What won’t stick to the software giant is the June 2000 ruling by Judge Thomas Penfield Jackson that Microsoft is a monopoly and should be broken in two.

It won’t stick in part because in February, Microsoft will be in a much friendlier place than Jackson’s courtroom, where the company was repeatedly embarrassed. This time the software giant and the Department of Justice will tussle in the U.S. Court of Appeals for the District of Columbia Circuit.

In 1998, the same court ruled in Microsoft’s favor, saying it was difficult for the government to prove that the company unlawfully "tied" its operating system and browser. The government contends Microsoft did just that to crush rival Netscape.

The legal issue of "tying," where a buyer must purchase one product to get the other, has been one of the nuts of this case. That nut will crack in June, when Microsoft wins on appeal, and the sides prepare for the next step in front of the Supreme Court in the fall.

Microsoft must only prove plausible benefits from integrating the operating system and the browser. The appeals court ruled in 1998 that was indeed the case, calling the union of Windows 95 and Internet Explorer "a genuine integration."

The Justice Department has recognized that it failed to refute that ruling during the trial.

But the case goes beyond the issue of tying. Microsoft also will benefit from Jackson failing to show the anticompetitive effects of the company’s behavior. Indeed, Jackson conceded in his ruling that Microsoft did not foreclose the browser market to Netscape.

Legally, the cards are beginning to stack up in Microsoft’s favor, even though the government enters the appeals process with Jackson’s ruling snug in its pocket.

The only wrinkle is President-elect George W. Bush, who will take office a month before arguments begin in the appeals court. Bush has not commented specifically on the case, but says he favors competition over litigation. He will appoint the assistant attorneys general who will oversee the case, and that could be a feather in Microsoft’s cap. With Bush, the case could easily end with a settlement that meets his political goals and gives Microsoft a result far short of a breakup.

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Contact Senior Editor John Fontana

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