Summary of the Lawsuit

Type of Lawsuit

Sun Microsystems' action is a private antitrust suit filed under the antitrust laws of the United States as well as the laws of the State of California. Sun is the plaintiff; Microsoft Corporation is the defendant.

Sun's suit seeks to restrain anticompetitive conduct by Microsoft and to remedy the damage suffered by Sun as a result of Microsoft's illegal efforts to maintain and expand its monopoly power. No damage amounts have been specified.

Court

Sun's civil antitrust suit was filed in March 2002 in the San Jose Division, United States District Court for the Northern District of California. On August 9, 2002, the Judicial Panel on Multidistrict Litigation, a panel charged with streamlining related cases filed in multiple districts, issued an order transferring Sun's lawsuit to the District of Maryland for inclusion in the central pretrial proceedings in the Microsoft Corp. Windows Operating System Antitrust Litigation, MDL-1332. At the conclusion of the pretrial proceedings in MDL-1332, Sun’s lawsuit will return for trial to the Northern District of California.

What Sun Charges

Sun's lawsuit charges that Microsoft's illegal behavior harmed the Java platform. In addition to this, the suit specifies that Microsoft:

Engaged in illegal monopolization and/or monopoly maintenance (violation of Section 2 of the Sherman Act) of the:

• Intel-compatible PC operating system market
• Web-browser market
• Office productivity suite market

Attempted to illegally monopolize (violation of Section 2 of the Sherman Act):

• Workgroup server operating system market

Engaged in illegal tying (violation of Section 1 of the Sherman Act) of its:

• Internet Explorer web browser to its Windows PC operating system
• Windows workgroup server operating systems (e.g., Windows 2000 Professional and Windows XP Professional) to its PC operating systems
• IIS Web server to its workgroup server operating system (e.g., Windows NT 4.0 and Windows 2000 Server)
• .NET framework to its PC and workgroup operating systems
• Active Directory Software to its Windows workgroup server and PC operating systems and to Exchange server software
• Exchange server software to Office productivity suite

Illegally entered into exclusive dealing and exclusionary agreements (violation of Section 1 of the Sherman Act), including, for example, its:

• Agreements with independent software vendors (developers), Apple Computer and Intel not to develop for, distribute or use a non-Microsoft compatible implementation of the Java platform

Engaged in copyright infringement (violation of 17 U.S.C. 501).

Unreasonably restrained trade (violation of California's Cartwright Act).

Engaged in unfair competition (violation of the California Business and Professions Code).

What Sun Seeks

Sun is seeking remedies that include:

Preliminary injunctions prior to trial requiring Microsoft to: :

• Distribute Sun's current, binary implementation of Java technology as part of Windows XP, and also distribute it as a recommended update for older Microsoft desktop operating systems.
• Stop the distribution of Microsoft's Virtual Machine for Java that is outside the scope of the Jan. 23, 2001 settlement agreement.

Relationship to Other Litigation

Sun's private antitrust suit is broader in scope than the breach-of-contract suit Sun filed against Microsoft on Oct. 7, 1997. That suit, in which Sun acted to protect the integrity of its Java platform, was settled on Jan. 23, 2001. Microsoft agreed to pay Sun $20 million, and Sun agreed to grant Microsoft a new, limited license to use Java "without modification" for a limited time in a defined set of existing Microsoft products. The settlement agreement specifically provided that Sun did not release any of its claims under antitrust laws.

Further, Sun's private antitrust suit expands significantly on the claims that were pursued by the U.S. Department of Justice and the states in U.S. v. Microsoft. Many of Sun's claims in its private antitrust suit were not adjudicated in the U.S. Department of Justice's case.

In addition, Sun filed a complaint with the European Commission concerning Microsoft’s activities with respect to the workgroup server market. The European Commission also brought its own ex-officio case. Both procedures are awaiting decision by the Commission.