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Microsoft's appeal

Talks between the Microsoft chairman, Bill Gates, and senior US Justice Department lawyers last week made no progress towards resolving the conflict between the government and the software company. Back in court, Microsoft asked a federal appeals court quickly to overturn the preliminary injunction, issued by a district court last December, that prohibits it from bundling its Internet Explorer Web browser with certain versions of the Windows operating system.

Microsoft has already appealed against that injunction, but only in regard to Windows 95. Arguments ended last month but the appeals court has yet to issue its decision. Microsoft said that when it launched that appeal it did not know when it might be releasing Windows 98, so it made no arguments about the new product. Now, however, the company says that the injunction does seem to bar it from bundling its Web browser with Windows 98, on sale to the public on 25 June. That release could lead to new legal problems under the injunction, it claimed.

"In order to comply with the preliminary injunction insofar as it relates to Windows 98, Microsoft would have to create a whole new operating system that did not provide support for Internet standards," a spokesman said, pointing out that the Web capability was so central to Windows 98 that removing it would result in a product that "would bear little, if any, resemblance to Windows 98".

Justice Department lawyers responded that Microsoft faces a "crisis of its own making"; it had months to seek clarification of the injunction but deliberately chose not to until just before the launch of Windows 98.

Search company alliances

The US telecoms giant AT&T and the Internet search and directory service Excite both made major deals last week. Together they will launch Excite Online, an Internet service using Excite's search and directory content plus AT&T's WorldNet Internet access service. The aim is to provide a doorway to the Internet that wins more members than the recently announced Yahoo! Online, run by Yahoo and MCI, and those in the pipeline from, among others, Microsoft.

AT&T also announced that it had entered into a three-year pact with the search-engine company Lycos to develop and offer a range of Internet-based consumer communications services. The companies plan to offer new multimedia Internet applications for Lycos users in the near future. Applications will include voice-enabled chat, and point-and-click directories, the companies said. AT&T services will be available via Lycos's website.

Excite also made a deal with Netscape to collaborate on Internet content and search services. The companies, two of the most popular gateways to the Internet, said the deal will help them compete with other big names such as AOL and Microsoft. "We will continue to compete with each other but we also recognise that we will need each other for the next couple of years," said George Bell, Excite's president.

Netscape not guilty

A claim for patent violation brought by Wang against Netscape was dismissed last week. Wang claimed that Netscape Navigator's "save as" and "bookmark" features infringed patents granted in 1988 for its Videotex system. Netscape argued that there was no need for a trial because the concepts extended beyond Wang's proprietary system and were already widely implemented on the Web.

Judge Leonie Brinkema agreed, ruling that Wang's patent on the Videotex system was "generically and fundamentally different" from Internet Web browsers. Brinkema said that Wang's patent did not cover pages displayed on the Web, and that Videotex was a closed and proprietary system that relied on a central database supplier.

"When you write a patent so many years ago and then expect it to apply to a technology that did not exist at the time, it's a big stretch," said David Himelstein, an attorney specialising in intellectual property law.