Sun sues Microsoft over Java, antitrust issues

Sun Microsystems Inc. has filed a private federal antitrust lawsuit against Microsoft Corp., accusing the company of harming competition by using its monopoly in the market for PC operating systems to undermine the success of Sun's Java technology, the company said Friday.

The suit accuses Microsoft of hampering Java's success by, among other things, distributing a version of the technology with its products that is not compatible with Sun's. Sun is seeking a series of preliminary injunctions against Microsoft, one of which would require it to stop making Microsoft's JVM (Java virtual machine) download available and instead distribute a current version using Sun's technology with Windows XP and Internet Explorer.

Sun noted in the suit, filed in the U.S. District Court in San Jose, California, that a U.S. federal court of appeals in June last year upheld a finding that Microsoft had been guilty of abusing its monopoly power, in part because of its dealings with Sun and the Java platform.

Sun is also seeking a permanent injunction that would require Microsoft to license its proprietary software interfaces to other companies and to "unbundle" products such as Internet Explorer, its IIS (Internet Information Server) Web server and the .Net framework from its operating systems.

"It (the new Sun lawsuit) is about determining the extent of that damage, how to fix it and not to stop it from reoccurring," said Michael Morris, senior vice president and general counsel at Sun, during a conference call with press and analysts. "I don't think this comes as a surprise to anyone."

Palo Alto, California-based Sun claims that Microsoft's "ultimate goal" is to dominate access to the Internet to the point where users would have to use a Microsoft product every time they connect to the Web. With its desktop and server operating systems, browser and .Net technology, Microsoft could create "choke points" for using the Internet, Morris said.

"That would be a tragedy for the industry as a whole and for consumers," he said.

Morris was asked to confirm reports in which he was quoted as saying that the Sun suit seeks damages of more than US$1 billion. While Morris declined to give an exact figure, he said "substantial damages are provable" and that parts of Sun's hardware business had suffered due to Microsoft's actions.

The companies' legal battle over Java goes back to 1997, when Sun filed a lawsuit against Redmond, Washington-based Microsoft in which it made similar claims. As part of a settlement in that case reached in January last year, Microsoft agreed to pay Sun $20 million and adopted a new Java licensing agreement that greatly limited the way in which it could use Java. It was also barred from using the Java logo on its products.

Sun said that its new lawsuit is broader in scope that the breach-of-contract suit it filed in 1997. Terms of the settlement reached in the original lawsuit "specifically provided that Sun did not release any of its claims under antitrust laws," the company said.

The new lawsuit expands the sanctions against Microsoft being pursued by the U.S. states that have yet to reach a settlement with Microsoft in its antitrust battle with the U.S. government, Sun said. In that case, the U.S. Department of Justice and nine of the suing states have agreed to settlement terms with Microsoft, while a further nine states plus the District of Columbia are pushing for harsher sanctions.

A Microsoft spokesman said the company has not had time to review the lawsuit, but had several immediate points to make.

"It's time to move past these issues, many of which are related to a lawsuit the parties settled last year," said Jim Desler, a Microsoft spokesman.

"Sadly, the real losers in this type of litigation are software developers. The industry is at its best when we focus on innovation and developing great products."

Desler said any lack of acceptance of Java is Sun's responsibility.

"Millions of consumers using Windows easily access and use Java technology every day. Java technology is widely used and any lack of consumer acceptance of Java is due to Sun's own failures and not actions by Microsoft."

In the new lawsuit, Sun charged that Microsoft tried to fragment the Java platform by "flooding the market" with Java Runtime Environments that are incompatible with Sun's technology. It accused Microsoft of forcing other companies to distribute or use incompatible products, and said the company is guilty of copyright infringement for distributing an unlicensed version of Java.

Since it filed its original lawsuit in 1997, Sun has argued that Microsoft sees Java as a major threat to the hegemony of Windows, in large part because Java programs can run on any operating system. Microsoft distributed its "polluted" version of Java in a bid to break Java's cross-platform capabilities and limit its popularity, Sun has argued. Microsoft has vehemently denied any wrongdoing, saying that it stuck to the letter of its licensing contract with Sun.

Sun additionally claims that Microsoft designed its .Net technology as a response to Java, and made it more difficult for users to access Java, hoping that it could "buy time" for building out .Net, Morris said. "The fact of the matter is that the .Net framework is in many ways designed to mimic the functionality of Java," he said.

Sun joins operating system vendor Be Inc. and AOL Time Warner Inc.'s Netscape division, which also filed private antitrust suits against Microsoft in the wake of the federal courts' finding that Microsoft is a monopoly company that broke antitrust laws.

"This is Sun going to its last resort," said David Smith, senior analyst at Gartner Inc. "They're not liking what the legal system has produced in terms of the antitrust case, and not having any other choice but to go after (Microsoft) in a private suit. I'm not the least bit surprised."

While the court battle is likely to be a lengthy one, some legal experts said the Appeals Court ruling against Microsoft could help Sun prove its case.

"To the extent that the facts are relevant to Sun's lawsuit, they are already established and the policy is that federal courts shouldn't spend time establishing the same set of facts," said Dana Hayter, an attorney for Howard, Rice, Nemerovski, Canady, Falk & Rabkin, in San Francisco. "They still have facts they need to prove (but the monopoly finding) takes them a long way."

(Stacy Cowley in New York and Scarlet Pruitt in Boston contributed to this report.)

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