An appeals court has reversed a lower-court ruling that Microsoft must distribute a version of Java endorsed by Sun Microsystems. But the appeals court also affirmed a ruling saying Microsoft violated Sun's copyright by distributing its own version of the Java programming language. Both companies claimed victory after the Fourth US Circuit Court of Appeals announced its decision, another step in Sun's private antitrust lawsuit against Microsoft.

The district court erred by requiring Microsoft to carry the Sun-compatible version of Java with its operating systems and browser products because there was no proof that Sun would suffer "immediate irreparable harm" without the order, Appeals Court Judge Paul Niemeyer wrote.

A Microsoft spokesman called the ruling a "positive step," saying the must-carry Java order was the key issue. As for the copyright-infringement order, Microsoft already complied in February, replacing the service pack Windows XP SP1 with a new service pack that excludes Microsoft's Java virtual machine. Sun officials said they are exploring their options on the must-carry Java decision.