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Another Strike For Microsoft EU Defense

UPDATED: It's not the sort of send-off Microsoft was hoping for as it prepares to appeal its European antitrust decision.

The company said it will end attempts to gain EU information from U.S. companies, following a New York court's rejection of the its appeal to subpoena IBM.

New York judge Colleen McMahon called Microsoft's subpoena a "blatant end run" on EU authority, according to court papers obtained by internetnews.com.

The New York court said the subpoena request was "unduly intrusive and burdensome" on IBM and the EU since the subpoena asked for attorney notes of conversations with the EU.

McMahon also said the request would pit the court against the EU, rendering the EU's "proceedings meaningless," according to the decision.

Microsoft's request was deemed "both unnecessary and improper", as well as undermining laws discouraging countries involving themselves in foreign courts, according to the decision.

The court loss follows a denial earlier this week by a Boston judge of a similar Microsoft request for EU-related documents from Novell.

In that decision, Massachusetts judge D.J. Wolf quashed the subpoena, finding Microsoft didn't make its case.

"Microsoft has not demonstrated that the commission's procedures are fundamentally unfair," Wolf wrote.

Microsoft had argued it needed information from Novell, alleging the EU's Statement of Objections used testimony from competitors.

Although Microsoft had planned to appeal a third defeat handed down last month, the company decided not to appeal a California federal court ruling rejecting the software company's request Oracle and Sun turn over EU-related material.

Instead, Microsoft is anticipating next week's EU appeal process.

"The writing is clearly on the wall for these actions, and we will not be pursuing them any further," said Stacy Drake, a Microsoft spokeswoman, in a statement to internetnews.com.

"In the last few weeks, we have received some clarity from the commission and the monitoring trustee that has been very helpful," said Drake.

Microsoft spokesman Jack Evans said in a statement that the company is looking forward to presenting its case to the Court of First Instance.

In the balance is whether companies can improve their products by developing new features, and "whether a successful company must hand over its valuable intellectual property to competitors," Evans said.

Evans refuted the EU claim that Microsoft domination hurts competition.

"There is healthy competition and interoperability in all the markets covered in this case and we will bring those facts to the court next week," according to the spokesperson.

Following last month's still-undecided hearing on whether the EU should continue assessing Microsoft daily $2.4 million fines for noncompliance with a 2005 ruling, both parties seemed to see common ground.

At the time, Microsoft lawyer Brad Smith characterized the hearing as bringing "constructive dialogue" and left optimistic: "I wish we could have had this type of dialog sooner," he said in a statement.

"I don't see much common ground at all," said Joe Wilcox, a JupiterResearch analyst. "Where they differ is fundamental."

Even before next week's hearing, speculation has begun about what impact the long-running court battle might have on the already-delayed Vista operating system.

Last month, the EU said it may investigate Vista's bundling practice, and it was Microsoft's responsibility to answer questions.

"It is in Microsoft's own interest to clarify these issues as soon as possible so as not to have any doubts about the legality of Vista hanging in the air," EU spokesperson Jonathan Todd told internetnews.com at the time.

While Wilcox isn't sure whether Vista will be pulled into the anticompetitive debate, the process may be different this time around.

Because of the mountain of evidence the EU has compiled in the original case, any challenge to Vista could be speedier, believes Wilcox.



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