Microsoft Lucks Out
By John Simons

(FORTUNE Magazine) – The Microsoft trial used to be about monopolies and software. But now that the case has moved into the D.C. Circuit Court of Appeals, it's clear that the focus has shifted. It's now about federal judges who really don't like one another. And here's what's truly amazing: The court system's infighting is likely to keep Microsoft in one piece.

The animosity between the members of the seven-judge appeals court and Thomas Penfield Jackson, the outspoken trial judge who decreed last year that Microsoft be split in two, goes back a decade. In 1991, D.C. Circuit Chief Judge Harry Edwards blasted Jackson for making public statements about the drug trial of former D.C. mayor Marion Barry. In 1998 the same court overturned Jackson's order that Microsoft unbundle Internet Explorer from the Windows operating system.

Once again, Jackson's public statements are raising the court's hackles. Microsoft's lawyers, hoping to show bias, included some choice Jackson quotes--comparing Bill Gates to Napoleon and Microsoft witnesses to a D.C. street gang--in their legal brief. The comments sent members of the panel into a rage at hearings in late February. Blurted Chief Judge Edwards: "The system would be a sham if all judges went around doing this."

The feud is downright startling. "I'm willing to bet there has never been such a scene in a U.S. courthouse, and I'm not sure you will ever see it again," says William Kovacic, a professor of antitrust law at George Washington University. "To have the court pillory one of their colleagues like that is a remarkable event."

The court's anti-Jackson bent wasn't the only encouraging sign for Microsoft. Several judges noted that never in the 111-year history of the Sherman Antitrust Act has the government broken up a company that was not the product of mergers and acquisitions. When the government's lawyers pointed to the 1911 Standard Oil breakup as a fitting precedent, Judge A. Raymond Randolph recommended that they read Titan (Ron Chernow's biography of Standard Oil founder John D. Rockefeller).

With Jackson's objectivity now in question and some of his key arguments piling up like sawdust in the appellate chambers, Microsoft is almost sure to win a reversal of at least some of his decision. For instance, Jackson wants the company split because, he says, he doesn't trust it. Considering how the appeals court feels about Jackson, that alone might persuade it to keep Microsoft whole.