05:43 PM ET 10/08/98
Judge denies Microsoft access to tapes
(Adds Justice, Microsoft comment on turning over databases to
government)
By Leslie Gevirtz
BOSTON (Reuters) - A federal judge Thursday denied a bid by
software giant Microsoft Corp. to get confidential tapes of
potentially embarrassing interviews that executives of rival
Netscape Communications Corp. gave to authors of a forthcoming
book.
Microsoft, which also was separately seeking documents from
a journalist in another case, argued it needed the tapes,
especially one of Netscape President James Barksdale, to prepare
for its epic antitrust battle with the U.S. Department of
Justice. The trial gets under way on Oct. 15.
The Justice Department sued Microsoft in May, charging it
violated antitrust laws by unfairly using its monopoly in
operating system software for personal computers. The trial
focuses in particular on Microsoft's allegedly unfair
competition with Netscape, a pioneer in browsers for accessing
the Web.
On Thursday, the Justice Department also asked that a judge
order Microsoft to turn over databases on the prices it charges
for its products.
Barksdale is set to testify for the government in the trial.
The forthcoming book, ``Competing on Internet Time: Lessons
from Netscape and Its Battle with Microsoft,'' to be published
next week, was made available to both Microsoft and Netscape.
In it, Barksdale reportedly makes some embarrassing
admissions about management and planning mistakes.
Microsoft attorney Thomas Sartory said as he pleaded for the
tapes' release that the interviews were important because
Barksdale was ``encouraged to be forthcoming, frank and truthful
and he hadn't been prepared by lawyers.''
When Massachusetts Institute of Technology Professor Michael
Cusumano and his co-author, Harvard University's David Yoffie,
questioned Barksdale and 43 other Netscape executives in some 60
to 70 hours of interviews, it was done with the promise of
confidentiality.
As part of their research, academics are often given
in-depth access to corporations -- as long as they allow the
company to review the manuscript before publication. Such
nondisclosure agreements are intended to protect proprietary
information.
The professors refused to cooperate with Microsoft and
instead accused the Redmond, Wash.-based company of being ``on a
fishing expedition.''
To surrender the tapes ``would stifle or chill future
opportunity for research as people would be less willing to
participate,'' argued their lawyer, Jeffrey Swope.
U.S. District Judge Richard Stearns agreed with the
professors -- for the most part.
In a rare ruling from the bench, Stearns said Microsoft's
arguments were based ``on the fundamental premise that a witness
in a civil case will lie. ... As a general proposition, I don't
think I can accept that as a judge.''
Stearns said Microsoft had the resources to question all the
witnesses involved and could get the information it sought
without forcing the tapes' release.
He did add, however, that if Microsoft could show it needed
the tapes to test a witness's credibility, he would listen to
the material in private and release it to the company if he
deemed it would be helpful.
In a separate development in pretrial maneuvering for
another case, Microsoft subpoenaed documents from a San
Francisco reporter for the online news service CNET.
Microsoft served reporter Dan Goodin with a subpoena at his
home Tuesday, demanding documents he used to write a Sept. 23
story about Microsoft's attempts to compete with Sun
Microsystems Inc.
In the story, which concerned a lawsuit Sun has brought
against Microsoft in San Jose, Calif., Goodin quoted internal
Microsoft memos.
CNET has retained a Los Angeles law firm to fight the
subpoena. Goodin's story is available at http://www.news.com.
In Washington, the Justice Department filed papers Thursday
that asserted Microsoft has resisted its attempts to get company
databases to help it determine the company's pricing and revenue
practices. The government asked the judge to order that
Microsoft produce the materials.
A Microsoft spokesman said the government's request was
overreaching.
``We've already given the government the databases they have
asked for,'' said company spokesman Greg Shaw. ``We offered to
help them get the information from the databases months ago
because of the sheer volume and complexity of the data sets. The
government refused our assistance.''
^REUTERS@
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