MS/DOJ - Judge might not admit licensing evidence

The states suing Microsoft may not be able to use evidence that they say shows that Microsoft is forcing PC vendors into unfair Windows licensing terms, during the company's remedy trial currently under way.

On Wednesday morning, U.S. District Judge Colleen Kollar-Kotelly addressed the issue of whether the states could introduce as evidence 14 documents regarding Microsoft's dealings with PC vendors. The states had intended to use these documents during its cross-examination of Richard Fade, senior vice president of Microsoft's OEM (original equipment manufacturer) division. But on Monday Microsoft announced plans to pare down its witness list, cutting Fade from the lineup.

Nine states and the District of Columbia are pursuing litigation against Microsoft, following the U.S. Court of Appeals for the District of Columbia Circuit's upholding last year of a lower court's ruling that Microsoft violated antitrust law. The U.S. Department of Justice (DOJ) and nine other states reached a settlement agreement with Microsoft last November; the holdout states are seeking stricter limits on Microsoft's business practices.

During this hearing, Kollar-Kotelly is listening to remedy proposals from the litigating states and from Microsoft, which has offered the terms of its settlement with the DOJ and settling states as remedies in the case.

With these 14 documents, which include correspondence from major U.S. PC manufacturers, lawyers for the states were likely hoping to show that Microsoft is using the terms of the settlement to strong-arm PC vendors into tougher licensing agreements for Windows.

Attorneys for Microsoft objected to the states' attempt to enter these documents as evidence without a related witness, particularly since the states rested their case earlier in April.

"This in not their case, this is ours," Microsoft trial attorney John Warden told the judge.

A lawyer for the states, Howard Gutman, maintained that of the 14 documents, eight were on the original evidence list and Microsoft had not objected to them. Among those eight documents were letters from PC makers Hewlett-Packard Co. and Compaq Computer Corp., Gutman said.

Warden reminded Kollar-Kotelly that she had already excluded one of the eight documents during rulings made when Microsoft Chairman and Chief Software Architect Bill Gates testified last week. "Those rulings stand," she said.

Four documents of the 14 that the states want to enter into evidence were not on the original evidence list. Gutman explained that those documents -- including a letter from Dell Computer Corp. that took issue with Microsoft's interpretation of its proposed settlement with the DOJ -- were created after the court's deadline for both sides to submit evidence lists passed.

Although she did not make a ruling, Kollar-Kotelly sounded skeptical Wednesday about admitting these four documents during Microsoft's case. "You're going to have to wait on this one," she told Gutman.

As for the remaining two documents of the total 14, Gutman told Kollar-Kotelly they are not essential and would be withdrawn.

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