Microsoft won a court appeal Tuesday in part of the federal monopoly case against the computer giant, winning the right to tie its Internet software to its popular computer operating system.
The U.S. Court of Appeals agreed that a lower court's injunction against Microsoft was improper and sent the matter back to the federal trial judge overseeing the antitrust case.The broad, 2-1 ruling found that U.S. District Judge Thomas Pen-field Jackson made procedural and substantive errors in issuing a preliminary injunction against Microsoft in December.
Jackson ruled that Microsoft could not force computer makers who sell the nearly ubiquitous Windows 95 operating system to also offer the company's Internet search product, called a browser.
Government prosecutors did not specifically ask for the injunction, but Jackson issued it anyway. On appeal, Microsoft lawyers complained that the company did not have an opportunity to fight something they did not know was on the table.
The appeals court agreed and told Jackson to reconsider.
"The preliminary injunction was issued without adequate notice and on an erroneous reading," of the law, the majority of the three-judge appeals court panel wrote.
Microsoft spokesman Jim Cullinan said company officials were still reading the 56-page opinion. "I think we're gratified with the court's decision and we will comment further once we review," he said.
Microsoft had complained that the judge should not have appointed a "special master" to consider important technical issues and report back to him. The company said the master, Harvard University law professor Lawrence Les-sig, was biased and was given too much authority.
Again, the appeals court agreed, calling the appointment "either a clear abuse of discretion or an exercise of wholly nonexistent discretion."
The appeals court did not agree that Lessig was biased but said his appointment amounts to the wrong-headed addition of a surrogate judge to the case.
The appeals court decision applies to the first, narrow antitrust move that government lawyers made against Microsoft last year.
The Justice Department contended the software company tied sale of Windows 95 to its Internet Explorer browser in violation of a 1995 agreement with the government.
The Justice Department filed a broader monopoly case against the Redmond, Wash., company this year that is not directly affected by the appeals court ruling.
The judges noted, however, that the second, broader case may supersede the first one.
Given the appeals court ruling, the Justice Department "may well regard further pursuit of this case as unpromising, especially given the alternative avenues developing in its recently launched separate attacks on Microsoft's practices," the judges wrote.
Justice Department lawyers were reviewing the ruling and had no immediate comment.