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MS on Trial Microsoft has published an open letter from Bill Gates and Steve Ballmer to "customers, partners and shareholders" reiterating the company's intention to appeal against Judge Jackson's verdict, but stressing that "we will continue to look for new opportunities to resolve [the case] without further litigation." They "respectful disagree" with Jackson's ruling, and promise that "innovation will continue to be the No 1 priority at Microsoft," which translates means the threat of judicial retribution and/or roadblocks isn't going to be allowed to derail the integration process. In line with what the two MS chiefs said immediately after the verdict, they regard the 1998 Court of Appeals decision overturning Judge's Jackson's preliminary injunction as the key plank of their appeal case. That decision, they say, "affirmed Microsoft's right to build Internet capabilities into Windows to benefit consumers." In his Conclusions of Law Judge Jackson went to some considerable lengths to narrow the scope of the Appeal Court decision, and to secure the support of Supreme Court precedents to justify the line he was taking. So depending on how the Supreme Court sees it, Microsoft's case may not be as strong as Gates and Ballmer think. Their claim that they will continue to pursue a negotiated settlement may however turn out to be more important. If, as seemed to be the case at the first of Jackson's post-verdict meetings yesterday, Microsoft's lawyers can slow the progress of the remedies section of the trial, the company could buy time in which to cobble together a deal. The judge's willingness to take separate remedies proposals from the DoJ and the states could help Microsoft too; the two parties in the government camp want to try to work together, but it's in Microsoft's interest to perpetuate and expand the split. ® Complete Register Trial coverage

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