Appeals Court Order Staying District Court Preliminary Injunction, as to Win98.
May 12, 1998.
Source: Microsoft.

United States Court of Appeals

No. 97-5343 September Term, 1997
United States of America,


Microsoft Corporation,

Consolidated with 98-5012

Appeals from the United States District Court
for the District of Columbia
(No. 94cv01564)

Before: WALD, WILLIAMS, and RANDOLPH, Circuit Judges.


Petitioner Microsoft Corporation moves for a stay of the preliminary injunction entered by the district court in this action, insofar as it relates to Windows 98, which is scheduled for initial release to computer manufacturers on May 15, 1998.  for the reasons that follow, the stay is GRANTED.

The United States objects that Microsoft should have applied initially to the district court. Federal Rule of Appellate Procedure 8(a) indicates a preference for that procedure but permits the motions to be made to the court of appeals if seeking relief from the district court is "not practicable."  Decision on Microsoft's  motion requires, among other things, an evaluation of the likelihood of success on the merits of its contention that Section IV(E)(i) of the consent decree does not bar Microsoft's sale and distribution of Windows 98 under the conditions that it evidently intends.   (Those chances are, of course, the inverse of [begin page 2] the United States's chances of showing that that section establishes such a bar.)  The meaning of the consent decree is now before us, not the district court, and we have heard argument and deliberated upon that meaning.  While the district court retains power to stay its judgment, insofar as that may affect Windows 98, see Rakovich v. Wade, 834 F.2d 673, 673-74 (7th Cir. 1987), it is comparatively impracticable for it to do so when the appeal has progressed so near resolution.

Whatever the United States's chances of winning permanent injunctive relief with respect to Windows 95 in the proceeding currently in the district court, they appear very weak with respect to Windows 98.  The United States presented no evidence suggesting that Windows 98 was not an "integrated product: and thus exempt from the prohibitions of Section IV(E)(i).  (So far as we know, it presented no evidence at all about Windows 98, and at oral argument appeared quite indeterminate as to whether it had any claim that the preliminary injunction applied to it.)  To the extent that the preliminary injunction awards the United States relief to which it has made no effort to show an entitlement under the consent decree, we must grant the stay.  Moreover, it has not suggested that it has any dispute with Microsoft's claims of technological integration.  Under these circumstances any interpretation of IV(E)(i) which barred the distribution of Windows 98 under the conditions evidently contemplated by Microsoft would "put [] judges and juries in the unwelcome position of designing computers."  IX Phillip E. Areeda, Antitrust Law P 1700j at 15 (1991).

Mark J. Langer, Clerk


Deputy Clerk