updated 6/11/2004 12:04:42 PM ET 2004-06-11T16:04:42

A federal judge is leaning toward unsealing much of the evidence companies want to keep secret in an antitrust trial examining Oracle Corp.'s $7.7 billion bid for rival business software maker PeopleSoft Inc. — a factor that could sway the case's outcome.

Before listening to Thursday's testimony in the nonjury trial, U.S. District Judge Vaughn Walker expressed exasperation with the amount of evidence that has been submitted as "highly confidential" material for competitive reasons.

"It does appear that it has gotten out of hand," Walker told attorneys for Oracle and the Department of Justice, which filed the antitrust suit to block the PeopleSoft bid.

Based on the evidence submitted during the first three days of the trial, Walker said he saw little reason any of the material should be kept confidential. "I am going to take a much tougher look at admitting any more documents under seal," Walker advised everyone involved in the case, including PeopleSoft and companies cooperating with the government.

For something to remain confidential, Walker said a company will have to prove that the information would cause "commercial injury" or undermine a technological advantage if it were revealed.

The Associated Press and five other media outlets — Bloomberg News, the Los Angeles Times, the San Francisco Chronicle, the San Jose Mercury News and the Contra Costa Times — filed a motion late Thursday seeking to unseal all evidence designated as confidential so far.

Walker's inclination toward displaying more potentially sensitive information could have a chilling effect on the willingness of key corporate witnesses to testify in the trial, said software industry analyst Patrick Walravens of JMP Securities.

If witnesses have second thoughts, Walravens expects the phenomenon will have a bigger impact on the government, which faces the burden of proof in the case.

Oracle has been aggressively pushing for greater public disclosure since the trial began, even though Walker's more open standard is likely to force the Redwood Shores, Calif.-based company to disclose some of its own closely held information.

For instance, the Justice Department has raised the possibility of submitting a recent list of Oracle's potential takeover targets besides PeopleSoft. Oracle's willing to disclose more if it means other companies are forced to show their cards, said Daniel Wall, an attorney representing the company. "Oracle very clearly wants this to be an open trial."

The government also believes the confidentiality shield has been overused so far in the trial, but still hopes to protect the competitive concerns of cooperating witnesses, said Thomas Barnett, a deputy assistant attorney general for the Justice Department. "We are confident we will still be able to present our case," he said.

The confidentiality issue seems likely to come to a head next week when a top Microsoft Corp. executive, Douglas Burgum, is scheduled to testify.

Microsoft, the world's biggest software company, plays a prominent role in the case's outcome because its future plans could influence the shape of the business applications software market that's the focal point of the antitrust trial.

Oracle maintains Microsoft is gearing up for a major push into business applications software — the computer coding that automates a wide range of administrative tasks. The government insists that not even Microsoft has the resources to break into the most sophisticated segments of the market — a niche dominated by Oracle, PeopleSoft and Germany-based SAP.

Microsoft caused a stir just before the trial began by disclosing that it entered discussions to buy SAP last year. Oracle says Microsoft began exploring a possible SAP takeover shortly after Oracle began to stalk PeopleSoft a year ago. Microsoft says it is no longer pursuing SAP.

Oracle believes it has collected more evidence that will illuminate Microsoft's determination to get into the business applications software market. Attorneys for Oracle and Microsoft are still haggling about which Microsoft documents can be kept confidential, Wall told Walker Thursday.

Microsoft spokesman Jim Desler declined to comment on Walker's desire to unseal more corporate documents in the case.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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