Microsoft, DOJ told to intensify effort

"I think this case should be settled and this is the optimum time to do so," said Judge Colleen Kollar-Kotelly at a hearing at the weekend to set the schedule for the next phase of the trial.

In referring to the recent terrorist attacks, the judge appeared to be telling both sides to put the case into perspective.

In written remarks issued with her order, the judge cited the September 11 terrorist attacks as a reason for the two sides to settle this case. "In light of the recent tragic events affecting our nation, this court regards the benefit which will be derived from a quick resolution of these cases as increasingly significant."

"The court cannot emphasize too strongly the importance of making these efforts to settle the cases and resolve the parties' differences in this time of rapid national change," the judge wrote. Kollar-Kotelly said she expects an "all-out effort to settle these cases, meeting seven days a week and around the clock."

In a setback for Microsoft, Kollar-Kotelly ordered a case timetable that was close to the government's request for an expedited process.

The judge gave a deadline of November 2 to reach an agreement. If no settlement is reached by then, the judge said, both sides will have to begin meeting a schedule for producing witnesses and conducting discovery that will culminate in a hearing to decide the company's fate beginning March 11.

The judge's demand for a settlement came in two parts. First, the two sides will have until October 12 to settle the case on their own. If they fail, Microsoft and the government must submit the name of "an agreed-upon" individual to act as a mediator.

The government had asked for a hearing to begin in February. Microsoft sought a more protracted schedule.

Kollar-Kotelly quickly established herself as no-nonsense and seemed prepared to foil any effort to drag out the proceedings. Citing the large number of attorneys that each side had put on a list to attend the hearing -- 28 in total -- the judge laconically told both sides that they had "sufficient resources" to handle any demand.

"We're pleased with the judge's decision to move quickly on this case," said Justice Department antitrust chief Charles James, after the hearing.

Microsoft's effort to limit the scope of potential remedies was rejected by Kollar-Kotelly, who said it would be premature, without consideration of any evidence, to cut her remedy options. The Supreme Court "has vested this court with large discretion," she said.

Microsoft attorney Daniel Webb told the judge that the government is considering remedies that would, in effect, require the company to turn over its Windows source code to competitors. "We might as well put it in a room and give it away for free. It would be devastating for that to happen," he said.

It’s uncertain whether the judge’s order concerning settlement talks will accomplish anything. Both sides have already tried twice to settle this case, and they are now in ongoing talks.

If Microsoft was hoping for a friendlier judge after its experience with trial Judge Thomas Penfield Jackson, it may be out of luck. Jackson, who would sometimes turn beet red over testimony by company witnesses, got in trouble with the US Court of Appeals for caustic comments he made about the company to reporters and in public speeches. Microsoft has accused the judge of bias and has asked the US Supreme Court to throw out his major findings.

The judge's hardball attitude was in evidence. Microsoft lead trial attorney John Warden asked the judge for a longer period to produce documents. He said the judge's limit of 10 days would be difficult to meet, citing the thousands of electronic and paper documents it must sift through to comply with any order for records. He asked for 21 days. “You can only do what you can do,” said Warden at one point.

“I think we should stick to the 10 days,” said Kollar-Kotelly. “Frankly, 20 days isn’t going to work on the schedule that I have set.”

The US Court of Appeals sent the case back to the lower court last month after affirming a finding that Microsoft had used predatory behaviour to maintain its monopoly.

The government’s lead attorney, Philip Beck, urge the court to move swiftly on the case.

“We do have a company that was found to have illegally maintained a monopoly and we’re in need of a remedy,” said Beck.

The court rejected, however, the lower court's finding that Microsoft had illegally attempted to monopolize the browser market.

The appeals court also rejected the lower court's finding that Microsoft had illegally tied its browser to the operating system but said the issue could be reconsidered under a different legal standard. The government and the 18 states involved in the case have decided to drop the tying claim in the belief that the monopoly maintenance charge is sufficient to warrant significant remedies.

At the end of the hearing, the judge told both parties, "good luck with your settlement efforts."