Microsoft Corp., embroiled in an antitrust dispute with the federal government, took its case to the public today by running advertisements in five newspapers outlining "the principle we are fighting for."

The quarter-page ads appear in today's The Washington Post, The Washington Times, The New York Times, the Seattle Post-Intelligencer and The Seattle Times."We believe the marketplace should determine what innovations consumers want," the ad states. "At Microsoft, the freedom to innovate for our customers is more than just a goal; it is a principle worth standing up for."

The ads appear a day before lawyers for the company and the Justice Department are scheduled to meet in preparation for a hearing at a federal appeals court in Washington, D.C., on an antitrust lawsuit.

The lawsuit, filed in October, alleges that Microsoft was using its dominance with the Windows 95 operating system software to gain an unfair market share for its Internet Explorer over competitors such as Netscape Communications Corp.

Microsoft disagrees, saying use of its browser is increasing because it works better than the Netscape browser.

The Justice Department is also considering a new antitrust case against Microsoft involving the latest operating system software's latest upgrade - Windows 98 - scheduled for public release June 25.

A dozen states have also been looking into the company's business practices.

A draft complaint is circulating among 11 states and could be filed by the end of the month before U.S. District Judge Thomas Pen-field Jackson, The Wall Street Journal reported today. State officials said they plan to take action with or without the Justice Department, the newspaper said. The report did not say which states were involved.

Bob Herbold, chief operating officer, said the ads were a way to take the company's case directly to the people.

"We want to begin a discussion with the American public, and PC users in particular, about the principle we are fighting for," Herbold said. "Some of our competitors have been working to hobble competition, by denying a competitor the right to improve its products."

Additional ads are scheduled to run in newspapers in the coming months, the company said.