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Jackson was quoted in "The New Yorker" as saying he thought Bill Gates had a "Napoleonic concept of himself."

WASHINGTON (CNN) -- The behavior of the trial judge is central to the federal appeals court vacating his final judgment that software giant Microsoft should be broken into two smaller companies.

In its decision Thursday, the U.S. Court of Appeals for the District of Columbia upheld several findings of facts against Microsoft, including that the company violated federal antitrust laws.

But the unanimous decision cited Judge Thomas Penfield Jackson's conduct as the reason for vacating his final judgment and remanding the case back to the lower court for reassignment to a different judge.

"We vacate the judgment on remedies, because the trial judge engaged in impermissible ex parte contacts by holding secret interviews with members of the media and made numerous offensive comments about Microsoft officials in public statements outside of the courtroom, giving rise to an appearance of partiality," the court said.

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Jackson's actions, the court said, "would give a reasonable, informed observer cause to question his impartiality in ordering the company split in two."

In Microsoft's appeal last February, it focused in large part on Jackson, whose ruling the company said was "motivated by a desire to punish" the company. The company's lawyers also argued Jackson's ruling was biased and based on his own personal feelings about the company and its top executives.

VIDEO Microsoft founder Bill Gates tells CNN's Lou Dobbs why the court's decision is positive (June 28) Play video (QuickTime, Real or Windows Media) Microsoft founder Bill Gates reacts to the appeals court decision (June 28) Play video (QuickTime, Real or Windows Media)   RESOURCES Read the appeals court ruling (PDF)     MORE STORIES Another Microsoft trial?     SPECIAL REPORT Microsoft on Trial

The company quoted from various interviews Jackson gave, including one published in "The New Yorker" in which he compared company founder Bill Gates to Napoleon.

The appeals court ruling included this excerpt from the Microsoft brief:

"Characterizing Gates' and his company's 'crime' as hubris, the Judge stated that '[I]f I were able to propose a remedy of my devising, I'd require Mr. Gates to write a book report' on Napoleon Bonaparte, '[B]ecause I think [Gates] has a Napoleonic concept of himself and his company, an arrogance that derives from power and unalloyed success, with no leavening hard experience, no reverses.'"

Author Ken Auletta interviewed Jackson several times for his "World War 3.0." At one point Jackson described himself as a right-wing conservative, Auletta said in February interview when the book was published.

According to the Microsoft brief quoted in the ruling, "The Judge apparently became, in Auletta's words, 'increasingly troubled by what he learned about Bill Gates and couldn't get out of his mind the group picture he has seen of Bill Gates and Paul Allen and their shaggy-haired first employees at Microsoft.' The reporter wrote that the judge said he saw in the picture 'a smart-mouthed young kid who has extraordinary ability and needs a little discipline. I've often said to colleagues that Gates would be better off if he had finished Harvard.'"

Auletta also recounted that Jackson said he had worked for Richard Nixon and that the Watergate scandal and Nixon's resignation had taught him "that prominent people sometimes lie."

Many legal experts believed the appeals court, which ruled for Microsoft in a related matter in 1998, represented the best chance for the company to overturn or substantially weaken Jackson's sweeping ruling.

Sending the case back to another district court judge brings to the fore questions of whether Bush's Justice Department will pursue the case with the same fervor as did Clinton's Justice Department.

Ashcroft looks on as his antitrust division chief Charles James tells reporters it would take time to digest the opinion.

"The Justice Department is going to review the decision, they're studying it now," White House press secretary Ari Fleischer said shortly after the appeals court decision. "The president has been informed. The president is going to have further discussions and will await Justice Department review and study."

U.S. Attorney General John Ashcroft hailed as a "significant victory" the appeals court ruling that Microsoft had violated antitrust laws.

But Charles James, assistant attorney general of the antitrust division, said the ruling was very long and complex and it would take time to "digest the opinion and determine our future course of conduct."