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Sun Microsystems Inc.’s $1 billion antitrust dispute with Microsoft is still moving forward, unfazed by AOL Time Warner Inc.’s move recently to settle its antitrust fight with the mammoth Redmond, Wash.-based software company. Lawyers representing Sun and Microsoft both say the issues central to the dispute between the two companies outnumber AOL’s simpler argument that Microsoft used its monopoly power to strangle the Netscape browser. “Our case involves a far broader set of issues and products than Netscape’s,” wrote Lee Patch, Sun’s vice president of legal affairs, in an e-mail, “and focuses principally upon strategic objectives that are intended to open the marketplace for greater opportunity for Sun and others to compete on the merits.” Santa Clara-based Sun filed a private antitrust lawsuit against Microsoft in March 2002. The action hinged on a federal ruling issued the year before that Microsoft had abused its monopoly power in the computer industry. Sun, which makes computer workstations, claimed that Microsoft had engaged in anticompetitive practices that hindered Sun’s Java software-development platform. Sun had created Java to be a universal translator that could help incompatible software platforms communicate over the Internet. In the suit, Sun Microsystems Inc. v. Microsoft Corp., 02-2739, Sun alleges Microsoft created and distributed its own version of the Java computer programming language, which isn’t compatible with Sun’s version. Sun also accused Microsoft of forcing other companies to distribute the incompatible version as well. AOL, meanwhile, accused Microsoft of using its monopoly in the operating systems business to hinder AOL’s Netscape browser, which the company acquired when it bought Netscape Communications Corp. in 1998. David Tulchin, a Sullivan & Cromwell partner in New York who represents Microsoft, said Netscape’s claim only involves its browser, while “the Sun claim is very broad. They’ve got the kitchen sink in there.” Tulchin said Sun’s dispute focuses on Microsoft’s past business behavior and doesn’t leave much room for talking about how the companies will compete in the future. “Nobody would say it’s impossible to imagine a settlement, but I don’t think it would be accurate to say that just because the Netscape lawsuit settled, the Sun lawsuit is likely to settle next.” Netscape settled for a cash payment of $750 million plus a host of software-development agreements. Charles “Chris” Compton, a Wilson Sonsini Goodrich & Rosati antitrust litigator, said Netscape’s settlement seemed like a smart move. “It follows the classic model of not just a monetary settlement but a whole suite of mutually advantageous business arrangements,” Compton said. “From a broad litigation perspective, it’s always easier to settle a hotly contested business case if you can find some common business grounds to rest a settlement on.” Currently, Sun and Microsoft are awaiting the outcome of Microsoft’s appeal of two preliminary injunctions won by Sun. The two companies expect a decision on the injunctions from the Fourth Circuit U.S. Court of Appeals soon. Pretrial work on the case was sent to the U.S. District Court for the District of Maryland, which is handling a slew of cases against Microsoft. AOL’s case also was in the Baltimore federal court. Sun filed its action in the U.S. District Court for the Northern District of California in San Jose. It has been assigned to Judge Ronald Whyte, who is known for his technical expertise and will preside over a trial if it comes to that. At this point, both companies are preparing for trial and appear far from a settlement. Sun’s Patch wrote that his company expects to go to trial in 2005 in San Jose. From Microsoft’s perspective, it’s not a good time to talk settlement, given the company is waiting for an outcome of its appeal. “The company has shown over the past year that it’s very open to looking at reasonable ways to settle litigation,” said Microsoft spokesman James Desler. “However, this must be done in context to where we are in the legal process.”

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