Microsoft ordered to search for "deleted" e-mails

[Dave Farber <dave () farber net>]

Date: Fri, 12 Sep 2003 07:02:57 -0400
From: Barry Ritholtz <britholtz at maximgrp dot com>
Subject: Microsoft ordered to search for "deleted" e-mails
To: dave () farber net
(please show my email as follows:  britholtz at maximgrp dot com


Hi Dave,

Here's the follow up to the Cringley article about Microsoft and the 
deleted e-mails;  If you recognize Judge Motz's name, its because he is 
also handling the Sun Microsystems v Microsoft case. That's the case where 
Microsoft was ordered to archive all its email, starting in 2000.

As you can imagine, if they defied his previous order achival order, he's 
going to be none-too-happy with Redmond; It also puts the lawyers in the 
uncomfortable situation of trying to defend the undefendable. As someone 
who has studied this company over the years, I have to say I continue to be 
mystified by some of the silly foibles they manage to find themselves in 
time and again. (As previously disclosed, I am on the BoD of Burst)

Regards,


Barry L. Ritholtz
Market Strategist
Maxim Group
britholtz at maximgrp dot com
(212) 895-3614
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Big Picture:  A blog of capital markets, geopolitics, with a dash of film!
http://bigpicture.typepad.com/comments



Microsoft ordered to look for deleted e-mails
http://seattlepi.nwsource.com/business/138857_msftburst10.html

Burst.com lawsuit is one of several filed by competitors since monopoly ruling

By JAMES ROWLEY
BLOOMBERG NEWS

WASHINGTON -- A U.S. judge has ordered Microsoft Corp. to search for any 
deleted e-mails that might help Burst.com Inc. win a lawsuit claiming its 
technique for broadcasting music and video on the Internet was stolen by 
the Redmond company.

Burst shares have jumped almost 75 percent since the judge issued the edict 
Aug. 28 at a hearing in Baltimore where the software company's lawyer, 
Spencer Hosie, complained that there were "profound gaps" in the 140 boxes 
of e-mails that Microsoft turned over in pretrial proceedings. A transcript 
of the hearing obtained by Bloomberg News showed that U.S. District Judge 
J. Frederick Motz ordered Microsoft to search 25,000 backup computer tapes 
to determine whether they contain deleted e-mails pertinent to Burst's 
lawsuit.

If Burst can show Microsoft executives destroyed documents, Motz may 
instruct the jury that it's free to assume the truth of some of Burst's 
allegations, legal experts said. They said that, in turn, might prompt 
Microsoft to settle with Burst, which is seeking unspecified triple damages 
for the alleged misappropriation of its patented technology.

"What would be the point of going into court with your hands cuffed on the 
facts?" said Andrew Gavil, an antitrust expert at Howard University's law 
school in Washington, of Microsoft's potential predicament. "There is a lot 
of law out there that you have a special obligation to retain information . 
. . "

Burst's lawsuit is one of four by Microsoft competitors filed after a U.S. 
appeals court ruled in 2001 that the company illegally protected its 
Windows monopoly. Microsoft has settled suits brought by AOL Time Warner 
Inc. and Be Inc., which agreed last week to accept a $23 million payment to 
drop its claims. Sun Microsystems Inc., which seeks more than $1 billion, 
also sued Microsoft.

Burst claims that Microsoft interfered with its attempt to demonstrate its 
software by broadcasting over the Internet a concert of the Irish rock bank 
U2.  Burst said Microsoft released a new version of its Windows Media 
Player just before the concert so that consumers who used Windows Media 
Player 7.0 couldn't view the concert.

At the Aug. 28 hearing, Motz rejected Microsoft's argument that it's unfair 
to burden the company with an e-mail search based on "conjecture" the 
computer tapes might yield evidence executives discussed incorporating 
Burst.com's streaming media software into Microsoft products.

"It's a burden of Microsoft's own making," Motz said, according to the 
transcript. "This is a problem that is going to face a lot of corporations. 
If they're in areas where litigation is a likelihood, they've got to store 
their documents in a way they're readily retrievable."

Microsoft lawyer John W. Treece told Motz that "Burst's accusations of 
purposeful destruction is based upon pure speculation." Microsoft employees 
"may have deleted their e-mails as a matter of course," Treece said, 
predicting the search "is highly unlikely to be successful." Motz told 
Microsoft to begin searching e-mail for three of six executives who dealt 
with Burst.

"Microsoft has been forthcoming in providing evidence and will continue to 
cooperate," Microsoft spokesman Jim Desler said. He called Burst's 
allegations "without merit," adding that "Microsoft has innovated with 
digital technology in Windows for more than 10 years." At the hearing Aug. 
28, Hosie said Microsoft executives who attended seven meetings with Burst 
officials deleted e-mails they would have written shortly before and after 
the sessions as is customary.

"We see it time and again the thing that should generate e-mail traffic 
have not. There's no e-mails produced," Hosie said. "This is a company that 
lives and dies on its e-mails. It just isn't possible. These are not 
conjectural gaps. They are very real gaps." Hosie said company lawyers 
found 70 e-mails from Microsoft executives to Burst executives that weren't 
included in the material Microsoft provided.

Motz instructed Microsoft to begin searching computer tapes for files of 
Will Friedman, the former Microsoft executive who was the company's liaison 
with Burst, and expand it to include others, including Senior Vice 
President William Poole.




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