Further settlement negotiations in the landmark Microsoft Corp antitrust case were taking place in Chicago Monday.

Representatives of Microsoft, the Justice Department and 19 states were meeting with the court-appointed mediator, Judge Richard Posner, chief of the United States Court of Appeals for the Seventh Circuit, who is acting in a private capacity, sources said. The parties first met with Judge Posner on Nov. 30 to talk about the possibility of settlement. US District Court Judge Thomas Penfield Jackson -- who is trying the case in Washington -- asked Judge Posner to step in to mediate the case after earlier attempts at settlement failed. As negotiations continued, Jackson was keeping the trial itself on track. Monday was also the day that the government's first written arguments on conclusions of law were due. Jackson has already found that Microsoft used monopoly power to harm consumers, competitors, and other companies. The papers to be filed by the government later were to argue that those actions violated the antitrust laws.