9854 1 IN THE IOWA DISTRICT COURT FOR POLK COUNTY ----------------------------------------------- 2 JOE COMES; RILEY PAINT, ) 3 INC., an Iowa Corporation;) SKEFFINGTON'S FORMAL ) 4 WEAR OF IOWA, INC., an ) NO. CL82311 Iowa Corporation; and ) 5 PATRICIA ANNE LARSEN; ) ) TRANSCRIPT OF 6 Plaintiffs, ) PROCEEDINGS ) VOLUME XXXVI 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation, ) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 8:15 a.m., January 23, 14 2007, in Room 302 of the Polk County 15 Courthouse, Des Moines, Iowa. 16 17 18 19 20 HUNEY-VAUGHN COURT REPORTERS, LTD. 21 Suite 307, 604 Locust Street 22 Des Moines, Iowa 50309 23 (515)288-4910 24 25 9855 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 RICHARD M. HAGSTROM 7 Attorney at Law Zelle, Hofmann, Voelbel, 8 Mason & Gette, LLP 500 Washington Avenue South 9 Suite 4000 Minneapolis, MN 55415 10 (612) 339-2020 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 9856 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY SHARON L. NELLES 3 JOSEPH E. NEUHAUS JEFFREY C. CHAPMAN 4 Attorneys at Law Sullivan & Cromwell, LLP 5 125 Broad Street New York, NY 10004-2498 6 (212) 558-3749 7 ROBERT A. ROSENFELD KIT A. PIERSON 8 Attorneys at Law Heller Ehrman, LLP 9 333 Bush Street San Francisco, CA 94104 10 (415) 772-6000 11 HEIDI B. BRADLEY Attorneys at Law 12 Heller Ehrman, LLP 333 South Hope Street 13 Suite 3900 Los Angeles, CA 90071-3043 14 (213) 689-0200 15 BRENT B. GREEN Attorney at Law 16 Duncan, Green, Brown & Langeness, PC 17 Suite 380 400 Locust Street 18 Des Moines, IA 50309 (515) 288-6440 19 20 21 22 23 24 25 9857 1 RICHARD J. WALLIS Attorney at Law 2 Microsoft Corporation One Microsoft Way 3 Redmond, WA 98052 (425) 882-8080 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 9858 1 (The following record was made out of 2 the presence of the jury at 8:18 a.m.) 3 MS. CONLIN: Your Honor, we have that 4 offer of proof. It will just take a moment. 5 THE COURT: Okay. 6 MS. CONLIN: Mr. Bradford, would you 7 take the stand. 8 THE COURT: You are still under oath, 9 sir. 10 OFFER OF PROOF EXAMINATION 11 BY MS. CONLIN: 12 Q. Okay. Mr. Bradford, let me take you 13 back to July 18th or 19th of 1991, and the 14 conversation that we were discussing yesterday 15 that you had with Mr. Noorda immediately after 16 Mr. Gates called him. 17 And I would like for you to tell us, 18 please, what Mr. Noorda said to you in that 19 conversation. 20 A. Ray Noorda came back to my office 21 pretty exercised and said just got off the 22 phone with Bill Gates. He called me in 23 reference to the public announcement that was 24 made associated with our letter of intent that 25 we'd signed with Digital Research. 9859 1 He indicated that Mr. Gates had been 2 pretty offensive in his words to him, and he 3 said a couple of things to Ray. 4 Number one, he said I want to 5 reinstitute those merger discussions that we 6 had in late 1989, early '90, but, number one, 7 that DRI thing, that's got to go. 8 And Ray said something like, well, 9 what about the government? 10 And Gates' reply, according to Ray, 11 was you don't worry about the government. I 12 can take care of the government. 13 MS. CONLIN: All right. Your Honor, 14 that concludes the offer of proof. 15 THE COURT: Very well. 16 MS. CONLIN: Okay. You can step down. 17 THE COURT: Thank you much. 18 MS. CONLIN: And I think, Your Honor, 19 in terms of the instruction, we had agreed on 20 everything except one word, and you've probably 21 made your mind up with respect to that. 22 THE COURT: I did. And Carrie was 23 making copies of it to show to you. 24 MS. CONLIN: Okay. Great. 25 MR. TULCHIN: Thank you, Your Honor. 9860 1 THE COURT: And I'll let you see it. 2 Do you want me to read it when? 3 MS. CONLIN: Well, Your Honor, how 4 about when I -- let's see. 5 THE COURT: After? Before? 6 MS. CONLIN: We are not going to -- 7 why don't we go off the record for a minute 8 just to try to figure this out. 9 THE COURT: Okay. 10 (An off-the-record discussion was 11 held.) 12 (The following record was made in the 13 presence of the jury at 8:31 a.m.) 14 THE COURT: Everyone else may be 15 seated. 16 Members of the jury, what Carrie 17 handed out to you was Instruction Number 34. 18 It was the instruction I read to you regarding 19 Plaintiffs' Exhibit 5166. 20 Put it in your instruction book. 21 Mr. Bradford, take the stand. You are 22 still under oath. 23 MS. CONLIN: Yeah, you need your desk. 24 THE COURT: That's the most high-tech 25 thing we have in the courtroom. 9861 1 MS. CONLIN: Really fancy and it's all 2 worn out too. 3 JUROR [redacted]: Looks like you could 4 use a bib there too. 5 THE WITNESS: Bring me some food. 6 MS. CONLIN: Everybody got their 7 instruction? 8 DAVID BRADFORD, 9 called as a witness, having been previously 10 duly sworn, testified as follows: 11 DIRECT EXAMINATION (CONT'D) 12 BY MS. CONLIN: 13 Q. Mr. Bradford, good morning. 14 Do you know a man named Toby Corey? 15 A. Yes, I do. 16 Q. Was Mr. Corey an employee of DRI and 17 Novell? 18 A. Yes, he was. 19 Q. What was his job? 20 A. Toby was in charge of the marketing 21 organization for Digital Research, at least for 22 some period of time. 23 Q. Did he stay on when the merger 24 occurred? 25 A. Yes, he did. 9862 1 Q. Where was he geographically located? 2 A. Toby was in northern California. I 3 don't know where his residence was, but he 4 operated out of our San Jose office, and, to 5 some extent, the Monterey office. 6 Q. All right. And do you know where all 7 of the development was done for DR-DOS? 8 A. I do. 9 Q. Where? 10 A. That development was done in 11 Hungerford, England. 12 Q. And do you know who the development 13 product manager was for DR-DOS 5.0 and 6.0? 14 A. Yes. That was John Constant. 15 Q. Let's move now and discuss DRI's 16 relationship with IBM and the negotiations that 17 you had with IBM about DR-DOS and Novell DOS. 18 Were you involved yourself in 19 discussions with IBM? 20 A. Yes, I was. 21 Q. Can you orient us a little bit in 22 terms of time. About when did those 23 discussions begin and about when did they end? 24 A. Shortly after we closed the merger 25 with Digital Research, that was November 1 of 9863 1 1991, we were informed by Dick Williams, who 2 was the CEO of Digital Research, that there was 3 an opportunity to do a deal with IBM. 4 And toward the end of 1991, beginning 5 early in 1992, then there was a series of 6 discussions, negotiations, information exchange 7 meetings with IBM. 8 Q. And who else besides you was involved 9 on the part of Novell? 10 A. There was -- Dick Williams was the CEO 11 of DRI, myself was part of that negotiating 12 team. It included Jack Blount, who at the time 13 was vice president, I believe, of strategic 14 relations for Novell. 15 Another fellow that was knowledgeable 16 in the DRI area was a fellow by the name of 17 Steve Maysonave. And Steve at the time was no 18 longer an employee of DRI. He was an 19 independent consultant that Dick Williams knew. 20 And so the four of us -- and there may 21 have been one or two others that were involved 22 in the Novell team working with IBM. 23 Q. Who were you negotiating with on IBM's 24 side? 25 A. Boy, as I recall, the head of that 9864 1 group was a fellow by the name of Jim Canovena. 2 There was another senior level guy by the name 3 of Lee Reiswig at IBM. There was a fellow out 4 of Dallas, I think, by the name of Art Olbert 5 who was part of the IBM negotiating team. They 6 had a couple of lawyers that were involved. 7 The fellow that I remember most distinctly is 8 Bob Anderegg. And I think Bob was chief 9 counsel for the IBM software division. 10 Q. Did I give you any exhibits? 11 A. No. 12 Q. Oh, I'm sorry. 13 For this one we can just look at the 14 -- and you probably need to know a number. All 15 right. Let me see. 16 9440. And that is a memorandum of 17 January 13th, 1992, to Mr. Williams and you and 18 -- now, who's Steve Tucker and Andy Wightman? 19 You didn't mention them. 20 A. Steve Tucker was an engineering type. 21 He kind of bridged both marketing and 22 engineering. He had a technical background, 23 but he was very good at marketing, and he 24 worked out of the DRI facility in Monterey, 25 California. 9865 1 Andy Wightman, I believe, was a more 2 technical fellow, as was John Bromhead. 3 Q. I didn't even notice him. All right. 4 And this is Mr. Maysonave; right? 5 A. That's correct, right. 6 Q. And it's a status report about IBM, 7 and I think we'll just look at that first 8 sentence. 9 And this says you met in Boca Raton. 10 And were you at that meeting in Boca Raton on 11 January 8th at the time? 12 A. Yes, I was. 13 Q. And you are referring to the code name 14 Cougar to refer to the project. And what was 15 the goal of the project? 16 A. The goal of that project was to get 17 IBM to adopt Novell's new DOS that we purchased 18 from Digital Research. 19 Q. Mr. Hagstrom found the exhibits. 20 Let's turn to the page that ends 1867 21 and Paragraph Number 10. 22 At the bottom it says, the good news 23 is that they want to help us be compatible by 24 working closely with us and providing detailed 25 specs whenever needed. 9866 1 What was necessary for IBM to do and 2 for DRI to do -- Novell/DRI to do to get DR-DOS 3 on to the IBM PCs? 4 I don't want a technical explanation. 5 A. In general, you have to make sure that 6 the operating system, Novell DOS, was 7 compatible with third-party applications, and, 8 in this instance, Microsoft Windows. 9 Q. Okay. And the negotiations went on 10 for about how long, do you think? 11 A. Oh, gosh. They started toward the end 12 of '91. And my recollection is they went 13 through approximately April, May of '92. 14 Q. At the same time, is Novell engaged 15 with IBM on any other matters? 16 A. Well, certainly IBM was the largest 17 computer hardware manufacturer in the world at 18 the time. And so we were very interested in 19 getting them to be a reseller of our network 20 operating system NetWare. 21 Q. Who starts out as the main point 22 person for these negotiations? 23 A. It was Steve Maysonave, together with 24 Dick Williams. 25 Q. And does that change, then, as time 9867 1 goes on? 2 A. Yes. As I recall, Steve Maysonave 3 left at some point in time, and I think Jack 4 Blount then took over the negotiations for 5 Novell. 6 Q. At some point do you recall meetings 7 with the IBM marketing people? 8 A. Yes. 9 Q. Did they have significant concerns 10 about switching from MS-DOS to DR-DOS? 11 A. Yes, they had concerns. 12 Q. Let's look at Defendant's Exhibit 3. 13 Now, you've got that if you want to look down 14 there, but you can look up here. 15 This is a January 19th, 1992, 16 memorandum to Dick Williams from Steve 17 Maysonave and you're among those copied. 18 And let's look at the first sentence 19 where Mr. Maysonave tells the members of the 20 negotiating team, the week of January 13th had 21 its share of surprises. 22 The good news is that our support from 23 the IBM technical team is stronger than ever. 24 They are very supportive and anxious to get 25 started. Andy and John have won them over 100 9868 1 percent. 2 And then let's go down to the next 3 paragraph. 4 MR. TULCHIN: Your Honor, I'm sorry to 5 interrupt. I didn't get a copy of this from 6 Plaintiffs' counsel. I wonder if I could. 7 MS. CONLIN: You bet. I'm sorry. 8 MR. TULCHIN: Sorry to interrupt. 9 MS. CONLIN: My system failed or I 10 failed. 11 MR. TULCHIN: I understand. The 12 system will fail too. 13 Q. Mr. Kalb apparently works for Lee 14 Reiswig and has been designated as their chief 15 negotiator and met with us on 1-16. It did not 16 appear that he had been properly debriefed and 17 brought up to speed. David knows him from past 18 negotiating sessions. 19 And that was you? You were the David 20 that knew Mr. Kalb? 21 A. That's correct. 22 Q. He started out by stating that there 23 were some major issues that had to be addressed 24 before we progressed any further on finalizing 25 an agreement. The issues and subsequent 9869 1 subissues are outlined here. 2 Number one, when it comes to the 3 substitution of DR-DOS for their current DOS, 4 IBM marketing votes no, in big capital letters. 5 Was that -- the issues with the 6 marketing team, was that the subject of 7 substantial discussion in the course of these 8 negotiations? 9 A. Certainly it was. 10 Q. And were you, on the Novell side, able 11 to resolve the concerns that the marketing 12 people of IBM had? 13 A. Over time I think we won them over, as 14 we won them over technically as well, but there 15 were still concerns at the IBM level because 16 the deal never did get done. 17 Q. All right. Let's go now, if we could, 18 to Plaintiffs' Exhibit 9350. And some pages 19 are a duplicate of the one we just looked at, 20 Defendant's Exhibit 3, but these are easier to 21 see. 22 And these are the areas of IBM 23 marketing concern. And those are the issues 24 that you addressed with IBM? 25 A. Yes. Those were among them, yes. 9870 1 MS. CONLIN: And then if we could turn 2 to the next page, Darin. 3 Q. And I'm not going to go over all of 4 these with you, but I want to do that first 5 one. 6 MS. CONLIN: Thank you. 7 Q. One of the marketing concerns was DOS 8 equals Microsoft. And no compelling reason to 9 change. Will be very unsure of compatibility. 10 Is that an issue that came up 11 regularly? 12 A. Yes, it was. 13 Q. Were there -- what was the genesis of 14 IBM's concern? Why were they so concerned 15 about compatibility? 16 A. Well, obviously, Windows was the next 17 operating system that was going to be 18 introduced by Microsoft Corporation. 19 And in order to get broad based market 20 acceptance, you needed to ensure 21 interoperability between whatever DOS system 22 that you had, whether it was MS-DOS, DR-DOS, 23 Novell DOS, IBM's own PC DOS, you had to ensure 24 interoperability between those DOSs and the 25 Windows' operating system from Microsoft's 9871 1 system. 2 Q. All right. Was anything going on in 3 the industry at this time, this is in January 4 of -- January of 1992, that's January 24th, 5 1992, that was leading to concerns on the part 6 of IBM about compatibility? 7 A. Yes. There were certainly public 8 pronouncements to the effect that Windows and 9 Novell's DOS or DR-DOS wouldn't be compatible. 10 And we were seeing increasing reports from 11 marketing and sales representatives and 12 technical folks throughout the Novell family 13 reporting that there was incompatibility 14 between Windows and Novell DOS. 15 Q. All right. And that was while Windows 16 3.1 was in beta? 17 A. That's correct, among other times. 18 Q. And have you ever heard of the AARD 19 code? 20 A. Yes, I have. 21 Q. All right. Well, I'm not going to ask 22 you to explain it, but -- 23 A. Thank you. 24 Q. And another of the concerns that the 25 marketing people had in this same paragraph, 9872 1 can't afford to risk compatibility with another 2 DOS. Microsoft perceived as standard. Large 3 OEM base. Leading compatible applications and 4 best marketing. 5 And are those all issues that you 6 discussed in the course of the negotiations? 7 A. Yes, they were. 8 Q. And you and your team were able to 9 resolve those issues? 10 A. I think for the most part we got past 11 those issues, correct. 12 Q. Let's go down, if we could, under 13 unnecessary risk, the second one. Well, both 14 of those. 15 OS/2 was an operating system that IBM 16 was doing at the time; correct? 17 A. That's right. 18 Q. And so -- 19 A. It was an alternative to Windows, I 20 think. 21 Q. All right. And the second one is 22 don't want to invest in what is perceived as a 23 nonstandard product, especially at this price 24 point. 25 Do you remember anything about that? 9873 1 A. Sitting here today, I can't remember 2 that specific issue. 3 Q. All right. Not a surprise. 4 Let's turn to the next page and look 5 at the first one. And that one says PC DOS 6 success currently achieved without aggressive 7 marketing. In other words, the product kind of 8 sold itself, is that what they were concerned 9 about? 10 A. Well, the reference there is to IBM's 11 own DOS. 12 Q. All right. 13 A. And I think the desire on many folks 14 at IBM was to get out of the DOS business and 15 turn that over to Novell. 16 And so they're saying, IBM is saying 17 that PC/DOS success is currently achieved 18 without aggressive marketing. So there were 19 some folks at least within the IBM family that 20 thought leave well enough alone, PC/DOS is 21 doing okay. 22 Q. Okay. Let's turn now if we could -- I 23 am skipping a lot of these. And let's turn to 24 two pages that begin with -- maybe they all 25 begin with this. It says Cougar at the top. I 9874 1 just want that first one, please. 2 It says, providing and continuing 3 compatibility when Microsoft will continue to 4 assert otherwise. 5 What was the nature of your 6 discussions in that regard, if you remember, 7 Mr. Bradford? 8 A. I don't remember specific discussions, 9 but, in general, there was concerns about 10 compatibility and Microsoft alleging that the 11 two wouldn't interoperate, Windows and Novell's 12 version of DOS. 13 Q. All right. Let's turn, then, to a 14 couple pages, and it's a summary of key IBM 15 marketing concerns. 16 And we've looked at only a couple of 17 them, but I want to look at the -- let's just 18 -- 19 MS. CONLIN: Can you blow up that 20 whole page, please, Darin? 21 Q. Okay. One of the things you were 22 talking about, apparently at some level is the 23 timing and positioning of the announcement. 24 And that would be the announcement of 25 cooperation or strategic partnership between 9875 1 IBM and Novell? 2 A. That's correct. 3 Q. All right. And the bottom one is 4 ability to achieve consistent family of 5 operating systems with current conflicting 6 views of the evolution of LAN systems. 7 Can you explain that a little bit to 8 us? 9 A. Sure. LAN, L-A-N stands for local 10 area network, and that was Novell's primary 11 business. And I mentioned in my testimony 12 yesterday about something called the NetWare 13 operating system. That was our principal 14 product. 15 IBM at the time had a competing 16 product, network operating system, as did 17 Microsoft. Microsoft's product was called LAN 18 manager. So managing the local area network. 19 And I can't recall what IBM's product 20 was, the name specifically, but it might have 21 been LAN Systems. 22 Q. Okay. Well, let's look at one of the 23 diagrams that accompanies this exhibit, and it 24 is on the page ending 84. Personal systems and 25 it's called operating systems positioning. 9876 1 MS. CONLIN: Oh, that's not the one I 2 like. I like that one fine, but another couple 3 pages, I think. It says -- it's got arrows 4 that go up this way. 5 Yeah, that's it. 6 Q. Okay. This is a diagram I think that 7 IBM did. And can you just sort of tell us what 8 this is supposed to mean in terms of 9 positioning, if you can? 10 A. Well, I think it is a diagram showing 11 the spectrum of operating systems. So I think 12 it's good for just a general understanding of 13 the industry, that the most base level 14 operating system for single user personal 15 computer would be DOS. 16 Moving up from there, it would be a 17 combination of Windows sitting on top of DOS 18 operating together. 19 IBM's OS/2, there's a couple of 20 versions that they identify there. I think 21 this is an IBM document. 22 Q. It is. 23 A. And so IBM is saying that their OS/2 24 2.1 and 2.0 are higher in the hierarchy than 25 Windows DOS. 9877 1 Then it moves to OS/2 LAN systems. So 2 that would be a combination of IBM's OS/2 and 3 their own LAN system, their networking system. 4 Then there's Novell with NetWare, and 5 then there's AIX. And that was a box that IBM 6 was coming out with, a piece of hardware. And, 7 boy, it's been some years since I saw the term 8 AIX, but I thought it referred to more of a 9 hardware system rather than a software system, 10 although if it's on this chart, then it 11 obviously is the operating system that drives 12 that particular piece of IBM hardware. 13 Q. Okay. So this was a possible way of 14 positioning the sort of family of operating 15 systems that would be available on IBM 16 hardware? 17 A. Yes. 18 Q. All right. At the time of your 19 deposition back in 1998, you were not able to 20 recall why these negotiations did not end in a 21 deal between IBM and Novell. 22 Are you able to recall now? 23 A. Well, I've seen more documents this 24 time. I'd never seen these IBM documents 25 before this latest iteration. I probably saw 9878 1 them. 2 I should be accurate on that. In the 3 late '91, '92 time frame when we were in these 4 negotiations, but in the '98 time frame when I 5 had my deposition taken earlier, I hadn't seen 6 these documents. 7 So this and other documents that we 8 have seen, the IBM status report from Steve 9 Maysonave, the discussions, internal 10 memorandums with Dick Williams, et cetera, 11 helped refresh my recollection as to what 12 happened there. 13 Q. All right. And did you also talk with 14 anybody? 15 A. Yes. I talked to Jack Blount, who was 16 our former lead negotiator on this transaction. 17 Q. All right. And is your memory 18 refreshed? 19 A. Yes, it is. 20 Q. Can you tell us, please, what you 21 understood to be the reason or one of the 22 reasons why IBM and Novell were not able to 23 reach a deal? 24 MR. TULCHIN: Objection, Your Honor. 25 To the extent this is based on the hearsay 9879 1 conversation with Mr. Blount and given that 2 this is a fact witness, not an expert, we 3 object. This appears to be based on hearsay. 4 THE COURT: Overruled. 5 Go ahead. 6 A. Yes, I recall. And there was a very 7 specific contract issue that I remember the IBM 8 lawyers talking to us about; that they had a 9 contract with IBM, and the essence of that 10 contract prohibited them from taking the Novell 11 software in addition to the IBM software, in 12 essence, because they had signed a contract 13 with Microsoft that essentially was a per 14 processor license that they could no longer -- 15 they would having to pay twice for Novell's 16 disk operating system if they adopted it, in 17 addition to what they were already paying IBM. 18 Q. Okay. That's the per processor per 19 CPU type license? 20 A. Right. I believe in one of the 21 documents I saw a reference to royalty issues, 22 having to pay double or something like that. 23 Q. All right. I don't remember that. 24 Do you remember anything else about 25 the rationale that IBM offered in connection 9880 1 with not doing the deal? 2 A. Well, I believe they were certainly 3 concerned with Microsoft's growing marketing 4 strength in the Windows market and the desire 5 of end user consumers broadly to get access to 6 that Windows operating system. And so I think 7 they were concerned that if they did a deal 8 with Novell, that Microsoft would withhold from 9 them future versions of the Windows operating 10 system. 11 Q. Okay. In all of your discussions with 12 IBM, was there any kind of a technical problem 13 mentioned as a deal breaker? 14 A. No, not that I recall. 15 Q. Did you ever hear of a man named Tony 16 Ingenuso? I hope I'm pronouncing his name 17 correctly. 18 A. I don't recall that name. He may have 19 been part of the negotiating team at IBM. 20 There were a number of folks there, but I don't 21 remember that name. 22 Q. All right. Well, let's move a little 23 more into this per processor license issue. 24 Who is John Edwards? 25 A. John was a senior vice president of 9881 1 marketing at Novell, and John eventually, after 2 Dick Williams' departure from the Novell 3 family, John Edwards took over the lead role 4 running that Novell division, Digital Research. 5 Q. He was a marketing -- you said senior 6 VP of marketing? 7 A. That's correct. 8 Q. And in April of 1992 when he took 9 over, what kinds of things does he do to sell 10 DR-DOS? 11 It's DR-DOS 6 that's on the market at 12 this point; right? 13 A. Correct. 14 Q. All right. 15 A. Well, I remember John got very active 16 in traveling around the world, sometimes with 17 Ray Noorda, sometimes not, but John got very 18 active in trying to convince original equipment 19 manufacturers, hardware manufacturers, like 20 Compaq and Dell and Vobis in Germany and others 21 around the world, to adopt as an alternative to 22 Microsoft's DOS, adopt Novell DOS and 23 incorporate it into their systems. 24 Q. Are some of these OEMs with which 25 Novell had a preexisting relationship on their 9882 1 NetWare operating system? 2 A. Yes, they were. 3 Q. The people that were known to Novell 4 and to Mr. Edwards, and that's who he was going 5 out to visit? 6 A. That's right. 7 Q. How do he and Mr. Noorda do on their 8 trips around the country and around the world? 9 A. They don't do very well. It's a very 10 disappointing series of trips and meetings that 11 they have. 12 Q. And what is the reason for that? 13 A. Well, the principal reason is they 14 came back and there was a series of meetings at 15 the executive committee level talking about 16 Microsoft's contracting practices that excluded 17 Novell DOS from the marketplace. 18 Q. How did it exclude Novell DOS? 19 A. Well, there was something called a per 20 processor license that Microsoft would have 21 these hardware manufacturers sign, like Compaq 22 and Dell, that said essentially for every 23 machine built at the Dell factory or the Compaq 24 factory or Acer in Taiwan or Vobis in Germany, 25 that for every machine that they built, those 9883 1 folks owed a royalty to Microsoft, whether or 2 not Microsoft actually shipped MS-DOS with 3 their systems. 4 So, essentially, the original 5 equipment manufacturer, in order to adopt 6 Novell's DOS, despite the fact that it arguably 7 had better features and functionality than 8 Microsoft DOS, in order for them to adopt our 9 software program, they would have to pay dual 10 royalties, one to Microsoft in Redmond, 11 Washington, and one to us. 12 Q. All right. And you said -- did they 13 visit Dell? 14 A. That's correct, they did visit Dell. 15 Q. Compaq? 16 A. Yes, they visited Compaq. 17 Q. All right. And when they came back, 18 either Mr. Edwards or Mr. Noorda or both would 19 visit with the executive committee about what 20 they had learned? 21 A. That's correct. 22 Q. Do you remember specifically their 23 visit to the Dell Corporation. 24 A. I do. 25 MR. TULCHIN: Objection, Your Honor. 9884 1 This is necessarily based on hearsay. 2 THE COURT: Well, overruled so far as 3 that question. The next question. 4 Q. What did you learn about their visit 5 to Dell? 6 A. They came back very concerned from 7 that meeting, very exercised. They were 8 frustrated by Dell's inability to want to adopt 9 our system. 10 Well, let's be clear. Dell seemed to 11 want to adopt our system because they met with 12 Michael Dell, the founder and CEO of Dell 13 computer and essentially -- 14 MR. TULCHIN: Objection to this, Your 15 Honor. 16 THE COURT: Sustained. 17 Q. As a result of what happened with 18 Michael Dell and Mr. -- I believe Mr. Edwards 19 will be here to talk about that, but as a 20 result of what happened with Dell and other 21 companies, did the company -- did Novell take 22 any action? 23 A. Certainly. We continued to try to 24 drive sales of the product while at the same 25 time we felt we needed to report these 9885 1 activities to the relevant government agencies. 2 Q. Okay. Now, at this point is Novell 3 aware -- I guess you are because of the -- 4 Novell's aware that there is an ongoing FTC 5 investigation? 6 A. Yes, we were, uh-huh. 7 Q. And did you cooperate and provide 8 witnesses and testimony and declarations and 9 the like to the federal government? 10 A. Well, just to set the time frame for 11 this, as the Jury probably recalls, in late 12 '91, when we negotiated or announced the deal 13 with Digital Research, IBM -- or Microsoft then 14 came to us and says we want to reinstitute 15 merger discussions between the two companies. 16 Then there was a series of meetings 17 held in late '91 with Microsoft and early 1992. 18 During this time period, we kept the 19 Digital Research Company separate and distinct 20 from Novell, Inc., while we had the discussions 21 with Microsoft. 22 Then in late March of 1992, Microsoft 23 announced its acquisition of Fox Pro. As a 24 result, the negotiations between Microsoft and 25 Novell kind of blew up at that point in time. 9886 1 Then Dick Williams left Novell. John 2 Edwards took over. And now we decided, you 3 know -- we hadn't been very aggressive, 4 honestly, marketing the Novell DOS product 5 during this period thinking that we might have 6 a deal with Microsoft. 7 So then April of '92, May of '92, John 8 Edwards and team get more active in going out 9 and meeting with the original equipment 10 manufacturers. 11 And then in June of 1992, I think it 12 was, we were contacted by regulatory commission 13 in Europe and responded to that and filed a 14 complaint against Microsoft for their alleged 15 unlawful practices in the disk operating 16 system, the operating system market. 17 Q. All right. And returning to 18 Mr. Edwards and Mr. Noorda and their marketing 19 efforts, did Novell ever get a contract for 20 Novell DOS or DR-DOS with any major OEM? 21 A. No, not that I recall. 22 Q. All right. Was Novell in any way the 23 initiator of the original federal government 24 investigation into the practices of Microsoft? 25 A. No, we weren't. 9887 1 Q. When you began being more aggressive 2 about the practices of Microsoft, did you ask 3 people in the company to provide you with 4 information about the practices that they had 5 awareness of? 6 A. Yes, I did. 7 Q. And did they do that? 8 A. Yes, they did. 9 Q. Do you then provide it to the FTC? 10 A. Yes, we do. And the European 11 commission. 12 I think to again set the time frame, 13 if you'll remember, in September of '91 when we 14 had some of those meetings with the folks at 15 Microsoft, the attorneys for Microsoft, Bill 16 Neukom, the general counsel of Microsoft, 17 explained to us that they were under 18 investigation by the Federal Trade Commission 19 at that time. 20 That may have been the first time I'd 21 heard of that. And then so now we are about 22 nine months later, and we begin to be more 23 active with the government agencies. 24 Q. All right. I'm going to show you now 25 Exhibit -- Plaintiffs' Exhibit 4 -- I beg your 9888 1 pardon -- 5473, and that is, I think, one of 2 the responses that you received. 3 Do you know Linnet Harlan? 4 A. Yes. Linnet Harlan was the general 5 counsel for -- 6 MR. TULCHIN: We object to this 7 exhibit, Your Honor, for the reasons discussed 8 yesterday. Same issue. 9 MS. CONLIN: Your Honor, if we may 10 approach. 11 THE COURT: Okay. 12 (The following record was made out of 13 the presence of the jury at 9:05 a.m.) 14 MS. CONLIN: Your Honor, we appealed 15 the Special Master. This is what the database 16 says, and I have checked all of these exhibits. 17 We appealed the Special Master's ruling 18 sustaining Microsoft's hearsay, embedded 19 hearsay objection, and you granted in part and 20 denied in part. 21 You said specifically the first and 22 second pages are admissible and the third and 23 fourth pages are inadmissible. We have removed 24 the third and fourth pages, and so we believe 25 the Court has ruled on this. 9889 1 MR. TULCHIN: That may be so, Your 2 Honor. I would like a moment to check. If Ms. 3 Conlin is correct, then, of course, you know, I 4 withdraw my objection. 5 I thought this was covered by the same 6 issues that we discussed yesterday, and I may 7 be incorrect. She may have a better database 8 than I. 9 THE COURT: Do you want to check? 10 MR. TULCHIN: Can I check? 11 THE COURT: Sure, sure. Go ahead. 12 I'll wait here. 13 MR. TULCHIN: Thank you, Your Honor. 14 My apologies. Ms. Conlin is correct. 15 MS. CONLIN: I'm right. 16 MR. TULCHIN: My indication was that 17 this was out, but it is the other two pages and 18 these are the first two. 19 THE COURT: Okay. Thank you, David. 20 (The following record was made in the 21 presence of the jury at 9:08 a.m.) 22 THE COURT: You may continue. 23 MS. CONLIN: Thank you, Your Honor. 24 You may put that back up, Darin. 25 It is Plaintiffs' Exhibit 5473. There 9890 1 we go. 2 BY MS. CONLIN: 3 Q. All right. And I think you told us 4 who Linnet Harlan was, but did you tell us who 5 Lindsey Williams is, or do you know? 6 A. Yes. Lindsey was an administrative 7 leader or the head of contracts, I should be 8 clear, in Europe for the Digital Research team. 9 I think she was based in Hungerford, England. 10 Q. All right. That's where the 11 development is going on? 12 A. That's right. 13 Q. And then let's go down to the second 14 paragraph. Okay, thanks. 15 And she tells you or tells Linnet 16 Harlan, one other -- I think this is item -- to 17 mention is that through a telephone survey 18 which we carried out, we have learned that 19 Microsoft refuses to support Windows or any 20 other of their products if run with DR-DOS if 21 the problem appears to be with DR-DOS. Yet, 22 they support competitors' applications with 23 Windows. 24 Now, explain to the Jury what that 25 means. 9891 1 A. Again, this is the incompatibility 2 concern. And the representations made by 3 Microsoft representatives, in Europe in 4 particular in this instance, that they would 5 ensure that Windows wouldn't run with Novell's 6 version of DOS. 7 Q. All right. And then the second page 8 is a different issue. 9 This is a Microsoft fax to Mike Davis 10 of Diamond Trading. Is Diamond Trading an OEM 11 to your knowledge? 12 A. Yes, that's correct. 13 Q. And it's from a woman named Ellen 14 Taylor dated January 23rd, 1992. 15 MS. CONLIN: And can you blow that up 16 a little bit more, Darin, the body of the 17 letter? 18 Thank you. 19 Q. Dear Mike, she says, further to our 20 conversation yesterday, I am writing to confirm 21 that Microsoft is unable to supply you Windows 22 as a single product. 23 Microsoft will only sell you Windows 24 as a combined packaged with MS-DOS version 5. 25 And then it's signed by Ms. Taylor. 9892 1 And it is on Microsoft letterhead. 2 What does it mean if Microsoft will 3 not sell Windows all by itself to an OEM, but 4 will only sell it combined with MS-DOS? What 5 does that mean for DR-DOS? 6 A. Obviously, they won't purchase DR-DOS 7 if it would not be able to run with Windows. 8 Q. And at this point Windows is the GUI, 9 the graphical user interface; correct? 10 A. That's correct. 11 Q. All right. I'm not sure, but -- so 12 the Jury has complete information, I'm not sure 13 if I showed you this, Mr. Bradford, but six or 14 so weeks later, there is a correction to that, 15 and Ms. Taylor or someone on behalf of 16 Microsoft says that that's not correct. 17 Did you get other reports of this kind 18 of activity on the part of Microsoft? 19 A. Yes, we did. 20 Q. Okay. From around the world? 21 A. That's right. 22 Q. All right. Let's move now to a 23 different subject matter, and that is Novell 24 DOS 7.0. 25 This would be the product that you -- 9893 1 that's issued or worked on both before and 2 after -- no, I guess only after Novell and DRI 3 join. 4 As you go forward, are there 5 discussions about generally the future of DOS, 6 of the disk operating system at the executive 7 committee level? 8 A. Yes. 9 Q. And let's take a look at the timeline. 10 Okay. September of 1991, that's when 11 DRI ships DR-DOS 6.0. And that's a month -- 12 two months, I guess, before the two companies 13 merge; right? 14 A. That's right. So I think accurately 15 that should say DRI ships DR-DOS 6.0. 16 Q. When the companies join, you don't 17 change the product name at that point, do you? 18 A. No. It remains DR-DOS 6.0. 19 Q. All right. And then December 21, 20 1991, that's the Windows 3.0 Christmas beta 21 with the AARD code. 22 And then it's after you have merged. 23 And then April 6, 1992, Windows 3.1 is 24 released. And that's the product released to 25 market? 9894 1 A. From Microsoft? 2 Q. Yes. And then March 30th, a year 3 later, MS-DOS 6.0 is released. 4 And then January of 1994 Novell DOS 5 7.0 is released; correct? 6 A. That's correct. 7 Q. All right. So from November of 1991 8 when the merger occurred until January of 1994, 9 no DOS product is issued by Novell, is released 10 by Novell? 11 A. That's correct. There may have been 12 some upgrades, you know, that sort of thing, 13 but it was called DR-DOS 6.0. 14 Q. Tell the Jury what was going on inside 15 Novell in the late fall of '92 and early '93 16 concerning how to release or if to release 17 another DOS. 18 A. Well, there was great concern broadly 19 about our DOS product line that we'd purchased 20 from Digital Research. 21 We were running into these contracting 22 issues from Microsoft, compatibility issues 23 with Microsoft with Windows, and so forth. 24 And so the sales of DR-DOS were now 25 decreasing fairly rapidly, and so there was 9895 1 concern, do we release a new Novell DOS? Do we 2 put marketing resources behind it? Do we 3 continue with the engineering group in 4 Hungerford, England, or do we terminate the 5 product and cut our losses and move on? 6 Q. All right. Was there discussion about 7 how to release it if you released it? I mean, 8 in what form? As a stand-alone or combined 9 with other things? 10 A. Sure. You know, we had those 11 discussions actively. How to, you know, make 12 it come to the customer, what would be the best 13 for the end user customer, what would be the 14 best marketing plans, et cetera. 15 Q. All right. Was there talk of 16 combining it with a product -- a personal 17 NetWare? 18 A. Yes. Just to put this in context, we 19 had the NetWare operating system that was 20 popular, and it was an operating system that 21 operated a number -- almost an infinite number 22 of personal computers together if you put 23 enough NetWare on the project. 24 But if you have a small office, maybe 25 five to ten people, and you wanted what we 9896 1 called a lighter version of the NetWare 2 operating system for, like I say, five to ten 3 users, we had a little product called NetWare 4 Lite for small businesses. 5 Q. All right. We're going to stop with 6 the discussion and go to a document. 7 9052. And that I don't -- I'm just 8 calling to your attention. 9 In March -- this is a -- I think this 10 is a news report, and this is your announcement 11 in -- let me see the date here -- March 20 -- 12 MS. CONLIN: Can you go down a little 13 bit? 14 Q. March 24th, 1993. 15 This is Novell's announcement that it 16 is going to release a 7.0 product; is that 17 correct? 18 A. That's right. 19 Q. All right. That's all I need of that 20 document. 21 And this went out to the press and the 22 public, and it was -- what was the purpose of 23 announcing in March of 1993 that, in fact, 24 Novell was going to release another DOS? 25 A. Well, we wanted the customer base to 9897 1 know that we were not abandoning our DR-DOS 2 product line. Instead, we were going to 3 release a better version, if you will, of 4 Novell DOS that had increasing functionalities 5 and capabilities. 6 Q. Okay. Let's look at 9053. And that 7 is a document, an internal Novell confidential 8 document, that deals with the same issue. 9 I think it may or may not be the same 10 date. 11 MS. CONLIN: If you could blow up the 12 whole thing, Darin. 13 Thanks. Good. 14 Q. And it talks about what to tell the 15 public and the press about the new operating 16 system that Novell is going to produce. 17 And at the bottom, it says 18 communications, opportunities, and issues, and 19 it says by announcing Novell DOS 7 just prior 20 to the official announcement by Microsoft of 21 MS-DOS 6.0, it is hoped that Novell can 22 generate enough interest to potentially stall 23 DR-DOS customers upgrading to the newly 24 released MS-DOS 6.0. 25 The industry has speculated on 9898 1 Novell's commitment to continue -- 2 MS. CONLIN: Could we get that a 3 little bit bigger, just that bottom part? 4 Okay. 5 Q. The industry has speculated on 6 Novell's commitment to continue development of 7 DR-DOS. 8 Novell DOS 7 reflects that commitment 9 and is a communications opportunity to hint at 10 future product offerings from Novell and its 11 industry partners, as well as solidify Novell's 12 continued commitment to the desktop platform. 13 I think that touches on the issue that 14 you mentioned earlier. Because of the time 15 limit, people were feeling that maybe there 16 wasn't going to be a new DOS? 17 A. Yes. 18 MR. TULCHIN: Objection. Leading. 19 THE COURT: Sustained. 20 Q. Okay. What does that address? 21 A. Well, I think it speaks for itself. 22 There was concern that the marketplace 23 was believing that Novell no longer had a 24 commitment to its desktop product, the DOS 25 operating system. 9899 1 And so I think the marketing 2 organization -- I saw Toby Corey's name up at 3 the top right of this document -- I think the 4 marketing organization was concerned that they 5 get the message right, that they get 6 information out to the marketplace that we 7 still had a commitment to this product line. 8 Q. And when you release this information 9 before Microsoft, I take it that you knew 10 Microsoft's product was coming out shortly 11 thereafter? 12 A. I assume so based on this e-mail, or 13 this letter. 14 Q. All right. I want to show you a few 15 Microsoft documents that deal with this 16 announcement. 17 Plaintiffs' Exhibit 1591. I think 18 that the Jury has already seen this, and I just 19 want to call the Jury's attention back to the 20 top e-mail. 21 And it is from Mr. Freedman to Mr. 22 Cole and Mr. Silverberg dated March 26, 1993. 23 So this would just be a couple of days 24 after your announcement? 25 A. That's correct. 9900 1 Q. And Mr. Freedberg -- Freedman, I'm 2 sorry, tells his bosses, quote, if they really 3 release a version with all this junk in it, it 4 will mean that for three MS-DOS releases in a 5 row (5, 6 and 7), DR will have had our key 6 features in their product 12 to 18 months 7 before us (kernel in HMA, compression, 8 VxD/multi-tasking). Given that track record, 9 it's going to be impossible to shake this MS as 10 follower image. It's been very difficult so 11 far as it is. 12 Would you agree with that? 13 A. Yes, I would. 14 Q. All right. And let's look at 15 Plaintiffs' Exhibit 1797. 16 This one deals with the general 17 relationship between Novell and Microsoft 18 during this time frame. 19 And if we could start down -- oh, I'm 20 not remembering this and you are not reminding 21 me. 22 Down at the bottom, the one from 23 Mr. Kruger. 24 He says, I contacted Novell following 25 our meeting this afternoon. The gears are 9901 1 turning in Provo. This guy, Jeff Turner, is a 2 very suspicious ombre. We'll get what we need, 3 but it's going to be time consuming. 4 And then Mr. Silverberg responds, what 5 are they suspicious about? Okay. 6 And then the next one is Mr. Kruger's 7 response. 8 You must be pulling my leg in asking 9 what Novell is suspicious about, right? They 10 think we're out to cheat them. We, of course, 11 did this with WFW, Windows for WorkGroups (in 12 their eyes). 13 We also haven't given them Chicago 14 code and we changed NT APIs at the last minute 15 and didn't tell them. 16 In terms of the Chicago code -- 17 MR. TULCHIN: Could I ask, Your Honor, 18 that the rest be read just for the sake of 19 completeness? 20 THE COURT: Certainly. 21 Q. In the new Novell math -- 22 MS. CONLIN: Of course, Mr. Tulchin 23 can also read it. 24 Q. In the new Novell math, this equals 25 the fact that Microsoft is not a good partner. 9902 1 Note that I didn't say this was 2 logical. 3 But not giving you the Chicago code, 4 that would be not being a good partner; 5 correct? 6 A. Among other things, right. 7 Q. And changing the APIs and not telling 8 you, that wouldn't be being a good partner, 9 would it? 10 A. That's correct. 11 Q. All right. After this announcement, 12 were there continuing discussions inside Novell 13 about what to do about DOS? 14 A. Yes. There was great consternation 15 because our sales continued to drop and we 16 weren't sure exactly what to do and how to 17 support the product, et cetera. 18 Q. Okay. And are you also trying to 19 gauge how the market is going to receive this 20 new offering from Novell? 21 A. Right. I think if there's broad-based 22 enthusiasm about the announcement of Novell DOS 23 7.0, we'll put more energy behind it, put more 24 marketing resources, do more press releases, et 25 cetera. 9903 1 Q. All right. The months before the 2 release of Novell DOS 7.0, what's it like 3 inside Novell in terms of these discussions? 4 A. Well, certainly at any company of this 5 size, there's going to be disagreement among 6 the executives as to how to position products, 7 how to position technologies, how much support 8 to throw behind a product. 9 Certainly Novell's NetWare operating 10 system was still doing reasonably well at this 11 point and was a good profitable product for us. 12 How much energy do we put behind this desktop 13 OS, et cetera. 14 Q. All right. And are there other 15 factors that are going into this discussion and 16 this difference of opinion? 17 A. Well, as mentioned earlier, of course, 18 we were concerned about Microsoft's broad-based 19 monopoly in this market and could we really 20 break into it. You know, we mentioned earlier 21 things such as the incompatibility issues, the 22 per processor licensing, the preannouncements 23 of their own products, et cetera, that were 24 hurting Novell. 25 And so with all of those things going 9904 1 on, we were concerned that, you know, would 2 Novell DOS 7.0 really be successful and really 3 be able to get a groundhold, a swell, if you 4 will, among consumer users. 5 Q. Were you concerned about what was 6 going to go on with the FTC and whether or not 7 they would take any action? 8 A. Certainly. 9 The Federal Trade Commission was very 10 interested in our ongoing desire to release a 11 product. 12 I can remember conversations with the 13 Federal Trade Commission, you know, and they're 14 kind of encouraging us to release a product and 15 to hang in there and, you know, at some point 16 in time we'll take some action and it will make 17 it better for you and open up a market 18 opportunity for you. 19 And so, you know, I would go back and 20 report those things to our executive staff 21 saying that the FTC is kind of on our side, if 22 you will, and they want us to continue to try 23 to compete in this market so that consumers 24 will have choices. 25 And so those were some of the 9905 1 interactions that were going on at the time. 2 Q. All right. Are people testifying 3 before the FTC during this time as well, from 4 Novell and DRI? 5 A. Yes, they were. 6 Q. All right. Was one of the factors 7 that you took into account in connection with 8 your decision whether or not to release another 9 product and how to release it what was going on 10 at the FTC? 11 A. Yes, that was -- 12 MR. TULCHIN: Objection. Leading. 13 THE COURT: Sustained. 14 MS. CONLIN: Withdrawn. 15 Q. All right. 16 What was one of the factors? 17 A. There were a number of factors 18 involving our decision whether or not to go 19 fully forward with Novell DOS 7.0. And one of 20 those factors was the FTC investigation. 21 Q. Was it a driving factor? 22 A. It certainly was a material factor. I 23 don't know if it's the driving factor, but 24 certainly a material factor. 25 Q. When you released this in January, 9906 1 this meaning Novell DOS 7.0, does it include 2 some peer-to-peer ability itself at that point, 3 or do you remember? 4 A. I don't know. I'd have to go back and 5 look at the announcement. 6 I think the announcement that we read 7 earlier talked about multi-tasking DOS, but 8 that's not the same as networking capabilities. 9 Q. Okay. Peer-to-peer, okay, maybe I'm 10 confused, Mr. Bradford. 11 The peer-to-peer, what is the name of 12 Novell's peer-to-peer networking? 13 A. I think that was NetWare Lite. 14 Q. Okay. And that's the one that 15 connects individual computers together? 16 A. Right. 17 Q. And then the big NetWare needs a 18 server? 19 A. Right. 20 Q. All right. 21 A. That's correct. 22 Q. All right. 23 A. So, again, just for explanation. 24 NetWare's the big one. You can run, you know, 25 hundreds of machines off a NetWare operating 9907 1 system. 2 Then there's the NetWare Lite, which 3 is just a peer-to-peer networking thing for 4 small business. 5 Q. Some other things happen in this time 6 frame that I want to discuss. 7 In November of 1993, what happens with 8 respect to the CEO of Novell, Mr. Ray Noorda? 9 A. Ray Noorda determines it's now time to 10 retire from Novell. 11 Q. And does he provide reasons to his 12 company and to the public at that time? 13 A. Yes, he does. 14 Q. What does he say? 15 A. He says that his memory's failing, 16 among other things. 17 Q. All right. I know this is a bit of a 18 sensitive subject, so -- 19 Let's -- I want to talk about it, 20 though, because Mr. Noorda's deposition is 21 going to be perhaps a part of this record. 22 Let's talk about how you interacted 23 with Mr. Noorda over the period of time and 24 what your observations were about his memory. 25 Starting, you know, when you started, 9908 1 how often would you see him? That's one of the 2 things I want to know. 3 A. Well, it was daily interaction if we 4 were both in town. He would make a habit every 5 day to come down to my office and meet with me 6 in the morning. And then in the afternoon he'd 7 come back and meet with me again. 8 In the morning we'd review, you know, 9 what I was going to do during that day and so 10 forth. I was typically the first guy he saw 11 and then the last guy he saw when he left at 12 night. 13 In the interim, he'd go off and meet 14 with engineers and have marketing meetings and 15 that sort of thing. 16 Q. Was there a time that you began to 17 notice changes in Mr. Noorda? 18 A. Yes. I would approximate that as 19 1989. I'd been there about four years at that 20 time. 21 Q. What did you notice? 22 A. I noticed that in the afternoons when 23 he would come back, he would forget what we'd 24 talked about earlier in the day. It was almost 25 as if that earlier conversation had not taken 9909 1 place. 2 And so I saw a memory problem there. 3 Q. During this time frame of -- well, 4 what did you notice about his conduct of 5 business matters? I mean by that, his 6 understanding, perhaps comprehension? 7 A. Well, he was still very lucid and he 8 understood concepts and could run a great 9 meeting for the executive team. And during the 10 two or three hours we would be in that meeting, 11 he would be great and lucid and understand 12 everything that was going on. And not only 13 understood it but, you know, comprehended and 14 could strategize with the company effectively. 15 Q. And then after the meeting? 16 A. After the meeting, if there were a 17 period of time that expired between that 18 meeting and, say, a follow-on meeting, he may 19 have forgotten what he had said or had been 20 decided at that earlier meeting. 21 Q. Do you have some specific memories of 22 things that happened in this time frame that 23 were distressing or disturbing to you? 24 A. Well, yes. 25 I can remember him from time to time 9910 1 as he would travel, he would call me and say I 2 can't believe that I woke up this morning and I 3 had to leave myself a message last night as to 4 the city that I was going to wake up in. 5 I think we all wake up in cities from 6 time to time that we are unfamiliar with. And 7 we travel a lot, but he was actually writing 8 himself notes as to I'm in Houston or I'm in 9 Dallas or I'm in Prague or wherever it might 10 have been in the world. 11 Q. And was he, to your observation and 12 knowledge, aware that his memory was failing? 13 A. Oh, yes, uh-huh. 14 Q. Was it something that you and he 15 discussed? 16 A. Yes, it was. 17 Q. All right. And was there any change 18 from the beginning of the time that you noticed 19 it in 1989 until his announcement of his 20 resignation as CEO in November of 1993? 21 A. Well, it became increasingly poor. 22 Q. Did you -- now, after he announced 23 that he resigned in April of '94, did he 24 continue for a while to serve on the board of 25 directors? 9911 1 A. Right. Just to set the time frame. 2 So he announces in November of '93 that he's 3 going to retire, cites some reasons. He stays 4 on board the company as CEO while we go and do 5 our chief executive officer search for the 6 company, and he assists in that process. 7 Bob Frankenberg comes, I believe it 8 was April, May time frame of 1994 and becomes 9 the chief executive officer for Novell. 10 And then Ray stays on the board of 11 directors for a period of time, probably 12 another six months. 13 Q. Then he resigns from the board of 14 directors? 15 A. That's correct. 16 Q. After he resigns from the board of 17 directors, do you continue to have both social 18 and business interaction with him? 19 A. Yes. I see Ray on occasion. At 20 church functions, social events, meetings of 21 the Utah Technology Council, things like that. 22 And then he also started a venture 23 capital fund that he called the Canopy Group 24 where he was busy out funding technology 25 companies. 9912 1 And in connection with that, from time 2 to time those companies would have products or 3 technologies that would interact with Novell's 4 products and technologies. And so we would go 5 and meet with them, negotiate contracts, 6 license technologies backwards and forwards 7 with the Canopy Group and those Canopy family 8 of companies that Ray was running. 9 Q. And did you continue to notice 10 anything about his mental health? 11 A. Yes. He just got increasingly, you 12 know, poor in terms of his memory and his 13 ability to communicate and remember in 14 meetings. So that was probably '94, '95, '96, 15 '97 time frame over which that got worse. 16 Q. Did there come a time when Mr. Noorda 17 no longer was -- 18 A. I'm sorry. There was a cough there. 19 That's all right. I didn't hear the 20 question. If you could repeat it. 21 Q. You bet. 22 Did there come a time when Mr. Noorda 23 no longer appeared in public? 24 A. Right. That -- I would say '98, '99 25 time frame became very reluctant to even go out 9913 1 in public. And so he was not seen much, and he 2 passed away just a couple of months ago. 3 Q. What did he die from? 4 A. It was a combination of Alzheimer's 5 and cancer. 6 Q. Did you participate in any services 7 for him? 8 A. I did. 9 Q. Did you -- 10 A. Well, he had his funeral, and Drew 11 Major, who was the inventor of the NetWare 12 operating system, spoke at that funeral. 13 And then we had a memorial service for 14 Ray and his family at Novell's offices, our 15 headquarters in Provo, Utah, and I spoke at the 16 memorial service. 17 Q. All right. Moving away from that 18 subject to the replacement for Mr. Noorda. You 19 indicated Bob Frankenberg was the replacement? 20 A. I did, uh-huh. 21 Q. And did he come after a search by the 22 company? 23 A. That's right. 24 Q. What was Mr. Frankenberg's background? 25 A. He had been an executive with Hewlett 9914 1 Packard Corporation. 2 Q. I think I made him the CEO in my 3 opening statement, but you told me that was not 4 so. 5 A. No. 6 Q. What was his area of responsibility? 7 A. I think it was a senior vice president 8 at Hewlett Packard, and he had specific 9 responsibilities over the personal computer 10 division at Hewlett Packard. 11 Q. And as a result -- when he came, you 12 continued on the executive committee during 13 this time? 14 A. That's right. 15 Q. And when he came, did you have 16 discussions with him about what he saw as the 17 future of DOS? 18 A. Yes. 19 Q. And what did he see as the future of 20 DOS? 21 A. Bob was not as optimistic as some 22 others within the company. I think I mentioned 23 that there was, you know, differing opinion 24 among the executive committee as to the future 25 of DOS and, you know, how much resources we 9915 1 should put behind the product. 2 So Bob having been at Hewlett Packard 3 and having been specifically assigned to the PC 4 division there, I think he was concerned about 5 the future of Novell's version of DOS. 6 Q. All right. 7 MS. CONLIN: Your Honor, I can move on 8 to another area. I know it's a little early 9 for our break, but I have a part two, and I can 10 move on. 11 Shall I do that or shall we stop? 12 THE COURT: We'll take a recess now. 13 Ten minutes. And remember the 14 admonition previously given. 15 Leave your notebooks here. 16 (A recess was taken from 9:39 a.m. 17 to 9:51 a.m.) 18 THE COURT: There's been a question 19 from one of the jurors, Number 8. 20 He wanted a copy of the timeline, 21 which has been displayed. 22 For the record, Ms. Conlin has 23 indicated that she may introduce it under Iowa 24 Rule of Evidence 1 point -- it can't be 1 25 point. 9916 1 MS. CONLIN: 5 point. 2 THE COURT: 1006. 3 MS. CONLIN: I'm sorry, Your Honor. 4 THE COURT: And Mr. Tulchin has yet to 5 be heard. So go ahead. 6 MR. TULCHIN: Yes, Your Honor. 7 We object to this being admitted into 8 evidence. It's been used as a demonstrative, 9 and I think it properly has been used as a 10 demonstrative. 11 In fact, it was sent to us over the 12 weekend pursuant to our agreement about 13 demonstratives, and we lodged no objection to 14 it. And I told Ms. Conlin we had no objection 15 to it as a demonstrative. But there's no basis 16 for admitting this into evidence, and I don't 17 think the Jury should get it. 18 MS. CONLIN: Your Honor, if I may 19 respond briefly. 20 Under Iowa Rule of Evidence 1006, the 21 Court may admit a document that summarizes 22 voluminous documents. 23 The Jury has particularly requested -- 24 a member of the jury has particularly requested 25 this, Your Honor, and we would offer it at this 9917 1 time. 2 I'm going to mark it, believe it or 3 not, 10,100. So it would be 10100. 4 THE COURT: Well, looking at the rule, 5 it states the contents of voluminous writings, 6 recordings, or photographs which cannot easily 7 be examined in court may be presented in the 8 form of a chart, summary, or calculation. 9 I think the timeline is more of events 10 rather than writings or recordings. It 11 certainly is a proper demonstrative. 12 MS. CONLIN: Your Honor, timelines, I 13 think, are quite often admitted under that 14 section because in order to prove each of those 15 dates, you know, would take a number of 16 documents, I think. 17 Certainly it's within the Court's 18 sound discretion as to whether or not it should 19 go to the Jury, but I think that particularly 20 given the juror's request to have it, that it 21 would be appropriate to permit it. 22 MR. TULCHIN: I continue to think 23 otherwise, Your Honor. 24 This doesn't fit within the rule. 25 It's not a summary of, for example, accounting 9918 1 records that are voluminous that would fit 2 within the rule. 3 It is a timeline. It was offered to 4 us as a demonstrative. And, on that basis, I 5 have no problem with the Jury seeing it. But 6 it's not of evidentiary quality. 7 MS. CONLIN: I can make it better. 8 I don't think -- do you want to wait, 9 Your Honor, to decide? Because I don't think 10 we need to -- 11 THE COURT: I will look at it some 12 more. I will give you a ruling this afternoon. 13 MS. CONLIN: Okay. Thanks, Your 14 Honor. 15 THE COURT: We're ready. 16 (The following record was made in the 17 presence of the jury at 9:56 a.m.) 18 THE COURT: Everyone else may be 19 seated. 20 Members of the jury, I will remind you 21 one of our jurors has to appear in court on 22 Friday and Monday, so we will be off those 23 days. 24 In light of the fact that some of our 25 witnesses are live and travel great distances, 9919 1 we may take a few extra times to try to get 2 them done. I will let you know well in advance 3 of that. Okay. But one of our jurors will be 4 gone so. 5 Mr. Bradford, you are still under 6 oath. 7 MS. CONLIN: Getting pretty good at 8 that. 9 BY MS. CONLIN: 10 Q. Mr. Bradford, shortly after -- I guess 11 not shortly, but after Mr. Frankenberg from 12 Hewlett Packard came to Novell, is there a 13 development in connection with the government 14 case? 15 A. Yes. I believe Bob came in April, May 16 time frame of '94. And in June or July -- I 17 believe it was July -- of '94 there is a 18 consent decree announced between the European 19 commission and the U.S. Department of Justice 20 and Microsoft wherein Microsoft agreed to stop 21 -- 22 Q. Wait. 23 A. I'm sorry. 24 Q. Let me go in order here. I'm sorry to 25 interrupt you. 9920 1 MS. CONLIN: But let me offer at this 2 time, Your Honor, both Plaintiffs' Exhibit 3 5664, which is the original consent decree 4 entered into by Microsoft and the United States 5 of America on July 15th, 1994. 6 And I will also offer at this time -- 7 I already gave them -- I gave them these in 8 advance. 9 And I would also offer at this time 10 Plaintiffs' Exhibit 4588, which is the final 11 decree entered August 21st, 1995. 12 THE COURT: 4568? 13 MS. CONLIN: What did I say, Your 14 Honor? 15 4388 is the final decree. 16 THE COURT: 4388? 17 So 5664 and 4388 are offered. 18 Any objections? 19 MR. TULCHIN: No objection, Your 20 Honor. 21 THE COURT: They are admitted. 22 Ladies and gentlemen of the jury, I'm 23 going to give you an instruction on that. 24 It's a 1994 agreement between 25 Microsoft and the government. Carrie is going 9921 1 to hand it out to you at this time. I'll read 2 it. 3 On July 15th, 1994, Microsoft entered 4 into a voluntary agreement with the government 5 in which Microsoft agreed not to enter into any 6 per processor license agreements with OEMs for 7 operating system software and not to include 8 certain terms in per system licenses and 9 nondisclosure agreements. 10 Microsoft also agreed not to enter 11 into any license agreement with OEMs for 12 operating system software that: Exceeds one 13 year in duration, except that an OEM at its 14 option could renew the license agreement for up 15 to an additional year; contains provisions that 16 by their terms prohibit or restrict an OEM's 17 licensing of non-Microsoft operating systems; 18 contains terms conditioning licenses for 19 Microsoft operating systems upon licensing of 20 any other product, provided that this provision 21 of the agreement did not prohibit Microsoft 22 from developing integrated products or contains 23 a minimum commitment. 24 The 1994 agreement with the government 25 also permitted Microsoft to offer volume 9922 1 discounts. 2 Microsoft entered into this agreement 3 without any trial or adjudication by a court of 4 any issue and without admitting wrongdoing of 5 any kind. 6 The 1994 agreement entered into by the 7 government and Microsoft is not evidence that 8 the OEM licensing provisions mentioned above 9 violated any law. 10 You may consider this agreement in 11 evaluating Microsoft's acts and conduct as well 12 as the intent, purpose, and reasonableness of 13 Microsoft's acts and conduct after July 15th, 14 1994. 15 MS. CONLIN: Your Honor, did you 16 assign a number to this? 17 THE COURT: 35. 18 MS. CONLIN: Thank you. 19 THE COURT: I'm sorry. 20 You may proceed. 21 MS. CONLIN: Okay. Now would you put 22 5664 up? 23 Just show the Jury the caption of that 24 so they'll recognize it and the date and the 25 stipulation. 9923 1 BY MS. CONLIN: 2 Q. And let's talk for a moment, if we 3 could, in lay language about what this 4 agreement means in terms of Microsoft and 5 Novell. 6 You've talked to the Jury about the 7 per processor licenses. And as a result of 8 this consent order, the per processor licenses 9 were no longer going to be used. 10 What impact did Novell expect that to 11 have, if any, on its DOS business? 12 A. Well, we were certainly hopeful that 13 as we approached original equipment 14 manufacturers from that point forward, folks 15 like Compaq and Dell and others, that they 16 would now be more open to signing a contract to 17 license Novell DOS rather than MS-DOS. 18 Q. All right. And then I want to just 19 show the Jury just again for the purpose of 20 recognition -- 21 MS. CONLIN: Would you put up, Darin, 22 the first page of 4388? 23 Q. And that's the final judgment, the 24 nominated final judgment and that is August 25 21st, 1995. 9924 1 Now, let's go back to July 15th, 1994 2 consent decree. At that point, I guess it's 3 not a decree, but the consent stipulation. 4 Is Novell's view of what the consent 5 stipulation means or may mean for Novell and 6 its DOS business unanimous or not unanimous? 7 A. Well, it's not unanimous. I think 8 there was broad-based enthusiasm or excitement 9 that finally a government agency had actually, 10 in concurrence with Microsoft, forced Microsoft 11 to cease certain marketing practices. 12 And so for the first time in the 13 history, this was a big deal for the industry. 14 And I think it was also historic from the 15 standpoint it was the first time that a 16 European commission had ever collaborated with 17 the United States Department of Justice in 18 stopping marketing activities of a U.S.-based 19 company. 20 Q. Shortly after this, however -- well, 21 let me show you Exhibit 9981. 22 MS. CONLIN: This is a new exhibit, 23 Your Honor, which we offer at this time not for 24 the truth of the matter asserted, but, rather, 25 to show that, in fact, notice was given to the 9925 1 press and the public about Novell's intention. 2 MR. TULCHIN: On that basis, no 3 objection. 4 THE COURT: Very well. It's admitted 5 for that purpose. 6 MS. CONLIN: Thank you, Your Honor. 7 Give us the date, if you would, Darin, 8 and the headline. 9 Q. This is September 12th, 1994, just a 10 really few months, I guess, after the consent 11 decree. 12 Novell, Inc., is planning a new system 13 for networks. 14 Was this one of a number of articles 15 that were published around this time on this 16 subject matter? 17 A. Well, this appears to be an article, 18 and I haven't seen this one before, I don't 19 think, or recently. Novell, Inc., is planning 20 a new system for networks. 21 Q. I'm going to show you the bottom of 22 it. 23 A. Oh, okay. So that's talking more 24 about networking in the title. 25 MS. CONLIN: Why don't you go on the 9926 1 very last sentence on this page. 2 Q. Novell, moreover, will discontinue 3 further development of its, and then the next 4 page, clone of DOS, the Microsoft operating 5 system for personal computers. 6 So that is the announcement, I think 7 -- generally, the announcement that Novell 8 intends to discontinue its development of 9 Novell DOS; correct? 10 A. That's correct. 11 Q. All right. So we've just got a few 12 months in between. 13 Why after this long period of time 14 working with the government and trying to get 15 some results, the results occurred and you're 16 out of the business? 17 A. Right. Well, the frustration is the 18 length of time it takes a government agency to 19 actually make a difference and to move forward 20 and stop certain what we viewed as 21 anticompetitive acts. 22 And so the exciting thing about the 23 consent decree was that it actually happened. 24 But the sad part was it was too little, 25 probably, but, more importantly, it was just 9927 1 too late. 2 Now, three years had gone by and our 3 market had dropped significantly. And so from 4 a profitability standpoint, it was no longer 5 advisable -- 6 I think the executive committee felt 7 no longer advisable that we proceed with future 8 product developments for Novell DOS. 9 Q. When you say stop development, what 10 does that mean? 11 A. Well, that means you're not going to 12 develop for future versions. Whatever's out 13 there at the time, whatever you intend to ship 14 within the next three months, that's going to 15 go out. 16 And we will support that product for a 17 period of time, say, a year, two, three, four 18 years after that last product ships. 19 But in terms of Novell DOS 8.0, there 20 wasn't going to be one. 21 Q. All right. So that's the end of 22 Novell DOS? 23 A. Right. Yes. It was the end of Novell 24 DOS, but we continued to support whatever 25 products that we had out there in the 9928 1 marketplace. 2 Q. This wasn't something you agreed with, 3 was it? 4 A. Well, no, I wasn't happy about it in 5 terms of the decision, but reasonable minds can 6 differ, and, hey, I understand -- you know, our 7 principal role as an executive committee at 8 Novell was to return value to our stockholders. 9 And if we had a product that was 10 significantly leaking that was nonprofitable, I 11 understand why the decision was made to move 12 away from this product. 13 Q. Why -- you told the Jury it was too 14 little, too late. And I'm wondering, why was 15 it too late? 16 A. Well, I think we have discussed what 17 happened. I don't know if the Jury has 18 previously seen any of our charts in terms of 19 the -- you know, our sales activities in the 20 DOS market, but it really dropped off a cliff, 21 if you will, and we were not doing well with 22 that product line. 23 Q. All right. Well, let's see. We've 24 got the April 6, 1992 release of Windows, and 25 then the March 30th, 1993 MS-DOS 6 is released, 9929 1 and then you release on January 1994. 2 And I take it the sales of Novell DOS 3 7.0 were not increasing either? 4 A. No, that was not doing robustly, 5 unfortunately. 6 Q. Did the executive committee discuss 7 why sales were dropping? 8 A. Oh, yes. 9 Q. And what were the reasons that the 10 committee felt sales were dropping? 11 A. Well, it was the broad-based reason of 12 Microsoft's monopoly in the market and the fact 13 that they had excluded us from competing 14 effectively in that marketplace. 15 Q. All right. Let's move to a different 16 subject, and we're going to go backwards again. 17 Back to perhaps late '93. I want to 18 talk with you about the WordPerfect 19 acquisition, Mr. Bradford. That's where we're 20 going. 21 A. Okay. 22 Q. What was WordPerfect? 23 A. WordPerfect was a very popular word 24 processing program that competed with several 25 in the market, including Microsoft's Word, MS 9930 1 Word. 2 Q. All right. And back in the late '93 3 or early '94, what was the strategy Novell was 4 considering in connection with WordPerfect and 5 perhaps other products as well? 6 A. Well, obviously, we were concerned at 7 the broad-based product line that Microsoft was 8 putting out, they had the desktop operating 9 systems. They were competing now effectively, 10 more effectively in the network operating 11 system market. 12 And then they had their whole suite of 13 software applications that end users saw, from 14 Excel to Microsoft Word, et cetera. 15 And so we felt that in order to not 16 just be a one-product company, the networking 17 company, we felt like we needed to expand our 18 product line and offer our consumer customers a 19 broader set of products. 20 Q. How did you implement that strategy? 21 A. Among other things, we went and 22 acquired WordPerfect Corporation. 23 Q. And give us sort of the time frame of 24 the negotiations, if you recall. 25 A. In late '93 I spent some time with 9931 1 Duff Thompson, who was my counterpart at 2 WordPerfect. He was the general counsel at 3 WordPerfect Corporation, the chief financial 4 officer Dan Campbell there, were friends of 5 mine. 6 Just geographically Novell and 7 WordPerfect were both located within six or 8 seven miles of each other in Provo, Utah, Orem, 9 Utah, about 35 miles south of Salt Lake as I 10 mentioned earlier. And so they were 11 approximately close to where we were physically 12 located. 13 And so we would interact with them, 14 and I recall that Duff or Dan from WordPerfect 15 indicated that Lotus was starting to pursue 16 WordPerfect to buy them. 17 Q. What was the product or products that 18 Lotus was making? 19 A. Lotus was known for Lotus 1-2-3, their 20 spreadsheet package, was a popular application. 21 Q. All right. So the negotiations begin 22 about when in earnest? 23 A. In earnest, it was after -- it was 24 more into 1994, the winter, spring of 1994 when 25 we negotiated in earnest with WordPerfect. 9932 1 Q. All right. And about when did you 2 announce that you and WordPerfect were going to 3 merge? I'm not sure we've got it up there. 4 Let me see. 5 A. My recollection is -- 6 Q. Oh March 1994 it says. 7 A. Right. March 1994, that would be 8 correct. 9 Q. And finalized in June? 10 A. It was finalized -- Novell completes 11 the merger with WordPerfect and purchases 12 Borland Quattro Pro. 13 Q. Okay. Tell us about that product. 14 A. Well, Borland was another company out 15 there like Microsoft, Novell, Lotus, 16 WordPerfect, that were competing in PC software 17 market. 18 Borland had a product called Quattro 19 Pro, which was a spreadsheet, spreadsheet 20 package. 21 And we needed -- Microsoft at this 22 point in time had announced that they were 23 going to start marketing a suite of products. 24 So you can buy Microsoft Office in an 25 integrated suite of products which included 9933 1 word processing, spreadsheets, database to some 2 extent, et cetera. 3 And so we felt like, yes, we'd get the 4 WordPerfect software and we could have that, 5 but in order to compete effectively with 6 Microsoft moving forward, we needed a broader 7 suite of products. 8 So we went to Borland and we purchased 9 Quattro Pro from them to give us a Novell suite 10 of software products that we could market. 11 We didn't buy the Borland corporation, 12 we just bought the Quattro Pro product suite 13 from them. 14 Q. All right. And let's look at our 15 timeline for releases. 16 After you and WordPerfect have merged, 17 let's see, shortly -- September '94 there's a 18 release of WordPerfect for the Macintosh. 19 October, WordPerfect 3.0 is released. 20 November, WordPerfect 6.1 for Windows is 21 released. And that would be Windows 3.1 or 22 whatever the current version of the GUI is; 23 correct? 24 A. That's right. 25 Q. All right. And then the WordPerfect 9934 1 3.0, that would be for the DOS product; 2 correct? I don't think we have that down 3 there, but that -- if that doesn't seem 4 correct, don't -- I could be wrong. 5 A. I don't recall to be honest -- 6 Q. All right. 7 A. -- which version was operating on what 8 system. 9 Q. All right. And then we've got 10 December 1994 Novell DOS 7.0 is withdrawn. 11 Okay, we skipped that one. 12 And then January 1995, Perfect Office 13 3.0 for Windows is released. Tell the Jury 14 what that is, Perfect Office. 15 A. Well, as we saw six months earlier, we 16 purchased from Quattro Pro -- we purchased from 17 Borland Quattro Pro, and now we combined word 18 processing spreadsheets, et cetera, into one 19 combined package. 20 Q. Did you have a presentation package as 21 a part of your Perfect Office suite? 22 A. Yes. 23 Q. And what was InfoCentral, all one 24 word? 25 A. Boy, I don't recall. 9935 1 Q. Okay. 2 A. Was that part of our product suite? 3 Q. That's what it says here. 4 A. Okay. It was probably a presentation 5 package. It might have been a desktop but -- 6 Q. Okay. Groupwise and Envoy, do you 7 remember what those were? 8 A. Well, Groupwise and Envoy were Word -- 9 or excuse me, e-mail capability. 10 Q. All right. And were those the kinds 11 of things that were in the Perfect Office 12 Suite? 13 A. Right, that's correct. 14 Q. And that is the -- January 1995 is 15 the, according to our timeline, your timeline, 16 is the only Perfect Office product released by 17 Novell; correct? 18 A. That's right. 19 Q. All right. At the time that you 20 released these various WordPerfect products and 21 your Perfect Office product, is Windows 95 also 22 known as Chicago in beta? 23 A. That's right. That's my recollection. 24 Q. All right. And you were on the 25 executive committee all during the time that 9936 1 Novell owned WordPerfect? 2 A. That's right, uh-huh. 3 Q. And continuing your cooperation with 4 the federal government? 5 A. Yes. Certainly. 6 Q. As part of your decision-making about 7 WordPerfect, did you receive reports about the 8 interaction between Novell and Microsoft during 9 the time that you owned WordPerfect? 10 A. Yes, we did. 11 Q. As to WordPerfect as an application -- 12 this is Novell's first foray into desktop 13 applications; correct? 14 A. Yes. 15 Q. What things did Novell need from 16 Microsoft, the operating system vendor, in 17 order to build your WordPerfect products? 18 A. Well, I think the analogy is if you 19 had a bridge across the Mississippi River and 20 you needed to get from the East Coast to the 21 West Coast, but the only way to get from the 22 East Coast to the West Coast was to cross that 23 bridge, think of that bridge as the Windows 24 operating system. 25 And so you had an application like a 9937 1 word processing application sitting on top of 2 Windows, but in order to get from the East 3 Coast to the West Coast, you know, in order to 4 sell word processing on top of Windows, if you 5 will, you needed access to application 6 programming interfaces, documentation, and the 7 like from Microsoft. 8 Q. How important was it to Novell to get 9 access to the betas as they came out on a 10 timely fashion? 11 A. Absolutely critical. You could not 12 compete without access to those early betas. 13 Q. All right. And did the betas come out 14 on a schedule? 15 A. I'm sure Microsoft had a schedule for 16 releasing those betas, yes. 17 Q. During this time frame, Mr. Bradford, 18 is Novell receiving what it needs to build its 19 applications on top of the Windows operating 20 system? 21 A. No, we weren't. 22 Q. Now, Windows 95 ships August 21st -- 23 no, I'm sorry. August 24th, 1995. Windows 95 24 is released August 24th, 1995; correct, 25 according to our timeline? 9938 1 Do you know when Microsoft is able to 2 ship its application products that work with 3 Windows 95? 4 A. I assume they ship them the same day. 5 Q. All right. 6 A. Virtually, the same day, but I don't 7 have any document in front of me that would 8 remind me. 9 So Windows 95 is released on August 10 24, 1995. That's our wedding anniversary. 11 Then probably the suite of software 12 applications that Microsoft sold would be 13 released at essentially the same time as that. 14 Q. All right. I'm not going to show you 15 this. I'm going to show it to Mr. Tulchin just 16 to put us in the right time frame about when 17 the applications products of Microsoft were 18 released. 19 I have Answers to Interrogatories from 20 Microsoft in another proceeding which indicates 21 that Word 95 was released August 24th, 1995. 22 Does that comport with your 23 recollection? August 24th, 1995, the word 24 processing application of Microsoft was 25 released? 9939 1 A. It ships the same day as Windows. 2 Q. All right. And Excel 95 ships August 3 24th, 1995. That's the spreadsheet? 4 A. Right. Sounds like the same day. 5 Q. And Office 95, the Office productivity 6 suite, both standard and professional, also 7 ships August 24th, 1995. 8 Is that your recollection? 9 A. Okay. 10 Q. All right. 11 A. I don't know if I have a specific 12 recollection of them shipping, you know, that 13 exact same day, but certainly it sounds like 14 you have the documents to indicate that 15 happened. 16 Q. Is Novell ever able to release a word 17 processor, WordPerfect that runs on top of 18 Windows 95? 19 A. Well, we sold the word processing 20 division of WordPerfect shortly after this 21 time. It was early 1996. And I don't think we 22 ever had a full Office suite by the time we 23 sold our WordPerfect division. It actually 24 operated on the most recently released Windows 25 platform. 9940 1 Q. All right. Let's talk about the sale 2 of WordPerfect. 3 By October of 1995 what has Novell 4 decided to do about WordPerfect? 5 A. Well, now we've had WordPerfect since 6 March, June -- actually, June of '94. So we've 7 had the product for a little over a year. 8 The word processing market for Novell 9 is going drastically downhill, much like it did 10 with the DOS market. And so now there's 11 broad-based concern among Novell executives as 12 to whether or not we keep the word processing 13 package. 14 Q. And what do you decide to do? 15 A. We decide to sell WordPerfect to 16 someone else. 17 Q. Why? 18 A. Again, we are losing money on that 19 product line. 20 There were a number of products that 21 WordPerfect brought to us, including Groupwise 22 and some other technologies that were pretty 23 good. 24 Those we were keeping, but the 25 specific word processing package known as 9941 1 WordPerfect, that particular product we decided 2 to sell. 3 Q. I'm sure there were many factors that 4 led to your decision, but why were you -- do 5 you -- why were you losing money? What was -- 6 was WordPerfect a popular word processing 7 program? 8 A. I think many of us in the courtroom 9 remember WordPerfect as a terrific product and 10 a very popular product back in the early and 11 mid '90s. 12 But at this point in time if you 13 couldn't get our word processing package to 14 interoperate effectively with the Windows 15 operating system, which, again, was that 16 bridge, then you're definitely going to lose 17 market share rapidly because unless your word 18 processing would interact with Windows at the 19 time, you as a consumer wouldn't want to have 20 that product. 21 Q. All right. Who do you sell it to? 22 A. We sell it to a company in Canada by 23 the name of Corel Corporation. 24 Q. All right. Let's see. 25 In connection with your -- well, let's 9942 1 go back for a minute because when you buy 2 WordPerfect or merge with WordPerfect, do you 3 -- in consolidating the two or try to 4 consolidate the two, do you lose some 5 salespeople? 6 What happened in that time frame with 7 respect to your sales operation? 8 A. Okay. Well, at the time I think our 9 executive vice president of sales was a fellow 10 by the name of Joe Marengi. 11 And whenever you combine two 12 organizations, you look for economies of scale 13 to help your companies. And so as you do that, 14 you look at your finance division, your sales 15 division, your marketing division, and you look 16 out where you can cut out layers of operation. 17 And so one of the areas that we cut 18 out substantially from the WordPerfect side of 19 the business was their sales organization 20 because Novell had a sales organization in 21 place. 22 Now, the nature of the sales that 23 WordPerfect had, vis-a-vis Novell, was a little 24 bit different because WordPerfect sold directly 25 to end user customers. They would go directly 9943 1 to law firms or libraries or your business as 2 opposed to Novell sold through an indirect 3 channel. We sold through distributors and 4 original equipment manufacturers, et cetera. 5 And WordPerfect did that same thing to 6 some extent, but mostly it was a retail, kind 7 of end user sale. 8 And so we cut out much of their retail 9 sales division. 10 Q. All right. Did you also let some 11 engineers go? 12 A. Certainly. 13 Q. All right. And the deal to sell 14 WordPerfect to Corel January 1996? 15 A. Uh-huh. 16 Q. So you own it for a year, year and a 17 half? 18 A. Little over a year, right. Year and a 19 half, I guess, you're right. 20 Q. And throughout the time that Novell 21 and WordPerfect were merged, did you seek 22 reports from employees on their interaction 23 with Microsoft? 24 A. Yes, we did. 25 Q. And were those kinds of reports 9944 1 provided to you? 2 A. Yes, they were. 3 Q. Did those reports contribute to your 4 decision, your later decision to sell 5 WordPerfect? 6 A. Yes, they did. 7 Q. Did you also continue to report this 8 information to the federal government? 9 A. Yes. 10 Q. All right. Let's look at 2253. 11 MS. CONLIN: Don't put it up yet, 12 please. 13 Q. Is this one -- do you have it? 14 A. Must be in this stack. 15 Q. Yes, it is in part two. 16 A. In this special case -- 17 MR. TULCHIN: We object to this, Your 18 Honor. This is one of those we discussed and 19 it was ruled upon. 20 MS. CONLIN: I don't think it was 21 ruled upon. 22 THE COURT: It hasn't been offered 23 yet. 24 MS. CONLIN: Your Honor, at this time 25 under McElroy versus State and also for the 9945 1 nonhearsay purpose of showing subsequent 2 conduct, we would offer -- do you have your 3 copy up there, Your Honor -- 2253. 4 MR. TULCHIN: Same objections as 5 previously stated, Your Honor, yesterday. 6 THE COURT: I don't have a copy of it. 7 MS. CONLIN: Oh, I'm sorry, Your 8 Honor. In your -- in a folder marked part two 9 witness exhibits. 10 THE COURT: Oh, I'm sorry. 11 MS. CONLIN: It is 2253, Your Honor. 12 At the top it says from David Miller and to a 13 number of people and groups. 14 THE COURT: I have it. 15 MR. TULCHIN: This is in the category 16 we discussed yesterday, Your Honor. It has 17 been ruled upon. 18 THE COURT: I'll talk to counsel 19 outside the presence of the jury, please. 20 (The following record was made out of 21 the presence of the jury at 10:30 a.m.) 22 MR. TULCHIN: Your Honor, this is 23 exactly one of the documents we addressed in 24 the memorandum I handed you yesterday. 25 It was ruled on by the Special Master. 9946 1 The plaintiffs appealed. The appeal was 2 rejected by the Court. And this is another one 3 of those documents where what is going on -- 4 this is not a business record, and that's been 5 established -- what is going on is that this 6 witness is collecting argument and information 7 for a legal attack, which Novell is making on a 8 daily basis with the United States Department 9 of Justice on Microsoft. 10 These two pages, though not the third, 11 of which is a letter -- which is a letter from 12 Microsoft to Novell. The first two pages are 13 in that same category, and that's why 2253 was 14 ruled upon by the Special Master. The 15 plaintiffs appealed. This is the ruling. 16 Maybe the -- this is the Special Master's 17 ruling sustained, that is, Microsoft's 18 objection was sustained. 19 MS. CONLIN: I don't believe we 20 appealed this one. 21 MR. TULCHIN: Well, my records were 22 wrong earlier. 23 MS. CONLIN: We did. I'm sorry, 24 Judge. 25 MR. TULCHIN: Here's 2253, Your Honor, 9947 1 and the plaintiffs appealed and the appeal was 2 denied. 3 THE COURT: What are you offering it 4 for? Nonhearsay? 5 MS. CONLIN: Yes, I am. The question 6 of the ruling on hearsay is not before the 7 Court. We lost that. 8 We offer this for the nonhearsay 9 purpose of showing subsequent conduct, and if I 10 may just walk through that for the record. 11 THE COURT: Okay. 12 MS. CONLIN: Novell -- setting aside 13 also for the moment Mr. Tulchin's remarks about 14 the daily reports from Novell to the Department 15 of Justice, it's a bit of an exaggeration. But 16 what I'm focusing on is the fact that Novell 17 acquired and disgorged this company in 18 18 months, and during that time Windows 95 came 19 out. 20 During this period there are lots of 21 things going on within Novell, and these 22 reports are coming to Mr. Bradford and other 23 members of the executive committee. 24 It doesn't matter, Your Honor, whether 25 it is true or not. In other words, if it 9948 1 doesn't -- Novell believed that Microsoft did 2 certain things, whether they were true or not. 3 And we're not claiming the conduct is true. 4 Novell took actions based on its 5 belief that Microsoft did these things, and the 6 action they took was a pretty strong one, Your 7 Honor. They got rid of the company. 8 So we say that Microsoft has acted 9 illegally to reduce competition in some ways 10 that are already established in the findings of 11 fact. 12 And, also, Your Honor, some of this 13 forms the basis of the testimony of our expert 14 witnesses on the effect on competition of 15 Microsoft's predatory conduct and reputation 16 for predatory conduct. And then Novell leaves 17 the Office productivity market, and that leads 18 to a reduction, almost elimination, of 19 competition in Office productivity. 20 MR. TULCHIN: Several things, if I 21 may, Your Honor. 22 THE COURT: Uh-huh. 23 MR. TULCHIN: First, I did exaggerate. 24 There weren't daily reports from the Department 25 of Justice, and I apologize for that. 9949 1 But as this witness testified, he was 2 reporting to the Department of Justice on a 3 regular basis. I shouldn't have said daily. 4 Secondly, and more to the point, I 5 don't think what Ms. Conlin said really makes 6 any sense. She says at one point that she's 7 not offering this for the truth and then 8 follows it almost immediately by saying, "This 9 goes to prove Microsoft's illegal conduct"; 10 i.e., this is being offered for the truth. 11 Now, Mr. Bradford has testified -- and 12 I look forward to my cross-examination on 13 this -- he has testified that WordPerfect was 14 not compatible with Windows 95 because of 15 something Microsoft did. It isn't true, and 16 that is what cross-examination is for. But 17 he's offered that testimony for its truth to 18 the jury. 19 This isn't to explain the sale of 20 WordPerfect. By the way, WordPerfect was sold 21 to Corel which invigorated it after Novell 22 drove that company into the ground and Corel 23 has been selling WordPerfect ever since. 24 So it's not that the sale of 25 WordPerfect put it out of the market. Far from 9950 1 it. Corel actually tried to, for example, put 2 the sale staff together. Mr. Bradford just 3 acknowledged that they decimated the people who 4 were selling this. No wonder they weren't 5 selling much. 6 But to get back to the point again, 7 Your Honor, this does go to the truth. 8 Now, the third page, the letter from 9 Microsoft to Mr. Miller of Novell -- by the 10 way, Mr. Miller is on their witness list -- 11 MS. CONLIN: He'll come. 12 MR. TULCHIN: -- and they say that 13 he's coming to trial. He testified in 14 Minneapolis, and he actually has some 15 first-hand knowledge of some of the events 16 reflected in the third page of this document. 17 The third page goes to what Novell did 18 to surreptitiously get access to a beta. And 19 I'm going to examine this witness about the 20 betas. Novell had the betas. WordPerfect had 21 the betas. 22 The only people at Novell who weren't 23 supposed to have the betas were the people 24 working on operating systems, and Novell, by 25 contract, agreed that they wouldn't get the 9951 1 betas to the operating system people. 2 And this third page goes to this 3 surreptitious activity, and then -- which, by 4 the way, I don't think this witness as a member 5 of the bar ever reported to Microsoft, or for 6 that matter, to the authorities. 7 The memo from Mr. Miller, which has 8 already been ruled upon as hearsay, the 9 plaintiffs appealed. They argued that there 10 were exceptions to the hearsay rule, and they 11 lost. 12 And if anything has ever been offered 13 for the truth, this is it because what they 14 want to do with this witness is to try to get 15 into evidence something which Mr. Miller wrote 16 which is argument and opinion precisely to try 17 to prove to the jury that Microsoft illegally 18 interfered with their ability to compete. 19 That's what this is for, and I think 20 that's what Ms. Conlin was arguing. This 21 doesn't explain the sale of WordPerfect, and 22 there isn't any issue in this case that Novell 23 sold WordPerfect. 24 The dates on that demonstrative are 25 dates that Ms. Conlin gave me over the weekend. 9952 1 They appeared correct to me, and I said I had 2 no objection to any of that. 3 So sorry to be so long about this, but 4 for the life of me, I can't understand what 5 purported nonhearsay purpose this could be used 6 for. 7 THE COURT: I don't have a third page. 8 What's your third page? 9 MR. TULCHIN: There's three pages in 10 mine, Your Honor. That's the third page of 11 mine, but there's a second page to the 12 document, at least as they gave it to me. 13 MS. CONLIN: There are three pages to 14 the document, Your Honor. 15 Do you not have all three pages? 16 THE COURT: I don't have the middle 17 one. I do have the third page then. 18 MS. CONLIN: I'm sorry, Your Honor. 19 Let me address -- I don't know where to begin. 20 The third page is a letter from 21 Microsoft to Mr. Miller, which contains its 22 accusations about this surreptitious activity. 23 And as I recall, the Court has made a ruling 24 with respect to how betas were obtained. 25 MR. TULCHIN: That didn't apply to the 9953 1 95 beta. That ruling was very specific. It 2 went to the earlier period, '91 to '92. 3 MS. CONLIN: We would ask, then, that 4 the Court make the same ruling with respect to 5 the 95 beta because it's the same general 6 principle. 7 Let me address the issue. Let me be 8 very clear, Your Honor, on what I seek to enter 9 at this time, and that is, there is a paragraph 10 in the middle of the first page of the document 11 from Mr. Miller to the -- this sort of 12 summarizes -- Novell is not getting equal 13 opportunity and access and so on. That is the 14 paragraph. 15 And this is McElroy Gacke formulation 16 as I understand it: A nonhearsay purpose. 17 Novell believed Microsoft did these 18 things. Does it matter whether they're true or 19 not? Novell took action based on its belief, 20 so it squarely falls within McElroy and the 21 limitation imposed on McElroy by Gacke, which I 22 really hope I'm pronouncing correctly. 23 So I think that's -- I also think we 24 probably need to take up this issue of 25 surreptitious behavior before Mr. Bradford is 9954 1 cross-examined because I would certainly hope 2 that the Court does not permit the examination 3 of this witness, at least, with respect to 4 those betas that were allegedly surreptitiously 5 provided because his knowledge of that is 6 limited and Mr. Miller will be here. And so 7 even if -- perhaps, we can bring others as 8 well -- but even if that were to be permitted, 9 it should not be permitted with this witness. 10 THE COURT: So you want to offer the 11 whole exhibit? The entire exhibit? 12 MS. CONLIN: Well, Your Honor, it 13 comes together. That's my problem with the 14 exhibits. 15 I did not initially put these exhibits 16 together. These exhibits have been together 17 like this for a very long time, and so -- 18 THE COURT: But you're going to refer 19 to it and want to show the jury all of it? 20 MS. CONLIN: No. Only the first page, 21 Your Honor. 22 THE COURT: The first page? 23 MS. CONLIN: Yes. 24 MR. TULCHIN: Your Honor, if I may. 25 MS. CONLIN: We would ask to redact 9955 1 the last page. 2 THE COURT: Last two pages? 3 MS. CONLIN: Let me see, Your Honor. 4 THE COURT: You're talking about a 5 middle page. There's a middle page. There's 6 three pages. 7 MS. CONLIN: Yes, Your Honor. The 8 last page, which is the letter we would ask to 9 redact, the March 1, 1995 letter of Mr. Stanton 10 to Mr. Miller. 11 THE COURT: So you want to show the 12 jury the entire first page and second page? 13 MS. CONLIN: Just the first page. 14 THE COURT: Just the first page. 15 MS. CONLIN: Just this part is the 16 part I'm going to read to the jury. 17 THE COURT: Where it starts, "The main 18 message." 19 MS. CONLIN: Yeah. 20 MR. TULCHIN: Your Honor, again, this 21 makes no sense. Ms. Conlin says she wants this 22 to explain subsequent conduct, and the conduct 23 she says she wants to explain is the sale of 24 WordPerfect. And, therefore, she argues, it 25 doesn't matter whether the information is true. 9956 1 It's only that Novell believed it. So that 2 explains why they sold the company. 3 Well, the issue here is not the sale 4 of WordPerfect. There's no issue in this case. 5 We stipulate that WordPerfect was sold 6 on whatever date her demonstrative says it was 7 sold. I don't know if it was the right date or 8 not, but I've accepted it. 9 The question here is Microsoft's 10 conduct and whether there was anticompetitive 11 conduct. Of course she wants this for the 12 truth. The first page has already been ruled 13 upon. It was appealed. Your Honor denied 14 their appeal. There's no hearsay purpose that 15 pertains to any issue in this lawsuit. 16 MS. CONLIN: The motivation for the 17 sale, Your Honor. I'm sure that's it. 18 THE COURT: Anything else? 19 MS. CONLIN: No. 20 THE COURT: Anything else? 21 MR. TULCHIN: No. 22 THE COURT: Objection is sustained. 23 I'll sustain it out there. 24 MR. TULCHIN: Thank you, Your Honor. 25 (The following record was made in the 9957 1 presence of the jury at 10:44 a.m.) 2 THE COURT: Objection is sustained. 3 Next question. 4 MS. CONLIN: Thank you, Your Honor. 5 BY MS. CONLIN: 6 Q. Who was Dave Miller? 7 A. Dave Miller was a Novell employee that 8 had specific responsibilities for our strategic 9 discussions with Microsoft. 10 Q. Is he someone that you knew? 11 A. Yes. 12 Q. Is he someone that reported activities 13 of Microsoft to you and members of the 14 executive committee? 15 A. Yes. Dave Miller did that. 16 Q. Do you recall a report you received or 17 learned about from Mr. Miller in early -- March 18 9th, 1995? 19 A. There was a series of reports that 20 Dave Miller provided to us regarding 21 Microsoft's actions and counteractions. 22 Q. Do you recall any on March 9th -- 23 anything about one on March 9th, 1995? 24 A. That specific date, I do not recall. 25 Q. All right. Let me for the purpose of 9958 1 refreshing your recollection -- you actually 2 have this. 3 A. Okay. 4 Q. Let me show you a document. And if 5 you'll take a look at it and see whether or not 6 you can use that document for the purpose of 7 refreshing your recollection. 8 A. Yes. I recall these sorts of e-mails 9 and correspondence from Dave Miller. 10 Q. If you would tell the Jury what was 11 your understanding of what was going on between 12 Novell and Microsoft in March of 1995 and in 13 connection with the betas. 14 A. Well, specifically, there was great 15 frustration by Dave Miller and other people at 16 Novell that we weren't getting access to the 17 Microsoft Windows betas. 18 Q. Well, you were getting some of them, 19 weren't you? 20 A. As -- I suppose it depended on what 21 division you're talking about within Novell. 22 Q. Okay. Well, the division that was 23 working on, for example, the WordPerfect 24 product. 25 A. Correct. 9959 1 Q. And let me show you this document, 2 again, to refresh your recollection. 3 A. Okay. Thanks. 4 Q. You're welcome. 5 Does that refresh your recollection? 6 A. Yes, it does. 7 Q. All right. Tell us what Novell 8 believed was happening in terms of the betas 9 from Microsoft to the WordPerfect people so 10 they could work on their applications to run on 11 top of Windows 95. 12 A. They weren't getting them. 13 Q. Okay. Was Novell aware of how many 14 releases other people were getting in this time 15 frame? 16 A. Yes. Generally. 17 Q. Okay. Do you know how the number that 18 Novell got compared with the number that other 19 builders of applications were getting? 20 A. Well, certainly they were far less 21 than other application builders were receiving. 22 Q. Any way to put a number on it? 23 A. If other application developers in the 24 industry were getting 100 beta releases from 25 Microsoft, we might be getting 10. 9960 1 Q. Okay. That's just an estimate? 2 A. Yes. 3 Q. All right. The next document that we 4 are going to take a look at is in this same 5 time frame. It's a little bit later, April 6 4th. And it is 2270. 7 Do you have it up there? Did you get 8 yours out of order or did I get them out of 9 order? 10 A. Let me get them in order. 11 Q. Okay. 12 A. What was the last time you referenced? 13 Q. 2270. 14 And the one before that was 2253. 15 A. Okay. 16 Q. You see how it looks. Does this help 17 at all? 18 Let me give you another copy. We are 19 going to show it up here. This one has been 20 admitted and let me just show that to you. 21 A. Oh, 2270, I'm sorry. I do have this. 22 Right here. 23 Q. All right. And this is a document 24 from Mr. Paul Reiner. 25 Who was Mr. Reiner? 9961 1 A. Paul was working in our consulting 2 services group at Novell. 3 Q. All right. And this is dated Tuesday, 4 April 4th, 1995. 5 And he says at the very top -- 6 MS. CONLIN: Darin, first couple. 7 Okay. 8 Q. Several consulting services personnel 9 have installed Perfect Office on Win 95 (all 10 betas) and we have found the results to be 11 dismal. 12 In other words, they are not running 13 together correctly? 14 A. That's correct. 15 Q. All right. And he goes on to say, in 16 fact, we think there is a motto at Microsoft 17 that says Chicago ain't done, until Perfect 18 Office won't run. 19 Did you ever hear that before while 20 you were there? 21 A. Yes. 22 Q. All right. And then he lists -- he 23 says, we have many problems including, and then 24 he lists some of the technical issues which we 25 are mercifully not going to try to discuss. 9962 1 Let's go on, if we could. 2 Who was Ryan Richards? 3 A. Ryan Richards' title was associate 4 general counsel at Novell. He reported 5 directly to me. 6 Q. All right. In this April of 1995 time 7 frame, were there problems also with the way 8 that Microsoft applications were being written 9 to take advantage of things in the operating 10 system that other people didn't know about? 11 A. Can you restate the question? 12 Q. Maybe. 13 A. Okay. 14 Q. APIs. 15 A. Uh-huh, application programming 16 interfaces. 17 Q. You needed to know what they did and 18 where they were; is that correct? 19 A. Right. We needed to have those 20 application programming interfaces documented 21 from Microsoft in order to ensure that when we 22 built our application on top of their operating 23 system, that the two would interact 24 effectively. 25 Q. All right. Did you have -- I think 9963 1 you've already indicated there were problems 2 with getting documentation; correct? 3 A. Yes. Consistently. 4 Q. Do you remember a specific problem 5 with bookshelf and MSN that happened in -- or 6 it came to your attention, rather, in April of 7 1995? 8 A. I remember those terms vaguely, but to 9 say that I understand -- or remember all of the 10 specifics, there were a number of complaints 11 that were coming in during this time frame 12 about the failure of the products to interact. 13 Q. Did you have -- did you ever hear the 14 term the Chinese wall? 15 A. Yes. 16 Q. What did that mean to you, Novell, as 17 an applications developer, which you were at 18 this point? 19 A. Sure. Microsoft at one point said 20 that we are getting all of our APIs, all of our 21 documentation, all of our betas out fairly and 22 equally to all application developers. 23 In fact, there was a Chinese wall 24 within Microsoft that basically divides their 25 operating system division, the one 9964 1 responsibility for Windows, from their 2 applications division, the one creating Word 3 and Excel, et cetera, et cetera. 4 In other words, there was a Chinese 5 wall between the operating system division 6 within Microsoft and the applications division. 7 And they did that -- allegedly, 8 Microsoft did that to ensure that everybody in 9 the industry at the same time got fair and 10 equal access to all betas associated in 11 applications programming interfaces, associated 12 with the Windows operating system. 13 Q. Did there come a time when Microsoft 14 said that we don't have a Chinese wall? 15 A. Yes. They later acknowledged there 16 was no Chinese wall. 17 Q. How did Novell feel about the fact 18 that there was no Chinese wall or any 19 separation between Microsoft's operating system 20 division and its applications division? 21 MR. TULCHIN: Objection, Your Honor, 22 to how Novell felt. 23 THE COURT: Overruled. 24 You may answer. 25 A. Novell felt very frustrated because we 9965 1 sensed all along that we weren't getting timely 2 betas, timely documentation for the APIs, et 3 cetera. 4 And so when you have the dominant 5 operating system company in Microsoft with 6 Windows giving preferential treatment to their 7 own application developers, it made all other 8 application developers in the industry, 9 including Novell's with WordPerfect, et cetera, 10 very, very difficult to compete effectively. 11 Q. Did Novell have problems with bugs in 12 the operating system that adversely affected 13 its ability to run WordPerfect? 14 A. Yes. 15 Q. Okay. What is the practice in the 16 industry -- let me back up for a moment. 17 You were -- Novell was an operating 18 system developer; correct? 19 A. That's right, with NetWare. 20 Q. And as an operating system developer, 21 what did Novell do if their product created 22 problems for running an application even, you 23 know, with another company? 24 A. Well, we would fix those bugs 25 immediately. 9966 1 You know, sometimes the application 2 developer said, well, there's a bug in NetWare 3 that allows -- that doesn't permit X, Y, Z 4 function. 5 And so our developers at the network 6 operating system division would get busy to fix 7 that bug. 8 Sometimes we would find that the bug 9 was in the application software that was trying 10 to run on top of, and so the companies would 11 cooperate to resolve any bug issues. 12 Q. I don't know if you've talked about 13 this yet, but did Mr. Noorda come up with a 14 word to describe the area where companies would 15 compete in one area and need to cooperate in 16 other areas? 17 A. Yes. Mr. Noorda coined a term that 18 was later used in Harvard business reviews and 19 so forth called coopetition. 20 And the concept behind coopetition 21 would be you cooperated with your competitors 22 to ensure interoperability of products to 23 benefit end user customers. 24 Q. And so let's return to the bugs that 25 existed between the Chicago beta and the 9967 1 WordPerfect beta. 2 What would be the standard practice in 3 the industry about Windows developers fixing 4 the bugs that were show-stopping bugs for 5 WordPerfect? 6 MR. TULCHIN: Objection, Your Honor. 7 He's not an expert, and he was a lawyer. He 8 doesn't know about standard practice in the 9 industry. 10 THE COURT: I'll allow it. 11 Go ahead. 12 A. Basically, the practice is -- as I 13 mentioned earlier, Novell was very anxious to 14 fix bugs. And we assumed that Microsoft would 15 be very anxious to fix bugs between our 16 applications and their operating system. 17 Q. Did that happen? 18 A. I suppose on occasion they would fix a 19 bug, but certainly the sense of Novell at the 20 time was these bugs weren't getting fixed. And 21 as a result, our applications weren't getting 22 into the marketplace so consumers could use 23 them. 24 Q. Were there times that development was 25 affected by these bugs? 9968 1 A. Well, certainly. If you can't fix a 2 bug and you know that the end user customer is 3 going to get a product that's got a bug or a 4 defect in it, you know, you're not going to 5 ship the product. 6 So it delayed product shipments and so 7 forth. 8 THE COURT: Take our recess at this 9 time. 10 Remember the admonition given earlier. 11 We will resume at 12 noon. 12 See you then. 13 (A recess was taken from 10:58 a.m. 14 to 12:01 p.m.) 15 (The following record was made out of 16 the presence of the jury at 12:01 p.m.) 17 THE COURT: You had some housekeeping 18 matters? 19 MS. CONLIN: I do, Your Honor. 20 First of which is as an offer of 21 proof, Your Honor, the exhibits that I believe 22 fall in the category that the Court ruled on. 23 I would make -- I would offer now as a 24 part of my offer of proof on this issue, and 25 they are Plaintiffs' Exhibit 2352, 2353, 2308D, 9969 1 2391, 2184, and 2363. 2 And the juror's remarks caused me to 3 remember something else I wanted to ask the 4 Court. 5 It's been my experience, Your Honor, 6 that we do not usually need to ask permission 7 to approach the witness or other things of that 8 nature. And the juror indicates that she's 9 concerned about my failure to do that. 10 Does the Court want to institute that 11 practice or could the Court say to the Jury 12 that you've decided it's not necessary or 13 something so that it doesn't -- so it's not 14 offensive to the Jury? 15 THE COURT: I don't know. What's your 16 feeling, Mr. Tulchin? 17 MR. TULCHIN: Your Honor, I think 18 everyone so far, with the exception of one 19 lawyer, Ms. Conlin, has asked the Court for 20 permission to move about the courtroom. 21 That's what I'm used to. That's what 22 the practice is in most courtrooms that I've 23 practiced in over a number of years. And it 24 seems to me to be most appropriate. 25 Obviously, whatever the rule is, it 9970 1 is, and we'll be guided accordingly. 2 THE COURT: Well, let's continue with 3 the rule you should ask permission before 4 approaching the witness. 5 MS. CONLIN: All right, Your Honor. 6 I -- all right, Your Honor. I thought 7 it was the opposite in this courtroom, but I 8 would be happy to. 9 THE COURT: We'll do it that way. 10 MS. CONLIN: I beg your pardon? 11 THE COURT: We'll do it that way, ask 12 permission. 13 MS. CONLIN: All right. I hope I 14 remember, Your Honor. 15 A couple of these things -- 16 MR. TULCHIN: In light of I said it, 17 I'll probably be the first to forget. 18 THE COURT: Go ahead, Ms. Conlin. 19 MS. CONLIN: Some of these remarks 20 appear to me to require a private discussion. 21 If you want to do it now -- you see the last -- 22 THE COURT: Yes. 23 MS. CONLIN: I'm thinking of certainly 24 three. 25 THE COURT: Okay. We can do that. 9971 1 Anything else for the record here? 2 MS. CONLIN: Yes, Your Honor. 3 Let me make my formal motion, my 4 formal request for the Court to supplement its 5 ruling on the motion in limine to add the 6 Chicago 95 beta, or any other betas that 7 somehow become at issue here. 8 With this witness particularly, I 9 think it's important to extend it. 10 The Court ruled on November 19 -- 11 wrong decade -- 2006 that the Plaintiffs' 12 motion to exclude evidence or reference to the 13 circumstances under which DRI/Novell obtained 14 certain beta copies of Windows 3.1 is also 15 sustained. Such evidence is not relevant. 16 And that was the Court's ruling, and 17 what we ask, Your Honor, is that the Court 18 supplement that ruling by adding the Chicago 95 19 beta. 20 This witness particularly, his 21 knowledge of where betas came from is certainly 22 limited. 23 And what's distressing to me is Mr. 24 Tulchin's remark, sidebar that he is going to 25 seek to imply to the Jury that Mr. Bradford had 9972 1 some legal duty or ethical duty to do something 2 about betas. And certainly that, first of all, 3 doesn't seem to be correct, but in addition to 4 that, Your Honor, nothing about this is 5 relevant to the Jury's consideration of issues 6 in this case. 7 It would be highly unfair to the 8 Plaintiffs and unfairly prejudicial to the 9 Plaintiffs. And it is for that reason that we 10 seek the supplementation of the Court's earlier 11 ruling. 12 And we incorporate by reference, Your 13 Honor, all of the briefs and arguments that we 14 made in connection with our presentation of 15 that issue to the Court by way of our motion in 16 limine pretrial. 17 THE COURT: Thank you. 18 Response? 19 MR. TULCHIN: Yes, Your Honor, thank 20 you. 21 First, and perhaps most obviously, the 22 Plaintiffs could have and should have sought an 23 in limine ruling on this subject when in limine 24 motions were filed. 25 They directed their motion only to the 9973 1 question of how Novell received an earlier 2 beta. And with respect to that issue, the 3 Court ruled in their favor. 4 I might say, given Mr. Bradford's 5 testimony, I think it would be unfair to adhere 6 to that ruling. But let me leave that aside. 7 On the issue of the Windows 95 or 8 Chicago betas, I find it quite astounding that 9 Mr. Bradford from the witness stand has said 10 quite emphatically that he knows the extent to 11 which Novell and its divisions received copies 12 of the Windows 95 beta. 13 He knows how frequently. He knows how 14 frequently in comparison to other companies. 15 And he knows that the absence of betas hurt 16 various portions of Novell in their effort to 17 develop products. 18 Now, of course, as a lawyer and not an 19 engineer, he was never building any of these 20 products. And that's certainly something that 21 on cross-examination I think everyone would 22 agree I'm free to establish. 23 But the fact that Novell actually had 24 the betas when he said they didn't, of course, 25 has been completely opened up for cross by 9974 1 virtue of the Plaintiffs' decision to solicit 2 this information from Mr. Bradford when he 3 couldn't possibly have been in a position even 4 to know what was happening at the software 5 engineering level. 6 There's lots of evidence in this case 7 about the receipt of betas. Mr. Bradford's 8 testimony was incorrect. I think we're 9 entitled to establish it. 10 Otherwise, we have the Plaintiffs 11 moving right now in limine immediately after a 12 direct examination in which they extracted from 13 the form of general counsel, Mr. Bradford, his 14 testimony that Novell didn't have the betas it 15 needed. It did, and I should be able to cross 16 on that subject. 17 MS. CONLIN: Your Honor, if I may. 18 First of all, Your Honor, let me kind 19 of tell you what the accusation here is so that 20 you will have a way to consider this. 21 Early in the beta process, as I 22 understand the accusation, it is asserted that 23 three of Novell engineers had companies or set 24 up companies that got betas from Microsoft in 25 the name of the companies, not Novell, and then 9975 1 used them to build product at Novell. 2 Mr. Miller is the person who will 3 address that if the Court requires that it be 4 addressed. 5 That issue, however, is inappropriate. 6 Certainly, I think, inappropriate totally, but 7 inappropriate for discussion with Mr. Bradford 8 who testified in a general way as to what he 9 was -- as to the knowledge of the corporation. 10 There is no evidence whatsoever that 11 the corporation had knowledge or directed these 12 engineers to do what they did. And though 13 Mr. Bradford doesn't remember this incident 14 directly, uncertain whether he handled it 15 himself, anyway he can -- his expectation is 16 that something like that came to the attention 17 of the legal department, it would be handled 18 quickly and completely. 19 But, as I said, no direct knowledge 20 and no particular recollection with respect to 21 that. 22 And he's made clear that his -- and 23 I've made clear repeatedly that his testimony 24 about the availability of betas is based on the 25 reports that he received, that Novell received, 9976 1 that the executive committee received, and to 2 bring this testimony before the Jury in 3 connection with this witness's testimony is 4 unfairly prejudicial and adds nothing. 5 And, also, I should say a couple of 6 things about the fact that Microsoft complains 7 that this is too late, when Microsoft sought 8 months late in the middle of the trial, one 9 working day before Mr. Alepin was to take the 10 stand, to exclude most of his testimony. 11 So I really don't think that our 12 failure to supplement this motion before 13 Mr. Bradford got on the stand should bear on 14 the Court's consideration of it, in that 15 Microsoft has often been late in its motions. 16 And the Court has always considered 17 them on the merits, and I hope the Court will 18 do the same with respect to this motion. And 19 we simply ask that the Court adhere to its 20 earlier ruling and extend it to the Chicago 21 beta. 22 And while we're discussing this, Your 23 Honor, it appears to me that Microsoft has 24 violated the Court's earlier ruling in any 25 event, but I don't have before me any specific 9977 1 examples. Perhaps we could do that at another 2 time. 3 I'm only concerned about the 4 cross-examination of Mr. Bradford on this 5 issue. 6 I've got about another -- well, it's 7 kind of hard to say how much more I've got, 8 Your Honor, but I might get to cross before the 9 next break. 10 THE COURT: Anything else? 11 MR. TULCHIN: Just very quickly, Your 12 Honor. 13 Mr. Bradford, whatever else is going 14 on here, is not Novell and he's not Novell's 15 designated representative at this trial. 16 He could only be testifying, unless 17 all his testimony now should be stricken, based 18 on his personal knowledge. 19 So when Ms. Conlin says he's just 20 offering Novell's corporate knowledge, I don't 21 know what that means. Either he knows 22 something or he doesn't. 23 But he knew enough to be able to tell 24 the Jury a few moments before lunch, and I 25 think he said I know, k-n-o-w, that we weren't 9978 1 getting sufficient copies of the betas. We 2 should be able to test that. 3 MS. CONLIN: Doesn't even go to the 4 issue. 5 The issue is were they getting 6 sufficient copies of the beta. 7 What Mr. Tulchin seeks to do is go 8 back to the beginning of the beta process. And 9 I confined his testimony to late '94 and the 10 summer of '95. So it's not even in the time 11 frame that we were discussing, Your Honor. 12 THE COURT: Anything else? 13 MR. TULCHIN: No, Your Honor. 14 THE COURT: The exhibits that you had 15 for the offer of proof, you want to put those 16 before the Court as separate files? 17 MS. CONLIN: Exactly, Your Honor. I 18 will figure out a way to make sure they don't 19 get mixed up. 20 THE COURT: All right. Make sure you 21 give them to the court reporter. They will be 22 put in a separate file for your offer of proof. 23 MS. CONLIN: Okay, Your Honor. 24 MR. TULCHIN: Sorry to take the time, 25 Your Honor, but could I get those numbers read 9979 1 to me again because I was scrambling to note 2 what they were and I didn't get them? 3 THE COURT: Okay. 4 MS. CONLIN: 2352, 2353, 2308D, 2391, 5 2184, and 2363. 6 MR. TULCHIN: Thank you. 7 MS. CONLIN: One other thing, Your 8 Honor, while you think about this issue, if 9 that's what you're doing. 10 I'd like to offer Exhibit 10100, which 11 is the timeline in front of the jury, and we 12 could make further arguments on that, Your 13 Honor. 14 We have case law that specifically and 15 directly says chronologies, timelines are 16 included under and pursuant to 1006. But I 17 don't need to argue that again, Your Honor, but 18 I do want to offer it in front of the jury. 19 THE COURT: Do you have the 20 authorities with you? 21 MS. CONLIN: Yeah. 22 THE COURT: Same objection by 23 Defendant? 24 MR. TULCHIN: Yes, sir. 25 THE COURT: Court will review it. 9980 1 MS. CONLIN: Thank you, Your Honor. 2 MR. HAGSTROM: May I hand them all now 3 up, Your Honor? 4 THE COURT: Yes. 5 MR. TULCHIN: Thank you. 6 THE COURT: Thank you. I'll take a 7 look at this and decide it before the end of 8 the day. 9 MR. HAGSTROM: I can note down the 10 jump cites for you too. 11 THE COURT: Very well. 12 MR. HAGSTROM: I should have 13 highlighted those, but maybe I can get you 14 those at the break. 15 THE COURT: Okay. 16 In regard to the motion in limine, it 17 is sustained. 18 Consistent with the Court's prior 19 ruling evidence of illegal or unlawful acts by 20 any competitor is inadmissible. 21 Now, do you want to talk about this 22 juror note? 23 MS. CONLIN: Well, what do you think? 24 I think perhaps we should. 25 THE COURT: If you want to make a 9981 1 record on it, fine. 2 MS. CONLIN: Okay. 3 Well, I don't want to make a record in 4 open court, Your Honor. 5 THE COURT: I know. 6 MS. CONLIN: Okay. 7 THE COURT: You said you wanted to 8 make it back here. 9 (The following record was made out of 10 the presence of the jury 12:18 p.m.) 11 (At this time, a sealed-by-the-Court 12 record was made by Janis Lavorato.) 13 (The following record was made in the 14 presence of the jury at 12:31 p.m.) 15 THE COURT: Everyone else may be 16 seated. 17 Members of the jury, I apologize for 18 the delay. We had an issue to take up. We 19 have it resolved. We will continue. 20 You are are still under oath, 21 Mr. Bradford. 22 THE WITNESS: All right. 23 MS. CONLIN: Oh, Your Honor, at this 24 time the Plaintiffs would offer Exhibit 10100, 25 which is the Bradford timeline. 9982 1 MR. TULCHIN: Same objection as stated 2 earlier, Your Honor. 3 THE COURT: The Court will take the 4 matter under advisement. I'll rule on it 5 later. 6 MS. CONLIN: Thank you, Your Honor. 7 BY MS. CONLIN: 8 Q. Before the lunch break, Mr. Bradford, 9 we were talking about the reports that you were 10 receiving about things happening in the late 11 '94 and through 1995, about the interaction 12 between Microsoft and Novell. 13 Did you ever have any contact or 14 reports about five key bugs that Novell sought 15 to have fixed that were affecting the product 16 WordPerfect? 17 A. Yes, as I recall, uh-huh. 18 Q. What can you tell the Jury about that 19 situation? 20 A. Well, as I recall, there was a lot of 21 frustration by members of the executive team 22 and people like Dave Miller and other people 23 within the Novell family that these bugs 24 weren't getting fixed. 25 Q. Do you know approximately for how long 9983 1 a period these bugs existed and were not 2 repaired? 3 A. I don't recall specifically. 4 Q. All right. Well, let me -- 5 MS. CONLIN: If I may approach, Your 6 Honor. 7 THE COURT: You may. 8 Q. Let me show you a document that may 9 refresh your recollection at least as to some 10 of the time frame. 11 If you would look at the top. That's 12 from you. 13 A. All right. 14 Q. Does that refresh your recollection? 15 A. In terms of how long those bugs went 16 unremedied, it helps. I can't give you a 17 definitive date, but -- 18 Q. Well, as of July of 1995, a month or 19 so before Windows 95 was released, were those 20 five big bugs, to your knowledge, based on the 21 reports you were receiving, were those five big 22 bugs still not fixed? 23 A. They were still not fixed, that's 24 correct. 25 Q. All right. Did that have any impact 9984 1 as far as you know based on the reports you 2 were receiving on the ability of the 3 WordPerfect people to continue working on your 4 product? 5 A. Yes. It was my understanding that 6 they could not complete the development work on 7 WordPerfect for Windows, that version of 8 Windows, until those bugs were fixed. 9 Q. All right. Besides -- 10 MR. TULCHIN: Your Honor, sorry to 11 interrupt. 12 Could I just find out what document 13 Ms. Conlin showed the witness to refresh his 14 recollection? 15 THE COURT: Is there a number on it? 16 MR. TULCHIN: I didn't hear a number. 17 MS. CONLIN: There is, Your Honor, but 18 I'm using it only to refresh his recollection, 19 not offering the document into evidence. So do 20 I need to identify it for him? 21 THE COURT: Please disclose the 22 number. 23 MS. CONLIN: Of course, Your Honor. 24 That would be 2352. 25 THE COURT: Thank you. 9985 1 Q. Mr. Bradford, in this same time frame, 2 were there other things happening in connection 3 besides the five key bugs with your ability, 4 Novell's ability, not yours, to develop its 5 product WordPerfect? 6 A. Certainly, the bug fixes weren't done. 7 It was my understanding that we weren't getting 8 betas, early release beta software for our 9 WordPerfect division so that they could study 10 those betas and make things interoperable. 11 Q. Did you learn anything about 12 Microsoft's ability to hook into Explorer, not 13 Internet Explorer, but the Explorer on the 14 desktop? 15 A. If I did, my recollection is vague on 16 that one. So if you got something to refresh 17 my recollection, that would be useful. 18 MS. CONLIN: May I approach, Your 19 Honor? 20 THE COURT: You may. 21 MS. CONLIN: I'm showing the witness 22 Exhibit 2353. 23 Your Honor, I'm going to be dealing 24 with a number of these issues. May I leave the 25 document with the witness while I ask him about 9986 1 these matters? 2 THE COURT: Any objection? 3 MR. TULCHIN: No, Your Honor. 4 THE COURT: You may. 5 Q. You may refer, if you wish to, 6 Mr. Bradford, to the document as we talk 7 through these issues. 8 I asked you a question about the 9 ability to hook into the Explorer. 10 Do you know what happened at least in 11 some -- in this time frame about the ability of 12 WordPerfect to hook into the desktop Explorer? 13 A. Microsoft removed the ability to hook 14 into Explorer. 15 Q. Did that have to do also with the 16 namespace browser? 17 A. Yes. 18 Q. And what did Novell do to respond to 19 Microsoft's removal of the hooks into the 20 desktop Explorer? 21 A. Well, I'm sure we complained to 22 Microsoft about it. 23 MR. TULCHIN: Objection, Your Honor, 24 if I may. 25 This is improper refreshing of the 9987 1 recollection. The witness apparently is just 2 reading the document and, in effect, putting 3 into evidence what the Court has ruled cannot 4 be in. 5 THE COURT: You can't read the 6 document into the record. If it refreshes your 7 recollection, fine, but then I prefer you not 8 read it. 9 THE WITNESS: Okay. 10 MS. CONLIN: Well, Your Honor, in 11 fairness, I don't think the witness was reading 12 from the document. 13 THE COURT: Okay. Well, he's directed 14 not to. 15 MS. CONLIN: Yes. Thank you, Your 16 Honor. 17 Q. Let me return to the question. 18 What did Novell do when Microsoft 19 removed the hooks into Explorer? 20 A. If you're asking did we complain to 21 Microsoft, I'm sure we complained to Microsoft 22 about that. 23 Q. Did you do anything else that you can 24 remember? 25 A. No, not sitting here today. 9988 1 Q. All right. If you'd refer to the 2 document and then paragraph numbered one, that 3 may help to refresh your recollection. Then 4 look up from the document and I will ask you 5 the question. 6 A. All right. 7 Q. When Microsoft removed the hooks from 8 the desktop Explorer, what did Novell have to 9 do in response? 10 MR. TULCHIN: Same objection, Your 11 Honor, unless his recollection has been 12 refreshed as opposed to recounting what the 13 Court has ruled cannot go into evidence. 14 THE COURT: Mr. Bradford, has your 15 recollection been refreshed or are you merely 16 reciting what you've now read? 17 THE WITNESS: I -- now, my 18 recollection is refreshed with respect to what 19 occurred during that time period. 20 THE COURT: Can you testify about the 21 question proposed or propounded at this time 22 without referring to the document and what was 23 stated in there? 24 THE WITNESS: Yes. 25 THE COURT: Very well. You may 9989 1 answer. 2 A. So what we were doing about it, among 3 other things, was supplying information to the 4 Department of Justice and the authorities with 5 respect to this inability to hook in. 6 Q. All right. Do you recall a time when 7 Microsoft initially published some features of 8 its Chicago product and then took them away? 9 A. That sounds familiar. 10 Q. All right. If you would look at 11 paragraph 3 to see whether or not paragraph 3 12 can refresh your recollection on the issue of 13 whether or not Microsoft published some 14 features and then withdrew them. 15 A. Yes. 16 Q. Okay. Looking up from the document, 17 is your recollection refreshed? 18 A. It is. 19 Q. What can you tell the Jury about 20 Microsoft's publication of features and then 21 removal? 22 A. There was concerns by our marketing 23 and technology people that Microsoft would 24 publish a set of integration hooks to allow us 25 to integrate with their products and their 9990 1 technologies and then remove those so that they 2 either changed or we didn't have access to 3 them. 4 Q. Did you start from scratch to put 5 those features into WordPerfect? 6 A. That was the only way that we could 7 get a product out the door, yes. 8 Q. All right. Do you remember any 9 discussion about shell integration? 10 A. Yes. 11 Q. Are you able to explain to the Jury in 12 a general way what shell integration means? 13 A. Not specifically. 14 Q. All right. 15 A. I'll leave that for the technical 16 people. 17 Q. All right. They'll be coming along. 18 A. Okay. 19 Q. Do you recall learning in July of 1995 20 about a meeting at which Microsoft discussed 21 MAPI, M-A-P-I, all caps, APIs? 22 A. Yes. 23 Q. What can you tell the Jury about the 24 reports that you received concerning the MAPI, 25 which, I guess, includes API, but the MAPI 9991 1 APIs? 2 A. Again, it was hurting our ability to 3 get our applications out the door if we didn't 4 have those, access to those application 5 programming interfaces. 6 Q. Did anyone from Novell ask Microsoft 7 whether or not they were going to withhold 8 information on their exchange APIs like they 9 did on MAPI? 10 A. I'm sure that someone asked them that 11 question. 12 Q. Do you recall what Microsoft said? 13 A. Not offhand. 14 MS. CONLIN: All right. Your Honor, 15 I'm going to show the witness Exhibit 2308D, if 16 I may approach. 17 THE COURT: You may. 18 MS. CONLIN: I'm showing the witness a 19 document that he wrote dated 7-28-95 for the 20 purpose of refreshing your recollection. 21 Q. I'm going to point you to the sentence 22 and see -- first read it and then I'll ask you 23 -- 24 A. All right. 25 Q. Does reviewing your memorandum on this 9992 1 issue refresh your recollection? 2 A. It does. 3 Q. Can you tell the Jury, please, when a 4 Novell person asked a Microsoft representative 5 whether Microsoft was going to withhold 6 information on their exchange APIs like they 7 did on MAPI, what did you learn that the 8 Microsoft representative said? 9 MR. TULCHIN: Objection, Your Honor. 10 THE COURT: Overruled. 11 You may answer. 12 A. The Microsoft representative indicated 13 that they weren't going to share those APIs. 14 Q. All right. Was there a time when 15 Mr. Frankenberg as CEO of Novell communicated 16 directly with Mr. Gates? 17 A. Yes, there was. 18 Q. All right. Did you assist in the 19 preparation of that letter? 20 A. Yes. There was a very specific letter 21 that Frankenberg sent to Gates during that time 22 frame. 23 Q. All right. Do you recall -- I want to 24 ask a very narrow question, Mr. Bradford. 25 Did that letter, to your recollection, 9993 1 address the issue of the five or six key bugs 2 in the operating system that were affecting 3 WordPerfect? 4 A. Yes. It's my recollection that that 5 letter included that complaint. 6 Q. And if the letter was dated August 7 21st, 1995, does that seem about right? 8 A. Yes, uh-huh. 9 Q. So the bugs were still there at that 10 time? 11 A. Yes. 12 MS. CONLIN: Your Honor, that would be 13 Exhibit 2391. 14 THE COURT: Thank you. 15 MS. CONLIN: And now we have one we 16 can share. 17 Let me ask, Darin, if you would please 18 put up Exhibit 2399. 19 Q. And this is a letter from Mr. Miller 20 to Mr. Kruger at Microsoft, and he attaches a 21 list about outstanding bugs in Windows 95 that 22 impact many of our products. 23 The list, while not exhaustive, 24 contains a description of each bug and in some 25 cases consequence of the bug event. Get more 9994 1 details. 2 I hope that we can continue to work 3 together to resolve these and any future 4 problems that might occur. 5 We hope that you will be able to 6 facilitate the resolution of these bugs and the 7 solutions to find their way into the very next 8 version of Windows 95. 9 That date is 8-31-95. So that would 10 be after the release of Windows 95? 11 A. Yes. That's correct. 12 Q. All right. I think that you will find 13 Exhibit 2399A in your packet, and that is the 14 attachment to 2399. 15 A. All right. 16 Q. We're not going to go through those 17 very much, but there are two pages that look 18 like this that are attached. 19 And were you aware in your capacity as 20 general counsel and member of the executive 21 committee that there were still after the 22 release of Windows 95 a number of bugs that 23 Novell sought to have repaired? 24 A. Yes, I was. 25 Q. I want to go back now to 1994, and I 9995 1 want to go over to Microsoft to look at some 2 things that were happening in Microsoft during 3 this same time frame. 4 I want to show you -- 5 MS. CONLIN: And I believe this jury 6 has seen this, Darin. 7 Q. This will be Exhibit 2151, which is 8 already a part of the record. 9 And that is Mr. Gates' e-mail to a 10 number of executives dated October 3rd, 1994, 11 and he says at the top, it's time for a 12 decision on iShellBrowser. 13 Was iShellBrowser one of the things 14 that you were told was withdrawn? 15 MR. TULCHIN: Objection. Hearsay. 16 THE COURT: Would you read the 17 question back, please? 18 (Requested portion of the record 19 was read.) 20 THE COURT: Sustained. Rephrase it. 21 MS. CONLIN: I will, Your Honor. 22 Thank you. 23 Q. Did you ever learn that the APIs for 24 the iShellBrowser had been withdrawn? 25 A. I think at Novell we referred this 9996 1 more generally to the shell browser, but -- so 2 I'm not familiar specifically with the term the 3 iShellBrowser. 4 Q. All right. Let's look down, if we 5 could, to the paragraph that begins I have 6 decided. 7 Mr. Gates says, I have decided that we 8 should not publish these extensions. We should 9 wait until we have a way to do a high level of 10 integration that will be harder for the likes 11 of Notes, WordPerfect to achieve, and which 12 will give Office a real advantage. 13 Mr. Bradford, did the withdrawal of 14 the APIs for the browser give Office a real 15 advantage? 16 A. Right. To the best of my recollection 17 specifically, yeah, they did. 18 Q. Let's go down, if we could, to the 19 next paragraph, sort of in the middle, with the 20 sentence beginning having the Office team. 21 Having the Office team really think 22 through the information intensive scenarios and 23 be a demanding client of systems is absolutely 24 critical to our future success. We can't 25 compete with Lotus and WordPerfect without 9997 1 this. 2 And so were you aware at the time that 3 it was Mr. Gates who made the decision to 4 withdraw these APIs? 5 A. I was not aware it was Mr. Gates' 6 decision to do that. 7 Q. Let's look at 2184. 8 Oh, I'm sorry. 9 Do you recall, Mr. Bradford, if any 10 reason was offered to Novell for withdrawing 11 these extensions? 12 A. Not sitting here today. I don't 13 recall that. 14 MS. CONLIN: May I approach, Your 15 Honor? 16 THE COURT: You may. 17 Q. I'm showing you 2184, and this is a 18 memo dated November 29th, 1994. And I ask that 19 you look at this short memo and see whether or 20 not by doing so you can refresh your 21 recollection. 22 A. Yes, that's helpful. 23 Q. Okay. Does it refresh your 24 recollection as to what Novell was told by 25 Microsoft was the reason for taking those 9998 1 extensions back? 2 A. Well, that Microsoft no longer wanted 3 to support them on an external basis, that they 4 wanted to take them internal. 5 Q. All right. I want to now show you 6 2383, which I believe is an admitted exhibit. 7 This too is a Microsoft internal 8 document that contains an e-mail at the bottom 9 of the first page. 10 MS. CONLIN: Darin, we'll start with 11 -- 12 Q. It's from Scott Henson to Mr. Cameron 13 Mhryvold, then Doug Heinrich, and I believe 14 that the Jury has seen this, but to put it into 15 context, he sends this -- 16 MS. CONLIN: Next. Okay, good. Thank 17 you 18 Q. He sends this to a number of people, 19 and the subject is shell extensibility and 20 ISVs. 21 And the first paragraph says, this 22 mail is intended to summarize what I am seeing 23 internally on this subject and to voice a 24 strong concern for our ISVs. 25 And the first part of the next 9999 1 paragraph, the problem is that approximately a 2 year ago we told ISVs that a set of interspaces 3 -- interfaces (known as namespace extensions) 4 were no longer going to be a part of the 5 standard Win32 API set. They were moved to an 6 unsupported status or a B-list. 7 And then skipping down -- this 8 document, Mr. Bradford, as with all of them, 9 I'm picking out only certain sections, and of 10 course Mr. Tulchin can show the Jury other 11 sections. 12 But let's go down to given this, we 13 went and told the ISVs that there was a lot 14 that they could do in the system with respect 15 to the extensibility, but they could not 16 integrate into the Explorer (like the control 17 panel and the briefcase) as we had previously 18 mentioned was possible. 19 And then up to the however. Sort of 20 down there in the middle. 21 Today my perception changed 22 drastically. I have just installed a theme 23 from (the lightweight PIM from the PSD group) 24 onto my system. 25 And, to my dismay, they are not only 10000 1 using the namespace extensions, but they are 2 also displaying themselves in the scope (left) 3 pane and the view (right) pane. This is the 4 exact thing we told ISVs they could (and 5 should) not do. 6 And then continuing in the next 7 paragraph, in short, we have a product that 8 will be sold in the very near future that will 9 implement interfaces that we told ISVs they 10 should not use because we would not be able to 11 support them moving forward. 12 In the meantime, we were developing a 13 product that did exactly that. I can't even 14 express how bad this is. We lose everything 15 when we do this. Credibility, trust, leverage, 16 the works. 17 Did you learn -- and this, I guess, is 18 in '95, mid '95, August of '95. 19 When Microsoft's products came out, 20 did you learn that, in fact, they were using 21 things that your people were told not to use? 22 A. Yes, that was a general problem. 23 Q. All right. Let's move to a couple of 24 other subject matters in connection with the 25 period in '95. 10001 1 Do you recall receiving any reports 2 that Microsoft was providing incentives to 3 OEMs, the computer manufacturers, for not 4 bundling WordPerfect? 5 A. Sure. 6 Q. Did you receive a number of such 7 reports? 8 A. Yes. 9 Q. Do you remember the names of any OEMs 10 from which those reports came? 11 A. I remember that there was folks like 12 Compaq and, you know, those sorts that -- the 13 hardware manufacturers out there, Dell and so 14 forth. 15 Q. All right. Do you remember ZEos? 16 Yes. ZEos? 17 A. Yes, I remember that name as an 18 original equipment manufacturer. 19 Q. Did you ever receive a report about 20 Microsoft offering them a better discount on 21 bundling Office if they did not bundle 22 WordPerfect? 23 A. I don't recall specifically. 24 Q. Oh. 25 MS. CONLIN: May I approach, Your 10002 1 Honor? 2 THE COURT: You may. 3 Q. I'm showing you document 2363, which 4 is from Mr. Richards to you dated 7-20-95 for 5 the purpose of refreshing your recollection. 6 And if you would look -- I think I'm 7 pointing in the right place. Here. Take a 8 look at that and see whether or not that 9 refreshes your recollection as to what report 10 you may have received from ZEos. 11 A. Yes, it does. 12 Q. Thank you. 13 Can you now tell the Jury whether or 14 not Novell had received such a report from 15 ZEos? 16 A. Sure. There was a hardware 17 manufacturer by the name of ZEos that told us 18 that they were providing these big incentives 19 to the hardware manufacturer if, if Novell -- 20 if the hardware manufacturer wouldn't bundle 21 Novell's products. 22 Q. Let me now turn to yet a different 23 problem and show you -- actually put up for you 24 2266. 25 This is a -- you have that, you can 10003 1 probably look at it from there. 2 A. Okay. 3 Q. You have -- this is a report from a 4 guy named -- well, it's to the file from 5 Mr. Richards, and he was a lawyer that worked 6 with you; correct? 7 A. Yes. 8 Q. Dated March 29th, 1995. Spokane 9 Community College, deal with the devil. 10 And down at the very first paragraph, 11 if you can highlight all of that one, we'll 12 just talk about some of it. 13 Do you remember Mr. Jolly? 14 A. He was a sales representative on the 15 WordPerfect side. 16 Q. All right. He was, according to this, 17 an area sales rep in the Seattle area, reported 18 to me that he recently visited the Spokane 19 Community College, one of his accounts where he 20 worked as a WordPerfect sales rep in that area. 21 SCC has many campuses throughout 22 Washington where the majority of Washington 23 high school students end up. 24 While Mark worked in the Spokane area, 25 SCC was a solid WP shop. Meaning WordPerfect? 10004 1 A. That's correct. 2 Q. All the faculty and students used it, 3 and they taught it in their classes and labs. 4 When Mark visited there recently, he saw 5 Microsoft Word everywhere and WP nowhere. 6 And then skipping down, beyond the 7 efforts to find out what happened to the next 8 paragraph. 9 Mark has a good friend at SCC, Stan 10 McDonald, who is one year away from retirement. 11 He told Mark in confidence that MS had come in 12 and offered SCC free Microsoft software for 13 faculty, students and labs if they would dump 14 WordPerfect and quit teaching it in the 15 classes. 16 SCC took the offer. Stan felt bad 17 that SCC had done this deal, and he wouldn't 18 say anything -- but he wouldn't say anything 19 further because he doesn't want to jeopardize 20 his retirement. 21 MR. TULCHIN: Your Honor, can we 22 approach on this document? 23 THE COURT: Yes. 24 (Off-the-record sidebar discussion was 25 held at 1:01 p.m.) 10005 1 THE COURT: Ladies and gentlemen of 2 the jury, we have a matter of law. We will 3 take a recess. I don't know how long it will 4 last. 5 Remember the admonition and we'll get 6 to you as soon as we can. Thank you. 7 All rise. 8 (The following record was made out of 9 the presence of the jury at 1:02 p.m.) 10 THE COURT: Please be seated. We are 11 outside the presence of the jury. 12 Ms. Nelles, do you have a date of the 13 ruling? 14 MS. NELLES: I'm about to get it, Your 15 Honor. I shuffled some papers and I have to 16 find my book. 17 THE COURT: Okay. 18 MS. NELLES: Give me one second. 19 MR. TULCHIN: Sorry for the 20 interruption, Your Honor. 21 THE COURT: That's all right. 22 MR. TULCHIN: Our records show that 23 most of this is out. 24 THE COURT: No. I'm glad you said 25 something. We'll get it straight. 10006 1 MS. NELLES: As you'll note, Your 2 Honor, over 10,000 Plaintiffs' exhibits, it's 3 hard to find them. 4 THE COURT: I know. I have my rulings 5 by date. If you give me one, I'll try to find 6 it. 7 Probably a better system than I have. 8 MS. NELLES: I don't prove it every 9 day, but I haven't quite got there, Your Honor. 10 MS. CONLIN: The record may reflect, 11 Your Honor, I did check again last night about 12 this, and it is possible that our database is 13 mistaken. 14 But, in good faith, I believed that 15 the document had been admitted; that the 16 hearsay objection had been -- and the embedded 17 hearsay objections had been overruled. 18 THE COURT: Well, we'll take a look 19 here. I'm trying to find my ruling. 20 This is Mr. Bradford. 21 MS. CONLIN: 2266 is the number, Your 22 Honor. 23 THE COURT: While we are waiting for 24 that, I'm going to make a brief record. 25 The Court at one point after an 10007 1 objection, in order to clarify and to make sure 2 the Court made the right ruling, I asked 3 Mr. Bradford a couple of questions. 4 Normally, I do not like to ask 5 questions of witnesses. It's frowned upon for 6 the obvious reason that error could occur or 7 the Judge or Court could become an advocate, 8 and I don't want to do that. 9 The intent was to get some clarity 10 before I ruled on Mr. Tulchin's objection, and 11 I apologize if I overstepped my bounds on that. 12 I will allow either side to make a 13 record if they wish on that, if they believe 14 there was some error there by the Court asking 15 a question, but I did it just to clarify before 16 I entered a ruling. 17 So, Ms. Conlin, you may make a record 18 if you wish. 19 MS. CONLIN: I have no record I wish 20 to make, Your Honor. 21 THE COURT: Mr. Tulchin? 22 MR. TULCHIN: I have no problem with 23 that, Your Honor. 24 Your Honor, a related point, if I may. 25 THE COURT: Yes. 10008 1 MR. TULCHIN: I don't think this was 2 proper recollection refreshed-type testimony. 3 Mr. Bradford was simply reporting what 4 he was reading in the document, and I think 5 it's quite clear that he was doing so. And 6 these were all documents that have been 7 excluded. 8 So I guess on cross, I'm going to have 9 to go back through some of this, but I think 10 this pushed beyond the line of what is proper 11 use of a document to refresh a witness's 12 recollection. 13 THE COURT: Well, and the problem I 14 have with that was I think Ms. Conlin asked at 15 one point if the documents could stay up there, 16 and you didn't have any objection, which that's 17 your prerogative, but I prefer the procedure as 18 I recall should be done is ask if they have any 19 present recollection, if they have any -- if 20 they did have recollection at one time or knew 21 at one time, show them a document, have them 22 not read the document outloud, read it to 23 themselves, take it away, and then ask if their 24 recollection has been refreshed. 25 That's the procedure I'm going to ask 10009 1 everybody do. 2 So I was surprised when you wanted the 3 papers to stay up here. But I don't want it 4 there from now on. 5 MS. CONLIN: All right, Your Honor. 6 I think the record should also 7 reflect, Your Honor, that despite Mr. Tulchin's 8 representations, he wasn't parroting from the 9 document. He simply wasn't. 10 THE COURT: Just to be safe, I prefer 11 the document be taken away. 12 MS. CONLIN: I'll do that, Your Honor. 13 I did that in the case of that one long one. 14 THE COURT: So, Mr. Tulchin, your 15 objection is well taken. 16 MR. TULCHIN: Thank you, Your Honor. 17 THE COURT: Off the record. 18 (An off-the-record discussion was 19 held.) 20 MS. NELLES: With apologies, Your 21 Honor, my records are not sufficient enough for 22 me to state categorically that I've got it 23 right and Plaintiffs have it wrong. 24 So I think we should continue to go 25 forward and I will have to improve the system. 10010 1 THE COURT: All right. I'm going to 2 order that you stay away from this document at 3 this time until we get a clearer picture on it. 4 MS. CONLIN: I'm done with it, Your 5 Honor. 6 MS. NELLES: Great. I appreciate 7 that. 8 THE COURT: And are there any other 9 exhibits that we can forewarn Defense right 10 now? 11 MS. CONLIN: Your Honor, this is a 12 function for both sides of the massive amount, 13 and we've done our best to try to match up the 14 databases. 15 THE COURT: I know. I was just going 16 to ask if you have any more. 17 MS. CONLIN: No, Your Honor. 18 THE COURT: And I realize there's 19 10,000 plus exhibits. 20 As I said before, I think you guys 21 have done a great job of keeping organized. 22 Quite frankly, I'm surprised when one 23 of you recalls an exhibit like that. It's 24 unbelievable to me. I don't know how you guys 25 do it. 10011 1 Mr. Tulchin at one time -- 2 MS. CONLIN: I'm almost done with it, 3 Your Honor. 4 THE COURT: At one time referred to an 5 exhibit. I don't know if he had it written 6 down or what. 7 MR. TULCHIN: Numbers pop into my 8 head, Your Honor. 9 THE COURT: You know, unbelievable. 10 MR. TULCHIN: We're trying to do our 11 best. It's very hard to remember everything. 12 THE COURT: You guys are doing a great 13 job. 14 MS. NELLES: I think I'm falling down 15 on the job, Your Honor. 16 THE COURT: It was meant as a 17 compliment. 18 (An off-the-record discussion was 19 held.) 20 MS. CONLIN: Could I clarify 21 something, Your Honor? 22 THE COURT: Yes. 23 MS. CONLIN: I believe what Ms. Nelles 24 said was -- Sharon, are we going to go back to 25 this document at a later time or are we just -- 10012 1 THE COURT: She's going to reference 2 -- research it is what I thought. 3 MS. NELLES: I thought you were 4 finished. 5 MS. CONLIN: I am. Not my question. 6 My question is more along the lines of 7 are we done checking on it. 8 THE COURT: No. 9 MS. NELLES: No. I'm going to 10 continue to check on it and figure out what's 11 the problem. 12 THE COURT: Did I understand you 13 right? 14 MS. NELLES: You understood me 15 perfectly, Your Honor. 16 THE COURT: All right. It would be 17 the first time I did that today. My fault, not 18 yours. 19 MS. NELLES: No, that's my fault. 20 THE COURT: I didn't mean it that way. 21 MS. NELLES: May I be excused, Your 22 Honor? May I please be excused now? 23 THE COURT: I meant it's the first 24 time I understood something. 25 MR. TULCHIN: I thought I heard it 10013 1 right. 2 (An off-the-record discussion was 3 held.) 4 (The following record was made in the 5 presence of the jury at 1:14 p.m.) 6 THE COURT: Everyone else may be 7 seated. I apologize for the delay. 8 You may continue. 9 MS. CONLIN: Thank you, Your Honor. 10 We are done with the document. 11 BY MS. CONLIN: 12 Q. The things that we've just talked 13 about that Microsoft is doing, you learn of 14 those in the ordinary course of your work as 15 general counsel and on the executive committee? 16 A. Yes, that's correct. 17 Q. Do these reports of what Microsoft is 18 doing, are they a factor, big factor, or a 19 little factor, in Novell's decision to exit the 20 word processing market? 21 A. Yes, they are. 22 Q. Big or little? 23 A. It's a big factor. 24 Q. You get out of -- now, you talked 25 about Quattro Pro earlier, Mr. Bradford. That 10014 1 was a spreadsheet product? 2 A. That's correct. 3 Q. And at the time that you exit the word 4 processing market, are you doing anything with 5 respect to the Quattro Pro? 6 A. At the time it was primarily the 7 spin-out of Novell's word processing function, 8 but it also included Quattro Pro, so that Corel 9 Corporation could have a suite of products as 10 well to market. 11 Q. So they went at the same time? 12 A. Yes. That's to the best of my 13 recollection. 14 Q. To your knowledge, was the spreadsheet 15 product also affected by similar Microsoft 16 conduct? 17 A. Yes. Applications broadly were 18 affected by inability to get access to 19 documentation, betas, APIs, et cetera. 20 Q. Okay. Switching topics now. 21 Let's return for a moment to the DOS 22 product because this comes in order. 23 In January of 1966 (sic), you complete 24 your sale of the word processing product and 25 the spreadsheet product to Corel. 10015 1 Subsequent to that, you sell the DOS 2 product; correct? 3 A. Yes. Just to correct, it was 1996. 4 Q. What did I say? 5 A. '66, I think. 6 Q. Boy. 7 MR. TULCHIN: That's what I heard. 8 Q. Just off by several decades. 9 A. Right. I was back in high school. 10 Q. I was not. 11 A. Okay. But you look so young. 12 MR. TULCHIN: Grammar school? 13 Q. Yes. That's the year I graduated from 14 law school actually. 15 Maybe that's why I have it in my mind. 16 A. Right. 17 Q. Now, you withdraw the product, 18 Mr. Bradford, that being DR -- Novell DOS 19 September 1994. 20 And then the sale is finalized when? 21 A. In 1996, '97. 22 Q. Okay. Let's look. 23 Novell sells DOS to Caldera July 1996. 24 A. Okay. 25 Q. What was Caldera? 10016 1 A. Caldera was an operating systems 2 company. As you recall, Ray Noorda had left 3 Novell and he'd started a kind of venture 4 capital fund called the Canopy Group, and 5 Caldera Systems was one of the companies within 6 the Canopy Group that built technologies. 7 Q. Was Mr. Noorda still a fan of DOS? 8 A. Yes. Seemingly so, yes. 9 Q. All right. And were there other 10 potential purchasers for the DOS product? 11 A. Yes, there were. We were hopeful to 12 get the best possible offer for the products. 13 So, as I recall, we talked to IBM. We 14 talked to -- there was an attorney out of 15 California, last name was Jacobowitz, and he 16 was interested in purchasing the products. 17 There was a group called the Esnet 18 Group, E-s-n-e-t, that had an interest in 19 purchasing Novell DOS. 20 Q. Why did it take so long, from 21 September until July of 1996, to sell the 22 product? 23 Were you shopping it around at that 24 point or was there something else going on? 25 A. I think the Novell board of directors 10017 1 wasn't sure exactly what they wanted to do with 2 that product and those technologies. 3 At this time, '95, '96 time frame, I'm 4 now both in charge of the law department, as 5 well as business development function for the 6 company. 7 And so I see this DOS asset sitting on 8 the shelf kind of wasting away. Let's get some 9 value for that asset and sell it to somebody. 10 Q. Why did you choose to sell it to 11 Caldera? 12 A. Well, certainly geographically they 13 were local and I was familiar with the players. 14 I was familiar with their backgrounds 15 in terms of operating systems, that sort of 16 thing. 17 A lot of these fellows were friends 18 that had worked with me at Novell and had since 19 left and followed Ray into Caldera Systems. 20 So it was a familiarity. And, at the 21 end of the day, they offered us the best price. 22 Q. When you say the best price, what made 23 it the best price? 24 A. Well, it was a combination of things. 25 We basically -- in that contract, they 10018 1 agreed to pay us a million in cash up front for 2 the product, and they also agreed to pay us 18 3 percent, as I recall, of any revenues that they 4 derived from the DOS product over and above $10 5 million. 6 Q. Did you think they might make a 7 success of it? 8 A. We were hopeful that they would, 9 certainly. 10 Q. At the same time that you sold the 11 actual assets, did you sell the legal rights 12 associated with the assets? 13 A. Yes, we did. 14 Q. Tell the Jury, please, what that 15 meant. 16 A. Well, in practical terms, it meant 17 that they essentially had Novell's cause of 18 action to the extent that Novell had a cause of 19 action against Microsoft. 20 Then they stepped into Novell's shoes 21 and had that right to sue Microsoft if they so 22 desired. 23 Q. All right. Did you, in fact, 24 encourage them to file the lawsuit, a lawsuit 25 against Microsoft? 10019 1 A. Well, I was hopeful that they would 2 pursue legal action resulting in some monetary 3 damages, a portion of which Novell would get. 4 Q. All right. I want to move beyond 1996 5 and into the later years that you were there, 6 and specifically in the Memphis time frame, 7 Windows 98 time frame. 8 A. Okay. 9 Q. I'm putting you there. 10 Let me ask you to take a look at 11 Plaintiffs' Exhibit 2954. 12 MS. CONLIN: And, Darin, if you would 13 put that up. 14 Q. That is titled the Microsoft Internet 15 Explorer version 4 and Internet Explorer 16 administration kit license and distribution 17 agreement. 18 Does that mean the beta agreement? Or 19 maybe not. 20 A. I think it is what it says it is. It 21 was some sort of administration kit license and 22 distribution agreement. 23 Q. Okay. What I wanted to call your 24 attention to is on the page -- actually, the 25 very last page, Exhibit C to this agreement. I 10020 1 should probably also show the date that it was 2 signed. 3 MS. CONLIN: Sorry, Darin. There are 4 lots of attachments. 5 Let's do what you've got up there 6 first and then we'll go back and pick up the 7 signature page. 8 Q. At the bottom of Exhibit C, the very 9 last parenthetical remark says, Internet 10 Explorer and Outlook Express software 11 technology comprise part of the operating 12 system of Windows 95, Windows 98 and Windows 13 NT. 14 Was this provision of the agreement, 15 of the contract ever brought to your attention? 16 A. Yes, it was. 17 Q. All right. Do you recall -- oh, I'm 18 sorry, I did want to call the Jury's attention 19 to the signature lines which I found, on the 20 page ending 70 -- 21 MS. CONLIN: Oh, you're quicker than I 22 am. 23 Q. And these are -- the person who signs 24 for Novell is -- do you know Christopher Stone? 25 A. Yes. Chris Stone was the senior vice 10021 1 president, a senior vice president at Novell at 2 this time. 3 Q. All right. We were going to talk for 4 a moment about what that provision that we 5 looked at -- 6 MS. CONLIN: If you would put that 7 back up, Darin. 8 Q. What did Novell do, if anything, with 9 respect to the provision that says Internet 10 Explorer is part of the operating system? 11 A. Well, Greg Jones, an attorney on my 12 staff, brought it to my attention. 13 Q. Do you remember what you did? 14 A. I recall that we notified the 15 Department of Justice. And I'm relatively sure 16 that we complained to Microsoft about imposing 17 that sort of a statement on us. 18 We didn't want to sign that statement 19 acknowledging Microsoft's position that 20 Internet Explorer and Outlook Express software 21 technology comprised part of the operating 22 system. 23 Q. Was this happening in the -- let's see 24 when the agreement was signed. 25 A. This is late '98, August of '98, I 10022 1 believe. 2 Q. All right. Upon Novell's request -- 3 did Novell make more than one request of 4 Microsoft about this provision in the contract? 5 A. I don't recall specifically. 6 Q. All right. In any event, did Novell 7 ever get permission to cancel that provision? 8 A. No. Microsoft said that's in, it 9 stays in. 10 Q. In order to get the product you needed 11 to sign the agreement as it was written? 12 A. With that provision specifically, yes. 13 Q. Now, moving to the next to the last 14 topic. 15 A. Okay. Great. 16 Q. Mr. Bradford, in connection with your 17 attendance here in court, who's paying your 18 expenses? 19 A. I believe your law firm is. I hope. 20 Q. All right. In addition to paying -- 21 you're right. 22 In addition to paying your expenses, 23 have we also offered to compensate you for the 24 time that you have spent on this case -- 25 A. That's right. 10023 1 Q. -- including your time in court? 2 And have you done other things besides 3 appearing in court and preparing for your 4 testimony? 5 A. Certainly, oh, beginning about a year 6 ago I believe you contacted me. And since that 7 time on periodic occasion, I think it was my 8 assistance in helping you find witnesses and 9 relocate -- or locate Novell people who had 10 moved or were in different parts of the world. 11 Q. How does the fact that I've offered to 12 compensate you for your expenses and the time 13 that you've spent -- let me go back to that a 14 minute. 15 What I've offered to do is pay you 16 whatever your reasonable hourly rate is; 17 correct? 18 A. Right. 19 Q. All right. How does the fact that I'm 20 -- and by me, I mean, Plaintiffs' class, not me 21 personally. 22 How does the fact that Plaintiffs' 23 class is reimbursing you for your expenses and 24 paying for your time affect your testimony? 25 A. It doesn't affect it either way. 10024 1 Q. Why does Novell think that some, not 2 all, but some of Microsoft's conduct goes 3 beyond what would be ordinary or at least -- or 4 maybe very aggressive competition? 5 MR. TULCHIN: Objection as to what 6 what Novell thinks. 7 THE COURT: Rephrase. 8 MS. CONLIN: Thank you, Your Honor. 9 Q. In your capacity as a corporate 10 attorney for Novell and on the executive 11 committee, can you tell the Jury, please, why 12 Novell thinks, if it does, why you think as a 13 representative and lawyer for Novell, that this 14 conduct goes beyond, you know, just real hard 15 tough competition? 16 MR. TULCHIN: Same objection, Your 17 Honor. He's not with Novell and hasn't been 18 for more than six years. 19 And in addition, it calls for a legal 20 conclusion. 21 THE COURT: Sustained. 22 MS. CONLIN: Okay. 23 Q. Is Novell, while you were there, in 24 your observation, willing and able to compete 25 with Microsoft? 10025 1 A. Oh, certainly. 2 Q. Hard competition? 3 A. Yes. Looked forward to it. 4 Q. All right. I assume -- would it be 5 correct that Novell, in your observation while 6 you were there, made its share of strategic 7 errors, mistakes, and that sort of thing? 8 A. Like any company. You make decisions 9 that don't work out and you're always hopeful 10 you'll be successful, but it's a tough 11 industry. It's very competitive. 12 Q. And, in your experience based on your 13 observations while you were there, were there 14 other factors besides Microsoft's conduct that 15 we've discussed that contributed to the failure 16 of the products that we've talked about? 17 A. Yes. I can't contribute 100 percent 18 of the failures of those products to 19 Microsoft's activity. 20 Q. Do you attribute a significant part of 21 the failure of DOS and WordPerfect to 22 Microsoft's conduct that we've discussed? 23 A. Yes, I do. 24 Q. The last document I want to show you 25 is in front of you and it's been admitted, and 10026 1 I think the Jury's seen it. 2 1793. 3 MR. TULCHIN: That's when I was in 4 high school. 5 THE WITNESS: Sure. 6 MS. CONLIN: Do you have it up there? 7 Oh, good. We are all good to go. 8 Q. Mr. Allchin writes to a number of 9 people. The subject is customers and Novell 10 dated Saturday, September 18th, 1993. I'm 11 aware that you've not seen it. 12 Let's look at the first paragraph, the 13 first sentence. 14 Reading the PC Week article about the 15 mud slinging between Novell and Microsoft on 16 the black screen of death. 17 Do you know what that is? 18 A. Yes. 19 Q. You do? 20 A. Well, it's a typical phrase in the 21 industry to describe what happens when Windows 22 goes down. 23 Q. All right. During this time frame, 24 Mr. Bradford, was there public comment about 25 any disagreements between Novell and Microsoft? 10027 1 This is '93, September. 2 A. I'm sure there were. 3 Q. All right. Let's move down, if we 4 could, to -- let me see how many down this is. 5 One, two -- it's the pluses I'm looking for. 6 It's the very last plus. 7 Yes, we have a group. 8 Okay. This says, yes, we have a group 9 that competes with Novell on the server, but 10 isn't competition good for the customers? 11 Do you agree with that? 12 A. Yes, absolutely. 13 Q. Mr. Allchin goes on to say, Novell 14 support is critical to us because it's critical 15 to customers. 16 We'd be pretty silly not working as 17 hard as we can with Novell on compatibility and 18 interoperability. That's what customers want. 19 Do you agree with Mr. Allchin that, in 20 fact, customers want companies to work together 21 on compatibility and interoperability? 22 A. Yes, I do. 23 Q. Is that what Novell was seeking from 24 Microsoft? 25 A. Certainly. 10028 1 Q. All right. Again, we're thinking of 2 customers here. We welcome Novell's 3 competition provided they work with us to help 4 customers. 5 Did you welcome Microsoft's 6 competition provided they work with you to help 7 customers? 8 A. Yes, we did. 9 Q. All right. I want to call your 10 attention, then, to the next page, last 11 paragraph. 12 This really isn't that hard, says 13 Mr. Allchin. 14 If you're going to kill someone, there 15 isn't much reason to get all worked up about it 16 and angry, you just pull the trigger. Angry 17 discussions beforehand are a waste of time. We 18 need to smile at Novell while we pull the 19 trigger. 20 Does that seem to be a pretty accurate 21 discussion of what it felt like -- of what 22 Microsoft was doing to Novell in this time 23 frame? 24 A. Right. Specifically, I recall another 25 occasion, an internal e-mail that was sent to 10029 1 Novell from some Microsoft employee who sent it 2 to a Novell employee, and he brought it to my 3 attention. 4 And in describing the Novell 5 networking business, I think it was Allchin 6 that said something to the effect that Novell 7 is this business, referring to the network 8 operating system business, we have to take them 9 out, quote-unquote. 10 Q. All right. 11 A. So this was -- in our experience, they 12 competed much more aggressively and more 13 unfairly than any other -- 14 MR. TULCHIN: Objection, Your Honor. 15 Move to strike. 16 THE COURT: Sustained. 17 Q. In your experience, was your 18 competition -- was the competition between 19 Microsoft and Novell different in quality -- 20 did it differ in quality from that you 21 experienced with other companies, other 22 competitors? 23 A. Yes, it did. 24 Q. And how did it differ? 25 A. Well, we felt a sense of coopetition, 10030 1 if you will, with other competitors with which 2 we would work in terms of creating, fixing 3 software bugs, betas, that sort of thing. 4 When it came to Microsoft, we always 5 felt like they owned the operating system. 6 They dictated what we got, what we didn't get, 7 et cetera. It created an unlevel playing field 8 in the industry. 9 MS. CONLIN: Your Honor, that's all I 10 have of this witness. 11 THE COURT: Cross. 12 MR. TULCHIN: May I, Your Honor? 13 MS. CONLIN: Your Honor, are we going 14 to -- 15 THE COURT: No. 16 MS. CONLIN: Okay. 17 CROSS-EXAMINATION 18 BY MR. TULCHIN: 19 Q. Mr. Bradford, good afternoon. 20 A. Hello. 21 Q. We haven't met. My name is David 22 Tulchin. I represent Microsoft. I do have 23 questions for you. 24 I want to start not necessarily at the 25 most logical place, but you testified a little 10031 1 earlier today about reports that you said you 2 were getting during the time you worked at 3 Novell about -- I think you said the fact that 4 Microsoft was providing incentives to OEMs not 5 to bundle WordPerfect. 6 Do you remember that testimony? 7 A. Yes, I do. 8 Q. And Ms. Conlin asked you about those 9 reports. And I think you testified that you 10 thought you were getting reports from people at 11 Novell that this was occurring at companies 12 like Compaq and Dell. 13 Did you say that? 14 A. I think we could go back and look at 15 it, but that's my recollection. 16 Q. I want to make sure I understand your 17 testimony. 18 A. And I want to make sure I understand 19 your question. 20 Q. Good. 21 A. Okay. 22 Q. But let's do that. 23 Yes. We could go back and look, but 24 let's not do that. Let's just -- if you could, 25 you could answer my question. 10032 1 Do you remember testifying earlier 2 today that you received reports at Novell that 3 OEMs, including Compaq and Dell, were being 4 given incentives by Microsoft not to bundle 5 WordPerfect with their machines? 6 A. Yes. 7 Q. You did testify to that? 8 A. Yes. 9 Q. I thought so. 10 And you were then shown a document, it 11 was Plaintiffs' Exhibit 2363, and you were 12 asked whether that refreshed your recollection 13 about this. 14 Do you remember? 15 A. I don't remember the exhibit number, 16 but I remember something about refreshing the 17 recollection. 18 Q. The exhibit numbers are very hard to 19 remember. 20 A. Okay. 21 Q. We'll all agree. There's so many. 22 Do you recall sitting here right now, 23 it's a little after 1:35 let's say, that the 24 only OEM mentioned in the document that you 25 were shown was ZEos? 10033 1 A. Yes, I do remember that. That's 2 correct. 3 Q. So your testimony about getting 4 reports from people at Novell about Compaq and 5 Dell, are there any documents that you know of 6 that reflect that? 7 A. Not with me today, no. 8 Q. Well, Mr. Bradford, I know that you 9 are a lawyer; right? 10 A. Yes, I am. 11 Q. And you graduated from law school, was 12 it in the 1970s? 13 A. Uh-huh. Yes. 14 Q. Okay. So you've been a member of the 15 bar for, let's say -- shall we say 30 years, 16 plus or minus? 17 A. Certainly. 18 Q. Okay. And you're aware, are you not, 19 that in this case the Plaintiffs, represented 20 by Ms. Conlin and others, went out and 21 collected lots of documents? 22 A. Yes. 23 Q. Do you know that the Plaintiffs have 24 25 million pages of documents that were 25 produced to them by Microsoft and other 10034 1 companies? 2 A. I've heard that number, yes. 3 Q. Okay. Well, let me back up. Let me 4 just take a moment to understand something 5 about this question of the reports. 6 You said a few moments ago that you've 7 been working with Ms. Conlin for about a year? 8 A. Yes. Not continuously certainly. 9 Q. Not continuously, but started about a 10 year ago? 11 A. Yes. 12 Q. And to prepare for your deposition, 13 did you have any discussions or meetings with 14 her to prepare your testimony? 15 A. Yes, I did. 16 Q. How many? 17 A. We met on Saturday and Sunday of this 18 weekend. 19 Q. And any prior phone calls to discuss 20 or arrange for any of this? 21 A. Well, certainly to arrange for it. 22 But there was no testimony discussed during the 23 prior -- 24 Q. And how many hours on each of the 25 Saturday and Sunday days did you spend 10035 1 preparing for your testimony? 2 A. Well, I got in Saturday about 4 3 o'clock at the airport, in the afternoon, your 4 local time. 5 I met with Roxanne probably around 5 6 or 6, and we probably spent four or five hours 7 Saturday night talking through things. 8 And then we met on Sunday after church 9 beginning roughly around noon. 10 Q. For how long? 11 A. Oh, we spent, gosh, on Sunday probably 12 five or six hours in total. There were a 13 couple of breaks in there where I had to go 14 make phone calls and whatnot. 15 Q. In the course of that, did you try to 16 look for any of these documents that might 17 reflect that Compaq and Dell were companies 18 about whom you were getting reports that there 19 were incentives being given? 20 A. No. 21 Q. Do you know of any such documents that 22 say that Compaq and Dell were getting these 23 incentives from Microsoft during the relevant 24 time? 25 A. Not sitting here today. 10036 1 Q. Well, how about sitting here any other 2 day? 3 A. Right. 4 Q. I'm just asking if you know about 5 them. 6 A. I'm not aware of a specific document 7 that talks about specifically Compaq and Dell. 8 My specific recollection is during 9 that time frame that there were numerous 10 complaints from Novell folks about their 11 failure and the threat Microsoft was putting on 12 OEMs to not deliver things to us and not bundle 13 things with us. 14 Q. Well, if there were reports, they were 15 coming to you in writing; correct? 16 A. Not necessarily. People would come 17 down to my office and visit with me. 18 Q. And I want to come in more detail to 19 this in a few minutes, but -- and what was the 20 time period, again, Mr. Bradford, that you're 21 referring to? 22 A. Well, you specifically were referring 23 to the '95, '96 time frame I thought you had 24 said. 25 This was post-WordPerfect combination, 10037 1 and we were talking specifically about 2 WordPerfect and their products. 3 Q. And am I right that during that time 4 period, as well as other periods, one of the 5 things you were doing at Novell on a frequent 6 basis was communicating with the authorities in 7 Washington, D.C., to make complaints about 8 Microsoft's conduct? 9 A. Beginning in late '92 or June of '92 10 we started being more proactive with 11 Washington, D.C. and the European commission, 12 yes. 13 Q. Well, I just asked you about '95 and 14 '96, but you're saying this started in late 15 '92? 16 A. June of 1992. 17 Q. And went for how long? 18 A. Well, pretty much the last eight years 19 I was there we would talk from time to time 20 with the Department of Justice, respond to 21 their questions, et cetera. 22 Q. And this was one of the functions that 23 you were assigned as general counsel of Novell 24 as the chief lawyer, one of the functions was 25 to continue to communicate with the Department 10038 1 of Justice to register Novell's complaints 2 about Microsoft? 3 A. Yes. Certainly. 4 Q. So in this period '95 or '96, if there 5 was any evidence that these so-called 6 incentives were being given to Compaq or Dell, 7 you would have had every reason to provide that 8 in writing to the Department of Justice; 9 correct? 10 A. Yes, uh-huh. 11 Q. And you didn't do that? 12 A. Well, we provided whatever documents 13 that we had in our possession. 14 Q. And sitting here today, you don't know 15 that there were any that mentioned Compaq or 16 Dell, which is what I've been asking you about? 17 A. Not in the 1995-'96 time frame. 18 Q. Yes, and that's what we've been 19 discussing. 20 A. Okay. 21 Q. The only document you've seen on this 22 subject is a document pertaining to ZEos? 23 A. Yes, that's correct. 24 Q. And you didn't testify as to what sort 25 of -- did you earlier on direct examination, as 10039 1 to what sort of incentives these were? 2 A. Yes. I think we mentioned that the 3 OEM was being provided, ZEos specifically, 4 being provided an incentive not to bundle the 5 Word -- or the Novell bundle with their 6 machine. 7 Q. Well, isn't it the case, Mr. Bradford, 8 that what was happening at the time is that 9 Microsoft and Novell were competing and 10 Microsoft made an offer of a lower price to 11 ZEos? That was the incentive, competing on 12 price? 13 A. I don't recall it that specifically 14 was the incentive. 15 Q. But, of course, you wouldn't consider 16 that anything -- if the Department of Justice 17 should be concerned about, would you, if two 18 companies are out competing on price? 19 A. If the tactic by Microsoft is a 20 completely exclusionary one and the incentives 21 are so high that they as a monopolist are now 22 leveraging their monopoly position against 23 someone like WordPerfect to exclude us from the 24 market, yes, I think that's something that the 25 Justice Department should find out about. 10040 1 Q. And what investigation did you 2 personally make to find out what the facts were 3 when it comes to these incentives that you 4 heard Microsoft was giving to ZEos around '95, 5 '96? 6 A. Well, very generally, whenever a 7 report like that would come in, I would ask -- 8 if it came from a legal representative of the 9 company I would say, hey, you know, can you 10 send me an e-mail on that? Can you get the 11 sales representative to send me an e-mail on 12 that? 13 We always were hopeful that the 14 hardware manufacturer would actually send us an 15 e-mail saying that that's, in fact, what 16 happened. So are the sorts of things that we 17 would naturally normally do. 18 Q. Sure. And you think you did that with 19 ZEos? 20 A. Yes, probably. 21 Q. Where are those documents? 22 A. If they're not in the record -- I 23 don't personally keep those records. I left 24 Novell six years ago, as you mentioned. 25 Q. Correct. But you know that Ms. Conlin 10041 1 has these 25 million pages. Is there any 2 effort to see if the documents are in there? 3 A. Not by me, no. 4 Q. Do you know whether Ms. Conlin made 5 that effort? 6 A. I don't know that. 7 Q. But it's your testimony that those 8 documents existed when you were at Novell? Is 9 that your best recollection? 10 A. Be specific on what documents that 11 you're talking about. 12 Q. The documents that you just referred 13 about that you said you would gather in making 14 an investigation to find out what the real 15 facts were concerning Microsoft's contacts with 16 ZEos around '95, '96. 17 A. Yes. We would make an investigation 18 and try to get those contracts back and -- you 19 know, or statements from third parties, et 20 cetera, et cetera. 21 Q. Well, I understand, Mr. Bradford, I've 22 heard your testimony. I understand what you're 23 saying. And I heard your testimony earlier on 24 direct about ZEos. 25 I'm just now asking whether or not you 10042 1 know anything about where the documents might 2 be that you gathered in connection with that 3 so-called investigation. 4 A. I don't know. 5 Q. Now, is it the case, Mr. Bradford, 6 that -- let's focus on the period, let's say, 7 in the mid 1990s. 8 A. All right. 9 Q. Let's say about 1994 or 1995. And 10 let's talk about applications just for a 11 second. 12 Is it your recollection that as of 13 that time Novell recognized that users, users 14 of personal computers, are likely to prefer a 15 bundle or a suite of applications as compared 16 to individually purchased applications? 17 A. Yes, that would be accurate. 18 Q. And Novell recognized that? 19 A. Yes, we did. 20 Q. So if Microsoft, for instance, had a 21 product on the market at the time called 22 Office, which included word processing; 23 correct? Also included a spreadsheet? 24 A. Yes. 25 Q. Also had presentation software like 10043 1 PowerPoint at the time; is that right? 2 A. Yes. 3 Q. You agree that at the time Novell 4 recognized that users were likely to prefer 5 Office over individually purchased components, 6 like a spreadsheet from, let's say, Borland, a 7 word processor from some other company, et 8 cetera? 9 A. Certainly. 10 Q. And as of 1994, Novell didn't have 11 that; correct? 12 A. We finalized the purchase of 13 WordPerfect in March of 1994 and -- excuse me. 14 And the Quattro Pro, we actually finalized that 15 deal in June of 1994. And so at that time we 16 began creating the Novell Office Suite, if you 17 will. 18 Q. Is that what you referred to as 19 Perfect Office? 20 A. Yes. 21 Q. Right. Now, you acquired these 22 companies around June of '94; correct? 23 A. That's right. 24 Q. Now, it's correct, is it not, 25 Mr. Bradford, that it takes a substantial 10044 1 period of time for the software engineers to 2 integrate these products together into a suite 3 that will work well for a consumer? 4 A. Yes, it does take some time. 5 Q. Do you have any recollection sitting 6 here today as to how long it took people at 7 Novell and Novell divisions to actually 8 integrate these products together until the 9 point where they had a suite ready to go? 10 A. It's probably a period of three or 11 four months would be my guess that it took that 12 kind of time to put those products together, 13 Quattro Pro, WordPerfect, whatever database we 14 had, et cetera, to make sure they interoperated 15 effectively. 16 Q. Do you think it might have been a 17 little longer than three, four months maybe? 18 A. It could have been. 19 Q. And in integrating these different 20 products together, software engineers would 21 want to get them to use the lingo of the 22 business, I think, tightly integrated; correct? 23 A. Certainly. 24 Q. So they work really well together? 25 A. Yes. 10045 1 Q. And they have the same look and feel? 2 A. Yes. 3 Q. And a user could go sort of seamlessly 4 from one portion of the suite to another; is 5 that fair? 6 A. That's right, uh-huh. 7 Q. Okay. And Microsoft had been working 8 on Office for how long? 9 A. I don't know. 10 Q. Do you know whether Microsoft had an 11 Office Suite out many years earlier than 1994? 12 A. I certainly wouldn't describe many 13 years earlier. I'm trying to think when they 14 actually introduced their first Office Suite. 15 I don't know that. 16 Q. Okay. Do you recall when it was, if 17 ever, that Novell was satisfied that Perfect 18 Office, the Novell suite, was integrated as 19 tightly and as well as Microsoft Office had 20 been? 21 A. I think probably four or five months 22 after we did those deals that the integration 23 was very close except that we couldn't 24 interoperate effectively with the Windows 25 operating system like the Microsoft suite 10046 1 could. 2 Q. All right. I want to come to that 3 subject, I'm sure. 4 A. Okay. 5 Q. Mr. Bradford, was it the case around 6 the middle of the 1990s that Novell recognized 7 that the market for computer software had 8 become increasingly competitive due to 9 Microsoft's growing presence in various sectors 10 of the software business? 11 MS. CONLIN: Your Honor, I'm going to 12 have to object to that as compound. 13 THE COURT: Overruled. 14 He can answer if he understands. 15 A. Can you repeat the full question? I'm 16 sorry. 17 Q. Sure. Sure. Let me try to repeat the 18 whole thing. 19 My question, Mr. Bradford, is this -- 20 Well, let me ask something first and 21 then I'll get right to it. 22 A. Okay. 23 Q. You're not here today testifying as of 24 2007 for Novell Corporation; correct? 25 A. I don't represent Novell, Inc., today, 10047 1 no, I do not. 2 Q. Correct. But in the 1990s you were 3 the general counsel of Novell? 4 A. Yes. 5 Q. The chief lawyer? 6 A. Yes, among other things. 7 Q. Yes. And you've testified several 8 times that you were on the executive committee 9 of Novell? 10 A. That's correct. 11 Q. I think yesterday you said the 12 executive committee was the decision-making 13 body at Novell. 14 Do you recall that? 15 A. Yes, I do. 16 Q. And that's your testimony? 17 A. Yes. 18 Q. Well, before I go back to the question 19 I asked a moment ago, let me pause here for 20 just a moment. 21 Novell, of course, like any other 22 corporation had a board of directors, correct? 23 A. That's right. 24 Q. And you were never a member of the 25 board of directors, were you, sir? 10048 1 A. No. I was secretary to the board of 2 directors. 3 Q. Right. You were not a director of the 4 corporation? 5 A. That's correct. 6 Q. You were never a member. 7 And the executive committee reported 8 to the board of directors? 9 A. Well, in terms of, you know, every 10 other month, we would have a board meeting, and 11 so in that sense we would report back to the 12 board. 13 But in terms of day-to-day 14 decision-making authority, that certainly was 15 within the purview of the CEO and his direct 16 reports. 17 And we were all officers of the 18 corporation. 19 Q. Well, I understand, Mr. Bradford. But 20 the board of directors sets overall strategy 21 and makes the key decisions for the 22 corporation; agreed? 23 A. No, I don't completely agree with that 24 statement. 25 Q. You don't completely disagree, do you? 10049 1 A. No, not completely. I'm on several 2 boards myself. And we leave in the discretion 3 of the CEO great weight in terms of his 4 recommendations and the recommendations of his 5 strategic team. 6 Q. All right. Let's go back to my 7 question. 8 In the middle of the 1990s, around 9 1995, 1996, did Novell as a corporation 10 recognize that the market for computer software 11 had become increasingly competitive due to 12 Microsoft's growing presence in all sectors of 13 the software business? 14 A. Yes. It was more aggressive during 15 those -- well, I don't want to say that. Let's 16 be clear. 17 From 1989 forward, I think we got a 18 sense of just how aggressive Microsoft was 19 going to be in the computer software market. 20 And from '89 forward I think the 21 answer to your question is, yes, Microsoft had 22 a greater presence throughout the computer 23 software industry, had more product lines, et 24 cetera. 25 Q. I wonder if you could answer my 10050 1 question. 2 My question wasn't about whether the 3 markets had become more aggressive or whether a 4 particular company had become more aggressive. 5 My question was whether Novell had 6 recognized that software markets had become 7 more competitive due to Microsoft's presence? 8 Is the answer to that yes? 9 A. I think that's a fair assessment that 10 it was -- but from day one the computer 11 software industry is very competitive. 12 And so, yes, Microsoft's presence more 13 broadly within that industry created an even 14 higher level of competition. 15 Is that -- okay. 16 Q. Mr. Bradford, do you agree with this 17 statement, that clarity of direction and 18 strategy are essential for a software company 19 to sustain growth? 20 A. Yes, I think that's important. 21 Q. And when we talk about clarity of 22 direction and strategy, we're talking about the 23 leadership of the company, are we not? 24 A. Yes. 25 Q. Because it's the leader who sets the 10051 1 direction and strategy? 2 A. Yes. 3 Q. And, really, we're talking about the 4 chief executive officer, the CEO; isn't that 5 right? 6 A. That's right. 7 Q. Okay. Now, I think you testified 8 earlier today -- it may have been before lunch, 9 but I'm losing track of exactly when -- that 10 beginning in 1989, you began to notice that the 11 CEO, the chief executive officer of Novell, was 12 becoming very forgetful; correct? 13 A. That's when it started. I wouldn't 14 say -- I wouldn't characterize him in 1999 as 15 very forgetful. I would say he was forgetful. 16 Q. And we're talking about Mr. Noorda, 17 N-o-o-r-d-a; correct? 18 A. That's correct. 19 Q. Mr. Noorda had been with Novell since 20 its inception; correct? 21 A. 1983, that's correct. 22 Q. And I think you testified yesterday 23 that by the mid '90s, Novell had revenues of 24 about $2 billion a year; is that right? 25 A. That was after the combination with 10052 1 WordPerfect Corporation, that's correct. 2 Q. Okay. And it had 9- or 10,000 3 employees? 4 A. That's correct. 5 Q. And even in the early '90s, Novell was 6 a sizable company, was it not? 7 A. Yes. Relatively speaking to the rest. 8 Q. And a very successful software 9 company? 10 A. Yes, we were. 11 Q. And its main business was, would you 12 say, operating systems? 13 A. Network operating systems, yes. 14 Q. Yes. But Novell's main business from 15 the beginning was always network operating 16 systems? 17 A. Right. 18 Q. And that was the focus? 19 A. That's correct. 20 Q. And that was the core of Novell's 21 business throughout the '90s? 22 A. Yes. 23 Q. In fact, isn't it the case that Novell 24 started selling off companies like WordPerfect 25 and selling off the Quattro Pro spreadsheet, 10053 1 and selling off DR-DOS, that one of the things 2 Novell said was that it wanted to focus on its 3 core business, network operating systems? 4 A. Yes. 5 Q. The network operating systems were 6 always the principal source of revenue and 7 profit for the company; correct? 8 A. Yes, that's right. 9 Q. And going back to Mr. Noorda for a 10 minute. 11 If I understood your testimony, you 12 were saying that you first noticed his 13 forgetfulness in 1989, but it got progressively 14 worse as time went on? 15 A. That's right. 16 Q. And there came a time -- and I think 17 you said this was around the early '90s -- when 18 you would meet with Mr. Noorda in the afternoon 19 and he couldn't remember what the two of you 20 had talked about in the morning? 21 A. That's right. 22 Q. Was this something that the board of 23 directors of Novell was aware of? 24 A. Yes, they became aware of it. 25 Q. Well, you say they became aware of it. 10054 1 He was in meetings with the directors; correct? 2 A. That's correct. 3 Q. Must have been pretty obvious? 4 A. Well, you would go into a meeting of 5 the board of directors, and that might last 6 four hours. And he might be perfectly fine 7 during that whole period, but what would happen 8 is he might call a board member the following 9 day and have a conversation, and Ray might not 10 recollect exactly what happened or was said 11 during that board meeting. 12 Q. Do you recall testifying on direct 13 examination that it was always the case that 14 people at Novell recognized that the key thing 15 was returning value for the stockholders? 16 A. Right. That's the number one priority 17 of any publicly traded company -- 18 Q. Sure. 19 A. -- to return an investment well on 20 their stock investment. 21 Q. And Novell's stock was then listed and 22 traded on the NASDAQ exchange; is that right? 23 A. That's right, beginning in 1985. 24 Q. So there were public stockholders all 25 around the country? 10055 1 A. Yes, there were. 2 Q. Thousands and thousands of them? 3 A. Yes, there were. 4 Q. And you recognized that you had a duty 5 foremost to the public stockholders; correct? 6 A. Correct. 7 Q. And yet no one asked Mr. Noorda to 8 resign in 1989 or '90 when he was so forgetful 9 that he couldn't remember something in the 10 afternoon that had occurred in the morning? 11 A. I think you're overstating that time 12 frame, 1989-'90. 13 As we mentioned earlier, it started in 14 '89 and got progressively worse, and probably 15 about 1993, it was pretty bad. 16 And so he admitted to the world that 17 his memory was not good and shared that with 18 the board, and he resigned. 19 Q. And it hadn't been good for four 20 years; right? 21 A. Again, it got progressively worse. 22 Q. Right. But it was your testimony that 23 you first began noticing this in 1989? 24 A. That's correct. 25 Q. Okay. And through those four-year 10056 1 periods -- sorry. 2 Through the four-year period that you 3 just referred to, Mr. Noorda remained as the 4 chief executive officer? He was the boss? 5 A. That's right. 6 Q. He was the guy setting direction and 7 setting strategy for all Novell employees? 8 A. That's right. CEO of the company. 9 Q. You know, do you not, sir, that there 10 was a substantial amount of public criticism of 11 Novell's direction and strategy throughout that 12 period? 13 A. I think that would be an 14 overstatement, but, certainly, like any public 15 company, if the stock price is going up, people 16 love it. They're thrilled with it, and so 17 forth. 18 But as the stock price drops, then 19 there becomes the criticism. 20 Q. And it was criticism about the 21 strategy and direction that was being set at 22 the company at the time; correct? 23 A. Certainly, among other things, yeah. 24 Q. Okay. Now, I want to ask you a little 25 bit about these network operating systems 10057 1 because you told the Jury about a number of 2 different subjects, but I want to understand a 3 little bit more about the core of Novell's 4 business, these network operating systems. 5 You joined the company in 1985, sir; 6 correct? 7 A. That's right. 8 Q. And would it be fair to say that 9 network operating systems evolved over time in 10 the 15 or so years that you were at the 11 company? 12 A. Yes, absolutely. 13 Q. Would it be fair to say that network 14 operating systems evolved in response to two 15 things, changes in technology and changes in 16 customer demand? 17 A. Those are certainly two of the 18 factors, yes. 19 Q. Okay. And would it be fair to say, as 20 well, that the line between a network operating 21 system and an application that ran on it 22 changed as network operating systems evolved 23 over time? 24 A. Can you repeat that question? 25 Q. Sure. 10058 1 Well, let me try it this way first, 2 Mr. Bradford, if I could. 3 A. Okay. 4 Q. When we talk about network operating 5 systems, you and I, I think, agreed that over 6 time they evolved in response to, perhaps among 7 other things, changes in technology and 8 customer demand; right? 9 A. Yes, we agreed on that. 10 Q. And when we say they evolved, what 11 we're saying is, in part, new features were 12 added as time went on to network operating 13 systems? 14 A. That's correct. 15 Q. And Novell liked to think that it was 16 in the forefront of adding new features to its 17 own network operating system; right? 18 A. That's right. 19 Q. And just by way of example, are these 20 features that were added to the network 21 operating system during the time you were at 22 the company NetWare Directory Services? 23 A. Yes. It was called Novell Directory 24 Services, I think. 25 Q. Okay. 10059 1 A. NDS. 2 Q. NDS. 3 A. Right. 4 Q. I think I said NetWare, and it's my 5 fault. Thank you for correcting me. 6 And did Novell also add to its 7 operating system, the network operating system, 8 web page services? 9 A. That would have been the late '90s, 10 I'm guessing, because the Internet then from 11 '95 forward became more significant. 12 But, specifically, the term web pages, 13 I'm not sure what you mean by that. 14 Q. Well, I actually said web page 15 services. 16 A. Okay. 17 The term more used in the industry was 18 web services. So you call them web page 19 services. 20 Q. Okay. 21 A. But the term used -- and that's what 22 confused me a little bit, so -- 23 Yes, we added web services to the 24 Novell operating system. 25 Q. And how about spam filtering? Was 10060 1 that added at one point? 2 A. I don't recall us adding spam 3 filtering. 4 Q. How about built-in collaboration 5 functionality? Was that added to the network 6 operating system? 7 A. That's a very broad term. If you 8 could give me a more specific term that 9 described an actual product or an actual thing, 10 that would be -- 11 Q. Well, were there any specific aspects 12 of collaboration functionality that you 13 remember being added to the operating system 14 that Novell was making? 15 A. Novell had a product called Groupwise 16 that competed with Microsoft Outlook. These 17 are e-mail packages. 18 And at some point when we sold the 19 WordPerfect, just the WordPerfect and Quattro 20 Pro, we retained Groupwise, which was this 21 e-mail package. And so I suspect at some 22 point, from '95 forward, that we more tightly 23 integrated Groupwise with the Novell NetWare 24 operating system. 25 Q. And I think what we're both saying is 10061 1 that some of this functionality over time was 2 added to and incorporated as part of the 3 network operating system at Novell; correct? 4 A. Honestly, sitting here today, I do not 5 know if Groupwise was ever integrated that 6 tightly to make it part of the network 7 operating system. 8 I personally have always viewed 9 Groupwise as kind of a separate, distinct 10 e-mail package that kind of sat on top of the 11 network operating system. 12 Q. You don't know whether it was 13 integrated or not? 14 A. No. 15 Q. And certainly some of these other 16 features we talked about were integrated into 17 the operating system? 18 A. I don't know if Novell Directory 19 Services, you know, going back to NDS, if 20 Novell Directory Services was considered part 21 and parcel of the network OS, the core network 22 OS. 23 It might have been sold in connection 24 with it, but, certainly, I don't know if it was 25 deemed core as to the operating system. It may 10062 1 have been. 2 Q. All right. Would you say, 3 Mr. Bradford, that as operating systems evolve 4 and new features are added that the very 5 definition of what a network operating system 6 is tends to change over time? 7 A. I defer to a technical expert on that, 8 but certainly -- anyway, I'll leave my answer 9 at that. 10 Q. Okay. Now, let me go to a slightly 11 different subject, if I may, at the moment. 12 I think you said on direct 13 examination, Mr. Bradford, that you worked 14 during your years at Novell on 15 or more 15 acquisitions that Novell made of other 16 companies; correct? 17 A. That's correct, yes. 18 Q. So Novell was out there on a frequent 19 basis talking to merger partners about the 20 possibility of making a deal? 21 A. That's right. 22 Q. And you were very often involved in 23 those? 24 A. Frequently, yes. 25 Q. Now, it's the case, is it not, 10063 1 Mr. Bradford, that you actually worked on many 2 more than the 15 or so that wound up being 3 successful deals, that is, wound up in 4 acquisitions? 5 A. That's correct, yes. 6 Q. Because what tends to happen is that 7 two companies have conversations, discussions, 8 maybe negotiations about making a deal, having 9 a merger, but, for whatever reason, it just 10 never comes to be; correct? 11 A. That's correct. 12 Q. Would it be fair to say that you 13 worked on 100 of these possible mergers during 14 the time you were at Novell? 15 A. Yes. 16 Q. So just roughly speaking -- and exact 17 percentage isn't important -- but just in your 18 experience at Novell, that would mean that 19 roughly 15 percent of the possible mergers you 20 worked on wound up actually taking place, 15 21 out of 100? 22 A. Yes. 23 Q. And when you're talking to another 24 potential merger partner, I think you testified 25 yesterday it's important to keep those talks 10064 1 secret; right? 2 A. That's correct. 3 Q. And it's particularly important if one 4 or both of the companies is a public company; 5 correct? 6 A. That's right. 7 Q. And that's because if the word gets 8 out more broadly that discussions are going on, 9 people might trade on that information in the 10 stock market; correct? 11 A. That's correct. 12 Q. And some people might get rumors of a 13 deal and buy some stock in the hope that a deal 14 will happen and they'll make money. And that's 15 actually against the law; right? 16 A. Right. Trading on material inside 17 information is, in fact, against the law. 18 Q. So, in your experience, in let's say 19 100 possible merger transactions, you always 20 tried very, very hard to make sure that only a 21 very few people knew about the discussions that 22 were going on; correct? 23 A. Right. Especially in the early phases 24 of those discussions. 25 If it became more apparent that we 10065 1 were going to get a deal done, naturally the 2 team would broaden. 3 Q. Right. And when you were talking to 4 Digital Research; that is, Novell was talking 5 to Digital Research about the possibility of an 6 acquisition, again, the objective there was to 7 keep things as sort of tight-lipped as 8 possible; right? 9 A. Yes, certainly. 10 Q. You didn't want the outside world to 11 know? 12 A. That's right. 13 Q. And you testified, I think, on direct 14 examination that after the announcement by 15 Novell of its agreement to merge with Digital 16 Research, that after that, Mr. Gates of 17 Microsoft called Mr. Noorda, the CEO of Novell; 18 right? 19 A. That's correct. 20 Q. Is it correct, Mr. Bradford -- and 21 this took place around July of '91; right? 22 A. That's right. 23 Q. And that's what your timeline said, 24 July of '91? 25 A. Correct. 10066 1 Q. I don't believe you told the Jury on 2 direct examination about the discussions that 3 Novell was having with Lotus in 1991. 4 Did you mention that? 5 A. No, we haven't talked about those 6 discussions. And I think the time frame was 7 more 1990 as I recall, but I could go back and 8 look at my notes. 9 Q. What notes are you referring to, sir? 10 A. Well, there was an agreement -- we 11 signed a letter of intent to merge with Lotus 12 Development Corporation. It was in the spring 13 of a year, and I thought it was 1990. It could 14 have been '91, but I rather think it was 1990. 15 And that was publicly announced, a 16 letter of intent had been signed, and we 17 proceeded to do due diligence. They in looking 18 at us, us looking at Lotus, et cetera, et 19 cetera. But the deal never finally got 20 consummated. 21 Q. Well, what I want to first ask, 22 Mr. Bradford, if I could, sir, is perhaps 23 tonight both you and I can look and see whether 24 it was the spring of '90 or the spring of '91 25 -- 10067 1 A. Sure. 2 Q. -- that the deal with Lotus was 3 announced. 4 A. Okay. I'm sure some of these law 5 clerks out there probably already have that 6 information. 7 Q. Well, I think I know what it is. 8 A. Oh, okay. 9 Q. I want to give you a chance to look 10 for it. 11 A. Okay. 12 Q. Mr. Bradford, it was the case, was it 13 not, that Novell wanted to acquire Lotus 14 because Lotus had this very successful 15 spreadsheet called Lotus 1-2-3; correct? 16 A. Certainly. That was one of the 17 reasons, uh-huh. 18 Q. And there were discussions about a 19 merger. These were discussions that led at one 20 point to an agreement being signed? 21 A. That's correct. 22 Q. A letter of intent? 23 A. Yes. 24 Q. But not a formal contract that would 25 be binding? 10068 1 A. No. 2 Q. Okay. 3 A. It was like the DRI transaction. We 4 signed a letter of intent in late July, and the 5 deal was actually closed November 1. 6 The same thing happened with Lotus 7 Development Corporation. We signed a letter of 8 intent in the spring of whatever year we'll 9 find. And then that went on for a month and a 10 half while the companies did due diligence, 11 but, at the end of the day, both parties agreed 12 to not do that deal. 13 Q. And was it the case, Mr. Bradford, 14 that one of the principal reasons that the deal 15 with Lotus never actually got done was that 16 Lotus wanted significant representation for its 17 people on the board of directors of the merged 18 company; correct? 19 A. That's right. Specifically, they 20 wanted to have a majority of their people on 21 the board of directors, and we wanted to have 22 equal representation on the board. If they had 23 four representatives on the board, we wanted 24 four. But Jim Manzi, the CEO of Lotus, wanted 25 to have five to our four. 10069 1 Q. And Mr. Noorda didn't want to go along 2 with that? 3 A. That's correct. 4 Q. Mr. Noorda wanted it to be four and 5 four? 6 A. Whatever that number was. Equal 7 representation on the board. 8 Q. All right. And it was on that basis, 9 wasn't it, that was the principal reason that 10 the deal never actually got done? 11 A. Yeah, that was -- as I recall, that 12 was the biggest reason. I'm sure that there 13 were other things, but that certainly was a 14 driving factor. 15 Q. This was a lost opportunity, was it 16 not, for Novell to get the leading -- the 17 company that for many years had been the 18 leading spreadsheet company? 19 A. Yes. 20 Q. And later on Novell really had to pick 21 a company that was way down the line when it 22 came to software spreadsheet companies. That 23 was the Borland Quattro Pro product; correct? 24 A. Well, I wouldn't describe it as way 25 down the line. I'd have to go back and look at 10070 1 relative market shares in 1994. 2 But my recollection specifically is 3 that Quattro Pro was, you know, kind of gaining 4 market share; that it -- you know, in that 5 spreadsheet market. 6 But, you know, I think we were 7 relatively excited about getting their 8 technology and felt it was every bit as good as 9 Lotus'. 10 Q. Your first choice, obviously, would 11 have been Lotus? 12 A. Well, remember, that's two and a half, 13 three years earlier, four years earlier. 14 Q. I do remember. 15 A. So a lot happened, you know, in the 16 spreadsheet market between '90, '91, and '94 17 when we acquired Quattro Pro. 18 Q. In fact, what happened to Lotus 19 eventually was that a company called IBM -- 20 A. Right, a small little company. 21 Q. -- took over? 22 A. That's right. 23 Q. So IBM wound up acquiring Lotus, not 24 Novell? 25 A. That's right. 10071 1 Q. So IBM got the benefit, whatever 2 benefit there was, to the Lotus 1-2-3 software 3 product? 4 A. Sure. 5 Q. Okay. Mr. Bradford, it seemed to me 6 that during much of your testimony you were 7 testifying on direct examination, you were 8 testifying about subjects that maybe we can 9 agree are pretty much technical in nature, 10 wouldn't you say? 11 A. Certainly some of them were, yes. 12 Q. Things like, for instance, whether or 13 not a software engineer needs a particular beta 14 in order to make two pieces of software 15 compatible. 16 Would you say that's sort of 17 technical? 18 A. Not necessarily. I think the average 19 person out there can understand that in order 20 to get products working together, that you need 21 the beta release of a particular software 22 package in order to make the two interoperable. 23 Q. Well, let's come to that. Maybe it 24 will be in the morning. Maybe we'll have time 25 today. 10072 1 But, first, let me just start this 2 way. 3 You don't have any background in 4 software engineering, do you? 5 A. That's correct. I have no specific 6 education in that area. 7 Q. And you've never worked as a software 8 engineer? 9 A. That's right. 10 Q. Your job has been, always was at 11 Novell, your job was being a lawyer? 12 A. Not solely a lawyer, but certainly 13 that was one of my primary functions at Novell. 14 Q. Right. And you told us that around 15 '95, '96 you had another piece of 16 responsibility given to you. 17 A. Right. That was called strategic 18 relations. 19 Q. Right. But your principal job for the 20 15 years at Novell was being Novell's lawyer? 21 A. Again, as I testified when we got this 22 whole thing started, I had four areas of 23 responsibility over time at Novell. 24 Certainly the traditional law group 25 was always my function. And then I had 10073 1 security. I had government relations. I had 2 strategic relations at varying times. 3 Q. Right. And none of that included 4 engineering? 5 A. No. I did not have any engineering 6 responsibilities, that is correct. 7 Q. All right. And you never, for 8 instance, were a technical support manager for 9 Novell? 10 A. No, I was not. 11 Q. You weren't a product manager? 12 A. No, I was not. Thankfully. 13 Q. Okay. You were never a programmer? 14 A. No, I was not. 15 Q. And you were never the vice president 16 of marketing; right? 17 A. That's right. 18 Q. And you certainly were never the CEO? 19 A. That's right. 20 Q. Okay. And I wonder if we could just 21 pause for a minute and go back to Exhibit 2270. 22 MR. TULCHIN: And if I could ask the 23 Plaintiffs' assistance to put that document 24 back on the board, or maybe Chris can do it. 25 Q. This was a document that you looked at 10074 1 during your direct examination. Do you 2 remember this, sir? 3 A. Yes, I do. 4 Q. And it's from someone named Paul 5 Reiner? 6 A. That's right. 7 Q. And do you remember his position at 8 the time he wrote this in 1995 at Novell? 9 A. He was with our consulting services 10 group. And so that was a, if you will, a 11 technical support group that would help end 12 user customers integrate products together. 13 Q. Right. 14 MR. TULCHIN: And if we could bring up 15 the portion of 2270 beginning with we have many 16 problems including. 17 Q. Do you see that? Let's see if we can 18 highlight that if we can read it. 19 And this is Mr. Reiner writing in an 20 e-mail, we have many problems including; DAD 21 GPFs all the time when exiting. Do you see 22 that, sir? 23 A. Yes, I do. 24 Q. You don't know what that is, do you? 25 A. That's right. I have no idea. 10075 1 Q. No idea. And you have no idea whether 2 that was a flaw in Novell's software or in some 3 software or beta release that came from 4 Microsoft, do you? 5 A. That's right, I don't. 6 Q. This could be a problem with the 7 engineering at Novell? 8 A. That's right. 9 Q. And then the next one says WP 6.1. 10 That's WordPerfect, right? 11 A. That's right. 12 Q. WordPerfect 6.1 -- let's pause here 13 for a minute. 14 WordPerfect 6.1. At this time -- and 15 this e-mail was written on April 4th, 1995. 16 I'll show you that if you have trouble seeing 17 it. 18 A. Okay. 19 Q. But maybe you can take my word for it. 20 A. I can't see it. I've got something 21 here. 22 Q. All right. 23 A. So this is about a year after we had 24 acquired WordPerfect. 25 Q. Okay. Now, as of April 4th, '95, was 10076 1 WordPerfect 6.1 on the market? 2 A. I couldn't tell you that. 3 Q. You just don't remember? 4 A. I just don't remember if it was 5 WordPerfect 6.0 or 6.1 or 6.2 or what version 6 was actually being sold at August -- on April 7 4th, 1995. 8 Q. Right. But whatever it was, according 9 to Mr. Reiner, WordPerfect 6.1 has screen 10 redraw problems and often the cursor won't move 11 when your click on the mouse to point it 12 somewhere. 13 A. That's right. 14 Q. Do you see that? 15 A. Uh-huh. 16 Q. Now, do you know what a screen redraw 17 problem refers to? 18 A. Not specifically. 19 Q. Does this problem seem pretty serious, 20 that the cursor won't move when you click on 21 the mouse? 22 A. Yes, it does. 23 Q. That would be something to an end user 24 would be of great concern; right? 25 A. Right. It would make the product 10077 1 inoperable. 2 Q. Right. So was this a problem that 3 resulted from poor engineering at Novell or 4 from something that Microsoft had done? 5 A. Honestly, I don't know. 6 Q. Right. And then what about the next 7 one? Presentations is so bad, it's 8 indescribable. Now, this is Mr. Reiner who 9 works for Novell, and this is what he thinks of 10 your product; right? 11 A. Well, I think if you go back up to the 12 top of the document, I think the predicate for 13 all this, I thought, was a reference in general 14 to the problems that we were having with 15 Microsoft. 16 Q. Let's go back. 17 A. Let's look at it. 18 Q. Let's look at it. 19 Thank you. We've got the whole text 20 up there. 21 The first sentence says, several 22 consulting services personnel have installed 23 Perfect Office on Win 95 (all betas) and we 24 have found the results to be dismal; correct? 25 A. That's what it says. That's right. 10078 1 Q. And then there were a number of 2 different problems described. We've gone 3 through just a few of them. 4 But you don't know whether the results 5 were dismal because of anything in the betas 6 that was Microsoft's fault or because the 7 Novell software engineers hadn't done a good 8 job? 9 A. That's right. 10 Q. So when Mr. Reiner says the results 11 are dismal, sitting here today -- and now we're 12 almost 12 years later; right? This was written 13 in '95. 14 A. Right. 15 Q. Sitting here today, which is the best 16 we can do, you as the witness on the stand 17 right now, you don't know whether these 18 problems are Novell's fault or Microsoft's? 19 A. I assumed that since he wrote this 20 memo installing it on Perfect Office, then he 21 describes a series of problems, that those 22 problems probably do not exist on, say, DOS or 23 an alternative operating system. These 24 problems are specifically related to the Win 95 25 beta. 10079 1 Q. Let's assume just for a minute that 2 your assumption is correct. 3 A. Okay. 4 Q. That the problems don't work on DOS. 5 I just want to go along with you for a minute. 6 That is, you're saying, I assume, that 7 these problems don't come up on DOS. They only 8 come up when you use Windows. All right, let's 9 assume that. 10 Nevertheless, you would agree, would 11 you not, that it could very well be the Novell 12 engineers who have done a bad job and nothing 13 about the beta that causes these problems to 14 arise? 15 A. It could have been that, certainly. 16 But due to the nature of the memo, I 17 think it was the opposite, but we'd have to -- 18 Q. Well, wasn't there for years at 19 Novell, wasn't there for years a tendency when 20 Novell's products were unsuccessful, when you 21 found that sales were decreasing, wasn't there 22 for years a tendency, no matter what the issue, 23 to blame Microsoft? 24 A. I disagree with that statement. 25 Q. Well, in fact, wasn't that in part 10080 1 your job in taking to the Department of Justice 2 complaint after complaint to blame Microsoft 3 every time Novell's sales went down? 4 A. No. It had no relationship -- the 5 fact of illicit activity in the marketplace and 6 the fact that Microsoft is creating problems 7 for Novell's sales organization, that was 8 important to report because at the end of the 9 day, consumers weren't getting their products 10 compatible, et cetera. And so the consumer 11 lost out. 12 Q. We are going to get to compatibility 13 -- 14 A. Okay. 15 Q. -- and how that worked, but I want to 16 stick with this document. 17 You spent several hours Saturday, a 18 number of hours Sunday preparing for your 19 testimony; correct? 20 A. Yes. 21 Q. And you and Ms. Conlin together 22 determined what documents you were going to use 23 on direct examination? 24 A. That's not correct. 25 Q. Well, this is clearly one that was 10081 1 used? 2 A. Yes, it is. 3 Q. And you were asked about it? 4 A. You know, this specific document -- 5 yes, yes, we did discuss this document. 6 Q. Okay. So were you attempting when you 7 testified about it to communicate to the Jury 8 that the problems that are set forth by 9 Mr. Reiner in Exhibit 2270 were somehow 10 Microsoft's doing? 11 A. Yes. 12 Q. But, in fact, you don't know whether 13 that's so or it isn't so? 14 A. I testified earlier that my assumption 15 based on the way in which Paul described the 16 problem is that it related to Microsoft's betas 17 and not to our own engineering problems. 18 Q. I hear you. I hear you, Mr. Bradford. 19 As a lawyer with 30 years' experience 20 at the bar, do you think that it's your job to 21 communicate to the Jury that something's a fact 22 when it's based merely on an assumption that 23 you make almost 12 years after this document 24 was written? 25 A. Do you want to repeat that question? 10082 1 Q. Sure. 2 A. Okay. Tighten it up. 3 Q. Sure. I'll be happy to. 4 You've been a member of the bar, 5 you've been a lawyer for 30 years? 6 A. Yes. 7 Q. We've already established that. Give 8 or take. 9 A. Right. 10 Q. I don't know exactly. 11 And my question to you is whether or 12 not you think it's appropriate to testify to 13 the Jury in this case today about Exhibit 2270 14 implying that it's a fact that all these 15 problems are Microsoft's doing when, in truth, 16 your testimony is based merely on the 17 assumption that you've testified to 12 years 18 after this difficulty was written? 19 A. I told the Court that I would testify 20 fully and truthfully to the best of my ability, 21 and I've done that. 22 Q. Right. But your testimony on this 23 subject is based on the assumption that you've 24 described? 25 A. Yes. 10083 1 Q. Now, in 1995, did you see this 2 document? 3 A. I'm quite convinced that I did, yes. 4 Q. You have a memory of looking at it? 5 A. I have a memory of looking at many 6 documents from many sources within Novell, 7 including consulting services, including 8 strategic relations, including the WordPerfect 9 division, including the NetWare division, of 10 people supplying me with information relative 11 to Microsoft's bad acts in the marketplace. 12 Q. And what, if anything, did you do in 13 1995 to conduct some kind of investigation to 14 see whether or not the technical problems that 15 Mr. Reiner describes were Microsoft's doing or 16 whether they were the fault of engineers at 17 Novell? 18 A. I'm sure we wouldn't have supplied 19 this information to the Department of Justice 20 if we thought that it was merely our own fault; 21 that we had created this problem. 22 Q. You didn't supply this to the 23 Department of Justice, did you, this document? 24 A. I can't remember specifically whether 25 the DOJ actually had that or not. 10084 1 Q. Okay. So let's be very careful here. 2 I want to get your testimony as accurately as I 3 can. 4 You cannot testify, can you, 5 Mr. Bradford, that this document was given by 6 Novell to the Department of Justice? 7 A. That's an accurate statement. 8 Q. All right. So while you might have 9 made investigations, you don't have any 10 documents that reflect any investigation as to 11 whose fault these problems are, these technical 12 problems, do you? 13 A. No, I don't have any specific 14 documentation on that issue. 15 Q. All right. And just going down the 16 list a little bit, we won't cover every one of 17 them, but it says OFWINFIL -- I don't know if 18 I'm pronouncing it correctly -- 19 O-F-W-I-N-F-I-L -- often GPFs. Do you see 20 that? 21 A. Yes, I do. 22 Q. And right under it, shared code often 23 GPFs. 24 A. Correct. 25 Q. What does GPF stand for? 10085 1 A. I don't know. 2 Q. Well, you worked at Novell for these 3 15 years and you were in charge of passing 4 along information to the Department of Justice. 5 And here's a memo about something that 6 you thought was significant enough to tell the 7 Jury about and you can't tell me what GPF 8 stands for there; is that right? 9 A. That's right. 10 Q. All right. And, again, if we think 11 about these GPFs, sitting here today, you don't 12 know whether this is Microsoft's doing, that 13 the problem is attributable to something in the 14 beta, or whether it was an error by an engineer 15 at Novell; right? 16 A. I think I've testified fully on that 17 already. 18 Q. Okay. All right. Now, just at the 19 end of your direct examination, Mr. Bradford, 20 Ms. Conlin asked you whether your expenses were 21 being paid; correct? 22 A. That's right. 23 Q. And you said I hope so. 24 A. Yes. 25 Q. And then you were asked whether or not 10086 1 you were being paid for the time that you've 2 worked on this case. 3 Do you recall that? 4 A. Yes. 5 Q. Have you ever been in a position 6 before where you've been paid for your time as 7 a fact witness? 8 A. Well, as I testified yesterday, I 9 don't recall ever having been a fact witness 10 before. 11 Q. But you were the chief lawyer at 12 Novell. And Novell had lots and lots of 13 different cases going on; right? 14 A. Certainly. 15 Q. Every year there were lots of cases. 16 Novell suing somebody else and people suing 17 Novell; right? 18 A. That's right. 19 Q. And there were cases where fact 20 witnesses were called to testify, either by 21 deposition or at a trial; correct? 22 A. I'm certain of that, yes. 23 Q. Was it Novell's habit to pay fact 24 witnesses for their time in coming to testify? 25 A. I don't recall. I'm sure there were 10087 1 circumstances where we did. Others probably 2 where we didn't. 3 I had a chief litigation counsel by 4 the name of Jim Lundberg, who typically handled 5 all outside litigation for me. 6 Q. Okay. Now, in order to be paid for 7 your time in connection with this case, it 8 would be necessary, would it not, Mr. Bradford, 9 for you to maintain some records of the amount 10 of time that you've spent working on it? 11 A. Yes. 12 Q. And you have maintained records? 13 A. Yes. 14 Q. And do you make entries as to, let's 15 say, an hour on a particular day, so many hours 16 on some other day? 17 A. What I've maintained is my e-mail 18 correspondence, my records, and I just save it 19 in my folder on my e-mail. 20 Q. I see. And one of the things you've 21 done for the Plaintiffs' lawyers is I think you 22 said you've been out finding witnesses? 23 A. Yes. 24 Q. Have you been calling people who 25 worked at Novell and trying to convince them to 10088 1 come testify over the past year? 2 A. Sure. 3 Q. How many people have you called? 4 A. Oh, gosh. Over the past year, I've 5 probably spoken to 10 or 12 people, roughly. 6 Q. Any of them work at Novell currently 7 or are they all former employees? 8 A. One I know still works at Novell. 9 Q. So you've called 10 or 12, and you've 10 talked to each of them about coming. And 11 you've encouraged them to come and testify 12 against Microsoft in this case; correct? 13 A. Well, first I've had to locate them. 14 And then we visited about what was going on in 15 Iowa and the nature of the trial. And I 16 indicated that I was going to go back and 17 testify. And then Roxanne Conlin would contact 18 them to see if they were interested in coming 19 out and doing the same. 20 Q. Well, I wasn't asking you about all of 21 that. 22 I just asked you whether or not in 23 your discussions with these Novell people you 24 had encouraged them to come testify. 25 A. I would say I didn't discourage it. I 10089 1 think that's probably a fairer 2 characterization. 3 Because at the end of the day, each 4 individual has to make their own decision on 5 whether or not they want to actually come here 6 and show up. 7 Q. And did you tell these 10 or 12 people 8 that they would be paid for their time in 9 connection with their testimony? 10 A. No, I don't think so. I left that for 11 Roxanne to handle. 12 Q. How much have you been paid thus far? 13 A. Zero. 14 Q. How much are you owed? 15 A. Well, gosh, if I'm here five days and, 16 you know, it's probably -- and my billable rate 17 when I left my law firm last -- in June of 18 2006, my last billable rate there was 495 an 19 hour, which I'm sure is a small fraction of 20 what your billable rate is, but, yeah, it's 21 probably in the neighborhood of 25- to $40,000, 22 in that range. That includes the time that I 23 have spent here the last four days. 24 Q. Well, let me see if I understand that. 25 You talked about a billable rate when 10090 1 you were practicing law up until a year or so 2 ago; is that right? 3 A. That's right. 4 Q. I want to know how much per hour 5 you're being paid by the Plaintiffs in this 6 case. 7 A. We've not reached a final agreement on 8 that. 9 Q. Have you reached a tentative 10 agreement? 11 A. No, we haven't. 12 Q. Do you expect that it will be $495 per 13 hour? 14 A. Yes, that's what I intend to bill. 15 Q. And just doing a little sort of mental 16 calculations, using that rate and came out to a 17 total fee of somewhere in the neighborhood of 18 25- to $40,000? 19 A. That's right. 20 Q. And that doesn't include the 21 reimbursement of your expenses; correct? 22 A. That's correct. 23 Q. You're not practicing law now at all, 24 are you, sir? 25 A. No, I'm not. 10091 1 Q. You started a business called Ownli, 2 O-w-n-l-i? 3 A. That's right. 4 Q. And I think when you first took the 5 witness stand yesterday, might have just been 6 after lunch, you told the Jury a little bit 7 about Ownli? 8 A. Uh-huh, yes. 9 Q. And you said you were the CEO? 10 A. Yes, that's right. 11 Q. Does Ownli have any customers or 12 revenues? 13 A. No. We haven't launched our product 14 yet. 15 Q. So when you were telling the Jury 16 about the -- I think you said that Ownli was 17 competing with Citibank in the credit card, 18 debit card type? 19 A. It would eventually compete with them. 20 It doesn't now. 21 Q. Is that what you said yesterday, that 22 it would eventually? 23 A. If I said that, it was a mistake. 24 We have not launched our product yet. 25 Let me make that very clear. 10092 1 Q. And if you go to the Ownli website, as 2 I did this morning, try to click on any of the 3 information there, nothing happens; right? 4 A. That's right. 5 Q. And if it says click here to sign up 6 and become a customer, you get nothing? 7 A. Right. It's just a mere place holder. 8 Q. Okay. And when did this -- when did 9 you start in your capacity as the CEO of Ownli? 10 How long ago was that? 11 A. Oh, it was probably formalized at the 12 end of August. That's right. 13 Q. Okay. So five, six months ago? 14 A. That's right. 15 Q. All right. Does Ownli have an office? 16 A. Yes, we do. 17 Q. Do you have your own office within it? 18 A. No. I am working out of California. 19 And our principal office where mail is being 20 sent, invoices, et cetera, et cetera, is 2230 21 North University Parkway in Provo, Utah. 22 Q. All right. But you are working out of 23 your home in California; is that right? 24 A. That's right. 25 Q. What sort of computer do you use at 10093 1 home? 2 A. Oh, I've got -- I've got a couple of 3 HPs. I've got an HP laptop and I have an HP 4 desktop. 5 Q. And what kind of operating systems do 6 you have on those two Hewlett Packard 7 computers? 8 A. I have Windows on both of those. 9 Q. Which Windows? 10 A. Windows XP I think is the latest 11 release. I know Microsoft's coming out in the 12 next week or two with something called Vista. 13 I haven't installed Vista yet. 14 Q. Do you plan to do that? 15 A. Yes, likely, longer term. 16 Q. And what about business productivity 17 applications? Do you have any of those on your 18 computers? 19 A. Yes. I'm standardized on Microsoft 20 applications. 21 Q. So you have Office on both your 22 Hewlett Packard computers? 23 A. That's right. 24 Q. When you were at Novell in the mid 25 1990s, did you have a computer on your desk in 10094 1 your office at Novell? 2 A. Yes, I did. 3 Q. What kind of a computer was that? 4 A. I don't recall. 5 Q. Do you remember what the operating 6 system was? 7 A. I don't recall. 8 Q. Did you use Windows in the mid to late 9 1990s? 10 A. Yes. In all likelihood, yes. 11 Q. And did the CEO, Mr. Frankenberg, use 12 Windows? 13 A. I think we were standardized at that 14 point on the Windows operating system, as I 15 recall, in the time frame that you're 16 mentioning, '96, '97, '98, late '90s. 17 Q. Right, that was the time frame. 18 So when you say you were standardized, 19 is what you are saying is pretty much everybody 20 at Novell who had a company computer used the 21 Windows operating system? 22 A. That's right. 23 Q. Am I right, Mr. Bradford, that you 24 testified earlier -- and I want to just make 25 sure I get the words exactly right -- that the 10095 1 principal role of the executive committee at 2 Novell was to return value to Novell's 3 shareholders; correct? 4 A. That's right. 5 Q. So if some proposal was made to Novell 6 that didn't make any business sense to Novell, 7 it would be pretty much incumbent on the 8 executive committee to turn that down in order 9 to return value to the stockholders? 10 A. That's right. 11 Q. So the fact that, for instance, 12 somebody makes a merger proposal to Novell, if 13 that proposal makes no sense for the company 14 and would amount to a distraction because 15 executives and officers and maybe the CEO 16 himself would have to spend time on it, the 17 best thing to do in order to return value to 18 the stockholders is just to say no; fair 19 enough? 20 A. Yes. If it's a bad deal, yeah, you 21 say no and move on to the next deal. 22 Q. So one company -- I know you said 23 earlier that you were involved in about 100, 24 just roughly, 100 discussions with 100 25 different companies about merger possibilities. 10096 1 And there might be some categories where you 2 never even got to the stage of a discussion 3 because somebody makes an approach to Novell 4 about a merger. And it doesn't take you long 5 to say this isn't returning value to the 6 stockholders, we're just not going to talk to 7 them; right? 8 A. That's right. 9 Q. And that's happened? 10 A. Certainly. 11 Q. So when Microsoft asked you to engage 12 in merger discussions, let's say, in 1991, you 13 weren't compelled to talk to anybody, were you? 14 A. No, we weren't forced to talk to them. 15 Q. Ray Noorda made the decision in 1991 16 that he wanted to talk to Bill Gates about the 17 possibility of a merger; isn't that right? 18 A. Well, I remember specifically we all 19 felt a fiduciary obligation to our stockholders 20 to examine any reasonable offer to buy the 21 company. 22 Typically, Novell was doing the 23 acquisition. And in this case Microsoft was 24 acquiring Novell. So this was a bigger than 25 normal -- 10097 1 Q. Well, nobody acquired anybody. Nobody 2 acquired anybody because it didn't happen; 3 right? 4 A. Right. 5 Q. But surely if the Novell board of 6 directors or the Novell executive committee 7 believed that it was a distraction, it would 8 wind up hurting Novell, you wouldn't have 9 talked to Microsoft at all; correct? 10 A. Well, at that point in time, you 11 couldn't tell if it was going to be a 12 distraction if it led to a deal that would 13 return great value to our stockholders. 14 Q. Right. So you decided it was worth 15 talking? 16 A. That's correct. 17 Q. Now, I want to ask you a question 18 about when you first began making efforts to 19 convince the government to take some action 20 against Microsoft. 21 And I think you said just earlier in 22 this cross-examination that it was in '92, is 23 that your best memory? 24 A. That's correct, uh-huh. 25 MR. TULCHIN: May I approach the 10098 1 witness, Your Honor? 2 THE COURT: You may. 3 Q. I just want to show you a document. 4 It's not in evidence, and I just want to see if 5 that refreshes your recollection on that 6 subject. 7 This document, Mr. Bradford, is a 8 memorandum that you wrote in November 1993. 9 A. Okay. 10 Q. Correct? 11 A. Well, let's take a look. 12 Yes, I did. 13 Q. Okay. And you wrote it to Mr. Noorda? 14 A. That's right. 15 Q. Mr. Noorda was your boss? 16 A. That's correct. 17 Q. And I just want to direct your 18 attention to the first sentence, the very first 19 sentence after you write, Dear Ray. Do you see 20 where I'm looking at? 21 A. I do. 22 Q. Does this refresh your recollection 23 that you had been making concerted and 24 broad-based efforts to rally various government 25 agencies against Microsoft over the past few 10099 1 years? 2 A. Over the past few years, we've made 3 concerted and broad-based efforts to rally 4 various government agencies to action against 5 Microsoft's anticompetitive conduct. 6 Q. Yeah. I'm just asking -- 7 A. Well, you changed the sentence around, 8 but that's fine. 9 Q. No, I'm not changing the sentence 10 around. 11 I'm focusing on the time frame. 12 A. Okay. 13 Q. You said your efforts to rally 14 government agencies started in around April of 15 '92; right? 16 A. That's correct. April, June time 17 frame. 18 Q. Okay. And here we are November '93 19 and you're writing something to Mr. Noorda, the 20 chief executive officer, the CEO, and you're 21 saying that you've been engaged in those 22 efforts for the past few years; right? 23 A. Yes. That's correct. 24 Q. Well, does that refresh your 25 recollection that your efforts with the 10100 1 government went back at least as far as 1991? 2 A. Well, I believe Linnet Harlan, who was 3 general counsel at DRI, had had discussions 4 with the Department of Justice pre our 5 acquisition of them in November of 1991. So 6 this would have been two years later. 7 Q. All right. And my question is this: 8 Does this refresh your recollection that Novell 9 or the DRI division of Novell had been making 10 efforts to try to get the government to go 11 after Microsoft for several years as of '93? 12 A. Well -- 13 Q. As far back as at least 1991. 14 A. Okay. So let's be clear. That was 15 Digital Research doing that actively with the 16 government preNovell acquiring them. 17 So when I'm referring to Novell, I'm 18 not talking about premerger with DRI. I'm 19 talking about Novell, Inc.'s efforts. 20 Q. Sure. 21 A. And, specifically, my recollection is 22 that we didn't do anything very actively, 23 Novell, Inc., with any government agencies 24 until June of 1992 when it became apparent to 25 us that the conduct by Microsoft in the 10101 1 marketplace was hurting us. 2 Q. Well, now you referred to -- in your 3 direct examination you referred to the consent 4 stipulation. 5 Do you remember that? 6 A. Yes. 7 Q. And Ms. Conlin showed you Plaintiffs' 8 Exhibit 5664. 9 Do you recall that, sir? 10 A. I remember seeing an exhibit that 11 referenced the consent stipulation, yes. 12 Q. You understand, Mr. Bradford, do you 13 not, that as the Court instructed the Jury 14 today, there was no finding by any court that 15 anything Microsoft has done in connection with 16 that was unlawful in any way; right? 17 A. That's right. 18 Q. And you understand as well, do you 19 not, that no court has ever determined that the 20 per processor licenses that you discussed on 21 your direct examination violate the antitrust 22 laws; correct? 23 A. I do not know that. 24 Q. Maybe my question wasn't clear. Let 25 me start again. 10102 1 I'm just not sure I understand your 2 answer. 3 A. Right. 4 Q. I'm not being critical. 5 A. Right. 6 Q. Are you aware of any court that has 7 determined that these per processor licenses 8 violate the antitrust laws? 9 A. I know that Judge Jackson in '94, '95, 10 '96, whatever time frame that Microsoft case 11 came down, that there was a ruling that 12 Microsoft violated the antitrust laws. 13 Now, whether or not that included the 14 per processor licenses, I don't know sitting 15 here today. 16 Q. You don't know. 17 A. Right. 18 Q. And the Jury's been instructed on the 19 Judge Jackson case. 20 A. Okay. 21 Q. So the instructions are the 22 instructions. 23 But leaving that aside, certainly 24 you're not aware of any court that's ruled that 25 these per processor licenses that you were 10103 1 complaining about to the government were 2 illegal; right? 3 A. That's right. 4 Q. And the complaints about them go back 5 to 1991; is that right? 6 A. From the DRI side, that's right. 7 Q. Yeah, from the DRI side. But you 8 acquired DRI? 9 A. That's right. 10 Q. And you became aware of what DRI had 11 been doing? 12 A. Yes. 13 Q. And you personally sort of picked that 14 up and made that part of your work? 15 A. Right. 16 Q. Complaining to the government; right? 17 A. Yes, I did. 18 Q. And you complained to the government 19 on a number of different subjects, did you not, 20 including the betas, including APIs, including 21 documentation that you think Novell or some 22 division of Novell should have gotten; right? 23 A. That's right. Yes. 24 Q. And are you aware of any judgment of 25 any court that any of those things have been 10104 1 unlawful? 2 MS. CONLIN: Your Honor, I'm going to 3 object. 4 THE COURT: Sustained. 5 Q. In any event, is it your testimony, 6 Mr. Bradford, that the only government action 7 in the United States of which you're aware that 8 came about as a result of your complaints was 9 this Plaintiffs' Exhibit 5664, the concept 10 stipulation that we've been talking about here; 11 is that right? 12 A. Well, what triggered that was a 13 complaint, I believe, that the government was 14 preparing to file against Microsoft. 15 Q. Yes. And all of that came about as a 16 result of Novell's complaints to the 17 government; right? 18 A. Well, I don't think it was solely 19 Novell's complaints to the government. 20 Q. Novell and DRI. 21 A. I'm quite sure that there were a 22 number of software companies complaining to 23 those government agencies about Microsoft's 24 anticompetitive conduct. 25 Q. As far as you know, in the United 10105 1 States, did the government take any action 2 against Microsoft other than what -- this 3 consent stipulation where Microsoft agreed? 4 A. I'm personally not aware of other 5 actions other than the one I mentioned with 6 Judge Jackson and so forth. 7 There's a whole lot of stuff that 8 happened with Netscape Navigator. And so I 9 know you don't want to go there, but I know 10 that there were other legal actions taken. 11 Q. All right. Well, you're certainly not 12 quarreling with the idea that Microsoft entered 13 into the agreement with the government 14 voluntarily and without admitting that it had 15 done anything wrong; right? 16 A. That's correct. That's very clear in 17 the documents. 18 Q. And you understand as the former 19 general counsel of Novell that these sort of 20 consent decrees or consent judgments or consent 21 stipulations are not all that uncommon? 22 MS. CONLIN: Your Honor, I object. 23 Vague. 24 A. Well, I just -- 25 MS. CONLIN: Wait, wait. I'm sorry. 10106 1 THE COURT: You may answer. 2 THE WITNESS: Can I answer? 3 THE COURT: Yes. Go ahead. 4 A. I completely disagree. This is an 5 extraordinary document and extraordinary action 6 and, to my knowledge, had never been done 7 before. 8 Q. There's never been a consent decree 9 between the Department of Justice and a private 10 party where they've agreed on steps to be 11 taken? 12 A. The DOJ -- 13 Q. Will you answer my question? 14 A. Sorry. Go ahead. 15 Q. Has there never been any other consent 16 decree? 17 A. Oh, I'm sure there are other consent 18 decrees between the Department of Justice and 19 other U.S.-based companies. 20 Q. Right. 21 A. To my knowledge -- well, we'll just 22 leave it at that. 23 Q. That's what I was asking. 24 THE COURT: We will take our recess at 25 this time for the day. 10107 1 Remember the admonition previously 2 given. Leave your notebooks here. 3 Drive safely. See you tomorrow at 4 8:30. 5 All rise. 6 (A recess was taken at 2:58 p.m.) 7 (At this time, a sealed-by-the-Court 8 record was made by Janis Lavorato.) 9 (The following record was made out of 10 the presence of the jury at 3:31 p.m.) 11 THE COURT: Mr. Hagstrom, you had some 12 record you wanted to make? 13 MR. HAGSTROM: Yes. Actually, three 14 items. 15 First, Your Honor, I promised to give 16 you some jump cites on those cases. 17 THE COURT: Okay. 18 MR. HAGSTROM: And I handed up to you 19 and Mr. Tulchin the Uniroyal case. That's 977 20 S.W. 2nd 328 with a jump cite of 342. And 21 there, as I recall, a timeline was admitted. 22 THE COURT: Okay. 23 MR. HAGSTROM: The next one was Sharp 24 versus Texas Department of Protective and 25 Regulatory Services. That was 1997 Westlaw 10108 1 334900. And the jump cite is at asterisk 2. 2 And the third one was United States 3 versus Gray, 2005 Westlaw 3059482, and the jump 4 cite is at asterisk 11. 5 THE COURT: 305 -- 6 MR. HAGSTROM: 9482. 7 THE COURT: Jump cite? 8 MR. HAGSTROM: From pages 11 to 12. 9 THE COURT: Okay. 10 MR. HAGSTROM: So each of these 11 discuss the timeline issue under the equivalent 12 of Iowa Rule 5.1006. 13 THE COURT: Got you. 14 MR. HAGSTROM: And also -- 15 MS. NELLES: Your Honor, I don't want 16 to interrupt, but I also have some authority on 17 this topic, and I could certainly wait until 18 Mr. Hagstrom addresses all of his topics, but I 19 just want to let you know that Defendant also 20 has some materials here. 21 THE COURT: Okay. Just let him 22 finish. 23 MS. NELLES: Fine. 24 MR. HAGSTROM: And just I'd also 25 direct Your Honor to the Iowa Practice Guide at 10109 1 pages 942 to 943 under Rule 5.1006. 2 THE COURT: 5.1006? 3 MR. HAGSTROM: Right. 4 THE COURT: Okay. 5 MR. HAGSTROM: And, basically, under 6 the practice guide, there's other case law that 7 says it really doesn't matter whether or not 8 the underlying documents which are summarized 9 are admitted or not admitted. And that's kind 10 of the point of the practice guide. 11 THE COURT: Okay. 12 MR. HAGSTROM: The second item that I 13 wished to discuss, unless you want to get Ms. 14 Nelles' cites first on this. 15 THE COURT: Okay. I'll take your 16 cites. 17 MS. NELLES: Okay. Your Honor, I have 18 a series of four cases here for you which I'll 19 also provide to Plaintiffs. I'm not going to 20 go through and discuss them all. 21 The various cases, however, here are 22 White Industries, Inc., v. Cessna Aircraft Co. 23 It's 611 F. Supp. Jump cite 1049, 1070, Eighth 24 Circuit 1985, which says the volume of 25 underlying documents is an important factor to 10110 1 be considered by the Court. 2 I would note that here there really 3 has been no showing about the volume underlying 4 this timeline. Ms. Conlin waved her hand 5 around. I don't say that pejoratively. She's 6 a hand waver. She does it quite effectively. 7 But that is not evidence of volume here. 8 And another case I'm going to give you 9 is State versus Fingert, which is 298 N.W. 2d 10 249. The jump cite is 255 through 256. That's 11 an Iowa 1980 case, which I believe is going to 12 tell you that there has to be a showing that 13 all the underlying materials are themselves 14 admissible. 15 Perhaps Mr. Hagstrom is correct, they 16 don't have to be admitted, but they have to 17 have been admissible. 18 Another -- make sure I have the right 19 set of cases here for you. 20 I also have U.S. versus -- I'm not 21 going to pronounce this right -- it's 22 Milkiewicz, I think, M-i-l-k-i-e-w-i-c-z. It's 23 470 F. 3rd 390, 396, First Circuit. That's a 24 First Circuit opinion at 2006 that deals with 25 the same proposition. 10111 1 I also have a case here, another 2 Eighth Circuit case, Square Liner 360 Degrees, 3 Inc., versus, Chisum, C-h-i-s-u-m, 691 F. 2nd 4 362 at 376. It's an Eighth Circuit 1982 case 5 which states that another requirement before 6 you can admit a summary under the equivalent of 7 Iowa Rule of Evidence 5.1006 is that all the 8 underlying writings be made available for 9 examination and copying. 10 We certainly weren't given any 11 compilation of materials this summary is 12 reportedly based upon. It was given to us as a 13 demonstrative and, as we said, we think it's a 14 perfectly appropriate demonstrative. 15 I'm also going to give you a case U.S. 16 v. Ray, 139 F. 3rd 1104 at 1111. This is a 17 Sixth Circuit, a 1998 case, which says to be 18 admissible, summaries must fairly represent the 19 underlying documents and be accurate and 20 nonprejudicial. 21 I think there's strong argument here 22 that this summary exhibit is argumentative. To 23 Plaintiffs' credit, I thought the presentation 24 itself was extraordinarily straightforward, and 25 I wouldn't complain about it on that ground, 10112 1 but I'm not suggesting calling out or 2 highlighting certain things. However, it's a 3 selection of certain events. 4 This is not, for example, a selection 5 of every single release of every single product 6 in a certain market. That would certainly be 7 too voluminous to put in. 8 This is a compilation of materials, 9 particular events that the Plaintiffs want to 10 call out with this witness which is why it was 11 put together as a demonstrative and provided to 12 us as a demonstrative. It's an aid. It was a 13 pedagogical aid. That's not a summary. 14 And I believe in the same case, the 15 fifth and final element to set forth which must 16 be a summary document must be properly 17 introduced before it may be admitted into 18 evidence. And that in order to lay a proper 19 foundation for a summary, the proponent needs 20 to present the testimony of the witness who 21 supervised the preparation. 22 I believe Ms. Conlin offered to us 23 that she herself prepared this. She's not a 24 witness to the materials. I think she offered 25 to do a better job even, which we all thought 10113 1 was very -- it was very clever when she said 2 it. And I'm not complaining about her 3 preparing a demonstrative in any way, shape, or 4 form. I just think it's not an element in her 5 summary. 6 So I'm going to -- I will hand these 7 up to Your Honor and I will provide a copy to 8 Mr. Hagstrom if that's all right. 9 THE COURT: Yes, please do. 10 MS. NELLES: I'm going to give you my 11 highlighted set. 12 THE COURT: Thank you. Anything else 13 on this then? 14 MS. NELLES: Not from Microsoft. 15 THE COURT: Next issue. Mr. Hagstrom? 16 MR. HAGSTROM: Do I get a highlighted 17 one too? 18 MS. NELLES: I'm sorry. If I have to 19 pick between the two of you, I'm going with the 20 Court. 21 MR. HAGSTROM: Just on the first 22 issue, Your Honor, as you know, we offered the 23 timeline in response to a juror question, and 24 certainly if Your Honor wishes the 25 identification of the documents which the 10114 1 timeline summarizes, we can certainly put that 2 into evidence. 3 THE COURT: Okay. 4 Anything else? 5 MR. HAGSTROM: Not on that issue. 6 THE COURT: Next. 7 MR. HAGSTROM: Next issue, I just 8 wanted to update the Court that we have sent 9 off letters to the Department of Justice and 10 the Iowa Attorney General thus far. 11 And the Iowa Attorney General has 12 asked us for copies of the Andrew Schulman 13 expert reports. 14 So our understanding consistent with 15 the Court's order is that we're permitted to go 16 ahead and provide that information to the Iowa 17 AG, but we wanted to, you know, advise the 18 Court of that. 19 That's item Number 2. 20 Item Number 3 is that we've learned 21 today that Microsoft took the names and 22 addresses of all of the opt-outs pursuant to 23 the opt-out notice that was provided to the 24 class and has provided that information to the 25 press, particularly The Des Moines Register. I 10115 1 don't know, perhaps there's others as well. 2 I also understand that The Des Moines 3 Register is going to be publishing some story 4 about the opt-outs, the letters that particular 5 individuals might have written in response to 6 the opt-out notice. 7 I guess that was rather surprising to 8 us. We had assumed that that information was 9 confidential, but apparently Microsoft did not 10 view it the same way. 11 THE COURT: Does the notice provide 12 confidentiality? 13 MR. HAGSTROM: I don't think so. 14 And I suspect that -- I think the 15 opt-out notices provided for notification to 16 counsel, Plaintiffs' counsel, and I believe 17 perhaps a copy was sent to the clerk, but I'd 18 have to go back to the notice to check whether 19 or not that was required. But I know that it 20 was required to be sent to Plaintiffs' counsel. 21 So, as a result, we turned that 22 information over to Microsoft pursuant to the 23 Court's order of last August, September, July, 24 whenever that was. I just don't remember the 25 date. 10116 1 And so we have not done anything with 2 that information other than to turn it over to 3 Microsoft. Microsoft apparently has been busy 4 contacting the opt-outs and then providing that 5 information to the press. 6 MS. NELLES: Well, Your Honor, 7 certainly it's not Microsoft that's been waging 8 a war in the press. I don't know if Your Honor 9 has had an opportunity to peruse Plaintiffs' 10 website, but it is not us. 11 That said, I do not believe Microsoft 12 -- and I haven't been involved in discussing 13 these issues with the press. I have been very 14 focused on in court, but I believe the opt-out 15 list was filed publicly by Plaintiffs, and that 16 is likely the list that any press has received. 17 But that said, I don't -- there is no 18 confidentiality or rule that I have any belief 19 that anybody at Microsoft has violated in any 20 way, shape, or form. 21 And if Mr. Hagstrom would like to show 22 me something, I certainly would take a look and 23 make sure that everything appropriate is done. 24 And with -- I frankly don't know what 25 else to say. 10117 1 THE COURT: Anything else, 2 Mr. Hagstrom? 3 MR. HAGSTROM: Just two other 4 comments. 5 One, you know, Microsoft, of course, 6 has its own website. It's putting out PR 7 daily. So I don't quite understand Ms. Nelles' 8 comment referencing Plaintiffs. 9 And, secondly, I understand that Ms. 10 Nelles is suggesting that since this 11 information wasn't filed under seal or required 12 to be filed under seal, that it's public. 13 So we're understanding that anything 14 that is not filed under seal apparently is 15 public in this case. 16 THE COURT: Very well. 17 Anything else? 18 MS. NELLES: I will make Mr. Hagstrom 19 and Ms. Conlin the offer right now. If they 20 would like to take down their website, we will 21 take down ours. If you would like to stop 22 trying this case in the press, we will not 23 respond in kind. 24 If they'd like to take me up on it, 25 they know my number, they know my e-mail. I'd 10118 1 like to effect it immediately. 2 THE COURT: Any other issues for the 3 Court to decide? 4 MS. CONLIN: No, Your Honor. But I 5 would say for the record if Microsoft is 6 willing to take down its whole website, then we 7 are going to consider that. 8 MS. NELLES: She always has to have 9 the last word, Your Honor. Just because she's 10 -- always has to have the last word. 11 MR. HAGSTROM: Who's speaking right 12 now? 13 MS. NELLES: I want Heidi Bradley here 14 today to protect me. 15 MS. CONLIN: Who was that speaking? 16 THE COURT: You just spoke last, 17 Sharon. 18 MS. NELLES: I had to talk over them 19 just to have a shot. 20 And with that said, I just have one 21 very short, short item. 22 THE COURT: All right. Thank you 23 everybody. 24 MS. NELLES: All right. I have, wait, 25 one very quick -- with my lawyer, Heidi Bradley 10119 1 here beside me. 2 THE COURT: Ms. Bradley? 3 MS. NELLES: If I may. I would like 4 to alert the Court that we have investigated 5 that document extensively, 2266, and we were 6 absolutely right as far as -- and I can give 7 the evidence to the Court and to Plaintiffs. 8 There was a series of objections made 9 to that document, both on hearsay, embedded 10 hearsay. One of the embedded hearsay -- the 11 Special Master sustained the embedded hearsay. 12 THE COURT: What was the number of it 13 again? 14 MS. NELLES: One of these -- this is 15 Exhibit 226. 16 MS. BRADLEY: 2266. 17 MS. NELLES: Sorry. Plaintiffs' 18 Exhibit 2266. 19 THE COURT: The entire thing was not 20 admitted? 21 MS. NELLES: No. And then, 22 ultimately, Your Honor, a piece of this came up 23 to you on appeal, on hearsay, but not on the 24 embedded hearsay. 25 So when it all worked itself out, 10120 1 there was one piece of embedded hearsay that 2 became admissible. The document was admissible 3 without a hearsay objection, but there was a 4 large portion of it, embedded hearsay, which 5 was actually the entirety of the first 6 paragraph to which there is a sustained 7 embedded hearsay objection. And it should not 8 have been put out before the Jury. 9 I'm really -- I'm tired. I assume 10 Plaintiffs are, as well. I think we should 11 just at least think about what should be -- how 12 this should be handled and whether it's at 13 issue particularly to this document or whether 14 we need to figure out a better way to handle 15 documents going forward. 16 But, however, we were correct when we 17 raised the -- 18 THE COURT: So some part of it is 19 admissible? 20 MS. NELLES: Some part of it 21 admissible. I have it, and let me show Your 22 Honor what's admissible and I will give this to 23 Plaintiffs, as well. 24 THE COURT: Can you have Carrie make a 25 copy of it for me? 10121 1 MS. NELLES: Absolutely. And I have 2 bracketed -- 3 THE COURT: Is that what's admissible, 4 what you have bracketed? 5 MS. NELLES: What's bracketed is what 6 is not admissible. 7 THE COURT: The red brackets? 8 MS. NELLES: Yes. 9 MS. CONLIN: Can I see that? 10 MS. NELLES: Absolutely. 11 THE COURT: I can either tell the 12 Jury, bring it more to their attention and tell 13 them what not to or I can just let it go. 14 MS. NELLES: No. What I'd like to do, 15 I think, Your Honor, with your permission is 16 just sort of have an opportunity to think about 17 if there's a better way to proceed. 18 And I don't want -- they don't have to 19 preclear what they are going to do with us and 20 I would never suggest that. And we certainly 21 don't want to preclear what we are going to do 22 with them, but, you know, we do have a 23 situation where they're handing us a document 24 as they are putting it on the screen and maybe 25 if we could have a minute to take a deep 10122 1 breath, I think that would be helpful to 2 everybody. So we have a chance to just check 3 before we put them up. 4 MS. CONLIN: Sure. 5 THE COURT: If you guys can work 6 something out, that's fine. 7 MS. NELLES: I think we can work it 8 out. 9 THE COURT: I think this was just an 10 honest mistake. 11 MS. NELLES: Oh, absolutely. No doubt 12 about it. It took us, what, three hours to 13 figure it out. 14 MS. CONLIN: Now I need to understand 15 this, though. 16 It is -- the first highlight, the 17 embedded hearsay -- okay. Here's what I 18 understand. 19 The Special Master said it was 20 hearsay. We appealed that and you agreed with 21 us. So the document is not hearsay. That's 22 number one. 23 There were two embedded hearsay 24 objections. As I understand it, the embedded 25 hearsay objection -- 10123 1 THE COURT: Was sustained? 2 MS. CONLIN: No, only to one, Your 3 Honor. There are two of them. 4 MS. NELLES: Correct. There were two 5 and it was only sustained as to one. 6 THE COURT: Oh, okay. 7 MS. NELLES: And that's the only one 8 I've showed you, bracketed is the one. 9 MS. CONLIN: So the embedded hearsay 10 number one would also be admissible for a 11 nonhearsay purpose, and embedded hearsay number 12 two is admissible for all purposes. 13 So I think that's what you're telling 14 me. Is that a correct understanding? 15 MS. NELLES: I think that's correct, 16 though, I'm not sure I ever heard a nonhearsay 17 use for it. 18 MS. CONLIN: I'm not sure I offered it 19 because I thought the whole thing is in. 20 MS. NELLES: Agreed. 21 And we are not picking on each other. 22 Just let the record reflect we will figure it 23 out. 24 THE COURT: I think you're right. 25 MS. CONLIN: Let's figure it out if we 10124 1 can. 2 THE COURT: Okay. No big deal. Thank 3 you very much. It's a fun day. 4 MS. CONLIN: Honestly, this case has 5 everything. 6 (Proceedings adjourned at 3:51 p.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10125 1 CERTIFICATE TO TRANSCRIPT 2 The undersigned, Official Court 3 Reporters in and for the Fifth Judicial 4 District of Iowa, which embraces the County of 5 Polk, hereby certifies: 6 That she acted as such reporter in the 7 above-entitled cause in the District Court of 8 Iowa, for Polk County, before the Judge stated 9 in the title page attached to this transcript, 10 and took down in shorthand the proceedings had 11 at said time and place. 12 That the foregoing pages of typed 13 written matter is a full, true and complete 14 transcript of said shorthand notes so taken by 15 her in said cause, and that said transcript 16 contains all of the proceedings had at the 17 times therein shown. 18 Dated at Des Moines, Iowa, this 23rd 19 day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25 20 was required to be sent to Plaintiffs' counsel. 21 So, as a result, we turned that 22 information over to Microsoft pursuant to the 23 Court's order of last August, September, July, 24 whenever that was. I just don't remember the 25 date. 10116 1 And so we have not done anything with 2 that information other than to turn it over to 3 Microsoft. Microsoft apparently has been busy 4 contacting the opt-outs and then providing that 5 information to the press. 6 MS. NELLES: Well, Your Honor, 7 certainly it's not Microsoft that's been waging 8 a war in the press. I don't know if Your Honor 9 has had an opportunity to peruse Plaintiffs' 10 website, but it is not us. 11 That said, I do not believe Microsoft 12 -- and I haven't been involved in discussing 13 these issues with the press. I have been very 14 focused on in court, but I believe the opt-out 15 list was filed publicly by Plaintiffs, and that 16 is likely the list that any press has received. 17 But that said, I don't -- there is no 18 confidentiality or rule that I have any belief 19 that anybody at Microsoft has violated in any 20 way, shape, or form. 21 And if Mr. Hagstrom would like to show 22 me something, I certainly would take a look and 23 make sure that everything appropriate is done. 24 And with -- I frankly don't know what 25 else to say. 10117 1 THE COURT: Anything else, 2 Mr. Hagstrom? 3 MR. HAGSTROM: Just two other 4 comments. 5 One, you know, Microsoft, of course, 6 has its own website. It's putting out PR 7 daily. So I don't quite understand Ms. Nelles' 8 comment referencing Plaintiffs. 9 And, secondly, I understand that Ms. 10 Nelles is suggesting that since this 11 information wasn't filed under seal or required 12 to be filed under seal, that it's public. 13 So we're understanding that anything 14 that is not filed under seal apparently is 15 public in this case. 16 THE COURT: Very well. 17 Anything else? 18 MS. NELLES: I will make Mr. Hagstrom 19 and Ms. Conlin the offer right now. If they 20 would like to take down their website, we will 21 take down ours. If you would like to stop 22 trying this case in the press, we will not 23 respond in kind. 24 If they'd like to take me up on it, 25 they know my number, they know my e-mail. I'd 10118 1 like to effect it immediately. 2 THE COURT: Any other issues for the 3 Court to decide? 4 MS. CONLIN: No, Your Honor. But I 5 would say for the record if Microsoft is 6 willing to take down its whole website, then we 7 are going to consider that. 8 MS. NELLES: She always has to have 9 the last word, Your Honor. Just because she's 10 -- always has to have the last word. 11 MR. HAGSTROM: Who's speaking right 12 now? 13 MS. NELLES: I want Heidi Bradley here 14 today to protect me. 15 MS. CONLIN: Who was that speaking? 16 THE COURT: You just spoke last, 17 Sharon. 18 MS. NELLES: I had to talk over them 19 just to have a shot. 20 And with that said, I just have one 21 very short, short item. 22 THE COURT: All right. Thank you 23 everybody. 24 MS. NELLES: All right. I have, wait, 25 one very quick -- with my lawyer, Heidi Bradley 10119 1 here beside me. 2 THE COURT: Ms. Bradley? 3 MS. NELLES: If I may. I would like 4 to alert the Court that we have investigated 5 that document extensively, 2266, and we were 6 absolutely right as far as -- and I can give 7 the evidence to the Court and to Plaintiffs. 8 There was a series of objections made 9 to that document, both on hearsay, embedded 10 hearsay. One of the embedded hearsay -- the 11 Special Master sustained the embedded hearsay. 12 THE COURT: What was the number of it 13 again? 14 MS. NELLES: One of these -- this is 15 Exhibit 226. 16 MS. BRADLEY: 2266. 17 MS. NELLES: Sorry. Plaintiffs' 18 Exhibit 2266. 19 THE COURT: The entire thing was not 20 admitted? 21 MS. NELLES: No. And then, 22 ultimately, Your Honor, a piece of this came up 23 to you on appeal, on hearsay, but not on the 24 embedded hearsay. 25 So when it all worked itself out, 10120 1 there was one piece of embedded hearsay that 2 became admissible. The document was admissible 3 without a hearsay objection, but there was a 4 large portion of it, embedded hearsay, which 5 was actually the entirety of the first 6 paragraph to which there is a sustained 7 embedded hearsay objection. And it should not 8 have been put out before the Jury. 9 I'm really -- I'm tired. I assume 10 Plaintiffs are, as well. I think we should 11 just at least think about what should be -- how 12 this should be handled and whether it's at 13 issue particularly to this document or whether 14 we need to figure out a better way to handle 15 documents going forward. 16 But, however, we were correct when we 17 raised the -- 18 THE COURT: So some part of it is 19 admissible? 20 MS. NELLES: Some part of it 21 admissible. I have it, and let me show Your 22 Honor what's admissible and I will give this to 23 Plaintiffs, as well. 24 THE COURT: Can you have Carrie make a 25 copy of it for me? 10121 1 MS. NELLES: Absolutely. And I have 2 bracketed -- 3 THE COURT: Is that what's admissible, 4 what you have bracketed? 5 MS. NELLES: What's bracketed is what 6 is not admissible. 7 THE COURT: The red brackets? 8 MS. NELLES: Yes. 9 MS. CONLIN: Can I see that? 10 MS. NELLES: Absolutely. 11 THE COURT: I can either tell the 12 Jury, bring it more to their attention and tell 13 them what not to or I can just let it go. 14 MS. NELLES: No. What I'd like to do, 15 I think, Your Honor, with your permission is 16 just sort of have an opportunity to think about 17 if there's a better way to proceed. 18 And I don't want -- they don't have to 19 preclear what they are going to do with us and 20 I would never suggest that. And we certainly 21 don't want to preclear what we are going to do 22 with them, but, you know, we do have a 23 situation where they're handing us a document 24 as they are putting it on the screen and maybe 25 if we could have a minute to take a deep 10122 1 breath, I think that would be helpful to 2 everybody. So we have a chance to just check 3 before we put them up. 4 MS. CONLIN: Sure. 5 THE COURT: If you guys can work 6 something out, that's fine. 7 MS. NELLES: I think we can work it 8 out. 9 THE COURT: I think this was just an 10 honest mistake. 11 MS. NELLES: Oh, absolutely. No doubt 12 about it. It took us, what, three hours to 13 figure it out. 14 MS. CONLIN: Now I need to understand 15 this, though. 16 It is -- the first highlight, the 17 embedded hearsay -- okay. Here's what I 18 understand. 19 The Special Master said it was 20 hearsay. We appealed that and you agreed with 21 us. So the document is not hearsay. That's 22 number one. 23 There were two embedded hearsay 24 objections. As I understand it, the embedded 25 hearsay objection -- 10123 1 THE COURT: Was sustained? 2 MS. CONLIN: No, only to one, Your 3 Honor. There are two of them. 4 MS. NELLES: Correct. There were two 5 and it was only sustained as to one. 6 THE COURT: Oh, okay. 7 MS. NELLES: And that's the only one 8 I've showed you, bracketed is the one. 9 MS. CONLIN: So the embedded hearsay 10 number one would also be admissible for a 11 nonhearsay purpose, and embedded hearsay number 12 two is admissible for all purposes. 13 So I think that's what you're telling 14 me. Is that a correct understanding? 15 MS. NELLES: I think that's correct, 16 though, I'm not sure I ever heard a nonhearsay 17 use for it. 18 MS. CONLIN: I'm not sure I offered it 19 because I thought the whole thing is in. 20 MS. NELLES: Agreed. 21 And we are not picking on each other. 22 Just let the record reflect we will figure it 23 out. 24 THE COURT: I think you're right. 25 MS. CONLIN: Let's figure it out if we 10124 1 can. 2 THE COURT: Okay. No big deal. Thank 3 you very much. It's a fun day. 4 MS. CONLIN: Honestly, this case has 5 everything. 6 (Proceedings adjourned at 3:51 p.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10125 1 CERTIFICATE TO TRANSCRIPT 2 The undersigned, Official Court 3 Reporters in and for the Fifth Judicial 4 District of Iowa, which embraces the County of 5 Polk, hereby certifies: 6 That she acted as such reporter in the 7 above-entitled cause in the District Court of 8 Iowa, for Polk County, before the Judge stated 9 in the title page attached to this transcript, 10 and took down in shorthand the proceedings had 11 at said time and place. 12 That the foregoing pages of typed 13 written matter is a full, true and complete 14 transcript of said shorthand notes so taken by 15 her in said cause, and that said transcript 16 contains all of the proceedings had at the 17 times therein shown. 18 Dated at Des Moines, Iowa, this 23rd 19 day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25