Microsoft lawyers have argued that the European Commission is forcing the firm to give up valuable trade secrets, a move that would handicap its future.
The key anti-trust hearing is expected to last for five days
The claims were made during the third day of an anti-competition hearing where the software giant is appealing against a landmark ruling from 2004.
Brussels fined Microsoft 497m euros ($613m; £344m) and ordered it to change how it sells its Media Player software.
Microsoft argues that adhering to the ruling will hurt its business.
The Commission wants Microsoft to provide rivals with enough information to develop software that could run as smoothly as its own on Microsoft's Windows operating system.
Microsoft's lawyer Ian Forrester claimed on Wednesday that the ruling would handicap the market leader "in perpetuity".
"The Windows source code is copyright. It is valuable, the fruit of lots of effort," he said.
Microsoft has come out fighting and wants to protect its secrets
Thomas Vinje, one of the lawyers arguing against Microsoft, said that the software company was trying to change the parameters of the dispute.
"Microsoft are trying to turn this into an intellectual property case when it's not," he said.
"This is a case about abuse of a dominant position, about refusing to provide information to vendors."
Microsoft's challenge at the EU's Court of First Instance could have widespread ramifications for future competition rulings by the Commission if the court's 13-member panel rule in its favour.
Microsoft's appeal is being heard over five days, although a decision in the case is not expected for months, or possibly a year.
It could be further the subject of a further appeal to the European Court of Justice on a point of law.
In the meantime, Microsoft is facing fines of up to 2m euros a day if it is found to have delayed its compliance with the anti-competition ruling.