UPDATE: Judge Reverses Java-Must-Carry Order On Windows XP

In a mixed decision handed down Thursday, the 4th U.S. Circuit Court of Appeals affirmed U.S. District Court Judge J. Frederick Motz's December 2002 ruling that supported Sun's copyright infringement claims against Microsoft. However, in a stunning victory for Microsoft, the court vacated the Java-Must-Carry order delivered last January.

While the decision is viewed as a victory for Microsoft, Sun attorneys characterized the reversal as a temporary setback and said the company will seek redress based on the upheld copyright-infringement claims.

"We are extremely pleased with the Appellate Court's ruling today affirming the copyright infringement injunction. This decision confirms that Microsoft violated our prior settlement agreement, and that it did so in a way that continued to fragment the Java platform on PCs," said Lee Patch, vice president, legal affairs at Sun, in a statement.

"While we are disappointed with the delay that results from the Court's determination to vacate and remand the Must-Carry preliminary injunction, the Court accepted the District Court's determination that Microsoft engaged in anticompetitive acts," the Sun attorney added. "We look forward to a speedy trial and our opportunity to more fully address these and significant additional violations when we present our complete antitrust case against Microsoft."

Industry observers said the decision lets Microsoft off the hook--for now. Had the order been upheld, Microsoft would have had to bundle Sun's native Java in with its Windows XP client. The current version of Windows XP ships without any Java support. Microsoft pulled its own Java Virtual Machine from Windows once the court granted a stay on Motz' order.

While Sun prepares go after Microsoft on the copyright infingement claims, Microsoft expressed relief on both counts.

"We are pleased with today's Court ruling. This is another step in a long legal process and we consider it to be a positive step. We are also pleased that today's ruling appears to affirm [U.S. District Court] Judge Kotelly's conclusions on this [Java] issue," said a Microsoft spokesman, alluding to Kotelly's final ruling on the settlement agreement between Microsoft and the Department of Justice in 2001. We will abide by the Court's ruling on copyright and have already stopped distributing the Microsoft JVM through Internet download. This is part of a broader process of phasing out the Microsoft Java Virtual Machine as contemplated in the companies 2001 settlement agreement."

Industry observers said the Java VM debate and Microsoft's desktop dominance could well be moot points in the future, as adoption of development standards such as J2EE and Microsoft .Net for Web services become more widespread.

Earlier this month at Java One, several large OEMs including Hewlett-Packard and Dell Computer inked deals to include Java on PCs and laptop computers regardless of the court's decision. HP said it would ship Sun's Java on its PCs by the third quarter, and Dell pledged to do the same by year's end.

One solution provider that sells Microsoft and Novell software and services said the ruling is a yawn.

"I don't see why Microsoft or any vendor should be obligated to include somebody else's product. If they chose to include it as a service to their clients, great. If not, so be it," said Carlos Paz Soldan, vice president at Tenet Computer Group, Toronto. "I don't think it is a big issue because end-customers or their integrators can easily load Sun Java if they need to. In fact, most PCs these days are erased and reloaded with customer-specific images before shipment anyway, so we just have to include [Sun's Java RTE] in the base image."

ELIZABETH MONTALBANO contributed to this story.