judicial Competence The harsh language of Judge Jackson's ruling makes no secret of his feelings toward Microsoft and its leaders--the text is sprinkled with words like untrustworthy and disingenuous. The feeling, Microsoft will make clear in its appeals, is mutual. "The judge simply got it wrong," says a senior Microsoft attorney. "He committed errors from the start of the proceeding and became more and more confused as time went on. He doesn't have special expertise in economics. He's a trial-court judge." Ouch.

Procedural Issues