Even Microsoft, accustomed to bad news from Judge Thomas Penfield Jackson, was struck by his resolve to put an end to the two-year case. If there was any doubt that the judge would once again rule against Microsoft in the trial’s final penalty, he seemed to wave it off. He took a keen interest in the Feds’ break-up plan: “That he went with it with zeal was a bit surprising,” says Howard University law professor Andrew Gavil. Equally surprising was Jackson’s abrupt termination of the remedy hearings the same day they began, denying Microsoft’s request for more time to defend itself. “I’m not contemplating any further process,” the ruddy-faced Jackson bluntly told Microsoft lawyers. He suggested the company had had plenty of time to prepare for the ax: “This case,” he said, “has been pending for two years.”

That brusqueness could ultimately help rescue Gates’s empire. Some experts say that the judge, who has been reversed before by appellate courts in a related case, may have given Microsoft an opening to argue that Jackson stiffed the company on its right to due process. “It’s a serious error,” said Prof. William Kovacic of George Washington University Law School, “and it provides Microsoft with a basis to dismantle his remedy.” Others say the judge, who of course knows the appeal is coming, is simply eager for other judges to review the case.

Privately, government lawyers admitted they were surprised by the judge’s boldness. “The people on my side didn’t expect such a rout,” said one official. It didn’t look that way at first. Within minutes of the hearing’s start, Jackson launched into a series of tough questions about the government’s break-up plan. But the shadows soon settled over Microsoft when Jackson’s questions seemed to indicate that the government’s plan didn’t go far enough.

Microsoft’s attorneys had come prepared for what one of its lawyers called the “doomsday scenario.” They quickly introduced a list of witnesses and what they would have said in court if given the chance. It included Bill Gates, who says that the upcoming NGWS project “will be doomed to failure” if the company is split. Looking ahead, one Microsoft lawyer said that the judge’s decision to end the hearings was “a nuclear bomb” in their appeal arsenal.

Microsoft is preparing its appeal papers and plans to ask the judge to delay any implementation of remedies. But the government has one more trick: it could ask that the case go directly to the Supreme Court, bypassing the Court of Appeals, which has been friendly to Microsoft in the past. It’s anybody’s guess which court will hear the case next. But clearly Microsoft’s nightmare isn’t going to end any time soon.

Breaks of the Game

Authors Their Break-Up Plans Feds and States A Windows company and an applications company Industry trade groups Same as above but adds a third Internet company University professors Three ‘Baby Bills,’ each with all the company’s products