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Microsoft antitrust trial enters critical phase

Microsoft Corp. lawyers will attempt to turn the government's own tactics against it today, arguing before Judge Thomas Penfield Jackson that the Justice Department's approach in the long-running antitrust case didn't damage the substance of the company's defense.

The trial, which began in October, enters an important new phase this week when both sides submit their proposed "Findings of Fact" to Jackson. The documents, due today, will essentially lay out what each side will claim was established as truth during the trial.

Microsoft will use the opportunity to try to take control of a case that most observers say has been going against it. The Justice Department will try to lay a path that will lead Jackson to the legal conclusions the government argues are necessary to prevent Microsoft from continuing its dominance of the desktop computer industry and conceivably of critical information flow throughout the world.

A key part of Microsoft's strategy in its proposed findings rests on an attempt to turn one of the government's basic methods used in the trial into a weapon for the defense. Microsoft will hang much of the material in its presentation on the argument that the government often failed to directly challenge specific declarations made by Microsoft's witnesses in their direct testimony.

During his cross-examination of Microsoft's witnesses, the government's lead attorney, David Boies, did not attempt to refute every claim made by the witnesses. Lawyers with ties to the government's case argue that such a course was necessary in large part because of pressure to wrap up the accelerated trial as quickly as possible. Microsoft partisans insist Boies simply ignored what he could not refute.

Whichever explanation is correct _ and in some instances it's possible both scenarios accurately describe what was happening in court _ Boies concentrated his efforts on attacking the credibility of each witness, trying to prove the witness had inaccurately testified that something was true.

Justice Department officials declined an invitation to respond, but a former senior official in the antitrust division expressed skepticism over the tactic.

"It's worth a try," said Robert Litan, director of economic studies at the Brookings Institution. "You play whatever hand you feel is strongest."

Litan said the Justice Department's oral arguments _ expected Sept. 21 _ will make the case that the government's proposed Findings of Fact directly refute any and all of Microsoft's proposed Findings of Fact. "They'll argue that their showing of facts implicitly rebut Microsoft's."

Both sides get two shots at presenting findings, followed by oral presentations, which are essentially closing arguments.

Jackson will rely on those presentations in part to develop his own findings, on which he will base his ultimate legal ruling. At that point, he applies the law to the facts and comes up with his legal opinion. But Jackson's declarations of all the facts that have been established since the trial began could have a significant impact well beyond his courtroom.

While Jackson's final ruling in the case _ his "Conclusions of Law" _ could easily be overturned on appeal, such a fate is much less likely for his Findings of Fact, which are far more likely to withstand judicial scrutiny. One of the greatest risks facing Microsoft in the current trial is the seeming likelihood that Jackson's Findings of Fact will declare that the company has monopoly power in the market for desktop computer operating systems, a critical point the government must establish to win its case.

If the legal system accepts that Microsoft does have monopoly power, then that fact need not be proved in subsequent legal actions. That could put Microsoft at risk of a line of lawsuits from rival companies who, in many cases, would then only need to demonstrate financial damages to win substantial amounts of money.

It is this issue, more than any other, that would compel Microsoft's combative chief executive, Bill Gates, to reach some sort of settlement with the Justice Department before the case is concluded.