April 16, 2002

Microsoft fighter David Boies, where are you?

- By Jack Bryar -
If those hauled into court ever wondered if it made a difference who their lawyer was, they would need look no further than the courtroom of Judge Colleen Kollar-Kotelly. Watch the legal team employed by the states still fighting the proposed Microsoft antitrust settlement. You might wonder if they are consciously trying to wreck their own case.
What's really annoying is the way these attorneys have let their own witnesses
dump on Open Source. Where is David Boies when you really need him?

The last time super-attorney and Microsoft fighter David Boies was
seen in front of a TV camera, it was to support the dying presidential
candidacy of Albert Gore Jr. Since then, his boutique
law firm
has grown from a staff of 25 to a national practice of
more than 100 lawyers. These days, Boies reportedly charges in excess of $750 an
hour for his time. If the legal team of states fighting Microsoft and the
proposed antitrust settlement want to prevail in court they might consider
paying his fee. When Boies was in charge of the original antitrust case, the
plaintiffs won their day in court. However, the team currently in charge of the
case is making a hash of things.

Among the states that rejected the government settlement with
Microsoft are Massachusetts, Iowa, Utah, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, plus the District of Columbia. Don't any of them employ at least one good lawyer? If not, how does one explain their handling of the case to date? Over the last few weeks, the states have managed to commit half a dozen violations of a
handful of basic rules for how to conduct a court case that should be obvious
to a first-year law clerk. Three in particular are killing the states
in court.

Rule #1: Never allow your opponents to retry a case.
This is a cardinal sin, particularly if you won the case
originally. Microsoft has already been found guilty of anti-competitive practices,
and
lost its appeal
. The company's attempt to claim that Internet
Explorer was somehow integral to the proper functioning of the Windows operating
system was already laughed out of an earlier court. Microsoft has
already accepted a set of penalties for its behavior. The trial before the
judge is supposed to be limited to three items, determining:

  • Whether the Justice Department's proposed penalty was sufficient.

  • Whether that settlement was developed in an open process, complying
    with the Tunney Act.

  • Whether there is an alternative set of penalties and oversight that
    more effectively restrains further anti-competitive practices.

However, because many of the states' alternative remedies have technical
elements, attorneys should have known that they would have to be vigilant if to keep the case from descending into a confusing exercise in swapping acronyms with Microsoft's lawyers.

In the past, Redmond's legal team has always used any technical issue as
an excuse to re-assert a series of unlikely, even outrageous technical
claims and effectively retry the original case all over again. The
states' legal team needed to take charge of the case and keep it focused on the
Tunney Act, Microsoft business practices and economic issues. This they
have failed to do.

For example, over the last few days, Microsoft attorneys have
focused on one suggested remedy, the "open sourcing" of Internet Explorer,
among a laundry list of proposals. They have used this suggestion to
re-assert a variety of previously discredited claims about the interoperability
of Internet explorer and the potential effect of third-party software on
the operational integrity of the Windows platform.

Rule #2 Don't let your witnesses tell (obvious) fibs
In many respects, Microsoft lost its original case because its lawyers didn't
caution Microsoft's Jim Allchin and Bill Gates about a critical
element of jurisprudence -- namely, it doesn't pay to sling BS on the witness
stand. In their initial testimonies, both witnesses made statements that were
robustly contradicted by many of their emails and memos. In that original case,
the Department of Justice's lead attorney Boies walked both Gates and Allchin
through all of those inconsistencies, completely embarrassing them
in the process. Many observers thought Gates, in particular, only
avoided getting caught in a "perjury trap" by suffering a spectacular loss of
memory on the witness stand.

Such testimony rarely does your case much good, and it is precisely
the kind of testimony Microsoft lawyers managed to get out of their
opponents this time around. An inability to tell the straight truth must be a
disease of marketing executives, because almost every witness with a marketing
background embarrassed him or herself on the stand, and risked putting his or her boss in hot water.

Typical was the testimony of Palm Inc.'s Michael Mace. Palm's "chief
competitive officer" told the court a story that seemed to contradict
the assertions his boss had made only days before.

At an investor conference recently, Palm CEO Eric Benhamou told
his audience, "We believe that the hand-held opportunity remains wide
open. There is no monopoly ... of software" in the handheld market.
In court, Mace told quite a different story. If Mace was to be
believed, far from a "wide open" market, Microsoft was breathing down Palm's
neck and there was a "substantial risk" that Microsoft could soon
monopolize the handhelds market altogether.

Microsoft's attorneys also attempted to get Red Hat to reconcile its
claim of injury from Microsoft's business tactics with their statements
to the investment community about being the "fastest growing operating
system." They rattled a witness from SBC Communications with similar
questions about the differences between what that company had told their
investors about the viability of their Prodigy ISP and what they were telling the
court.

A year or two back, such inconsistencies might have been laughed
off as Silicon Valley hyperbole. In today's post-Enron investment
marketplace, investors and their lawyers may not be as easily amused. A little early
guidance from the states' legal team might have alerted these
executives to the trap they were walking into.

Rule #3 Don't let your witnesses testify outside their
competencies.

Good lawyers coach their witnesses. Honest ones don't ask witnesses
to lie, and they don't feed them answers. Intelligent ones do make
certain witnesses only answer questions they are asked. They
also make sure "expert" witnesses stay within their area of supposed
expertise. An undisciplined witness who offers unsolicited opinions or who
pontificates on subjects he knows little about can be trapped into making statements that either damage the case or sound really, really dumb.

When Microsoft cross-examined the last major witness for the states,
Berkeley economics professor Carl Shapiro, he was just such an undisciplined
"expert." He offered many opinions and at great length. Microsoft's lawyers could have only wished the states had supplied a few more "experts" just like him. By
the time he got off the stand, Shapiro did more to wreck the states' case
than any Microsoft witness is likely to do.

Perhaps the lawyers for the states assumed that Shapiro, a former
Justice Department official, would know an expert witness shouldn't let
himself get trapped into grandstanding or offering half-considered opinions.
Trial lawyers know their opponents can cross-examine a client on
anything he or she says. The results can be disastrous.

The states' legal team should have expected Microsoft would be
highly motivated to jump all over Shapiro. In the original case, Boies
made some of his most damaging points against Microsoft by cross-examining the company's lead economist, Richard L. Schmalensee. By the time Boies
was done with him, Schmalensee had attacked many of his own works under
oath and contradicted many of the assertions being made by Microsoft
executives. Under Boies' guidance, Schmalensee read from his published writings on
monopoly only to declare on the witness stand, "what was I thinking?"

If Microsoft's attorneys were looking for payback for that episode,
they got it.

Shapiro was on the stand to provide expert testimony on the likely
consumer benefits and market effects of a variety of proposed remedies.
Unfortunately for the states, Shapiro was all too willing to offer a variety of
opinions on a variety of technical issues as well. Microsoft attorney Michael
Lacovara was able to get Shapiro to define what he thought constituted a
"nascent technology." Under his guidance, Shapiro speculated about whether the
Palm operating system and set-top software was a greater technical challenge to Windows than Open Source software. Lacovara later drew Shapiro into a lengthy discussion about Open Source and its impact on the software development process at
Netscape. At one point he had Shapiro agreeing that Open Source
development leads to incomplete, buggy software. At another point, Shapiro
suggested that, in an Open Source environment, Microsoft could set compliance
standards guiding any Open Source development of the Internet Explorer platform.

Shapiro even disagreed with the earlier testimony of Princeton
University professor Andrew Appel. Appel, whose expertise includes technology, had
testified in favor of a modularized version of Windows. He suggested
that such code would make it easier to integrate with third-party products.
It would also make it easier for users to replace modules with third-party
elements of their choosing. Under Lacovara's guidance, Shapiro even
seemed to agree with Microsoft's assertion that parts of the states'
proposed settlement served mostly to improve the competitive position of
AOL Time Warner.

It was quite a performance.

In short order, Microsoft will present many of its 31 witnesses to
the court. Perhaps the attorneys for the states will get lucky. It is
always possible that several of these witnesses will be as undisciplined and
unprepared as the states' witnesses were. They had better hope so if they expect to
prevail in court.

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