The new judge overseeing the remainder of the Microsoft antitrust case Friday gave the software giant and the government their marching orders, ordering them to enter intensive settlement talks ahead of hearings on possible sanctions.

U.S. District Court Judge Colleen Kollar-Kotelly told a status hearing with the parties that the settlement talks should proceed "24 hours a day, seven days a week" until a deadline on Nov. 2.

She said it was an `"ptimal time'' to settle the case out of court and that a deal should be possible "if everybody is reasonable and acting in good faith.'' 

If no settlement emerges, Kollar-Kotelly said she then expects hearings to begin in March on what sanctions should apply to prevent future violations of antitrust law by Microsoft. 

No Limits on Remedies 

The judge rejected a Microsoft request to narrow the scope of those possible remedies and said she has "large discretion'' to design a remedy in the case. 

The case returned to the district court after an appeals court in June agreed that Microsoft had illegally maintained its monopoly in personal computer operating systems. 

Citing court precedent, Kollar-Kotelly said it would be a mistake to put limits on the possible remedies until she has heard all the evidence. "It would obviate the usefulness of an evidentiary hearing,'' the judge said. 

She also swatted down Microsoft's suggestion that the remedies should be limited to only those specific acts that have been deemed illegal. 

If the two sides fail to reach a settlement by Nov. 2, the case will proceed under an ambitious timetable laid out by Kollar-Kotelly. 

Under the timetable, government lawyers will have to submit their proposal for sanctions against the company by Dec. 7. Microsoft would have to respond with its own proposal on Dec. 12. 

Hearings to determine the judge's final ruling would begin around Mar. 11, Kollar-Kotelly said. 

The judge's comments came during a status hearing aimed at determining how the case should proceed as the two sides head back to court for hearings on a remedy in the case. 

Government attorneys have said they will ask the judge to impose broad restrictions on Microsoft's business tactics that would be modeled after a set of interim sanctions handed down last year by U.S. District Court Judge Thomas Penfield Jackson, who at that time was the trial court judge in the case. 

Microsoft, on the other hand, had asked the judge to narrow the scope of any possible remedies, saying they should apply only to those products at issue during the trial and specific acts the courts have deemed illegal.

Reuters and the Associated Press contributed to this report.