Microsoft Countersues Sun In Java Dispute

Microsoft Corp. on Monday raised the stakes in its bitter Java licensing dispute with rival Sun Microsystems Inc., denying the computer makers allegations and filing a countersuit in federal court.

Microsofts lawsuit filed in U.S. District Court in San Jose, Calif., charges it was Sun that broke the March 1996 agreement to license its Java programming language, and not the other way around.

Sun has consistently failed to perform its obligations and to show good faith in its dealings with Microsoft, the computer software giant said in its countersuit. By its lawsuit Sun improperly seeks to rewrite the agreement.

In just over two years since its release Java has gained popularity among programmers for its promise to allow a single application to run across multiple platforms without having to be rewritten, which poses a threat to the dominance of Microsofts Windows system.

After negotiations that lasted several months Microsoft licensed Java from Sun and began including the technology in its products.

But Sun, a Palo Alto, Calif., manufacturer of high-end computer workstations and software, contends Microsoft is shipping altered versions of the technology that favor the Windows platform and undermine the ability of Java programs to run on other platforms. Sun sued on Oct. 7.

Microsoft, based in Redmond, Wash., says its license with Sun differs from that of most other licensees in that it allows the software company to determine whether to distribute Java in its entirety, in part or not at all.

Microsofts countersuit charges Sun with breach of contract, breach of the covenant of good faith and fair dealing and unfair competition. Microsoft contends Sun broke the contract by failing to deliver Java technology that passes its own tests and failing to provide a public set of compatibility standards.

Microsoft also said Sun has not treated it on an equal footing with all other licensees as required by the contract.

And Microsoft said Sun intentionally interfered with its business by repeatedly making false statements about the compatibility and desirability of Microsofts products and Microsofts rights under the agreement.

These actions and statements were undertaken willfully and deliberately with an intent to cause competitive injury to Microsoft and to aid Microsofts competitors, such as Netscape, Microsoft said, referring to its Internet software rival Netscape Communications Corp.

Microsoft is seeking the right to unilaterally terminate the licensing agreement, the right to continue using the Java trademark and unspecified monetary damages.

Sun said it had fully expected the countersuit.

This is a garden variety tactic. We fully expected this to happen, said a spokeswoman for Suns JavaSoft unit. It is standard operating procedure in litigation. We will look at and review the complaint when we see it.

Sun officials declined to comment specifically on the Microsoft allegations.

Microsoft stock fell $6.50 to $128.875 and Sun fell $3.25 to $34.31 in a day of steep losses on Nasdaq.