Outside the Courthouse, a Spin War Rages
At stake isn't so much Judge Jackson's decision, but the hearts and minds of consumers, Congress, and even the Supreme Court

Not long ago, a gaggle of reporters stood on the U.S. District courthouse steps, taking notes as they listened to a man dressed in pinstripes. Television cameras were recording the scene. A scraggly protestor in braids and T-shirt approached the circle, prancing around and screaming profanities about President Clinton. Reporters cut him short, letting him know he had the wrong spin group -- witnesses from Kenneth Starr's grand jury were leaving from another door. "Uh?" he said, stunned. "This is Microsoft," reporters shouted. The dejected protestor moved on, and Mark Murray, Microsoft's chief spokesman, continued his spiel on the day's events in the courtroom.

Whatever might be considered the most lurid testimony out of the Microsoft trial -- Bill Gates dissembling? Netscape's Jim Barksdale accusing? -- could never provoke the emotionalism of the Clinton scandals. But you can say this for the antitrust trial of the millennium: It has unleashed a public-relations onslaught worthy of a political crisis. Twice a day -- at the lunch recess and at the close -- Murray stands before the TV cameras to answer questions. Usually following him is the prosecution's chief spinmeister, Justice Dept. attorney David Boies, who offers his take on the evidence. During short breaks, government officials and company execs buttonhole reporters in the hallway outside the courtroom.

In a political setting like the impeachment hearings, spin is everything. The reality that Clinton's detractors and supporters create for the public will determine his fate. On the other hand, in most trials, all that really matters is the judge's view of the evidence. But in a case with so much at stake, it may be that the battle for the hearts and minds of the public outside the Microsoft courtroom is as important as winning over U.S. District Judge Thomas Penfield Jackson inside it. After all, reading the headlines every day are Microsoft shareholders, consumers, a conservative Congress skittish about toying with corporate success, and higher-court judges who at the next stage will have something to say about it.

A GEM OF A P.R. TOOL. In the spin wars, the government's ultimate weapon is the Bill Gates deposition videotape. Its value in helping the government prove an antitrust violation may be questionable. Yes, Gates's memory lapses about key documents and decisions could raise doubts in Judge Jackson's mind about the credibility of Microsoft executives who will testify. But as a P.R. tool, the deposition is a gem -- perhaps even better than Gates in person. If Gates were called, only the people in the courtroom would see him testify. Now, within moments after a deposition tape is shown in court, a Justice official rushes a copy to TV crews waiting outside.

Microsoft understood the power of that videotape from the beginning. On Nov. 2, John L. Warden, the company's lead trial attorney, asked the judge in a bench hearing to bar the public release of the tape. "A videotaped deposition is...a highly misleading record -- not to the court, of course -- but to the public," Warden said. Though the judge agreed, he rejected Warden's request, noting that erecting "artificial barriers to the press" would "incur criticism."

On Nov. 19, in another bench hearing, Warden asked the judge to ban Justice from showing just "bits and pieces" of the deposition. Warden accused Boies of splicing the tapes "for the purpose of an audience outside the courtroom and for the purpose of creating news stories day after day after day." Noting a recent Gates interview with the Associated Press, Boies snapped back: "Frankly, I think my good friend John Warden is carrying his company's P.R. water on this." Warden retorted: "I am not here or anywhere else to carry anyone's P.R. water. I don't hold press conferences on the steps of the courthouse every day at the conclusion of court."

For Justice, the tapes and the juiciest internal company E-mails -- many of which, like the deposition, are of dubious legal value -- are aimed at knocking Microsoft and Gates, long admired by the public, off their pedestal. One reason: If the government wins and asks for a severe remedy, perhaps forcing the company to drop key technologies, the public -- and Jackson -- may not find that so objectionable. "When judges think about remedies, they are influenced by the perception of what the public would regard as acceptable," says William Kovacic, visiting antitrust professor at George Washington University Law School. The videotaped image of a testy and less-than-candid Gates also could soften up Circuit Court and Supreme Court judges who will take up the case down the road.

REST ASSURED. Meanwhile, the Microsoft spin machine is working overtime. Among the software maker's tactics: issuing detailed releases rebutting testimony of government witnesses and arranging quiet meetings for the press with senior company officials. The company also has hired former U.S. Attorney Joseph diGenova as a consultant to do courthouse spin on Gates's testimony. Microsoft's big concern is assuring the investment community and customers that the software giant will prevail in the end and that they should not run away from the company.

Any defections among shareholders and customers, such as PC makers, could start snowballing for the company. And that could mean that while Microsoft may in the end win the legal battle, it could lose the bigger war: the fight for the loyalty of the buying public.

Both camps are also aiming to win over Congress. Though some Republican lawmakers, such as Senator Orrin Hatch (R-Utah), already are on the anti-Microsoft bandwagon, others would just as soon slash the Antitrust Div.'s budget. Microsoft's spinmeisters constantly harp on the idea that the government is causing havoc in the marketplace by singling out a major U.S. success story. Alternatively, by inflicting as much damage as it can on Microsoft's image, Justice can help create the perception among lawmakers that the case is worthwhile. Even if Justice ultimately loses the legal battle, if the government can leave the impression that Gates is a bully who doesn't play fair, lawmakers and the public can come away with the belief that there was no harm in Justice trying to rein him in.

So expect the TV crews to be parked outside the courtroom for the next few months, not far from where Starr is wrapping up his own proceedings.

Garland is covering the Microsoft trial in Washington for Business Week. Legal Affairs Editor Mike France will return to Decoding the Trial next week