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             IN THE UNITED STATES COURT OF APPEALS
             FOR THE DISTRICT OF COLUMBIA CIRCUIT
                     ____________________


                       No. 97-5343
                     ____________________


                UNITED STATES OF AMERICA,


                            Petitioner-Appellee,

                           v.


                 MICROSOFT CORPORATION,


                            Respondent-Appellant.
                     ____________________


        ON APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE DISTRICT OF COLUMBIA
                     ____________________



         RESPONSE OF THE UNITED STATES TO APPELLANT
    MICROSOFT'S MOTION FOR EXPEDITED CONSIDERATION AND
             FOR AN EXPEDITED BRIEFING SCHEDULE



   In its December 18, 1997, Order requiring the United States to respond to Appellant
Microsoft's Motion For Expedited Consideration And For An Expedited Briefing Schedule
("Motion"), this Court stated "it appears that this matter will be expedited" and requested the
United States "address any reason that [the appeal] not be expedited to the degree sought by
appellant." Order (Dec. 18, 1997).


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   1. Microsoft has not offered the requisite "strongly compelling" "reasons" 1 for priority
on this Court's docket. Despite its claim that the preliminary injunction was procedurally infirm
and will cause it irreparable harm, Microsoft neither requested further relief from the district
court nor sought a stay of its order. Microsoft's failure to seek a stay pending appeal poignantly
demonstrates that the district court's preliminary injunction imposes on Microsoft no significant
hardship, let alone threatens serious irreparable harm that might warrant accelerating the
appellate process.
   Indeed, Microsoft's construction of the preliminary injunction imposes on it no burden at
all. According to Microsoft, the district court required it to provide Original Equipment
Manufacturers ("OEMs") with two options to a license that compels an OEM to take Internet
Explorer 3 along with Windows 95 (the preexisting conditioned license). First, an OEM may
license what Microsoft itself characterizes as a "patently deficient" version of Windows 95.
Motion at 5. Second, an OEM may license a version of Windows 95 that is over two years old.
See Microsoft Telephone Press Conference Tr. 2-3 (Dec. 15, 1997) (attached as Exhibit 1). As
Microsoft concedes, neither option will be regarded by OEMs as commercially viable. See id. at
6-7, 14; Kempin Dep.  10 (lodged by Microsoft Dec. 9, 1997) ("I am not aware of any interest
among OEMs in installing outmoded versions of Windows 95."). Thus, far from "directing"
Microsoft to "license[] a degraded product," Motion at 5, Microsoft's reading of the injunction


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ensures that it will not license OEMs anything other than exactly what Microsoft wishes to
license. Microsoft's interpretation of the injunction's operation with regard to Internet Explorer
4 similarly imposes no hardship, as Microsoft reads the order simply to maintain the status quo. 2
   Although we disagree with Microsoft's interpretation of the preliminary injunction, the
United States believes that Microsoft could comply with it by, among other things, implementing
trivial modifications to the software it licenses to OEMs that includes Windows 95 (known as
"OEM Service Releases" or "OSRs"). By "uninstalling" Internet Explorer from Windows 95,
which Microsoft permits end users who have purchased a computer loaded with the most recent
OSR release to accomplish by reloading Internet Explorer 3 and invoking the "Add/Remove
Programs" utility, Microsoft could deactivate browser functionality without impairing the
underlying operating system. Microsoft, in recent public statements, has confirmed that this
form of compliance with the district court's order could be implemented with ease. See David


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Bank & Dean Takahashi, Microsoft Seeks Alternative Ways to Comply With Court, Wall St. J.,
Dec. 19, 1997, at B4 (reporting that Microsoft Vice President Brad Chase "conceded there are
simple ways to deactivate Internet Explorer"). Microsoft, then, can point to no substantial
burden that would flow from adoption of either party's view of the injunction's proper scope.
   Nor is there merit to Microsoft's claim, see Motion at 15, that the possibility the
preliminary injunction might be read to apply to its anticipated Windows 98 release justifies
highly-expedited proceedings. Microsoft has publicly taken the position that the issuance of the
preliminary injunction "will not affect the launch of Windows 98 in the first half of 1998."
Microsoft Appeals Preliminary Injunction (Dec. 15, 1997) [http://www.microsoft.com/
corpinfo/press/1997/Dec97/12-15doj.htm]. Indeed, Microsoft represented to this Court that any
concern that the injunction might impact on Windows 98 amounts to "unfounded" "speculation."
Motion at 15. Speculation cannot support a claim of irreparable harm. See Wisconsin Gas Co. v
FERC, 758 F.2d 669, 674 (D.C. Cir. 1985) (per curiam). 3


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   To be sure, the district court in the course of further proceedings might reject Microsoft's
construction of the injunction. 4 In that event, Microsoft would be free to forestall any asserted
irreparable injury by seeking a stay pending appeal from the district court and, if necessary, from
this Court -- although, as explained above, the injunction as read by the United States threatens
no such harm. But what Microsoft cannot do, yet sought to accomplish here by declining to
request a stay pending appeal, is to manufacture the very circumstances that it erroneously claims
warrant expedition.
   2. Nonetheless, if the Court determines that briefing should go forward on the highly-
expedited schedule proposed by Microsoft, with Microsoft's Opening Brief to be filed within 21
days of issuance of a briefing order, the United States would be prepared to file its Appellee
Brief 21 days thereafter. If Microsoft is allowed additional time in which to file its Opening
Brief, we request a briefing schedule allowing the United States to file its brief 30 days after the
filing of Microsoft's brief. In either event, Microsoft's Reply Brief should be due 7 days after
the filing of the United States' brief.
   The United States has not decided whether it will file a cross appeal. The United States
accordingly requests that any briefing schedule set by the Court provide that, if the United States
notices a cross appeal, it may file its joint Appellant/Appellee brief by the date on which its
Appellee brief otherwise would be due, and that Microsoft be given the same amount of time the


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court authorizes between the filing of Microsoft's Opening Brief and the filing of the United
States' brief in which to file its joint Reply/Appellee Brief. In that event, the United States
should be required to file its Cross Appeal Reply Brief 7 days thereafter.
   Respectfully submitted.




Of Counsel
:

CHRISTOPHER S CROOK
PHILLIP R. MALONE
STEVEN C. HOLTZMAN
PAULINE T. WAN
KARMA M. GIULIANELLI
MICHAEL C. WILSON
SANDY L. ROTH
JOHN F. COVE, JR.

Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue
San Francisco, CA 94102

  
JOEL I. KLEIN
Assistant Attorney General

A. DOUGLAS MELAMED
Deputy Assistant Attorney
General

CATHERINE G. O'SULLIVAN
MARK S. POPOFSKY
Attorneys

Antitrust Division
U.S. Department of Justice
601 D Street, NW
Washington, DC 20530
(202) 514-3764



   December 22, 1997                       CERTIFICATE OF SERVICE

   I hereby certify that on December 22, 1997, I caused the foregoing RESPONSE OF THE
UNITED STATES TO APPELLANT MICROSOFT'S MOTION FOR EXPEDITED
CONSIDERATION AND FOR AN EXPEDITED BRIEFING SCHEDULE to be hand-served
by courier upon:

                     Richard Urowsky, Esq. c/o
                     Sullivan & Cromwell
                     1701 Pennsylvania Avenue, NW
                     Washington, DC 20006


and to be served by facsimile upon:

                     Richard Urowsky, Esq.
                     Sullivan & Cromwell
                     125 Broad Street
                     New York, New York 10004

                     William H. Neukom, Esq.
                     Microsoft Corporation
                     One Microsoft Way
                     Redmond, Washington 98052

                     James R. Weiss
                     Preston Gates Ellis & Rouvelas Meeds
                     1725 New York Avenue, NW
                     Washington, DC 20006





                                  _________________________
                                  MARK S. POPOFSKY

                                   Attorney
                                   Antitrust Division
                                   Appellate Section
                                   601 D Street, NW
                                   Washington, DC 20530


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                                           EXHBIT 1

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FOOTNOTES


1 U.S. Court of Appeals for the District of Columbia Circuit, Handbook of Practice and Internal Procedures 61 (1997).

2 See Letter from Joachim Kempin to Microsoft OEM Customers at 1 (Dec. 15, 1997) ("Next week we will send you two new updates: the December 1997 Supplement (which will include Internet Explorer 4.01 and other Windows 95 updates), and OSR 2.5 (which contains all of Windows 95, including Internet Explorer 4.01 and other updates). Again, under the court's order, you are free to use or not to use these updates, as you wish."). To the extent this letter could be construed to mean that Microsoft intends to condition a license to "Windows 95 updates" on an OEM licensing Internet Explorer 4, see Letter from David A. Heiner to Phillip R. Malone (Dec. 17, 1997) ("Computer manufacturers are free to install Internet Explorer 4.0 (which provides the latest enhancements to Windows 95, including a new user interface) or not, as they choose."), the United States believes that Microsoft's conduct, depending on the facts, might violate the preliminary injunction. In that event Microsoft, as explained in the next paragraph, could comply with the district court's order by implementing trivial modifications to the software it licenses OEMs. Thus, regardless of which interpretation of Microsoft's intentions is correct, compliance with the injunction would impose on Microsoft no significant burden.

3 Microsoft's further contention, see Motion at 6, 13, 15-16, that the public has an "`unusual interest in prompt disposition'" of this appeal because OEMs and third-party software developers would benefit from "know[ing] exactly what features and functionality will be included" in Windows 98 and its OSR releases of Windows 95 is wide of the mark. For one thing, as explained above, Microsoft has not altered its plans with regard to Windows 98. For another, the consequences of any uncertainty are greatly overstated. As the United States explained, see U.S. Reply Br. at 17-18 (Nov. 20, 1997), and Microsoft acknowledged, see id. (discussing Microsoft declarations), because not all users immediately upgrade to the newest version of Windows, software developers usually write applications that can run without regard to whether the user has installed the latest operating system updates or other software. Indeed, far from impairing the market, the district court's order, by decoupling Windows 95 from Internet Explorer, expands the array of options available to OEMs and to consumers.

4 On December 17, 1997, the United States moved the district court to enforce the preliminary injunction and to hold Microsoft in civil contempt. The court has scheduled an evidentiary hearing on that motion for January 13, 1997.