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Microsoft Fights Code Demand

The Justice Department is demanding access to two extremely valuable Microsoft assets: the source code to the software giant's ubiquitous Windows operating system and two days' worth of Bill Gates' time.

U.S. District Judge Thomas Penfield Jackson has scheduled a status hearing for 11 a.m. EDT Wednesday on the government's motion to compel Microsoft to turn over millions of lines of software code and to order the co-founder and chief executive to make himself available for more than a single day of questioning by federal and state prosecutors preparing for a Sept. 8 antitrust trial.

"It's a completely unreasonable demand," said Microsoft spokesman Jim Cullinan. "It's plain they are just trying to disrupt our pretrial preparations."

In a motion filed Friday, the government also asked Jackson to order Microsoft to make other key executives available for questioning.

In establishing a fast-track schedule for the trial, Jackson ordered the two sides to work together "in good faith" to schedule depositions, to refrain from making unreasonable demands and to agree to reasonable requests. Wednesday's hearing will mark the first time the two sides have come back to the judge for help.

The government argued that the source code for Windows is a critical piece of evidence in the case. The Justice Department and 21 state attorneys general have charged Microsoft with attempting to extend its monopoly in personal-computer operating systems into other areas, such as Internet browsing software, Internet access and Internet content. The government says Microsoft illegally combined its browser, Internet Explorer, with its Windows software to stifle competition and to create a single toll gate to the Internet.

Microsoft has countered by arguing that integrating Web browsing with its operating system is a natural evolution driven by consumer preferences, not ulterior motives.

To prove that browsing belongs in the operating system, Microsoft has demanded internal documents from Novell, Sun Microsystems, Apple Computer, Caldera, IBM, Network Computer and the Santa Cruz Operation in hopes of showing that these companies have also integrated Web-browsing functions into operating systems.

Novell initially balked, voicing some of the same objections that Microsoft is now using to fight the Justice Department request, but has agreed to cooperate with Microsoft's subpoena.

In a distantly related private antitrust case in a federal court in Utah, Microsoft was ordered last week to turn over a small portion of its Windows 95 source code to lawyers and expert witnesses for Caldera, which is charging that Microsoft illegally tied Windows and the DOS operating system.

In that case, Microsoft insisted that no one with access to the code be allowed to develop any competing operating system software for 18 months. The court rejected that demand. Those who see the code will be prevented from making commercial use of their knoledge.

Similar protections would be in place for the government's expert witnesses in the federal and state case, but Microsoft is again demanding the 18-month ban, which the government said will prevent it from obtaining qualified experts.

Microsoft has agreed to let federal lawyers question Gates for eight hours, but the government said that might not be enough. The Justice Department said Gates has personal knowledge of Microsoft business and technical strategies that it needs to prove its case. Gates does not have the right to refuse to testify, as he would in a criminal trial.

"If it's such an urgent demand, why didn't they do it two months ago?" Microsoft's Cullinan asked. "It's not rocket science to know you'll want to depose Gates." He said Microsoft has obtained depositions from Sun Microsystems' Scott McNealy and Netscape Communications' Jim Barksdale.

Microsoft will file an expanded version of its formal legal reply Aug. 10, and the Justice Department will have two weeks to respond.

Written By Rex Nutting

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