The Computer & Communications Industry Association said late on Monday it is appealing that decision to a higher court.

U.S. District Judge Colleen Kollar-Kotelly said on Saturday the CCIA and the Software and Information Industry Association do not have the legal standing to step in and appeal the case to the U.S. Court of Appeals for the District of Columbia.

With the judge's permission, the two groups had filed friend-of-the-court briefs with Kollar-Kotelly arguing in favor of stricter sanctions against Microsoft MSFT.O .

But Kollar-Kotelly said legal precedents did not support the groups' argument that they had a right to intervene in the government case. If they want to pursue the matter further, she said, they can file a private case against the company.

"Nothing prevents (the associations) or their membership from pursuing their own antitrust actions against Microsoft," the judge wrote.

The CCIA said in a statement issued on Monday night that it was contesting Kollar-Kotelly's decision in an appeal to the U.S. Court of Appeals for the D.C. Circuit.

"We are committed to ensure that the courts carefully review the defects in the government's settlement, and believe appellate oversight by the D.C. Circuit is essential in the administration of justice," said CCIA president Ed Black. "This case is just too important to rest on the unreviewable discretion of a single district judge."

The settlement already faces an appeal by the state attorneys general of Massachusetts and West Virginia, the final hold-outs from a group of nine states that had tried to obtain more stringent sanctions against Microsoft.

Over the states' objections, Kollar-Kotelly approved, with minor adjustments, a settlement crafted by the U.S. Justice Department and Microsoft a year earlier.

In the deal endorsed by Kollar-Kotelly on Nov. 1, Microsoft agreed to measures that included giving computer makers greater freedom to feature rival software on their machines by allowing them to hide some Microsoft icons on the Windows desktop.

An appeals court ruled in June 2001 that Microsoft had illegally maintained its Windows operating system monopoly, but rejected a trial court proposal to break the company in two.

The case was then transferred to Kollar-Kotelly to determine the appropriate remedies in the case. She heard 32 days of testimony to determine what sanctions should be imposed on Microsoft.

The two industry groups that flagged their intention to appeal are long-standing critics of Microsoft and have lobbied for tough government action against the company.