10399 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 XXXVIII 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 8:20 a.m., January 25, 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 10400 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 MICHAEL R. CASHMAN 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 ROBERT J. GRALEWSKI, JR. Attorney at Law 12 Gergosian & Gralewski 550 West C Street 13 Suite 1600 San Diego, CA 92101 14 (619) 230-0104 15 KENT WILLIAMS Attorney at Law 16 Williams Law Firm 1632 Homestead Trail 17 Long Lake, MN 55356 (612) 940-4452 18 19 20 21 22 23 24 25 10401 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY SHARON L. NELLES 3 JEFFREY C. CHAPMAN Attorneys at Law 4 Sullivan & Cromwell, LLP 125 Broad Street 5 New York, NY 10004-2498 (212) 558-3749 6 ROBERT A. ROSENFELD 7 KIT A. PIERSON Attorneys at Law 8 Heller Ehrman, LLP 333 Bush Street 9 San Francisco, CA 94104 (415) 772-6000 10 DAVID SMUTNY 11 Attorney at Law Heller Ehrman, LLP 12 1717 Rhode Island Ave. NW Washington, D.C. 20036-3001 13 (202) 912-2000 14 HEIDI B. BRADLEY Attorney at Law 15 Heller Ehrman, LLP 333 South Hope Street 16 Suite 3900 Los Angeles, CA 90071-3043 17 (213) 689-0200 18 DAVID E. JONES Attorney at Law 19 Heller Ehrman, LLP One East Main Street 20 Suite 201 Madison, WI 53703-5118 21 (608) 663-7460 22 23 24 25 10402 1 BRENT B. GREEN Attorney at Law 2 Duncan, Green, Brown & Langeness, PC 3 Suite 380 400 Locust Street 4 Des Moines, IA 50309 (515) 288-6440 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10403 1 (The following record was made out of 2 the presence of the jury at 8:20 a.m.) 3 THE COURT: Morning. 4 Mr. Tulchin, you wanted to be heard? 5 MR. TULCHIN: Yes. With the Court's 6 permission, Mr. Holley will address this issue. 7 MR. HOLLEY: Good morning, Your Honor. 8 Yesterday there was a request from the 9 Plaintiffs for a curative instruction with 10 regard to a question that Mr. Tulchin asked 11 Mr. Bradford about a lawsuit brought by Lantec, 12 a competing maker of network software, against 13 Novell alleging violations of Section 2 of the 14 Sherman Act. 15 And for various reasons, it's 16 Microsoft's position that no such instruction 17 is warranted. 18 Initially, as Mr. Tulchin pointed out 19 yesterday, various questions by both sides on 20 direct and cross have been objected to in -- at 21 the time, and the Court has either sustained or 22 overruled those objections, and there hasn't 23 been some curative instruction telling the jury 24 that the question was improper. 25 So this would be a departure from 10404 1 normal procedure and would call attention to 2 something which isn't warranted. 3 So that's our procedural objection. 4 On substance, Your Honor, the question 5 was perfectly appropriate because Mr. Bradford 6 testified extensively on direct examination 7 about the fact that Microsoft was investigated 8 both by the Federal Trade Commission starting 9 in 1990 and then by the Department of Justice 10 starting in 1993. 11 And the mere purpose of that testimony 12 being elicited was to suggest to the jury that 13 the fact of those investigations could be -- 14 could give rise to an inference that Microsoft 15 had done something wrong. Otherwise, why was 16 the testimony being elicited. 17 And, of course, the fact of the matter 18 is that the Federal Trade Commission never did 19 anything having, investigated the matter for 20 some time. 21 On two occasions the commission 22 considered the question of bringing enforcement 23 action against Microsoft, and on both 24 occasions, there was a 2-2 vote and the 25 commission did not proceed. 10405 1 So it is not a fair inference that 2 because the government investigated Microsoft 3 that Microsoft had done something wrong. 4 As the Iowa Supreme Court has said in 5 State against Monroe, when lawyers make 6 tactical choices that create inferences that 7 help their clients, they open the door to 8 rebuttal by their adversary. 9 So if Plaintiffs make a choice to 10 suggest through the testimony not only of 11 Mr. Bradford, but also of Mr. Alepin, that 12 Microsoft has been subjected to numerous 13 government investigations and private lawsuits 14 -- and the Court will recall that Mr. Lamb took 15 Mr. Alepin through numerous lawsuits that have 16 been filed against Microsoft in the course of 17 talking about Mr. Alepin's credentials. 18 So the jury has heard all about Sun 19 suing Microsoft and RealNetworks suing 20 Microsoft. 21 And the clear implication of this is 22 that where there's that much smoke, there must 23 be fire. 24 And that -- if that suggestion has 25 been created in the minds of the jurors, it's 10406 1 perfectly appropriate for Microsoft to counter 2 that door opening by noting that other 3 companies that are successful in the 4 marketplace and acquire large market positions 5 are sued by their competitors. 6 It is a routine practice in American 7 business, there is an entire field of study 8 about the strategic use of antitrust litigation 9 against competitors, so it's our position, Your 10 Honor, that there was nothing improper about 11 the question and therefore no need for an 12 instruction. 13 Now if the Court is nonetheless 14 inclined to give an instruction, which we don't 15 think is appropriate, we certainly don't think 16 that the instruction that Ms. Conlin read to 17 the Court yesterday is the appropriate sort of 18 instruction because there needs to be parity on 19 this point. 20 The jury needs to be told, if they're 21 going to be told, that testimony from witnesses 22 on either side about prior investigations and 23 prior litigation should not be assumed to mean 24 that there's any merit to those cases. 25 That was not Mr. Tulchin's suggestion. 10407 1 His point was, and it's a perfectly valid point 2 given what Plaintiffs have done, is that people 3 who are successful in business often get sued. 4 That's the point. 5 But, Your Honor, I'd like -- if I 6 could approach the Court, I'd like to hand up 7 our suggestion -- and I need to give one to 8 Ms. Conlin first -- of the sort of instruction 9 that we would suggest if the Court is inclined 10 to give it and what -- it's a neutral 11 instruction. It would apply to both parties. 12 And it would say that witnesses have 13 testified and will continue, I assume, to 14 testify about government investigations that 15 have been instigated against Microsoft, Novell, 16 and other companies. 17 The existence of these lawsuits or 18 investigations is not proof of any wrongdoing 19 and you are not to conclude from the fact that 20 a lawsuit is brought or an investigation was 21 undertaken that those claims have any merit. 22 So, Your Honor, that -- if an 23 instruction is going to be given, and as I 24 said, we don't believe it's necessary or 25 appropriate, but if it happens, we think it 10408 1 should not be some sort of attack on Microsoft 2 or its counsel. It should apply equally to 3 both parties, and as with all of the Court's 4 other instructions, it should be a neutral 5 statement of the law. 6 That's all I have on that, Your Honor. 7 MS. CONLIN: Your Honor, my request 8 for an instruction was, in fact, a departure 9 from our normal procedure because for the 10 Defendant to ask such a question was a 11 departure from our normal procedure. 12 The purpose of testimony with respect 13 to the FTC and the DOJ was to assure that the 14 witness was not vulnerable on cross-examination 15 to a surprise assertion that he was simply a 16 pawn of the government or the government was 17 simply a pawn of his because DOJ, FTC all over 18 the documents in this matter, Your Honor, with 19 respect to this witness and others. 20 And there is also a difference in that 21 it was Microsoft who was under investigation. 22 Microsoft is a party to this lawsuit. 23 That investigation of the FTC and 24 subsequently the DOJ, as the Court is well 25 aware, forms a part of the basis of this 10409 1 lawsuit. 2 Novell, however, is not a party, and 3 the idea that there needs to be parity, I 4 think, is an erroneous idea. 5 There's not parity of questioning and 6 there therefore should not be parity of -- in 7 connection with the instruction. 8 It was Mr. Tulchin who suddenly out of 9 nowhere brought up this antitrust lawsuit. And 10 the Court will recall it wasn't just that 11 Novell was sued. That's not the point that 12 Mr. Tulchin was making. 13 First he asked, as I recall, what the 14 market share of Novell was, and then he asked 15 the question about the lawsuit, which was, as 16 he carefully pointed out, for antitrust 17 violations. 18 If the Court is not going to instruct 19 on this issue, then -- I, of course, will not 20 do this without asking the Court's permission, 21 but I assume that when I get to the defense 22 case and the defense witnesses are here, I can 23 ask them about the lawsuits against Microsoft. 24 And I'll try to divide them up in some fashion 25 that creates parity among the witnesses. 10410 1 The point that Mr. Tulchin was making 2 and the point that I fear the jury has gotten 3 from the question, even though it was objected 4 to and the objection was sustained, was that 5 Microsoft -- or that Novell was also guilty of 6 antitrust violations. 7 So, Your Honor, I believe that the 8 instruction is warranted, and I think that it 9 can be given, and I think that Mr. Tulchin's 10 questioning of this witness on that issue was 11 highly prejudicial to the Plaintiffs. 12 THE COURT: Anything else? 13 MR. HOLLEY: Your Honor, just briefly. 14 I'm surprised to hear Ms. Conlin say 15 that the investigation by the Federal Trade 16 Commission forms part of the basis of this 17 lawsuit. 18 There is no collateral estoppel as to 19 what is usually referred to as Microsoft I, 20 which is the series of investigations first by 21 the FTC, then taken over by the DOJ, resulting 22 in the consent decree which was signed on the 23 15th of July of 1994. 24 That is entirely separate, that 25 proceeding, from what is frequently referred to 10411 1 as Microsoft II, which is the lawsuit which was 2 begun on the 18th of May of 1998, and that is 3 the only lawsuit that has been -- as to which 4 any findings or conclusions have been given 5 collateral estoppel effect. 6 If the Plaintiffs want to seek to 7 prove the claims that the FTC considered 8 investigated and abandoned, then they have to 9 prove them. That's their obligation, and they 10 can't piggyback on the fact that some 11 government agency looked at these claims. 12 If they do, Your Honor, then we would 13 press again our argument that we are entitled 14 to ask, as we sought to do with Mr. Alepin, 15 witnesses to show that although the FTC looked 16 at FUD, vaporware, integration, and all of the 17 claims relating to DR-DOS, that the Plaintiffs 18 are pursuing here in the exercise of their 19 public interest obligations they decided not to 20 bring those claims. 21 If they want to open the door to that, 22 then we should be able to walk right through 23 it. 24 So I just want to make that point, 25 Your Honor. 10412 1 There is no collateral estoppel effect 2 to anything other than the second DOJ case. 3 The first DOJ case, they have to prove 4 they have no benefit of collateral estoppel. 5 THE COURT: Mr. Holley, what was the 6 case Mr. Tulchin mentioned? 7 MR. HOLLEY: There is a case, Your 8 Honor -- 9 THE COURT: The one he specifically 10 asked? 11 MR. HOLLEY: There is a case brought 12 by a company called Lantec, L-a-n-t-e-c, Your 13 Honor. 14 THE COURT: Okay. And the question 15 about -- to Mr. Bradford was with regard to FTC 16 or government investigation; right? 17 MR. HOLLEY: Those questions were 18 asked by Ms. Conlin on direct. 19 THE COURT: Right. And they were 20 about FTC and the government; right? 21 MR. HOLLEY: That is correct, Your 22 Honor. 23 THE COURT: How is there parity when 24 there's a private company sued? 25 MR. HOLLEY: Because the suggestion is 10413 1 that claims made either by private parties or 2 by the government gives rise to some inference 3 that -- no one said that explicitly, but that's 4 the clear purpose of all of this. 5 The notion is that, you know, if 6 you're investigated, there must be something 7 under there. And frankly, it's much worse when 8 the notion is that the government did it 9 because, you know, everyone can accept the 10 proposition that there are Plaintiffs out there 11 who are off the wall and bring completely 12 frivolous claims. But the jurors are much less 13 likely to believe that the Federal Trade 14 Commission brought some entirely frivolous 15 claim. 16 So in my view, Your Honor, it's 17 actually much worse when the implication is 18 created that, you know, there was a government 19 investigation because people tend to believe 20 that the government doesn't act in a completely 21 irrational way. 22 THE COURT: So according to your 23 interpretation of Monroe, any witness who 24 appears here, they can be asked if they've been 25 sued in any case whatsoever for anything; is 10414 1 that right? 2 MR. HOLLEY: Well, I'm not sure I'd 3 go that far, Your Honor, but I believe a 4 witness -- 5 THE COURT: Wouldn't that be parity? 6 After all, you're being sued. 7 MR. HOLLEY: No, Your Honor. 8 I think the point that I was seeking 9 to make is that a company -- that a witness who 10 works for a company or worked for a company 11 that had a market share within the range that 12 the Court has instructed the jury would give 13 rise to an inference of monopoly power and who 14 has been sued for antitrust violations could be 15 asked whether such a claim was brought because 16 the Plaintiffs have opened the door to that by 17 noting that Microsoft with its high market 18 share has been both sued by numerous 19 competitors and investigated by various 20 government agencies. 21 They didn't have to do that, but they 22 did. 23 THE COURT: Anything else on this 24 issue? 25 MS. CONLIN: Just very briefly, Your 10415 1 Honor. 2 Mr. Holley just made my point in his 3 last remark. 4 Mr. Tulchin did, in fact, say to this 5 witness again and again, you know, when you 6 were complaining every day to the federal 7 government and when you were making all of your 8 complaints to the federal government -- and, of 9 course, we know there's no collateral estoppel. 10 I hope that I was clear to the Court. 11 What I meant when I said forms the basis was 12 that we, in fact, have and have relied on the 13 documents, the statements, the depositions, and 14 so on from that -- those early investigations 15 which were three- or four-fold, as I recall. 16 So, Your Honor, I believe that the 17 instruction is justified and that the record as 18 it stands is highly prejudicial to the 19 Plaintiffs. 20 THE COURT: Anything further? 21 MR. HOLLEY: No, Your Honor. 22 THE COURT: Very well. 23 Court is going to give the following 24 instruction. 25 A question was asked on the 10416 1 cross-examination of Plaintiffs' witness 2 Mr. Bradford regarding Novell being sued by 3 another company or entity. An objection to the 4 question was sustained. 5 You are instructed that you are not to 6 find or infer anything from the question to 7 Mr. Bradford, nor may you speculate as to what 8 the answer may have been regarding any alleged 9 lawsuit against Novell. 10 A copy will be given to the parties. 11 Carrie, I need 11 copies for the 12 jurors, and give two to the parties. Then you 13 can get the jury. 14 MR. HOLLEY: Your Honor, just for the 15 record, I would note that Microsoft objects to 16 this instruction, and it's highly prejudicial 17 to us and not the sort of instruction that the 18 jury should be given in these circumstances 19 just for the record. 20 (An off-the-record discussion was 21 held.) 22 (The following record was made in the 23 presence of the jury at 8:42 a.m.) 24 THE COURT: Everyone else may be 25 seated. 10417 1 Ladies and gentlemen of the jury. 2 Thank you for your patience. We had a matter 3 that's had to be conducted by the Court only 4 and the attorneys. 5 You've been handed Preliminary 6 Instruction No. 36 regarding David Bradford. 7 I'll read it to you real quickly. 8 A question was asked on the 9 cross-examination of Plaintiffs' witness 10 Mr. Bradford regarding Novell being sued by 11 another company or entity. An objection to the 12 question was sustained. 13 You are instructed that you are not 14 to find or infer anything from the question of 15 Mr. Bradford, nor may you speculate as to what 16 the answer may have been regarding any alleged 17 lawsuit against Novell. 18 THE COURT: You may proceed with 19 cross. 20 Mr. Bradford, you're still under oath. 21 MR. TULCHIN: Thank you, Your Honor. 22 DAVID BRADFORD, 23 recalled as a witness, having been previously 24 duly sworn, testified as follows: 25 CROSS-EXAMINATION (CONT'D) 10418 1 BY MR. TULCHIN: 2 Q. Good morning, Mr. Bradford. 3 A. Hello. 4 MR. TULCHIN: May I approach the 5 witness, Your Honor? 6 THE COURT: Yes, you may. 7 Q. Mr. Bradford, I'm handing you 8 Defendant's Exhibit 6776, and this is a 9 memorandum that you wrote, is not, sir? 10 A. Yes. 11 Q. It's a memorandum you wrote around 12 December 3rd, 1991; correct? 13 A. That's right. 14 Q. And it records your notes of your 15 meeting of November 24, 1991, with Bill Gates 16 and Steve Ballmer; right? 17 A. Well, it records the interaction 18 between Darrell Miller and Ray Noorda, not my 19 meeting with Gates and Ballmer. 20 Q. Fair enough. I stand corrected. 21 MR. TULCHIN: Your Honor, we offer 22 Defendant's Exhibit 6776. 23 MS. CONLIN: No objection. 24 THE COURT: It's admitted. 25 MR. TULCHIN: If we could just look at 10419 1 the first page. 2 Q. And again, Mr. Bradford, this is -- 3 those are your initials there next to your 4 name? 5 A. They are. 6 Q. Is that something you commonly did 7 when you were sending a memo to the files at 8 Novell? 9 A. Yes, it is. 10 Q. And it says, results of November 24th 11 meeting with Microsoft. 12 Just below in the first paragraph, it 13 says, on Sunday, November 24, Darrell Miller 14 and Ray Noorda met with Bill Gates and Steve 15 Ballmer at the San Francisco airport. 16 Do you see that, sir? 17 A. I do. 18 Q. And I think you testified briefly 19 about that meeting on direct examination. 20 Do you recall that? 21 A. I think I testified specifically about 22 a Ray Noorda/Bill Gates meeting that occurred 23 earlier in the year. 24 Q. Was it also at the San Francisco 25 airport, is that -- 10420 1 A. Yes. 2 Q. -- maybe why -- 3 A. Yes. 4 Q. Okay, fair enough. 5 And I want to direct your attention 6 for the moment, if I may, to the second page. 7 And you'll see the letter A. 8 You have a heading which says 9 complicating factors, and then there is the 10 letter A, and then, Mr. Bradford, you say this, 11 neither Novell nor Microsoft want the source 12 code which would be shipped to these testing 13 teams to be shared with other parts of the 14 other entities' company. 15 Now, let me just pause there if I may. 16 We're talking about the source code to 17 various software products made either by Novell 18 or by Microsoft; correct? 19 A. That's right. 20 Q. And the source code, of course, is the 21 property of the company that developed that 22 software? 23 A. That's right. 24 Q. And I take it from your memorandum 25 that there had been some discussion at this 10421 1 meeting on November 24, '91, with Microsoft 2 about testing one another's beta versions of 3 software products; correct? 4 A. Well, I assume there was. I wasn't at 5 the meeting, but these are my recollections 6 from what Darrell or Ray told me when they 7 returned. 8 Q. Right, but I skipped over the first 9 page in the interest of time. 10 A. Okay. 11 Q. But that's what's being discussed 12 here, is it not, at least in part? 13 Testing one another's software 14 products so that the two companies could find a 15 way to make each company's software work better 16 with the other company's software? 17 A. I'm sure, among other things, that 18 interoperability was discussed at that meeting. 19 Q. Right. And I think you'll see 20 reference to that on the first page. 21 But so let's go back to point A on 22 page 2. 23 You go on to say, for example, Novell 24 would not want the source code to the NetWare 25 shell to be transferred to Microsoft's LAN 10422 1 manager group. 2 Again, I want to stop for just a 3 moment. 4 The NetWare, of course, is Novell's 5 product? 6 A. That's right. 7 Q. And Microsoft had a competing LAN 8 manager product? 9 A. Correct. 10 Q. And I think what you're saying here is 11 that if the -- if Novell, for example, is to 12 send a beta version of its product to Microsoft 13 for testing, Novell wouldn't want that beta 14 version of the NetWare shell to be used by 15 people at Microsoft who are developing a 16 competing product. 17 Is that what that means? 18 A. I suppose. Again, I'm recording the 19 discussions that Ray and Darrell had with Bill 20 and Steve as opposed to my own personal 21 opinion, et cetera, et cetera. 22 Q. I understand that, but did I state 23 accurately what your sentence is intended to 24 mean; Novell doesn't want the people at 25 Microsoft who are competing, making a competing 10423 1 product at Novell's to get Novell's source 2 code? 3 A. Yes, in general that would be correct. 4 Q. And the other side of it is stated in 5 the next sentence. 6 By the same token, Microsoft would not 7 want the Windows source code transmitted to 8 Novell's Digital Research subsidiary. Is that 9 right? 10 A. All right, uh-huh. 11 Q. Was that a proposition that both 12 companies adhered to over the period that you 13 worked at Novell? 14 Novell didn't want its source code to 15 be used at Microsoft by people making a product 16 that competed with Novell's NetWare, and 17 Microsoft didn't want its operating system for 18 Windows source code to be used by the Digital 19 Research subsidiary of Novell? 20 A. As a general proposition, that's 21 right. 22 Q. Thank you, sir. 23 MR. TULCHIN: Your Honor, may I 24 approach the witness? 25 THE COURT: Yes. 10424 1 Q. I want to hand you next, Mr. Bradford, 2 a memorandum that appears to have been written 3 by John Constant on the 25th of January, 1992. 4 This is Defendant's Exhibit 145. 5 MR. TULCHIN: We offer this document, 6 Your Honor. 7 MS. CONLIN: Your Honor, may we 8 approach? 9 THE COURT: You may. 10 (The following record was made out of 11 the presence of the jury at 8:49 a.m.) 12 MS. CONLIN: Your Honor, here is the 13 memorandum. I have no objection to the 14 document, but where Mr. Tulchin is going is in 15 direct violation of the Court's order with 16 respect to the question of where betas came 17 from and the like, at least that's my 18 understanding. That would be my guess where 19 he's going. 20 I'm at somewhat of a disadvantage, 21 Your Honor, because you'll recall that 22 Mr. Constant came to testify and had to return 23 to England, so he will be back. I don't want 24 this document used for this witness. He knows 25 nothing about it. It's unfair, and it also 10425 1 violates the Court's motion in limine. 2 THE COURT: Go ahead, Mr. Tulchin. 3 MR. TULCHIN: Your Honor, I'm not 4 using this to show that Novell acquired the 5 data in some improper way, only that Novell had 6 it. 7 And the third page -- my only question 8 to this witness is on the third page. There 9 was no objection, by the way, to this document 10 ever lodged, and I didn't think there was 11 anything controversial about it. The document 12 itself doesn't reveal how Novell obtained the 13 beta, and there's no question to this witness 14 on that subject that I plan to ask. 15 But at the very top of the third page, 16 it says test latest Windows 3.1 beta with 17 DR-DOS 6.0. 18 And all I wanted to do was to ask this 19 witness whether, as far as he understood it, 20 Novell had a copy of the Windows 3.1 beta. 21 Your Honor, on direct, of course, this 22 witness said that Novell was injured over a 23 course of years because it didn't get the betas 24 or didn't get them as frequently as other 25 companies. I think this is legitimate cross. 10426 1 I have no intention of violating the Court's 2 order by trying to explore how they got it. 3 MS. CONLIN: Your Honor, I have no 4 objection to him asking the question: Did 5 Novell have access to the betas. 6 THE COURT: Okay. 7 MS. CONLIN: That is a legitimate 8 question. But to use this document with this 9 witness, I don't have an objection to the 10 document, David. I just have an objection to 11 the document being used with this witness who 12 knows nothing about it, and it's just unfair to 13 the witness. 14 MR. TULCHIN: Well, Your Honor, if he 15 knows nothing about it, it will be very brief. 16 He'll say I know nothing about it. 17 THE COURT: Okay. Just stay away from 18 the one thing. Off the record. 19 (The following record was made in the 20 presence of the jury at 8:53 a.m.) 21 THE COURT: Sorry for the delay. 22 You were offering 145? 23 MR. TULCHIN: Yes, sir. 24 MS. CONLIN: No objection. 25 THE COURT: It's admitted. 10427 1 Q. Mr. Bradford, sorry for the delay. 2 If you could look at the third page -- 3 well, let's just look at the first page for a 4 minute. 5 John Constant is somebody you've 6 mentioned in the past; correct? 7 A. Yes. 8 Q. And he worked at Digital Research? 9 A. That's right. 10 Q. And, of course, the other names we've 11 talked about. I think you've mentioned Steve 12 Tucker, Andy Wightman, and John Bromhead 13 before. I'm not sure about Glenn Stephens. 14 A. Right. All DRI employees. 15 Q. Okay. And I just would ask you, sir, 16 to turn to the top of the third page. 17 There's a heading at the top which 18 says Windows 3.X. Do you see that? 19 And just below it, there's an entry 20 that says, test latest Windows 3.1 beta. 21 That's the symbol, is it not, for 22 beta, the Greek beta letter? 23 A. I suppose, but I -- typically, you 24 write beta if you mean beta. 25 Q. But it says, test latest Windows 10428 1 3.1 -- and maybe that's a beta -- with DR-DOS 2 6.0, et cetera. 3 And my only question to you, 4 Mr. Bradford, is whether or not as of January 5 25, '92, the date of this memo, you were aware 6 that Mr. Constant apparently had a copy or 7 Novell had a copy of the latest Windows 3.1 8 beta? 9 MS. CONLIN: Your Honor, I object to 10 the question as compound. 11 THE COURT: Overruled. He can answer 12 if he understands. 13 A. No, I had no personal knowledge of 14 that. 15 Q. Did you become aware at around this 16 time in 1992 that Novell was getting copies of 17 the 3.1 beta, the Windows 3.1 beta? 18 A. Not necessarily. 19 As a general proposition, I remember 20 the companies exchanging betas at some point in 21 time, and we talked ad infinitum about the 22 exchange of betas, so -- 23 But I have no specific recollection of 24 DRI -- again, at this point in time, remember, 25 Digital Research was a separate legal entity 10429 1 from Novell, Inc. They were operating pretty 2 much independently of what we were doing. 3 So I had no recollection of tests, 4 latest Windows 3.1 b, or beta, with DR-DOS 6.0. 5 MR. TULCHIN: May I approach the 6 witness, Your Honor? 7 THE COURT: Yes, you may. 8 Q. I want to give you two documents at 9 the same time, Mr. Bradford. 10 Just at the end of the day yesterday I 11 think one or both of us mentioned contracts 12 between Microsoft and Novell concerning betas, 13 and I've handed you Defendant's Exhibits 3628 14 and 3627. 15 Do you have them, sir? 16 A. I do. 17 Q. Are these indeed contracts between 18 Microsoft and Novell for the beta versions of 19 certain Microsoft products? 20 A. Well, let's read through. 21 I apologize, I don't have my glasses 22 on me. 23 MS. CONLIN: Do you have your glasses? 24 THE WITNESS: I don't have them on me. 25 They're in my coat at the back of the room. 10430 1 MS. CONLIN: Do you want me to get 2 them for you? 3 THE WITNESS: Sure. 4 MS. CONLIN: Because you're squinting 5 like this. 6 A. So Microsoft Corporation nondisclosure 7 agreement. 8 Q. Are you looking at 3628? 9 A. Yes. 10 Q. Maybe we should wait till you get your 11 glasses. 12 A. Well, I think I should read that much. 13 Q. Okay. 14 A. If you want to highlight it for the 15 jury. 16 Q. Well, we can't do it until it's in 17 evidence. 18 A. So Microsoft Corporation nondisclosure 19 agreement is what it says at the top. 20 Q. And then it says prerelease product, 21 and you see where it says product name Chicago? 22 We'll wait for your glasses. I think 23 that will make things easier. And Ms. Conlin 24 is helping us all out. 25 MS. CONLIN: May I approach, Your 10431 1 Honor? 2 THE COURT: You may. 3 A. Good. 4 So, again, this appears to be a 5 nondisclosure agreement that relates to a 6 prerelease version of Chicago. 7 Q. And the prerelease version, that 8 refers to the beta; correct? 9 A. Yes, in all likelihood. 10 Q. And if you look at the last page of 11 3628, you'll see a signature from Richard W. 12 King. Do you see that, sir? 13 A. Yes, I do. 14 Q. And he was a Novell employee? 15 A. Right. He was a vice president in our 16 Novell products group. 17 Q. And this was signed on or about 18 December 10, 1993; is that right? 19 A. Yes. 20 MR. TULCHIN: Microsoft offers 21 Defendant's Exhibit 3628. 22 MS. CONLIN: No objection. 23 THE COURT: It's admitted. 24 Q. Let's look briefly at 3627. We'll 25 come back to the other one. 10432 1 But is this another contract for the 2 beta version of Chicago? 3 A. Again, it's a nondisclosure agreement, 4 as it says at the top, relating to -- and I'll, 5 you know, concede it's probably a prerelease or 6 beta version of Chicago. 7 So I don't know if it relates to a 8 product exchange or it relates to nondisclosure 9 associated thereto. I'd have to look through 10 the document. 11 Q. All right. And then if you'll look at 12 the third page, the last page of Exhibit 3627, 13 you'll see it was signed by someone named David 14 Moon, M-o-o-n, Moon of WordPerfect. 15 Do you see that, sir? 16 A. That's right. Dave was a vice 17 president within our WordPerfect division, and 18 this appears to have been signed May 1994. So 19 either shortly or just before Novell's 20 acquisition of WordPerfect. 21 Q. Okay. 22 MR. TULCHIN: We offer Exhibit 3627, 23 Your Honor. 24 MS. CONLIN: No objection, Your Honor. 25 THE COURT: Admitted. 10433 1 Q. If we could look at 3628 first. 2 That's the 1993 nondisclosure agreement for 3 Chicago. 4 You're familiar with these sorts of 5 agreements or contracts, are you not, sir? 6 A. I'm familiar with nondisclosure 7 agreements, yeah. 8 Q. Okay. And you'll see in the paragraph 9 numbered one, it says, grant of license, and 10 then it says -- and I know there's a lot of 11 legal language here, but -- Microsoft grants 12 company -- and company refers to in this case 13 Novell; is that right? 14 A. Upon receipt, Microsoft, this 15 agreement signed and completed by the 16 individual organization indicated below 17 (company). 18 Okay, so if it's indicated below -- 19 okay, yes. 20 Q. Okay. So Microsoft grants company or 21 Novell the right to use the product -- and the 22 product had been defined as Chicago; right? 23 A. Yes. Operating system and prerelease 24 development kit for that. 25 Q. Right. So that would include the beta 10434 1 for Chicago or Windows 95; correct? 2 A. If these two are equivalent, yes. 3 Q. Okay. 4 A. It says PDK release. Product 5 development kit is what that refers to. 6 Q. Right. Prerelease development kit 7 maybe, PDK? 8 A. Yes. 9 Q. Okay. So Microsoft grants Novell the 10 right to use the -- we'll call it the beta 11 version of Chicago only for the purpose of 12 developing company's -- and then it has a list 13 of products; redirectors, transports, NetWare 14 directory services. I won't read them all, 15 Mr. Bradford, but it goes on. 16 -- to run on, connect to, or 17 interoperate with the product. That would be 18 Chicago; right? 19 A. Right. 20 Q. And testing such Novell products with 21 the beta version of Chicago for evaluating the 22 product for the sole purpose of providing 23 feedback to Microsoft. 24 Do you see that, sir? 25 A. Yes, I do. 10435 1 Q. And then it talks about a biweekly 2 status report to Microsoft by Novell. 3 There's another sentence about the 4 feedback. 5 And then later on in this paragraph, 6 it says, provided that each such copy is used 7 only for the purposes stated above and used 8 only by the authorized individuals listed in 9 Section 4. 10 Do you see that, Mr. Bradford? 11 A. Can he highlight that? I'm sorry. 12 Q. Sure. 13 I don't want to -- if I'm going too 14 fast, I'll stop, because the sentence begins by 15 saying, Microsoft grants company, or Novell, 16 the nontransferrable right to make and use the 17 number of copies as described in Section 3, 18 provided that each such copy is used only for 19 the purposes stated above and used only by the 20 authorized individuals listed in Section 4. 21 Are you with me? 22 A. Yes. 23 Q. And then it goes on, the next 24 sentence -- actually, the one beyond that. 25 Company may not reverse engineer, 10436 1 decompile or disassemble the product's 2 software. Company must cease use of the 3 product upon the earlier of either Microsoft's 4 public release of the commercial version or 5 upon request by Microsoft. 6 And then I want to turn to the -- 7 well, let me ask this question. 8 These are common terms in these kind 9 of beta contracts, are they not? 10 A. Yes. 11 Q. All right. Let's go to the next page 12 -- maybe before we do, just noting Point 3 on 13 the first page, it says, copyright, the product 14 is owned by Microsoft. 15 And that's consistent with what we've 16 talked about before; correct, sir? 17 A. That's right. 18 Q. All right. And then if you go to the 19 second page, which is a continuation of 20 paragraph four, towards the top there is a 21 sentence that begins the names and product 22 development area of the attendees Microsoft may 23 send to a developer conference or identified in 24 Exhibit A. 25 And then it says this, until the 10437 1 product is -- software is commercially released 2 by Microsoft, Novell agrees that the product 3 will not be made available, nor will Novell 4 assign any of the individuals identified in 5 Exhibit A, to the development teams of any 6 directly competing operating system product, 7 including personal NetWare, Novell DOS 8 development (DR-DOS), et cetera. 9 And I just want to stop there. 10 And again, sorry for all this legal 11 language, but what this contract provides is 12 that the beta version of Chicago may be used by 13 Novell for a number of purposes including 14 testing, but the development team for DR-DOS is 15 not authorized to get a copy of the beta 16 correct. 17 A. That's right. Under this agreement of 18 December 1993. 19 Q. All right. And again going back to 20 the document we looked at earlier this morning, 21 your notes of the meeting in San Francisco, 22 which was Exhibit 145, that's consistent with 23 what Mr. Gates and Mr. Noorda talked about at 24 that meeting? 25 A. In general, yeah. 10438 1 MR. TULCHIN: So could we look at 2 Exhibit 3627? 3 Q. And I think we've already identified 4 this as another nondisclosure agreement for the 5 beta version of Chicago. 6 MR. TULCHIN: Let's just go to the 7 first page quickly. Look at the top. 8 Q. And as we discussed earlier, this is 9 from May of 1994 with WordPerfect? 10 A. That's right. 11 Q. And I want to -- well, the grant of 12 license, paragraph one, is substantially the 13 same as in the prior version. Does that look 14 right to you? 15 A. Okay. For purposes of our discussion 16 to move things along, yes. 17 Q. And paragraph three says, copyright, 18 the product is owned by Microsoft, as in the 19 other paragraph; correct? 20 A. Well, let's see. I don't want to be 21 too quick on that. 22 So if we look back on number one, 23 there's a grant of license, and as I just 24 perused I saw the term open doc in it. 25 Q. Right. It's not identical to the 10439 1 paragraph one from the prior document, but 2 speaking lawyer to lawyer, the terms are 3 substantially the same, are they not? 4 And if you don't know, Mr. Bradford, I 5 don't want to spend a lot of time on that. 6 A. Right. For purposes of our discussion 7 today, without going into the details, let's 8 agree that it's substantially the same. 9 Q. Okay. 10 And then let's look at page 2 of 11 Exhibit 3627, the 1994 agreement with 12 WordPerfect. 13 And beginning three lines from the 14 top, you'll see a sentence which begins with 15 the word however. 16 And I just want to draw your attention 17 to that one sentence for the time being. 18 However, in no event shall company, 19 and in this case -- 20 A. Can it get highlighted? I'm sorry. 21 Q. Yes. 22 MR. TULCHIN: Maybe we can, in fact, 23 make that a little larger for Mr. Bradford. 24 THE COURT: Can you see on your screen 25 there? 10440 1 A. With all that language up there, it's 2 hard, unless it's highlighted in yellow. 3 That's great. 4 Q. You got it? 5 A. Yeah. 6 Q. So here the company refers to 7 WordPerfect, Mr. Bradford. Can we agree on 8 that? 9 A. Yes. 10 Q. Okay. And it says, however, in no 11 event shall company -- that is, WordPerfect -- 12 disclose the product or related information to 13 the development teams of any operating system 14 products, including personal NetWare, Novell 15 DOS development (DR-DOS), et cetera. 16 And that's a clause that's similar to 17 the one we saw in 3628? 18 A. Yes. 19 Q. And again this is more or less 20 standard in these nondisclosure agreements 21 pertaining to betas, that one company that's 22 giving a beta to a competing company for 23 testing doesn't want that competing company to 24 actually provide the beta copy to the 25 development teams that are making products that 10441 1 compete with the company that owns the beta; 2 fair enough? 3 A. As a very general proposition, I would 4 agree with that. 5 Q. All right. 6 MR. TULCHIN: May I approach, Your 7 Honor? 8 THE COURT: Yes. 9 Q. I'm handing you Plaintiffs' Exhibit 10 2132. And this is meeting minutes from a 11 meeting of August 18, 1994. 12 MR. TULCHIN: We offer this, 13 Plaintiffs' Exhibit 2132. 14 MS. CONLIN: Your Honor, we have no 15 objection to the document. It's a duplicate. 16 It is our document so we like it. But the -- 17 but there's no foundation for its use with this 18 witness. 19 THE COURT: It's admitted. 20 MR. TULCHIN: Thank you, Your Honor. 21 Q. Just one question about this, 22 Mr. Bradford. 23 MR. TULCHIN: And maybe we could show 24 the first page and -- up to Point Number 2. 25 Q. This is meeting minutes of a meeting 10442 1 called by Dave Miller; correct? 2 A. It appears to be that. 3 Q. And it's dated August 18, '94, and it 4 shows that there was a meeting in Provo, Utah; 5 correct? And I guess Redmond too? 6 A. Looks like a conference call perhaps. 7 Q. Right. 8 A. So there's -- Walnut Creek is actually 9 in northern California. 10 Q. Oh, I see. 11 A. Provo, Utah. Redmond, Washington. 12 Q. Okay. And Item 2 says, the beta 13 agreement has been signed and copies for 14 everyone on the list will go out Fed Ex today. 15 Do you know which beta agreement this 16 refers to? 17 A. I don't. 18 Q. Do you know whether this was an 19 agreement for Novell to get a beta of Chicago? 20 Is that what is being referred to? 21 A. I don't know. 22 Q. Okay. And actually, I do want to ask 23 you one other question about this document. 24 MR. TULCHIN: If we could look at the 25 paragraph numbered six. 10443 1 Q. Microsoft asked why they had not 2 received a beta copy of 4.1 since it began 3 shipping as of August 15, 1994. 4 Now, is it your understanding from 5 looking at this document, Mr. Bradford, that 6 4.1 refers to the NetWare product that Novell 7 was selling? 8 A. Yes, I think that's right. 9 Q. So Microsoft was asking why Microsoft 10 hadn't received a beta copy of NetWare 4.1; 11 correct? 12 A. Yes, that appears to be the question. 13 Q. And apparently, according to these 14 meeting minutes, it was explained that we are 15 not doing our mass beta ship until September 16 and that Microsoft will get a copy of the beta 17 then. 18 And then it says, and we will do about 19 an eight-week cycle. 20 Do you see that, sir? 21 A. Yes. 22 Q. Do you understand, Mr. Bradford, that 23 it's common that beta versions of various 24 software products are sent out to the 25 recipients on various cycles? And here it 10444 1 refers to an eight-week cycle. Would that be 2 more or less common and acceptable? 3 A. Sure. 4 Q. Thank you. 5 MR. TULCHIN: May I approach the 6 witness, Your Honor? 7 THE COURT: You may. 8 Q. I want to hand you, Mr. Bradford, 9 Defendant's Exhibit 2494. 10 And we talked about Mr. Jones 11 yesterday. Mr. Richard Jones was a software 12 engineer, right, at Novell? 13 A. Correct. 14 Q. And this is at the top an E-mail from 15 him dated January 13, 1995. 16 MR. TULCHIN: We offer this document, 17 Your Honor. 18 MS. CONLIN: No objection. 19 THE COURT: 2494? 20 MR. TULCHIN: Yes, sir. 21 THE COURT: It's admitted. 22 Q. And if we look at this, Mr. Bradford, 23 at the very top the E-mail from Mr. Jones says, 24 yes, we discovered that. 25 And to put some context in this, maybe 10445 1 we ought to show the whole thing. 2 Mr. Jones had sent an E-mail to Ben 3 Hendrick. He was at Novell; correct? 4 A. That's right. 5 Q. And then it goes on to say, Jonlu. Is 6 that Jon Ludwig at Microsoft? 7 A. Where do you see Jon -- oh, I see 8 Jonlu. 9 Q. Yeah, I'm looking at the E-mail of 10 January 12 now, towards the bottom. 11 A. Okay. So from Richard Jones to Ben 12 Hendrick, Jodyg, Jonlu. I do not know Jonlu, 13 Jon L-u. 14 Q. Do you see Bobkr? Do you think that's 15 Bob Kruger at Microsoft? 16 A. Yes, that would be my guess. He was 17 the Microsoft representative that worked with 18 the name that's next to his from Novell, Dave 19 Miller. 20 Q. Okay. And from this E-mail, can you 21 tell, sir, whether or not Novell had a beta 22 version of Chicago, Windows 95, on January 12, 23 1995? 24 A. John. So this is from Richard Jones 25 to John. 10446 1 I received the Build 306 CD this 2 afternoon. Thanks. We'll put it up on our 3 server for our team to install tonight. 4 I did get asked if this build requires 5 a beta ID and password as with Build 224. If 6 so, could you please send us that info. 7 So I don't know if you would classify 8 this as a classic beta, but it appears that 9 some form of a program was exchanged. 10 Q. Okay. And then the E-mail at the top 11 says preliminary feedback from the team -- and 12 this is written by Mr. Jones, the software 13 engineer at Novell -- is that it is noticeably 14 more stable than 224. Good work. 15 Do you see that, sir? 16 A. Yes, I do. 17 Q. Does this appear to be an example of 18 Microsoft and Novell cooperating when it comes 19 to the beta versions of Windows 95? 20 A. In this particular instance, yes. 21 Q. Okay. 22 MR. TULCHIN: May I approach the 23 witness, Your Honor? 24 THE COURT: You may. 25 Q. I'm handing you Defendant's Exhibit 10447 1 2508. 2 Now, this contains two E-mails, one 3 from Mr. Stanton at Microsoft and the other 4 from Dave Miller of Novell, to Mr. Stanton. Do 5 you see that, sir? 6 A. Yes. 7 MR. TULCHIN: We offer Exhibit 2508, 8 Your Honor. 9 MS. CONLIN: No objection. 10 THE COURT: It's admitted. 11 Q. Now, Mr. Bradford, just briefly. 12 This is a little later now in January. 13 The E-mails are dated January 24th and January 14 25th, and the prior E-mails were from the 12th 15 and 13th. 16 And the E-mail from Mr. Miller of 17 Novell to Mr. Stanton -- I won't read it all, 18 but he's asking for access to Microsoft's 19 CompuServe forum for Win 95. 20 Do you see that, sir? 21 A. Yes. 22 Q. And then at the bottom, he says, can 23 we do this for this particular case? I 24 understand your sensitivity to allowing 25 everyone access, Dave. 10448 1 Do you see that, sir? 2 A. Yes. 3 Q. Do you understand this E-mail when it 4 talks about sensitivity to allowing everyone 5 access to be a reference to the provision in 6 the contracts, the type of provision in the 7 beta contracts that we looked at earlier where 8 Novell and WordPerfect had agreed that people 9 working on DR-DOS should not get a beta version 10 of Chicago? 11 A. No. I think that would be an 12 overstatement. 13 Q. All right. And then you see 14 Mr. Stanton's response to Mr. Miller at the 15 top, January 24th. 16 And I must say it's a little confusing 17 because normally we see E-mails with the first 18 one at the bottom and the second one at the 19 top, but here the dates don't quite match that, 20 and I just want to make sure I point that out 21 to you because I'm not sure which is first and 22 which is second. The one at the top has the 23 date of January 24th. 24 Mr. Stanton says to Mr. Miller, the 25 private E-mail support provided directly by our 10449 1 Windows 95 development team is the highest 2 level of support available, and we will 3 continue to focus our support for your Windows 4 client development this way. 5 Now, when it talks about Windows 6 client development, do you have any 7 understanding as to what that refers to, 8 Mr. Bradford? 9 A. Let's see. So we're at the top now. 10 The private E-mail support provided 11 directly by our Windows 95 development team -- 12 so that's the Microsoft team. 13 Q. Right. 14 A. -- is the highest level of support 15 available. 16 So this is Paul telling this to Dave 17 Miller. 18 And we will continue, says Paul, to 19 focus our support for your Windows client 20 development this way. 21 And so what that is talking about, to 22 the best of my knowledge sitting here today, is 23 Novell had a product called the NetWare 24 operating system and it built a client for a 25 user interface. And I think it was important 10450 1 that that Novell client interoperate with the 2 Windows operating system. 3 Q. And Mr. Stanton is saying to Mr. 4 Miller, this is the highest level of support 5 available. 6 Is there any reason that you know of 7 to doubt that that was the highest level of 8 support available to a software developer like 9 Novell? 10 A. I have no reason to doubt Paul 11 Stanton's remarks. I don't know Paul, but -- 12 Q. Okay. 13 MR. TULCHIN: May I approach the 14 witness, Your Honor? 15 THE COURT: You may. 16 Q. I'm handing you Plaintiffs' Exhibit 17 2274, and we're now into April 1995. Little 18 bit later in the year. 19 MR. TULCHIN: Your Honor, we offer 20 Plaintiffs' Exhibit 2274. 21 MS. CONLIN: I think, Your Honor, it's 22 already admitted. 23 MR. TULCHIN: Oh, it may be. 24 MS. CONLIN: But if not, we have no 25 objection. 10451 1 THE COURT: Let me check. 2 Very well. It's admitted. 3 MR. TULCHIN: Thank you. 4 Q. Mr. Bradford, Exhibit 2274 is just one 5 page, and there are two E-mails from April 6 1995; correct? 7 A. Correct. 8 Q. And the bottom one from Ben Hendrick 9 at Novell goes to I guess you'd say an alias 10 called Novsup, N-o-v-s-u-p, at Microsoft.com. 11 Do you know what that referred to or 12 who the recipients were under that alias? 13 A. No, I have no idea. 14 Q. You'll see that Mr. Hendrick -- 15 Mr. Hendrick, of course, was with Novell; 16 right? 17 A. Yes, he was. 18 Q. And now we're in April of '95, and the 19 subject is updated Windows 95 builds. 20 And he says, in the spirit of getting 21 regular updates as they become available, I 22 have talked to several Novell external 23 customers and ISVs who received Build 437 24 CD-ROMs and are anticipating Build 440. 25 And I'll skip a little bit. 10452 1 And then he asks, is it possible to 2 have you send the latest build to Richard 3 Jones? 4 Now, there's more, but I want to 5 concentrate on the answer that he gets from Jon 6 Ludwig at Microsoft. 7 MR. TULCHIN: If we could show that. 8 Q. That's later the same day; correct? 9 April 7, 1995, at 10:18 a.m., less than two 10 hours later? 11 A. Okay. 12 Q. And Mr. Ludwig says, you should 13 understand a little about our processes. 14 We send out a lot of intermediate 15 builds in very small batches to address 16 specific bugs that people have raised. The 17 people that get these builds are the ones that 18 have raised the specific bugs. The process is 19 very automated. 20 I just want to stop here. 21 Was it your understanding with the 22 normal process of distributing beta versions of 23 software that not every so-called build went to 24 every beta tester? 25 A. That's probably right. I don't know. 10453 1 You've asked me what's typical out there, and 2 I'm not a software engineer -- 3 Q. I understand. 4 A. -- distributing betas back and forth, 5 so I really don't have a good answer for that. 6 Q. Well, let me be more specific then. 7 Do you know whether Novell itself when 8 it distributed beta versions, let's say of 9 Novell NetWare, sent every build to every 10 single beta tester? 11 A. I think what you do in general in the 12 software industry is you would send a beta out 13 to a small group of people initially. Maybe 14 that's the alpha release or the prebeta release 15 or the beta release. That these releases go 16 out to a small group of people. 17 And then as you get feedback from 18 those people, then you would send out another 19 release, perhaps to a broader set of people. 20 So that's in response, I hope, to your 21 question. 22 Q. Okay. But looking again at this first 23 paragraph of Mr. Ludwig, he goes on to say, we 24 don't broadly distribute these builds to the 25 entire beta program, so you will absolutely 10454 1 hear about people getting builds more current 2 than yours. 3 The more active you are on bug filing, 4 though, the more frequently you will get a 5 build. Honestly, we haven't seen a lot of bug 6 filings from Novell. 7 Now, is this consistent with your 8 recollection of what was going on at the time 9 in April '95 when it comes to Microsoft sending 10 betas to Novell? 11 A. Well, my recollection is that what's 12 extraordinary about these is that these go over 13 a four- or five-year period that both companies 14 have hundreds of products, especially Microsoft 15 had hundreds of products. Novell had, you 16 know, let's say 50 products. 17 And I would think that there would be 18 a lot more of these beta agreements if, in 19 fact, the companies were exchanging lots of 20 betas. 21 So, you know, these are -- relate to 22 specific instances where there was cooperation. 23 Q. Okay. And this is an example of 24 cooperation, Plaintiffs' Exhibit 2274; is that 25 correct? 10455 1 A. It appears to be, yeah. 2 Q. And then just one last point here. 3 We have Novell and a lot of other ISV 4 partners on about a biweekly regular 5 distribution schedule outside of the above 6 process. 7 Do you see that? 8 A. Yes. 9 Q. Was this your understanding that 10 people at Novell were getting betas for Windows 11 95 as did other ISV partners on about a 12 biweekly schedule? 13 A. Well, it looks like if you read the 14 next sentence, it says that we are on daily 15 builds at this point and have been for some 16 time. It doesn't surprise me that the last 17 build you had was 326. You were scheduled to 18 get 340 sent out probably today. 19 So it sounds like some people were 20 getting daily builds and others were getting 21 biweekly builds. That's the way I read that. 22 Q. Biweekly would be, let's say -- 23 A. Every other week. 24 Q. Yeah, every 14 days, and 326 and 340 25 is 14. So if there's a build every single day, 10456 1 if there is, then you'd get it each 14th build; 2 correct? 3 A. Unless you were on the schedule 4 getting one 327, 328, 329, 335. I don't know. 5 Q. Right. Well, I think what Mr. Ludwig 6 says in his E-mail is the people who file bug 7 reports get the specific builds that respond to 8 their bug reports; correct? 9 A. Yes. 10 Q. And what he also says is that Novell 11 and a lot of other ISV partners are on a 12 biweekly schedule; correct? 13 A. Yes, I see that. 14 Q. Do you have any reason to doubt that 15 that's what was going on in April of 1995? 16 A. No, not as it relates to this specific 17 E-mail and build for 326, whatever that is. 18 MR. TULCHIN: May I approach, Your 19 Honor? 20 THE COURT: Yes. 21 Q. Mr. Bradford, I hand you Defendant's 22 Exhibit 2499. This is now a little later in 23 April, April 27, 1995. 24 MR. TULCHIN: And we offer this 25 document, Your Honor. 10457 1 MS. CONLIN: No objection. 2 THE COURT: It's admitted. 3 Q. Again, this is one page, and at the 4 top you'll see there's an E-mail from Richard 5 Jones to Dave Miller and Ben -- I think it's 6 Ben Hendrick. Does that seem right? Ben 7 H-e-n-d? 8 A. Yes, that looks like it would be Ben 9 Hendrick. 10 Q. Right. And just going down a little 11 bit, if we could, there's an E-mail in the 12 middle which says -- it looks like it's from 13 Yvesm, Y-v-e-s-m, at Microsoft -- you will 14 receive Build 450 within two days as well. 15 And then Mr. Hendrick right above that 16 says, E-mail I got from Microsoft. I did not 17 see you guys on the CC line. 18 And then just above that, again, is 19 the E-mail from Mr. Jones to Miller and 20 Hendrick April 27, 1995. 21 Do you recall having seen this before, 22 sir? 23 A. No. 24 Q. Well, Mr. Jones says, we got it a 25 couple of days ago. 10458 1 And that appears to be a response to 2 Mr. Hendrick when he says I did not see you 3 guys on the CC line; right? 4 A. Okay. Maybe walk me through that 5 again, but -- 6 Q. Well, just below that, Mr. Hendrick 7 had said, E-mail I got from Microsoft. That 8 referred to the E-mail from Yvesm on April 24, 9 saying you will receive Build 450 within two 10 days? 11 A. Can I take a second to just read the 12 whole E-mail correspondence so I -- 13 Q. If I go too fast and you need time, 14 just let me know. 15 A. In this particular instance, you're 16 moving pretty quickly. 17 Q. Sorry. 18 A. Okay. 19 Okay, so this appears to be a series 20 of correspondence between Ben Hendrick and 21 someone by the name of Yves at Microsoft and 22 started April 21st, 1995. Ben sends an E-mail 23 to Yves. 24 Yves responds, you will receive the 25 Build 450 within two days. 10459 1 And I'm going from bottom to top now. 2 And Ben does an FYI, I believe to 3 Richard Jones probably in engineering, said 4 hey, look at this E-mail I got from Microsoft. 5 I did not see you guys on the CC line. So he's 6 providing them the information. 7 Q. Right. 8 A. And then Richard responds to Ben, we 9 got it a couple of days ago. 10 So now this is Richard's 11 correspondence of April 27th. So probably on 12 or about the 24th or 25th they got something 13 from Microsoft. 14 Q. Yes. And then Richard Jones, the 15 engineer, says, once a week is plenty good 16 enough for us. We really don't want it more 17 often than that. 18 Do you see that? 19 A. I do. 20 Q. Is that consistent with your 21 understanding that the engineers at Novell 22 didn't want betas more than once a week? 23 A. Well, no. This relates to a very 24 specific product, and it could be product 25 specific. Maybe they want the Windows Chicago 10460 1 beta every day. Maybe they want Build 330 that 2 we referenced earlier, you know, once a week, 3 and maybe they wanted some other things once 4 every two weeks. It would be dependent on the 5 circumstances and where both parties are at in 6 their respective product development. 7 Q. Okay. But in your last answer, you 8 were sort of making some assumptions or maybe 9 some guesses about what was going on? Because 10 I want to know whether you have any specific 11 recollection about this. 12 A. Of this document? 13 Q. Yes, and what was going on -- 14 A. No. 15 Q. -- around April 27, 1995. 16 A. Let's see, that's a very general 17 question. 18 Do you mean do I know what was going 19 on between Novell and Microsoft? 20 Q. With respect to the provision by 21 Microsoft of Windows 95 betas to Novell, that's 22 the subject. 23 A. I don't have any specific recollection 24 of this E-mail exchange or in general of that 25 particular topic that you're addressing. 10461 1 Your question to me said was once a 2 week enough, and I responded that sometimes 3 daily would be great, sometimes once a week 4 might be great, sometimes every two weeks might 5 be fine. It just depended on where the 6 respective parties were in their product 7 development. 8 Q. All right. Well, one last thing about 9 this document. 10 Mr. Jones concludes his E-mail to 11 Mr. Miller and Mr. Hendrick by saying, I need 12 to emphasize to you guys that from our 13 perspective, Microsoft has been very -- all 14 capital letters -- responsive and supportive 15 since January 1995. 16 Now, does this appear to be another 17 instance where Microsoft is cooperating with 18 Novell? 19 A. Yes. And I think what's most 20 interesting there is that very responsive and 21 supportive since January of 1995. In other 22 words, prior to January of 1995 there was 23 definitely a perception that they were not 24 being cooperative. 25 Q. Of course it doesn't say that, you're 10462 1 adding that? 2 A. Yes, I am. 3 MR. TULCHIN: May I approach, Your 4 Honor? 5 THE COURT: You may. 6 Q. Let me hand you Defendant's Exhibit 7 2502. And this at the top -- this has several 8 pages. It's three pages, Mr. Bradford, but at 9 the top its an E-mail from David Thompson at 10 Microsoft to Mr. Hendrick and other people. 11 Do you see that, sir? 12 A. Yes, I do. 13 MR. TULCHIN: We offer this document, 14 Your Honor. 15 MS. CONLIN: May I voir dire the 16 witness, Your Honor? 17 THE COURT: You may. 18 VOIR DIRE EXAMINATION 19 BY MS. CONLIN: 20 Q. Mr. Bradford, you've been very patient 21 about this. 22 None of these documents that you have 23 been shown over the last some time have you as 24 either the person who wrote the E-mail or on 25 the list of those who received the E-mail; is 10463 1 that correct? 2 A. That's correct. 3 Q. And these are E-mails going between 4 the engineering department or the development 5 department of one company to another company; 6 correct? 7 A. That's right. 8 Q. And would you in the ordinary course 9 of your business have anything whatsoever to do 10 with this kind of an exchange? 11 A. No. 12 Q. And would you in the ordinary course 13 of your duties to Novell even see this kind of 14 thing? 15 A. No, not typically. 16 MS. CONLIN: Your Honor, we do not 17 object to the exhibit, but we believe that 18 there is no foundation for the continued use of 19 documents of this sort with this witness who 20 has not seen them and who is not an engineer. 21 THE COURT: Objection is overruled. 22 It's admitted. 23 CROSS-EXAMINATION (CONT'D) 24 BY MR. TULCHIN: 25 Q. Mr. Bradford, looking at Exhibit 2502, 10464 1 and I want to focus your attention towards the 2 top. 3 The date of the first E-mail is 4 October 9, 1995. Now, by this time, Windows 95 5 has been released; right? Because we know it 6 was on your anniversary in 1995. 7 A. That's right. 8 Q. Okay. That was in August. Now we're 9 in October. 10 And just below that there's an E-mail 11 from Mr. Jones, the same Mr. Jones who is a 12 software engineer at Novell, to Jon Ludwig at 13 Microsoft and Yves Michali at Microsoft and 14 also to Mr. Hendrick and other people. And 15 it's dated Monday, October 9, 1995. 16 Do you see that? 17 A. Yes, I do. 18 Q. And he writes to Ben. That must be 19 Ben Hendrick; right? 20 A. Yes. 21 Q. And he says, I had asked Yves Michali 22 for a copy back in July and Jon Ludwig 23 responded and declined the request at that time 24 because they were working out some internal 25 details. I don't believe we have been 10465 1 discriminated against. 2 Do you see that, sir? 3 A. I do. 4 Q. And then below it says, we just 5 haven't asked since July, I will ask again. 6 Right at the bottom. 7 A. Yes, I see that. 8 Q. Now, in connection, Mr. Bradford, with 9 your testimony on direct examination, that 10 Novell you say wasn't getting the betas as 11 frequently as some other companies, did you 12 have occasion to look at this E-mail from 13 Mr. Jones which says I don't believe we have 14 been discriminated against? 15 A. No, I have never seen this E-mail. 16 And, again, it relates to a specific point in 17 time to a specific beta. 18 MR. TULCHIN: May I approach the 19 witness, Your Honor? 20 THE COURT: You may. 21 Q. Mr. Bradford, I'm handing you 22 Defendant's Exhibit 814. 23 And the first page is a fax cover 24 sheet, or so it appears. And if you turn to 25 the second page, there's a memorandum from 10466 1 Mr. Sobin at the law firm of Ablondi & Foster 2 to you of October 21, 1992; is that correct, 3 sir? 4 A. Yes. 5 Q. And you received this memorandum from 6 your lawyers on or about that time? 7 A. To the best of my recollection, yes. 8 Q. I just want to ask you one thing about 9 Exhibit 814, but before I do, let me ask you 10 the general question. 11 Do you recall in 1992 that Dick 12 Williams, who had been president of DRI -- and 13 remember, I think you testified that he left 14 Digital Research in or around April of '92, he 15 resigned? 16 A. That's right. 17 Q. Do you recall hearing that 18 Mr. Williams believed that at least some of the 19 problems that had caused the deteriorating 20 sales of DR-DOS were Novell's fault? 21 A. He may have said that that was a 22 factor. It's not particularly riveting in my 23 mind today, but Dick may have said something -- 24 he was frustrated. 25 Again, during this time period Novell 10467 1 was keeping kind of arm's length from this 2 company that we had purchased, and so Dick may 3 have had a perception that there was fault on 4 Novell's part without having access to all the 5 facts and information about what Novell was 6 doing and the discussions we were having at the 7 time with Microsoft. 8 Q. Well, if I could just ask you to look 9 briefly at the second page. It's the third 10 page of the document, the second page of the 11 memo from Mr. Sobin to you, and just -- I want 12 to see if this refreshes your recollection. 13 If you could just read to yourself the 14 paragraph that is the first full paragraph on 15 the second page. It starts there are obvious. 16 Do you see that? 17 A. Okay. 18 Q. And in particular, the sentence that 19 begins for example. 20 A. Yes. 21 Q. And my question to you, Mr. Bradford, 22 is whether this memorandum to you in October 23 1992 from Mr. Sobin refreshes your recollection 24 that at that time, Dick Williams, the former 25 president of Digital Research, had expressed 10468 1 the belief that at least some of the problems 2 that led to Novell's deteriorating sales had 3 more to do with Novell than Microsoft? 4 A. It refreshes my recollection that Dick 5 thought that some of the problems with respect 6 to deteriorating sales related to Novell's 7 problem and not necessarily Microsoft's. 8 Q. Okay. Thank you. 9 MR. TULCHIN: May I approach the 10 witness, Your Honor? 11 THE COURT: You may. 12 Q. I hand you, sir, Defendant's Exhibit 13 2535 entitled Novell business applications 14 business plan. 15 Do you recall having seen this before, 16 sir? 17 A. No, not immediately it doesn't come to 18 mind, but I may have seen it before. 19 Q. Do you recognize this document as a 20 Novell business application business plan 21 written around April 3, 1995? 22 A. Yes, that's -- that appears to be 23 accurate. 24 It says 1996 to 1998 at the top, so 25 that confused me for a second. But it appears 10469 1 to be someone's writing on April 3, 1995, 2 projecting into the future what we need to do 3 with respect to our applications division. 4 MR. TULCHIN: Your Honor, Microsoft 5 offers into evidence Defendant's Exhibit 2535. 6 MS. CONLIN: No objection. 7 THE COURT: It's admitted. 8 Q. I just want to look at the first page 9 very briefly, Mr. Bradford. 10 As I think you were just saying, this 11 is a business plan, and it does say draft on it 12 at the bottom, draft Novell confidential right 13 at the bottom. 14 A. Yes. 15 Q. But it appears to have been written 16 around April 3, '95, and it pertains to 17 Novell's applications products; correct? 18 A. It appears to be that. 19 Q. So the applications products would be 20 -- it's not DR-DOS. It's WordPerfect and 21 Quattro Pro and maybe suites as well, is that 22 what you would say? 23 A. Yes, uh-huh. 24 Q. All right. And were these kinds of 25 business plans -- you see right at the top it 10470 1 says Novell business applications business 2 plan? Were these type of business plans 3 prepared at Novell from time to time? 4 A. Yes. 5 Q. And if you need time to look at 6 specific portions of this, Mr. Bradford, please 7 take it. 8 But I want to just go up a few pages 9 into this document, and you'll see Roman number 10 III, marketplace analysis, which begins on the 11 page that's numbered page 4. 12 Do you see that, marketplace analysis? 13 A. Yes, I see that. 14 Q. And it talks about customer market 15 analysis, and then if you go all the way into 16 page 8 -- I'm sorry, it's page 9, at the very 17 top, it says, company weaknesses that hinder 18 Novell business applications. 19 Do you see that, sir? 20 A. I do. 21 Q. And in that section, the author of 22 this business applications business plan sets 23 forth weaknesses that are Novell weaknesses. 24 When he says company, he or she, he 25 says company, that refers to Novell; correct? 10471 1 A. That's correct. 2 Q. And then it has a list of Novell 3 weaknesses that hinder Novell business 4 applications. And again we're talking about 5 WordPerfect, we're talking about Quattro Pro, 6 and also suites of applications; is that right? 7 A. All right. 8 Q. And it says lack of ownership on the 9 desktop. Then it says weak development tools. 10 Were development tools important in 11 the success of business applications in 12 competing in the marketplace? 13 A. That's better -- I'm sure they were a 14 factor and important, but better ask a software 15 engineer. 16 Q. Okay. The third bullet point says 17 weak developers' program which has atrophied 18 over the last few years. 19 Do you recall at the time that the 20 developers' program had atrophied at Novell? 21 A. I don't recall that. 22 Q. And then the next point says, weak 23 vis-a-vis Microsoft in perception for corporate 24 strategy, vision, and ability to develop 25 software. 10472 1 Do you see that? 2 A. Yes, I see that. 3 Q. In your role as a member of the 4 executive committee at Novell, was it your 5 understanding at the time in 1995 that there 6 was nothing more fundamental when it comes to 7 success in the software business than corporate 8 strategy, vision, and ability to develop 9 software? 10 A. That was important, certainly. 11 Q. And then it goes on a couple more 12 bullet points, lack of perception among 13 customers that Novell is a corporate strategic 14 partner like Microsoft. 15 Was it your understanding as a member 16 of the executive committee that that was 17 important too? 18 A. I recall it being an important factor, 19 but I don't recall that there was a perception 20 among customers that Novell is a -- was not as 21 good a corporate strategic partner as 22 Microsoft. 23 Q. Okay. Just going down two more -- 24 A. I think it's -- well, we don't know 25 who wrote this or -- right? I don't know who 10473 1 wrote this. 2 Q. Fair enough, Mr. Bradford. 3 A. Right, okay. 4 Keep going. 5 Q. Sure. I'm going to just go to a 6 couple more of these type of things. 7 But two more bullet points down, we 8 talked yesterday about the sales force at 9 WordPerfect, and you'll remember that you 10 mentioned on direct that a number of members of 11 the sales team from the WordPerfect 12 organization had been laid off at the time that 13 Novell bought WordPerfect; right? 14 A. Yes. 15 Q. And here the author of this memorandum 16 says, over 50 percent of sales force does not 17 understand applications, changing but slow. 18 Over 95 percent of sales force does not 19 understand Quattro Pro or electronic publishing 20 tools. 21 Now, that sounds pretty basic, does it 22 not, for a company trying to sell software that 23 your sales force understand the products? 24 A. That would be important. 25 Q. And then if we can look at the bottom 10474 1 half of the page, the top half was a reference 2 to company weaknesses, and the bottom half 3 talks about division (group) weaknesses. 4 Do you see that? 5 A. Yes, I do. 6 Q. And the first bullet point says, third 7 to suite market. Microsoft has enormous 8 momentum. 9 Microsoft was the first to come out 10 with a suite; correct? 11 A. I'm not sure. 12 Q. Did you recall that -- 13 A. I'm not sure. They were certainly one 14 or two. I don't know if someone came out with 15 a suite before Microsoft. 16 Q. Okay. 17 A. But this appears that this author, 18 whoever it is, says that we were third to suite 19 market. 20 Q. Right. And the next bullet point 21 says, still recovering from WordPerfect 6.0 for 22 Windows which was perceived as a slow and buggy 23 product. 24 Do you recall that, that the 25 WordPerfect 6.0 product was perceived in the 10475 1 marketplace as slow and buggy? 2 A. No, but I'd have to think that if it 3 was, it related to some extent to the fact that 4 we couldn't get betas application programming 5 interfaces, et cetera, from Microsoft. 6 Q. And let's go down a little bit 7 further. 8 Weak development environment for 9 Perfect Office. Now, Perfect Office was the 10 Novell suite that was supposed to be competing 11 with Microsoft Office; correct? 12 A. That's correct. 13 Q. What is this a reference to, if you 14 know, sir, weak development environment? 15 A. I don't know sitting here today what 16 this author had in mind there. 17 Q. All right. Towards the bottom of the 18 page, it says, weak at localization compared to 19 Microsoft and Lotus. 20 And I just want to pause on this. 21 Is localization a reference to the 22 fact that in countries around the world, 23 software is written for the language that's 24 used in those particular countries? 25 A. That's right. 10476 1 Q. So let's say in portions of South 2 America, your software product would actually 3 be in Spanish? 4 A. That's right. 5 Q. And localization just means you're 6 writing for the local language? 7 A. That's right. 8 Q. And was it your recollection around 9 1995 that Microsoft and Lotus both were much 10 better at putting their English version 11 software products in local languages than 12 Novell had been? 13 A. No, I don't have an understanding on 14 that. 15 Q. You don't have an understanding one 16 way or another? 17 A. That's right. 18 Q. Okay. 19 MR. TULCHIN: Your Honor, I don't know 20 if it's too early for the break, but this is a 21 good time for me if it suits the Court. 22 THE COURT: Sure. We'll take our 23 recess at this time. 24 Remember the admonition previously 25 given. We'll be in recess for ten minutes. 10477 1 Leave your notebooks here. Thank you. 2 (A recess was taken from 9:50 a.m. 3 to 10:14 a.m.) 4 THE COURT: Everyone else may be 5 seated. 6 Mr. Bradford, you're still under oath. 7 MR. TULCHIN: May I approach the 8 witness, Your Honor? 9 THE COURT: You may. 10 BY MR. TULCHIN: 11 Q. Mr. Bradford, I'm handing you what 12 we've marked as Defendant's Exhibit 6787A. And 13 these are pages from -- it's not the full 14 document, but certain pages from a Form 10-K 15 filed with the Securities and Exchange 16 Commission by Novell. 17 Do you recognize this, sir? 18 A. Yes, in general. 19 Q. Could you explain to the jury what a 20 Form 10-K is? 21 A. When there is a -- let's see, so the 22 10-Q -- so this is an annual report. 23 Q. Yes, sir. 24 A. An annual report to stockholders about 25 the company's work. 10478 1 Q. And this particular one, Mr. Bradford, 2 was for the Novell's fiscal year ended October 3 29, 1994; correct? 4 A. I'm looking to find that date. I'm 5 sorry. 6 Q. Just on the first page under the words 7 Form 10-K, there's three lines, and the third 8 one says for the fiscal year ended October 29, 9 1994? 10 A. I'm looking above that, and this looks 11 like as of December 31, 1994. 12 Q. Well, let me back up one step. 13 Novell's fiscal year at the time ended 14 in late October; correct? 15 A. Yes, that's right. 16 Q. And I know there's a reference to the 17 number of outstanding shares as of December 18 31st -- 19 A. Right. 20 Q. -- '94. 21 A. Okay. 22 Q. But this is for the fiscal year ended 23 late October, 1994; correct? 24 A. That's right, correct. 25 MR. TULCHIN: Your Honor, Microsoft 10479 1 offers Defendant's Exhibit 6787A. 2 MS. CONLIN: No objection. 3 THE COURT: Admitted. 4 Q. And, Mr. Bradford, the Form 10-K is 5 prepared by Novell; is that right? 6 A. That's correct. 7 Q. And as the general counsel of Novell 8 at the time, would it have been part of your 9 duties and responsibilities to review at least 10 portions of the Form 10-K to make sure that 11 they were accurate and appropriate? 12 A. Yes. 13 Q. Did you review the portions of the 14 Form 10-K, the pages that make up Defendant's 15 Exhibit 6787A? 16 A. I don't know sitting here today if I 17 reviewed these particular ones, but typically, 18 I would peruse the entire 10-K. 19 Q. To make sure it was accurate before it 20 was filed; is that right? 21 A. That's right. 22 Q. What I want to do for the moment is to 23 -- well, let's look just at the first page for 24 a minute. 25 And at the top it says, Securities and 10480 1 Exchange Commission, and that's a part of the 2 federal government in Washington; correct? 3 A. That's right. 4 Q. And then Form 10-K, and just under 5 that, there are those three lines I was 6 referring to, annual report -- there's an X 7 there -- annual report pursuant to Section 13 8 or 15D of the Securities Exchange Act of 1934, 9 for the fiscal year ended October 29, 1994. 10 And then I want to direct your 11 attention to page 9 of the document. It's the 12 fourth page of the exhibit, again, 6787A. 13 The first full paragraph starts, in 14 the market for Microsoft Windows word 15 processing applications. 16 Do you see that? 17 A. Yes, I do. 18 Q. I know this is a little -- the type -- 19 the print face is very small, but this 20 particular paragraph talks about applications 21 products like suites and word processing 22 applications and spreadsheet applications; 23 correct? 24 A. Yes. And so this is under -- just to 25 get the document right, this looks like under 10481 1 the competition section. 2 Q. Correct. 3 A. Okay. 4 Q. Yes, on page 8, the previous page, the 5 section is entitled competition. 6 A. Right. 7 Q. And I want to direct your attention in 8 this paragraph, about halfway down there's a 9 sentence that begins in addition. 10 In addition, the company's principal 11 competitors, including Microsoft, are combining 12 a number of application programs in a bundle or 13 suite for sale as one unit or arranging with 14 hardware manufacturers to preload application 15 programs on new computers. 16 Do you see that, sir? 17 A. Right. 18 Q. And at the time, of course, by the end 19 of -- sorry, I think we talked yesterday about 20 the fact that as of October '94, Novell had not 21 yet come out with its suite that competed in 22 this market; correct? 23 A. Yes, I think that's accurate. 24 Q. And then it goes on to say, the price 25 for a bundle or suite is typically 10482 1 significantly less than the price for 2 separately purchased applications and many end 3 users are likely to prefer the bundle or suite 4 over a more expensive combination of other 5 individually purchased applications, even if 6 the latter applications offer superior 7 performance or features. 8 Do you see that, sir? 9 A. Yes. 10 Q. And is it your recollection of the way 11 your responsibilities worked at Novell at the 12 time that this is a sentence that you would 13 have reviewed and approved before Novell filed 14 the 10-K with the Securities and Exchange 15 Commission in Washington? 16 A. Well, if we had the full document 17 here, I think we would see that it's probably a 18 very lengthy one -- 19 Q. It is. I have the full one if you 20 want it. 21 A. -- with all of the attachments and so 22 forth. 23 But to say I reviewed this particular 24 sentence on that particular day, I can't 25 testify to that today. 10483 1 But typically, I would have, like I 2 said, perused the whole thing for accuracy. 3 Q. And is it, let's say, consistent with 4 your understanding today that as of 1994 the 5 statement that I just read about suites was 6 true and correct? 7 A. Yes, that's generally accurate. We 8 talked about that yesterday. 9 Q. Right. And then it says, Microsoft, 10 Lotus and the company offer bundles or suites 11 of their respective products at prices 12 significantly discounted from the prices of 13 stand-alone products. 14 Do you see that, sir? 15 A. Yes, I see that. 16 Q. And would you agree with me that 17 that's something that was good for consumers? 18 A. Yes, definitely. 19 If that were always the case, that was 20 definitely a positive for consumers. 21 Q. Okay. And looking at the last page of 22 Exhibit 6787A, would you agree that this Form 23 10-K was signed by Mr. Frankenberg, the CEO, 24 and also by the other members of the board of 25 directors of Novell? 10484 1 A. Well, looking down, you've got Bob 2 Frankenberg, who was the CEO; Jim Tolonen, who 3 was the CFO, the chief financial officer; and 4 then you had Steve Wise, who was vice president 5 of finance at the time; and then, yes, the 6 other members that have signed this were 7 members of the Novell board of directors at the 8 time. 9 Q. Thank you, sir. 10 MR. TULCHIN: May I approach, Your 11 Honor? 12 THE COURT: You may. 13 Q. I'm handing you, Mr. Bradford, 14 Defendant's Exhibit 6790A. 15 And, again, this isn't the full 16 document, this is an excerpt. If you want the 17 full document, it's in the courtroom and we'll 18 show it to you. 19 But this is the -- these are pages 20 from Novell's 1997 annual report; correct, sir? 21 A. It appears to be that. Yes, annual 22 report to our stockholders, all right. 23 Q. Right. And is the annual report 24 typically mailed out to the stockholders of 25 record of Novell? 10485 1 A. That's right. 2 Q. And that would be done once a year? 3 A. That's correct. 4 Q. Now, in this case -- oh, let me -- 5 sorry. 6 MR. TULCHIN: Your Honor, Microsoft 7 offers Defendant's Exhibit 6790A. 8 MS. CONLIN: No objection. 9 THE COURT: It's admitted. 10 Q. The first page of the exhibit, 11 Mr. Bradford, is just the cover of the annual 12 report; correct? 13 A. That's right. 14 Q. And typically the chief executive 15 officer, the CEO of Novell, during the period 16 you were general counsel would write a letter 17 to stockholders that would be included as part 18 of the annual report; correct? 19 A. That's right. 20 Q. This 1997 annual report has a letter 21 to stockholders that was signed by Doctor Eric 22 Schmidt. 23 A. Right. 24 Q. Isn't that right? 25 A. Yes. 10486 1 Q. And if we could look at the last page 2 of the document, that's Doctor Schmidt's 3 signature there, is it not? 4 A. Yes. 5 Q. And I think you testified on direct 6 that when you resigned in the year 2000, you 7 went into Doctor Schmidt's office and tendered 8 your resignation? 9 A. That's right. 10 Q. Doctor Schmidt was the man who took 11 over from Bob Frankenberg as the CEO? 12 A. Yes. There was an interim period 13 there where there was no CEO assigned, but, 14 yes. 15 Q. He was the next CEO after Mr. 16 Frankenberg? 17 A. Yes. 18 Q. Okay. And the letter that went out to 19 the stockholders as part of the annual report, 20 was this also something that you reviewed and 21 commented on before it was included and sent 22 out to the stockholders? 23 A. Yes, it was. 24 MR. TULCHIN: Could we look at the 25 second page of the document, the first page of 10487 1 Doctor Schmidt's letter, which is entitled to 2 our shareholders. 3 Q. And right at the top, Doctor Schmidt 4 says -- there's a little bit of an arrow. And 5 this is how he starts out the 1997 letter to 6 stockholders. Clarity of direction and 7 strategy are essential for software companies 8 to sustain growth. 9 Now, let me just stop there, 10 Mr. Bradford. 11 I think you and I agreed you testified 12 that clarity of direction and strategy are 13 essential for software companies. 14 A. That's right. 15 Q. And then Doctor Schmidt goes on to 16 say, the Novell that I joined in April of 1997, 17 midway through the company's fiscal year, had 18 lost touch with this simple truth. In seven 19 months we have corrected that. 20 My question to you, Mr. Bradford, is 21 whether or not you agree that as of April 22 1977 -- 23 THE COURT: '97? 24 MR. TULCHIN: What did I say, Your 25 Honor? 10488 1 THE COURT: '77. 2 THE WITNESS: We're back in college. 3 MR. TULCHIN: I'm 20 years off, and I 4 apologize to all concerned. 5 Q. I'm going to ask my question again. 6 Do you agree, Mr. Bradford, with 7 Doctor Schmidt's statement here that as of 8 April 1997, Novell had lost touch with the 9 simple truth that clarity of direction and 10 strategy are essential for Novell to sustain 11 growth? 12 A. I think it was a bit of an 13 overstatement. He's trying to communicate 14 effectively with the stockholders. But in 15 general, certainly Doctor Eric Schmidt had a 16 concern on that issue. 17 Q. And it was correct, was it not, that 18 as of 1997, Novell had lost touch with the idea 19 that clarity of direction and strategy were 20 important for its growth? 21 A. Again, I think that's an 22 overstatement. 23 MR. TULCHIN: Thank you, Mr. Bradford. 24 Nothing more on cross, Your Honor. 25 THE COURT: Very well. Redirect. 10489 1 MS. CONLIN: Thank you, Your Honor. 2 REDIRECT EXAMINATION 3 BY MS. CONLIN: 4 Q. Let's stay with this document for a 5 moment, if we could. 6 A. Okay. 7 Q. Doctor Eric Schmidt, for what period 8 of time was he Novell's CEO? 9 A. Approximately four years, five years, 10 perhaps. 11 Q. And came in '97, left in -- 12 A. 2001 or 2002. 13 Q. What is his current position, do you 14 know? 15 A. Yes. He is lucky enough to be 16 chairman and CEO of Google. 17 Q. And I have a few questions -- I better 18 not say that. I have more than a few questions 19 for you. 20 A. Okay. 21 Q. We won't cover every topic, but there 22 are some that I think deserve attention. 23 First of all, let's begin with 24 Defendant's Exhibit 6770. Do you remember, the 25 document is the Arnold & Porter list of OEMs 10490 1 who have -- 2 MS. CONLIN: May I approach, Your 3 Honor? 4 THE COURT: Yes. 5 Q. -- who have licensed the DR-DOS 6 product? 7 A. Yes, I see that. 8 Q. Do you know approximately, in this 9 time frame back in the early '90s, 10 approximately how many computer hardware 11 manufacturers there would have been in the 12 world? 13 A. Well, as I recall, we talked about 247 14 here. I would guess, and this is just an 15 estimate, 10,000. 16 Q. Do the top 20 or so of those 10,000 17 OEMs sell 80-plus percent of the computers that 18 are sold? 19 A. Yes, that's my understanding. 20 Q. So on that list, Mr. Bradford, are 21 there any of the top 20 that DRI has managed to 22 secure as customers? 23 A. I could look at it in detail, but I 24 really doubt it. 25 Q. All right. Don't look at it in 10491 1 detail. 2 A. Okay. 3 Q. I want to talk with you also about 4 Mr. Noorda and his health and your concerns 5 about it. 6 Did you in 1993 -- 1992, 1993, 1994, 7 until April when he left the company, did you 8 feel that Mr. Noorda continued to be capable of 9 running Novell? 10 A. Certainly, yes. 11 Q. If a point had come before his 12 voluntarily leaving where you felt he was not, 13 what would your obligation have been? 14 A. Report it to the board of directors. 15 Q. Did you ever do that? 16 A. No. 17 Q. And would you have done that if, in 18 fact, you doubted his ability to proceed as 19 CEO? 20 A. Yes. 21 Q. And then he stepped down in April of 22 1994; correct? 23 A. That's right. 24 Q. After that and based on your 25 continuing contact with him, did his state of 10492 1 mental health get better or worse? 2 A. It got worse. 3 Q. All right. You were also asked about 4 some questions with regard to the revenue of 5 Novell in the mid '90s. 6 Do you recall those questions? 7 A. Yes, in general. 8 Q. And I believe that Mr. Tulchin 9 provided to you a number of approximately $2 10 billion in sales revenue for Novell. 11 Do you recall that. 12 A. Yes, I do. 13 MS. CONLIN: If I may approach, Your 14 Honor? 15 THE COURT: You may. 16 MS. CONLIN: May I give the Court a 17 copy, as well? 18 THE COURT: Thank you. 19 Q. Do you recognize this, Mr. Bradford, 20 as an annual report that Novell provided to the 21 SEC? It's actually not the whole report. It 22 is only a tiny section of it. 23 A. I think what this is is a Microsoft -- 24 Q. I'm sorry, Microsoft. 25 A. -- SEC filing. 10493 1 Q. That would be correct; I'm sorry. 2 So Exhibit 4220, which is admitted, is 3 the annual report of Microsoft -- it's so hard 4 to see the dates on these -- for the fiscal 5 year ended June 30th, 1999? 6 A. Yes. Okay, I see that at the top. 7 Q. If you'll turn to the one page that I 8 have attached and look to the bottom table, the 9 year ended June 30th, and you will see a series 10 of numbers there in the billions. 11 A. Yes. 12 Q. All right. And so for the year 1995, 13 if Novell had $2 billion in sales, Microsoft 14 had about three times that many, 6 billion 75 15 million; correct? 16 A. That's right. 17 Q. And then for the year '96, 9 billion? 18 A. Right. 19 Q. For the year '97, 11 billion? 20 A. Yes, almost 12 billion. 21 Q. All right. And then for the year '98, 22 15 billion? 23 A. Yes. 24 Q. And for 1999, nearly 20 billion; 25 correct? 10494 1 A. That's right. 2 Q. Mr. Tulchin also talked with you about 3 the merger talks that Novell had with Lotus. 4 Do you recall those conversations? 5 A. Yes, I do. 6 Q. And Mr. Tulchin insisted that they had 7 occurred in 1991. Do you recall that? 8 A. Yes. 9 Q. And your memory was that they occurred 10 in 1990? 11 A. That's right. 12 Q. And that they were long over before 13 any communications with Microsoft began with 14 that phone call from Bill Gates? 15 A. That's right. 16 Q. Let me show you Exhibit 10017. 17 MS. CONLIN: May I approach the 18 witness, Your Honor? 19 THE COURT: Yes. 20 MS. CONLIN: May I show the Court a 21 copy, as well? 22 THE COURT: Yes, thank you. 23 Q. What I've handed you, Mr. Bradford, is 24 an article from the Microsoft library. It is 25 an IDC PC software -- to IDC PC software 10495 1 clients. And do you recall what IDC is? 2 A. Yes. It's an industry analyst group. 3 Q. All right. And this is dated April 6, 4 1990? 5 A. Correct. 6 Q. Not '91? 7 A. That's right. 8 Q. And the headline is Lotus and Novell 9 agree to merge. Do you see that? 10 A. Yes, I do. 11 MS. CONLIN: Your Honor, Plaintiffs 12 would offer Exhibit 10017, not for the truth of 13 the matter asserted, but as a document from the 14 Microsoft library that Microsoft was aware of, 15 and also for the purpose of establishing the 16 date of the public notice of these merger 17 discussions. 18 MR. TULCHIN: On that basis, Your 19 Honor, we have no objection. 20 THE COURT: It is admitted. 21 Q. And you can see that the headline is 22 Lotus and Novell agree to merge, and then if we 23 could look just at the first sentence, Lotus 24 Development Corporation and Novell announced -- 25 today announced -- actually it says today 10496 1 announced today an agreement to merge the two 2 companies. 3 Is that consistent with your 4 recollection? 5 A. Yes, it is. 6 Q. And the talks with Microsoft first 7 merger talks -- that very first thing that 8 started in November of 1989, that's over at 9 that point? 10 A. Right. That ended approximately 11 January of 1990, and then we started 12 discussions with Lotus after that, and those 13 began April 6 of 1990, and the discussions -- 14 the merger -- a tentative agreement with Lotus 15 to merge stopped about a month later, sometime 16 in May of 1990. 17 Q. I have that too. 18 A. Okay, I'm sorry. 19 Q. But I think you may have misspoken. 20 You said the merger talks started on April 6, 21 and, in fact, that's when the letter of intent 22 was signed; correct? 23 A. That's correct. 24 Q. Right. And then let me show you, if I 25 may, Plaintiffs' Exhibit 10016. 10497 1 MS. CONLIN: May I approach, Your 2 Honor? 3 THE COURT: Yes. 4 Q. And this is an article from USA Today, 5 and the date is 5-21-91. And -- I beg your 6 pardon. It's '90. 5-21-90. 7 And is this article consistent with 8 your recollection of the date when the Lotus 9 and Novell merger talks collapsed? 10 MR. TULCHIN: Your Honor, mine says 11 '91. I don't know when this article was 12 published, but it -- I read this as '91. 13 MS. CONLIN: That is not correct. I 14 have a number of other articles, Your Honor. 15 If you will just give me a moment to find them 16 here in my -- 17 THE COURT: Sure. 18 MS. CONLIN: I have no idea what 19 number, and I have only one copy of these. 20 Perhaps I could show these to 21 Mr. Tulchin for the purpose of establishing the 22 date. 23 May I do that, Your Honor? 24 THE COURT: Yes. 25 MS. CONLIN: It is a bit hard to read. 10498 1 Can we stipulate the date the merger 2 collapsed was 5-21-90? 3 MR. TULCHIN: Your Honor, I don't know 4 one way or another. I see what's written in 5 hand on those documents. I don't know the 6 date. 7 MS. CONLIN: I will provide additional 8 information about this, Your Honor. 9 THE COURT: Okay. 10 MS. CONLIN: But I would at this point 11 offer into evidence Plaintiffs' Exhibit 10016 12 for the same purpose; that is, to show the date 13 on which the Lotus/Novell deal collapsed. 14 MR. TULCHIN: I have no objection to 15 the document, Your Honor. 16 THE COURT: It's admitted. 17 Q. I believe I already asked you this, 18 but 1990, that was your recollection then and 19 now? 20 A. Absolutely it was 1990 to be clear. 21 Q. And I believe the intent of the 22 questioning of you on that matter was for the 23 purpose of indicating that like Microsoft, if 24 these talks with Lotus had occurred in the time 25 frame that Mr. Tulchin provided to you, then 10499 1 you, too, would have been involved in two 2 merger talks at the same time; correct? 3 A. That's right. 4 Q. But that was not the case? 5 A. That's correct. 6 Q. At the time that you and Novell were 7 discussing the possibility of merger, was that 8 the only merger that was under active 9 discussion at that time? 10 A. Yes. Of course, Microsoft knew about 11 the merger with Digital Research and so -- 12 Q. That had -- 13 A. That had already been announced and a 14 letter of intent had been signed, and Microsoft 15 knew about that. 16 MS. CONLIN: Could we put up the time 17 line again for the purpose of orienting 18 ourselves to the dates? 19 Can it go on this other one? 20 Q. I want to talk with you also about 21 Mr. Williams' departure from the company. 22 A. Sure. 23 Q. Can you explain why it was necessary 24 or why the people involved in those merger 25 discussions with Microsoft felt it was 10500 1 necessary to keep Mr. Williams in the dark 2 about it? 3 A. Well, certainly. 4 Again, as we discussed the last couple 5 of days, you want to keep merger discussions to 6 as narrow a group as possible, and we wanted 7 Dick Williams' complete focus on running 8 Digital Research without being distracted by 9 other discussions that were ongoing with 10 Microsoft. 11 Q. And he was not among the group, the 12 very narrow group that was actually involved in 13 the negotiations? 14 A. Right, that's correct. 15 Q. I also want to revisit with you a 16 topic that Mr. Tulchin took some time with you, 17 and that is the issue of the payment by the 18 plaintiff class for your time. 19 Do you recall, Mr. Bradford, when we 20 first spoke whether you asked me to pay you or 21 whether I offered to make payment for your time 22 devoted to this matter? 23 A. You offered to pay for my time. 24 Q. And I offered to compensate you for 25 any losses sustained as a result of your taking 10501 1 the time that you might otherwise be involved 2 in some other activity, perhaps even more 3 pleasant than this one? 4 MR. TULCHIN: Objection to leading, 5 Your Honor. 6 THE COURT: Sustained. 7 Q. If you were not here today, would you 8 be -- what would you be doing? 9 A. I would be running my new company and 10 spending time doing that, which would probably 11 be distinctly more pleasant than this. 12 Q. All right. Hard for me to believe 13 that. 14 Did the -- and I assume that you would 15 be -- would you state whether or not you would 16 be involved in income-generating activity on 17 your own behalf and on behalf of your company 18 if you were not here in Des Moines for four 19 days on the stand? 20 A. Yes, I would be. 21 Q. Did the -- 22 A. I would also be spending time with my 23 grandkids when I get a chance. 24 Q. That is not income generating, is it? 25 A. Well, eventually I hope they support 10502 1 and sustain me, but right now, no, my 2 eight-year-old grandson, my two-year-old 3 granddaughter's not income generating. 4 Q. Did the offer that we made to pay for 5 your time spent assisting in this case and 6 providing testimony influence your testimony in 7 any way? 8 A. Absolutely not. 9 Q. Did it make it possible for you to set 10 aside the other business matters and come here 11 and provide the information that you have to 12 this jury? 13 A. It assisted, certainly. 14 Q. Did it seem to you like a fair thing 15 to do? 16 A. Oh, yes. 17 Q. Let me also correct something that was 18 said I think yesterday. 19 When you bought -- this is back in 20 July of 1991. 21 When you and DRI entered into your 22 letter of intent and then in November when the 23 merger was completed, was a product produced by 24 Digital Research called Gem, G-e-m, on the 25 market? 10503 1 A. I don't recall today if that was 2 actually on the market. It was certainly, as I 3 recall, under product development. 4 Q. Well, tell the jury what Gem was. 5 A. Gem was going to be or was a graphical 6 user interface to sit on top of the DRI 7 operating system, DR-DOS, as I recall. 8 MS. CONLIN: Now, I would like to move 9 to Defendant's Exhibit 814, which, Your Honor, 10 the Defendant did not offer, but we would. 11 THE COURT: Any objection? 12 MR. TULCHIN: I don't know what it is, 13 Your Honor. Sorry. 14 MS. CONLIN: It's the one you used, 15 David. It's right here. 16 MR. TULCHIN: No objection, Your 17 Honor. 18 THE COURT: That's 814? 19 MS. CONLIN: Yes, Your Honor, 20 Defendant's 814. 21 THE COURT: It's admitted. 22 Q. I don't have a copy for you, but we -- 23 I think this is clear enough for us to look at 24 together. 25 This is the October 21, 1992 document 10504 1 that Mr. Tulchin called your attention to in 2 connection with Mr. Williams' concerns that 3 Novell may have been responsible for some of 4 the problems in the third and fourth quarter. 5 Dated October 21, 1992. 6 So several months after Mr. Williams 7 left Novell; correct? 8 A. That's right. 9 Q. And down at the bottom -- this is 10 addressed to you, and down at the bottom 11 there's a paragraph: David, a note on 12 yesterday's meeting with Dick Williams. I 13 reviewed with Dick what the next few months may 14 look like for him as a witness in the FTC case. 15 It was apparent to Dick that he is going to 16 have a very prominent role and therefore will 17 be the target of a lot of litigation harassment 18 by Microsoft. 19 Do you know what that referred to? 20 A. Well, yes. 21 During this time period and others, 22 there was always a very general concern that if 23 someone were to testify against Microsoft in 24 court or in front of the Federal Trade 25 Commission, that Microsoft could take action to 10505 1 harass or otherwise disturb the peace of those 2 providing such testimony. 3 Q. And I also want to review just briefly 4 with you another document you saw this morning, 5 which is Defendant's Exhibit 2535. 6 And what Mr. Tulchin focused on were 7 the -- in this draft report that we don't know 8 for sure who wrote. 9 MS. CONLIN: Perhaps we could show the 10 front page. It's 2535. 11 Do you have that, Darin? 12 MR. BUCHBINDER: Plaintiffs'? 13 MS. CONLIN: No, Defendant's. 14 Okay. 15 Q. Let's look at -- page 9 was the part 16 that you looked at before about the company's 17 weaknesses. So let's look at the page before 18 that, which provides a company's strengths and 19 opportunities. I just want to touch on a 20 couple. 21 MS. CONLIN: Yeah, that's good. 22 Q. Company strengths that assist Novell, 23 business applications included customer 24 support. Do you agree with that? 25 A. Certainly. 10506 1 Q. And best network channel in the 2 industry. What does that mean? 3 A. We had a very strong distribution 4 channel for our products, one that was admired 5 throughout the industry. 6 Q. And the best infrastructure of 7 training and education resources in the 8 industry. What does that mean? 9 A. Well, we were innovators in customer 10 education, providing customer support in terms 11 of education and training manuals to assist 12 computer users with respect to their operation 13 of the network operating system, or in this 14 case I guess the applications. 15 Q. And then under B, division group 16 strengths -- I assume that's the applications 17 division? 18 A. Yes. 19 Q. And under that, it says, strong 20 expertise in word processing, spreadsheets, 21 presentation graphics and electronic publishing 22 tools. 23 Was that a correct assessment in your 24 view? 25 A. Certainly, yes, we had extraordinarily 10507 1 good word processing spreadsheet products, et 2 cetera. 3 Q. And skipping down a couple to perfect 4 fit technology. Ideal platform for suites. 5 Way ahead of competition here. 6 Do you know what that meant? 7 A. Well, as I recall, the folks in the 8 application division felt like the suite of 9 products that they were putting together would 10 be eventually considered once it released to 11 those other competitive suites in the 12 marketplace. 13 Q. And then finally, on this -- no, I'm 14 sorry, not quite finally. 15 Next under that it says, support of 16 open architectures, ODBC, ODMA, open doc, and 17 OLE, PerfectLinks. 18 Tell the jury about the concept, if 19 you can, and if this is beyond your current 20 expertise, just tell me. 21 Can you tell the jury what this open 22 architecture means in a general way? 23 A. Yeah. In a very general way, when we 24 talk about openness in the computer industry 25 versus proprietary; in other words, some 10508 1 companies would keep their information more 2 closed and more proprietary. Others were more 3 open in sharing their application programming 4 hooks and documentation. And so we had a more 5 open architecture, I think, than other people 6 in the industry. 7 Q. And now, finally, first to market with 8 focus on task automation. 9 Do you know what that refers to? 10 A. I don't recall that one. 11 Q. You also talked for some time about 12 the betas in the Chicago time frame with 13 Mr. Tulchin. Do you recall that? 14 A. Yes, I do. 15 Q. That was quite recent. 16 A couple of things that I wanted to 17 talk with you about in that connection. 18 One of the areas that you discussed 19 with Mr. Tulchin was the document that is 20 Defendant's Exhibit 6773. 21 MS. CONLIN: May I approach, Your 22 Honor? 23 THE COURT: You may. 24 Q. And this was introduced yesterday. 25 A. All right. 10509 1 Q. And you commented on this as something 2 you did not recognize. In fact, you kind of 3 objected to foundation, as I recall. 4 A. Well, there was no Novell letterhead 5 on it and so forth, but I recognize Dave 6 Miller's name, but we couldn't figure out if 7 Dave wrote it or -- 8 Q. Was the subject of it or -- let me ask 9 you this question. 10 Does this document look like any other 11 document you recall ever having seen at Novell? 12 A. No. This would be atypical of what we 13 would see. 14 Q. You mean not typical, atypical? 15 A. I'm sorry, yes, not typical. 16 Q. It has no author listed; correct? 17 A. That's correct. 18 Q. Let me ask, in a group of -- you had 19 about 10,000 employees at this time? 20 A. Oh, probably 8,000 or so after we 21 consolidated with WordPerfect. That would have 22 been October of '95, probably would have been 23 8,000 employees. 24 Q. Do you imagine that some substantial 25 number of those employees are named Dave? 10510 1 A. Yes, that's a popular name. We have 2 at least three or four folks in the courtroom 3 by that name. 4 Q. Mr. Miller will be here, and he's 5 testified under oath before, and he says 6 unequivocally that he did not write this and 7 that if this Dave refers to him, he does not 8 agree with the content of that. 9 We will share his documents on this 10 issue with the jury when he comes, but let me 11 show you just a few of the ones that you were 12 not shown on your cross-examination. 13 MR. TULCHIN: Your Honor, I object to 14 the little statement to the jury about other 15 evidence. 16 THE COURT: Sustained. 17 MS. CONLIN: May I approach, Your 18 Honor? 19 THE COURT: You may. 20 Q. Let me show you 2180. 21 THE COURT: Is this Plaintiffs'? 22 MS. CONLIN: Yes, Your Honor. I'm 23 sorry. 24 Q. This is an E-mail to Mr. Miller from 25 Kevin Lewis. Does this indicate that Mr. Lewis 10511 1 was a Novell employee, or can you tell? 2 A. I cannot tell. 3 Q. All right. And the subject is our, 4 quote, cooperative, end quote, relationship 5 with Microsoft. The date is November 16, 1994. 6 MS. CONLIN: Your Honor, at this time 7 the Plaintiffs would offer 2180. 8 MR. TULCHIN: No objection. 9 THE COURT: It's admitted. 10 A. As I have time to peruse the document, 11 it's clear that this was a Novell employee that 12 was working on the NFS client for the LAN 13 workplace. 14 Q. All right. And he addresses Mr. 15 Miller who he says, last I heard, you were 16 managing our relationship with Microsoft as far 17 as getting information and support from 18 Microsoft. 19 Could you fill me in on just what our 20 relationship with Microsoft consists of? 21 And he describes what he's doing. 22 And then the last paragraph says, 23 unfortunately, when you are implementing 24 software at the system level, some information 25 is not enough information. 10512 1 Without source code for reference, the 2 specifications, sample source code, et cetera, 3 must be accurate and complete. I get the 4 feeling that the folks at Microsoft don't 5 understand this since they obviously have 6 source code to peruse. 7 Any suggestions on how I can get 8 information more readily out of Microsoft? 9 The problems that Mr. Lewis is having, 10 are those more typical of the problems you were 11 aware of in this time frame? 12 A. Yes, they are. 13 Q. Let's look at 2190. 14 MS. CONLIN: May I approach, Your 15 Honor? 16 THE COURT: Yes. 17 MS. CONLIN: I'm sorry, I have to give 18 you a marked copy. I don't seem to have enough 19 of the unmarked. 20 Q. This is a series of E-mails. And as 21 is the usual case, you start at the back on the 22 second page, and this E-mail is from Novsup at 23 Microsoft.com, and the subject is need Windows 24 95 TDI include files, and it's not -- the 25 heading is not quite complete because it's one 10513 1 of those incorporated E-mails. 2 But it says -- and I think this is as 3 we go through this -- 4 MS. CONLIN: Darin, can we start on 5 the first page? Because I believe that we've 6 got a whole long included string. 7 THE COURT: We're going to take a 8 break at this time, if that's okay. 9 MS. CONLIN: Yes, Your Honor, of 10 course. 11 THE COURT: We'll take our lunch 12 recess from now until 12. 13 Remember the admonition previously 14 given. 15 See you at 12. 16 (A recess was taken from 10:58 a.m 17 to 12:02 p.m.) 18 (The following record was made out of 19 the presence of the jury.) 20 THE COURT: Proceed. 21 MS. CONLIN: Your Honor, the Court 22 issued an order some time ago which precluded 23 either side from contacting class members 24 without the permission of the Court. 25 Plaintiffs have honored that order and 10514 1 -- but now we request the Court's permission to 2 contact members of the Plaintiffs' class, all 3 of them. 4 We want to -- we want that 5 opportunity, Your Honor. 6 The Court may have seen the article 7 today, and we thought perhaps it would be time 8 for us to contact our own clients. 9 THE COURT: Response? 10 MR. TULCHIN: Your Honor, this is a 11 surprise to us. I didn't know this motion was 12 coming. I'd like an adequate opportunity to 13 respond some point next week. 14 THE COURT: Very well. 15 MR. TULCHIN: Thank you, Your Honor. 16 MS. CONLIN: Well, I thought it would 17 be noncontroversial, Your Honor. I was wrong. 18 MS. NELLES: Your Honor, if we're 19 taking a very quick moment, on housekeeping, I 20 wanted to alert the Court and Plaintiffs as 21 well, that with respect to Your Honor's order 22 this morning on motions to be heard on Monday, 23 and I understand the first in line is the -- 24 relates to the prior deposition testimony of 25 Mr. Kempin, and that will be heard today at 10515 1 three. 2 On the remaining, Microsoft can be 3 available for number 2, number 4, number 5, and 4 number 6. 5 Three has not been fully briefed, and 6 we'd like to go to our brief on that, and the 7 lawyer who will likely argue will not be 8 available on Monday. 9 But we can take care of 1, 2, 4, 5, 10 and 6 between I believe myself and 11 Mr. Tuggy. 12 THE COURT: Very well. 13 MR. GRALEWSKI: Your Honor, I didn't 14 have the order in front of me. What is number 15 3? 16 MS. NELLES: Our motion to -- our 17 meaning Microsoft's motion to preclude Stephen 18 McGeady from offering testimony regarding facts 19 subject to collateral estoppel. 20 MR. GRALEWSKI: You're proposing to do 21 that? 22 THE COURT: No. Every one but that. 23 MS. NELLES: No. Every one but that 24 one. 25 MR. GRALEWSKI: At a later time? 10516 1 MS. NELLES: I'm not proposing any 2 time at the moment. 3 MR. GRALEWSKI: Not on Monday? 4 MS. NELLES: Not on Monday. 5 THE COURT: Thank you. 6 Thank you very much. 7 (An off-the-record discussion was 8 held.) 9 THE COURT: I've just been informed by 10 my court reporter, Janis, that [redacted] now 11 does not have to appear in trial because the 12 prosecutor or defense counsel? 13 THE CLERK: She didn't say. 14 THE COURT: One of the attorneys is 15 ill. However, at the same time, you report 16 what you heard, please, loudly for the Court. 17 THE CLERK: Patrice said she had then 18 made plans to go out of town for the weekend. 19 MS. CONLIN: That seems reasonable, 20 Your Honor. I think -- 21 THE COURT: I'm not going to change 22 our plans in any way, shape, or form. Stands 23 as it is. 24 (The following record was made in the 25 presence of the jury at 12:08 p.m.) 10517 1 THE COURT: Everyone else may be 2 seated. 3 You may proceed, Ms. Conlin. 4 MS. CONLIN: Thank you Your Honor. 5 REDIRECT EXAMINATION (CONT'D) 6 BY MS. CONLIN: 7 Q. Before we go back to the topic we were 8 discussing, Mr. Bradford, let me show you 9 Plaintiffs' Exhibit 10032. 10 MS. CONLIN: May I approach, Your 11 Honor? 12 THE COURT: Yes. 13 MS. CONLIN: I provided a copy to 14 Mr. Tulchin. 15 Q. 10032, Plaintiffs' 10032 is an article 16 dated 5-21-90 from the New York Times, the 17 headline of which is software merger collapses. 18 Do you see that? 19 A. Yes, I do. 20 MS. CONLIN: Your Honor, at this time 21 the Plaintiffs would offer 10032 not for the 22 truth of the matter asserted, but rather to 23 establish the date and on notice. 24 MR. TULCHIN: No objection, Your 25 Honor. 10518 1 THE COURT: It's admitted. 2 Q. And this article in the New York Times 3 on May 21st, 1990, indicates that the merger 4 between Novell and Lotus collapsed at that 5 time; correct? 6 A. That's correct. 7 Q. I believe you also testified that the 8 reason that you understood the merger to have 9 collapsed is because of a disagreement about 10 the number of people on the board; correct? 11 A. That's right. 12 Q. And what was Novell's desire in that 13 respect? 14 A. We wanted to have fair and equal 15 representation with Lotus Development 16 Corporation on that board of directors. 17 So the original concept is that they 18 would have four nominees for the board and we 19 would have four, and Jim Manzi, who was CEO of 20 Lotus at the time, wanted to have a majority of 21 Lotus folks on that board of directors. We 22 couldn't come to an agreement on that, and as a 23 result of that we stopped those merger 24 discussions. 25 Q. All right. So, in fact, all of this 10519 1 happened in -- before May 21 of 1990; correct? 2 A. That's right. 3 Q. And that would be more than a year 4 before the talks with Microsoft began; is that 5 right, July 18th -- 6 MS. CONLIN: Could we have the time 7 line? 8 A. Yes. We did not start the merger 9 discussions with Microsoft again the second 10 time until on or after July 19th of 1991. 11 Q. Let's return. We were talking about 12 the Win 95 beta cycle and whether or not Novell 13 was getting timely information from Microsoft, 14 and we were looking at Exhibit 2190, and we're 15 going to kind of -- this one is a little 16 difficult, but let's look at the one from 17 Kevinl to Johnl, TDI include files -- and this 18 is dated December 2, 1994. 19 And the letter begins, sorry to be a 20 pest. I looked on FTP Microsoft.com in 21 something, for the Windows 95 TDI include files 22 this morning, but the files don't seem to be 23 there. 24 Am I looking in the wrong place? 25 And then he also says, I think that 10520 1 the following is a copy of a previous request 2 that I sent on November 22, 1994. 3 The include files -- the include files 4 I think -- is include some software term for 5 some kind of file? 6 A. I don't know. 7 Q. Okay. The include files below are 8 referenced in the Microsoft TCP/IP VXD 9 interface specification, which was V 1.0 10 October 24th, 1994, which was sent to me 11 previously. I haven't been able to locate them 12 on the SDK or DDK for Windows 95. 13 SDK would be the software development 14 kit; right? 15 A. That's correct. 16 Q. DDK, any ideas? 17 A. I don't offhand. 18 Q. I need the Windows 95 specific files. 19 Okay, so the first request is made 20 November 22, 1994; correct? 21 A. That appears to be accurate. 22 Q. And then the second request is 23 December 2, 1994. So that would be a couple of 24 weeks. 25 Now, why would a couple of weeks 10521 1 matter, do you know? 2 A. Well, I'm not a software engineer, but 3 seems like in any of these time frames, you're 4 having to drive and create software programs 5 that would be compatible with others in the 6 marketplace so they would achieve widespread 7 market acceptance, and so any delay would hurt 8 the company. 9 Q. Even a couple of days -- if a 10 competitor of WordPerfect got a Microsoft 11 Chicago beta a couple of days before 12 WordPerfect got it, would that permit -- what 13 would that mean for WordPerfect? 14 A. Well, that would mean that the company 15 other than WordPerfect would have a competitive 16 advantage in building their products. 17 Q. All right. He sends this second 18 request on December 2nd, and then the reply 19 comes December -- actually, December 2nd 20 Mr. Ludwig says Dave -- I believe this is Dave 21 Beaver at Microsoft.com. 22 Dave, are you going to get the files 23 up there or can you E-mail them to Kevin? 24 And then on December 6th, again from 25 Kevin, I checked the server FTP Microsoft.com 10522 1 this morning and the files do not appear to be 2 there. I haven't received -- and then there's 3 some software language. I haven't received any 4 mail containing the files either. If there is 5 something that you can do to expedite the 6 delivery, I'd sure appreciate it. 7 So this goes for more than a month 8 with him trying to get these files. Do you see 9 that? 10 A. Let's see. So he sent the original 11 letter. The following is a copy of a request I 12 sent on November 22nd. 13 Q. I'm sorry, not more than a month. 14 A. Right. A little under a month. 15 Q. November 22nd. 16 A. Right. 17 Q. So to December 6th, a couple of weeks? 18 A. That's right. 19 Q. That amount of time might matter under 20 some circumstances or under all circumstances? 21 A. I would say the majority of 22 circumstances that would have a substantive 23 effect. 24 Q. And is Exhibit -- Plaintiffs' Exhibit 25 2190 consistent with what you understood was 10523 1 happening in receipt of Windows 95 Chicago 2 betas? 3 A. Yes. 4 Q. And that's in late '94. 5 Now, let's move to January of 1995. 6 MS. CONLIN: May I approach, Your 7 Honor? 8 THE COURT: You may. 9 Q. I am handing you Defendant's Exhibit 10 2507. 11 And this is -- the front page shows 12 E-mail to Provo PR V mail, Richard Jones and 13 Ben Hendrick, from Jon Ludwig at Microsoft, and 14 it's dated Wednesday, January 11th, 1995. But, 15 of course, that is not the first one. 16 MS. CONLIN: I'm uncertain, Your Honor 17 -- if it's not offered I do so. 18 MR. TULCHIN: No objection. 19 THE COURT: It's admitted. 20 MS. CONLIN: Thank you, Your Honor. 21 I'm sorry. 22 Darin, if we could go -- I think if we 23 could go to the very last line of the first 24 page because I think that's what begins this 25 chain, and it's from Prakash Rao, R-a-o. 10524 1 Is that a name with which you're 2 familiar? 3 Are you reading, David? 4 A. Yes, I am. I'm sorry. 5 Q. That's all right. It is pretty 6 fascinating. 7 Prakash Rao, Rao, or I'm perhaps not 8 pronouncing it correctly. But do you see his 9 name at the bottom of page 1? Actually, it's 10 at the bottom of page 2. 11 A. Yes. 12 Q. Is that a name that you know? 13 A. Yes. I vaguely remember him as being 14 in the engineering group at Novell. 15 Q. He on 1-1-96, he writes Ben Hendrick, 16 and I'm not sure you've had an opportunity to 17 say anything about Mr. Hendrick, but can you 18 tell the jury what role he played in -- with 19 respect to the development of products during 20 this time frame? 21 A. Yes. Ben was in our engineering group 22 or consulting services group and had much to do 23 with creating, I think, compatibility between 24 the Microsoft products and the Novell products. 25 Q. Was he at this time a very prominent 10525 1 person in the Novell family? 2 A. I would classify him as an important 3 midterm -- midtier employee. He wasn't a 4 senior vice president or vice president, but I 5 think he later became such. 6 Q. And he was a builder of software; 7 right? 8 A. Yes, among other things. 9 Q. This Mr. Prakash Rao writes to Ben on 10 January 6, 1995, saying, we are testing our 11 Client 32 against Build 224 October '94 of Win 12 95 beta. Even though our client seems to be 13 working great on this beta, we are finding Win 14 95 very unstable. We hear that later builds 15 post 224 resolve the issues we are seeing. 16 My understanding was that we are on 17 Microsoft's beta list for biweekly updates. 18 But my team has not received any version post 19 Build 224. Can we get the later beta builds 20 ASAP please? Help, this is a very critical 21 item. 22 And then if we go back to the front 23 page, we see that Ben writes to Mr. Ludwig on 24 January 9th, 1995, and says, Jon, is it 25 possible to make the biweekly builds available 10526 1 to us, Novell, on your FTP site? I currently 2 have an account on this FTP location. 3 And then skipping down, currently we 4 are using and working with Build 224. Getting 5 the regular builds before Beta 3 is publicly 6 released will become critical in the coming 7 months to keep the Client 32 for Windows 95 on 8 schedule. 9 And he identifies Mr. Rao as the 10 Client 32 development manager. 11 So then let's move up to Mr. Ludwig's 12 response on January 11, 1995. 13 He says, we are not going to put 14 builds on psg.microsoft.com. 15 Skipping down to the next line, we 16 have not released any builds post 224 to any 17 development partners. 18 Skipping down to I agreed to get a 19 build to Richard Jones' group as a result of 20 our meeting yesterday. This was Fed Ex'd to 21 him today, Build 306. 22 Do you see that? 23 A. Yes, I do. 24 Q. In the way that builds are numbered, 25 each -- is it correct or do you know whether or 10527 1 not each build of the beta is given a number in 2 sequence? 3 A. I don't know if they proceed 224, 225, 4 226. I thought we saw a document earlier that 5 seemed to indicate that. So I don't know if 6 there was a number 256, for example, between 7 224 and 306. I don't know how that was 8 accounted. Maybe at some point they jumped in 9 increments of 10, but I don't know. 10 Q. Would you assume with me that, in 11 fact, they're numbered consecutively? 12 And if that is so -- for the purposes 13 of this question, please assume that to be so 14 because I believe there may be testimony to 15 that effect. 16 That would be about 79 builds between 17 224 and the Build 306 that was Fed Ex'd to 18 Novell on January 11, 1995? 19 MR. TULCHIN: Your Honor, I object to 20 Ms. Conlin's testimony on the subject. 21 THE COURT: Overruled regarding that 22 objection. 23 Go ahead. 24 MS. CONLIN: Thank you, Your Honor. 25 Q. My question was, did I do the numbers 10528 1 right? 2 A. I think it was more like 81 or 3 something between 306 and 224 if my math is 4 right. 5 Q. We'll rely on yours. 6 And it looks also like the time 7 between the betas for Novell was October 1994 8 and then the one that was supposed to be Fed 9 Ex'd today on January 11, 1995. 10 Do you see that? 11 A. Yes, I do. 12 Q. And that would be about, well, three 13 months or more between releases provided to 14 Novell? 15 A. Roughly. I think it's closer to two 16 months. 17 Q. All right. So Mr. Jones' view that 18 you are getting timely betas would seem to 19 indicate that every three months was -- or 20 every two months was what he perceived to be 21 timely. Would you agree with that? 22 A. Mr. Jones' view? 23 Q. Yes. Mr. Jones -- remember -- you may 24 not recall this, Mr. Bradford, you've seen a 25 number of documents, but one of the documents 10529 1 you saw, which I may have in my stack here, was 2 one in which Mr. Jones suggested that 3 everything was quite fine with respect to what 4 Microsoft was doing in terms of betas. 5 Do you recall that at all? 6 A. Vaguely. 7 Q. All right. And so if there's two or 8 three months between and 81 builds, based on 9 your limited knowledge of the beta process, 10 would that be satisfactory or unsatisfactory to 11 Novell? 12 MR. TULCHIN: Object, Your Honor. 13 This calls for speculation. 14 THE COURT: Sustained. 15 Q. Do you have enough information to tell 16 us whether this would be a satisfactory or 17 unsatisfactory delivery of betas? 18 A. It doesn't seem like a timely delivery 19 of betas, but better ask an engineer in terms 20 of those precise numbers. 21 Q. All right. Let's return to 2274. 22 This was a document offered, and I 23 don't have another copy for you, but hopefully 24 you will be able to see it on the screen. 25 This was one shown to you and offered 10530 1 by the Defendant, and I wanted to go back to 2 it. 3 This is now -- we're moving up to 4 April 7th. So we're three months beyond, and 5 maybe four, beyond the one exhibit that we just 6 looked at, exhibit -- Defendant's Exhibit 2507. 7 And this is Mr. Hendrick again to the 8 Novell sup at Microsoft copying Mr. Miller and 9 Mr. Jones. The subject is updated Windows 95 10 builds. 11 And Mr. Hendrick says, in the spirit 12 of getting regular updates as they become 13 available, I have talked to several Novell 14 external customers. 15 Can you tell me if you know what that 16 means? External customers would be what kind 17 of folks? 18 A. Typically those would be end user 19 customers. 20 Q. All right. And ISVs who received 21 Build 437 CD-ROMs and are anticipating 440. We 22 understand there is a memory management patch 23 that was made in Build 436 that addresses some 24 issues that could affect our client. 25 Is it possible to have you send the 10531 1 latest build to Richard Jones? 2 And the last build we officially 3 received is Build 426, and that would mean, 4 assuming that the builds are numbered 5 consecutively, that between -- I'm not going to 6 do these numbers. 7 What is the -- let's see, you take 440 8 and subtract 426? 9 A. 14. 10 Q. All right. And I don't think this has 11 a date in it, but I believe that this is -- I 12 mean a date for the receipt by Novell of the 13 Build 426 that they were working off of. 14 And then this is the one from 15 Mr. Ludwig that explains that we send out a lot 16 of intermediate builds in very small batches to 17 address specific bugs. 18 And it goes on to say, we don't 19 broadly distribute these builds to the entire 20 beta program. 21 But he also tells people at Novell 22 that we have Novell and a lot of other ISV 23 partners -- ISV, independent software vendor. 24 Novell was such an independent software vendor; 25 correct? 10532 1 A. Yes. 2 Q. -- on about a biweekly regular 3 distribution schedule outside of the above 4 process. 5 So that is Mr. Ludwig's response to 6 that. 7 I also wanted to show you Exhibit 2306 8 which has been preadmitted. 9 MS. CONLIN: May I approach, Your 10 Honor? 11 THE COURT: You may. 12 Q. This is about -- this is 5-22-95, and 13 it is a letter to David Curtis at Microsoft 14 from Ryan Richards, associate general counsel, 15 and he was a man who worked for you as an 16 attorney; correct? 17 A. Ryan Richards was, yes, that's 18 correct. 19 Q. And this has to do with prerelease 20 ODBC and Windows 95 beta? 21 A. Correct. 22 Q. He says to Dave Curtis of Microsoft, 23 some of our international developers have been 24 experiencing long delays in getting prerelease 25 software under the beta agreements with 10533 1 Microsoft. 2 And then if you go down to the Windows 3 -- the paragraph headed Windows 95 beta 4 software, he says, we've been trying for many 5 weeks to get copies of the Eastern -- and he 6 names the countries then -- and Middle Eastern 7 language versions of the Windows 95 beta 8 software. 9 He names the contact in Redmond. 10 She refused to send the software 11 because she and other beta administration 12 people have claimed not to have the necessary 13 beta agreements in their files. 14 On two occasions I have produced 15 copies of those agreements. We were then 16 denied the software because the specific names 17 of the developers who would have access to the 18 software had not been submitted and approved. 19 In response, I provided Jodene with 20 copies of correspondence from Bill Pope waiving 21 the requirement that the developers be approved 22 by name. I was told that Bill did not have the 23 authority to grant such a waiver. 24 MR. TULCHIN: Your Honor, I'm sorry to 25 interrupt. I do apologize. 10534 1 I don't believe this is in evidence, 2 and as a result I don't think it should be on 3 the screen or read to the jury, at least until 4 it is. 5 MS. CONLIN: Your Honor, I would offer 6 Exhibit 2306 if it's not already a part -- 7 THE COURT: Any objection? 8 MR. TULCHIN: Can I have a moment, 9 Your Honor? 10 THE COURT: Sure. 11 MR. TULCHIN: Just want to make sure 12 we're doing this right. 13 I have no objections. 14 THE COURT: 2306 is admitted. 15 MS. CONLIN: Thank you, Your Honor. 16 Q. In response -- I guess I better go 17 back. 18 On two occasions, I have produced 19 copies of those agreements, meaning the beta 20 agreements that Microsoft said they did not 21 have. 22 Then he goes on to say, we were then 23 denied the software because the specific names 24 of the developers who would have access to the 25 software had not been submitted and approved. 10535 1 In response, I provided Jodene with 2 copies of correspondence from Bill Pope waiving 3 the requirement that the developers be approved 4 by name. I was told that Bill did not have the 5 authority to grant such a waiver and 6 name-by-name approval would be required. 7 So, we submitted the names and were 8 told a couple of weeks ago that they were 9 approved and the software was on its way. 10 Since then, we have received two of 11 the six or seven language versions we 12 requested. We have been told that all of them 13 have been mailed. We were given a tracking 14 number which we determined applied to the 15 package containing one of the two language 16 versions we already received. 17 We were then given a second tracking 18 number, and after further investigation, we 19 determined it applied to the package containing 20 the second language we had already received. 21 Jodene had no other numbers for us and told us 22 she would resend the software. 23 The delays in getting the software are 24 resulting in setbacks in our development 25 schedules for our application programs in those 10536 1 languages. 2 And do you know in Novell development 3 whether the language -- Novell tries to release 4 foreign language applications in about the same 5 time frame or shortly thereafter it releases 6 the English language versions? 7 A. Sure. Localization of products were 8 important. 9 Q. And he goes on to say, ODBC, we've had 10 similar difficulties getting prerelease ODBC 11 SDKs, software development kits. 12 Then turning the page he talks about 13 some of the early things. 14 And then he says, so Novell KK 15 registered as a beta site and asked again for 16 the software. We were then told that the time 17 period for the last beta version had expired 18 and the next one was not yet available. We 19 were told it would be available sometime in 20 March. It never came. 21 We were then promised it would come in 22 April, but again we received nothing. 23 We were then told it would be this 24 month. Just a few days ago we were told that 25 there never has been a beta program for ODBC 10537 1 2.0 and there won't be until sometime next 2 month. 3 And I'm skipping down. 4 In the meantime, we're aware that 5 Microsoft Access, which released earlier this 6 year, has ODBC 2.0 support. 7 And Mr. Ryan asks for assistance in 8 that connection. 9 Do you know whether or not you would 10 have seen this letter in the ordinary course of 11 events? 12 A. Yes, I likely would have seen this 13 letter. 14 Q. And, again, is this typical or not 15 typical of what you understood the relationship 16 between Novell and Microsoft to be with respect 17 to the Chicago betas? 18 A. It was typical, certainly, and, you 19 know, the frustrating part is that this has to 20 wind up in legal. 21 You're always hoping that the software 22 engineers among the two companies could just 23 work out this stuff by themselves without 24 having to resort to, you know, all of this 25 legalese and effort on the company's part to 10538 1 get what seemed to be fairly simple 2 information. 3 Q. Did you draft a couple of letters from 4 Mr. Frankenberg, the CEO of Novell, directly to 5 Bill Gates in connection with a number of 6 matters, one of which was the issue of the 7 repair of bugs in software, in the Microsoft 8 software that was causing problems for 9 WordPerfect and running on Windows? 10 A. Yes. I certainly assisted in the 11 preparation of those letters. 12 Q. All right. 13 MS. CONLIN: Your Honor, the first 14 letter is Plaintiffs' Exhibit 2336 dated 15 June 23, 1995. It is, as I said, to Mr. Gates 16 from Mr. Frankenberg. 17 Plaintiffs propose to read only a 18 sentence or two on the second page under number 19 II, Roman numeral II. 20 The part I proposed to read to the 21 jury, Your Honor, begins with this point is 22 further illustrated and ends with to reveal 23 them. 24 MR. TULCHIN: Your Honor, this has 25 been ruled inadmissible, this document, in 10539 1 prior rulings. So we object. 2 MS. CONLIN: Perhaps we should 3 approach, Your Honor. 4 THE COURT: Very well. 5 (The following record was made out of 6 the presence of the jury at 12:36 p.m.) 7 MS. CONLIN: Your Honor, here is my 8 rationale for offering these at this point. 9 The ruling -- I believe that they have 10 gone through the Special Master process, but I 11 don't have -- usually I have a sheet on top 12 that tells me things, but whatever that says, 13 at this point on redirect, Your Honor, I 14 believe that I am entitled to show the jury 15 that the situation that Mr. Tulchin has caused 16 the jury to believe was really not serious. 17 Mr. Jones just loved everything Microsoft was 18 doing. 19 This problem of getting these bugs 20 fixed was so serious that it was a subject of 21 two letters from Mr. Frankenberg to Mr. Gates. 22 All I propose to read and what I would 23 also say, Your Honor, is it may be entirely 24 appropriate to redact every part of the letter 25 except for that -- do you see where I'm 10540 1 looking, Your Honor? 2 THE COURT: What part do you want to 3 read? 4 MS. CONLIN: The part I want to read 5 of -- 6 THE COURT: It's not marked on here. 7 MS. CONLIN: -- of 23 -- 8 THE COURT: -- 2336. 9 MS. CONLIN: Yes. 2336, Your Honor, 10 is on the second page, and it's right under 11 Roman Numeral II. 12 This point is further illustrated by 13 Microsoft's refusal to fix certain bugs in 14 Windows 95. 15 It is my understanding that these bugs 16 caused Novell applications to be incompatible 17 with Windows 95 but allow Microsoft's 18 applications to run unaffected. 19 Microsoft's OS interfaces constitute a 20 resource access to which is required in order 21 to be able to compete in the market. 22 Novell cannot duplicate these 23 interfaces. Microsoft has denied them to 24 Novell when it would be simple to reveal them. 25 And we believe that directly addresses 10541 1 a matter that Mr. Tulchin spent quite a bit of 2 time discussing with this man who was a totally 3 inappropriate witness except his connection 4 would be these letters which he assisted in 5 drafting. 6 The point I wish for the jury to 7 understand is that whatever Mr. Jones or other 8 low-level software people may have thought 9 about the situation, they were wrong. 10 And what was true was what 11 Mr. Frankenberg, CEO, said to Mr. Gates, CEO of 12 Microsoft. 13 First, Your Honor, he said it on 14 June 23, 1995 before the release of Windows, 15 and then he said it again August 21, 1995, 16 three days before the release of Windows. 17 And at that point, Your Honor, if you 18 look at 2391, third paragraph that begins with 19 the word further, fourth line down, there are 20 still five or six bugs that Microsoft has 21 refused to fix which would allow WordPerfect to 22 run smoothly with Windows 95. We will have 23 Dave Miller send a specific list to Bob Kruger. 24 The result of lack of equal access cost Novell 25 and others months to release products that are 10542 1 Windows 95 compatible. These are issues that 2 need to be a major topic of discussion in our 3 meeting. 4 THE COURT: Where did you just read 5 from? This exhibit or another one? 6 MS. CONLIN: I'm sorry. 7 THE COURT: You gave me one, 2336. 8 You've got another one? Oh, okay. Has this 9 been admitted? 10 MS. CONLIN: I believe that it is 11 subject to the same category, Your Honor. 12 MR. TULCHIN: It's in the same 13 category. 14 MS. CONLIN: I do see what happened 15 here because they wrote it in a different way. 16 Pending objections. Hearsay. Unduly 17 prejudicial. Hearsay. Objections sustained. 18 Plaintiffs appeal. Appeal denied. Limitation: 19 Exhibit will not be offered for its truth. 20 I think both of them are exactly the 21 same. Hearsay objection sustained on 2391. 22 Exhibit will not be offered for the truth. 23 I think, however at this time, Your 24 Honor, these are statements of fact, not 25 opinion. These are -- the witness can provide 10543 1 foundation, and there's nothing about these 2 factual statements that is in any way -- that 3 should be in any way precluded from evidence in 4 this matter. 5 MR. TULCHIN: Your Honor, if I may. 6 THE COURT: Sure. 7 MR. TULCHIN: A few little things. 8 One, Ms. Conlin is correct that I 9 showed the witness e-mails and memos written by 10 software engineers at Novell that indicate that 11 the people actually building Novell products 12 were satisfied with what Microsoft was given. 13 That was admissible evidence. There wasn't any 14 question about it. The evidence was all 15 admitted for the most part, I think, without 16 objection. 17 These two documents are not 18 admissible, and they're not admissible 19 precisely because in the memorandum that we 20 handed the Court, I believe, on Monday of this 21 week we covered this point. Precisely because 22 this is argument and posturing in the course of 23 trying to extract a settlement from Microsoft 24 from one CEO to another. These are not 25 business records. These are mere opinions by 10544 1 people, I must say, similar to Mr. Bradford who 2 were not in a position to understand whether or 3 not the betas, indeed, are sufficient for 4 Novell to go ahead and make their products or 5 whether the bugs are sufficient problems or 6 they're not. 7 And the reason we went through the 8 Special Master process, our objections were 9 sustained, the plaintiffs appealed, Your Honor 10 ruled against them. 11 It would be one thing, Your Honor, to 12 ask this witness if he has any recollection 13 that Mr. Frankenberg complained to Mr. Gates 14 about these subjects. It's an entirely 15 different thing to read from these documents, 16 which are not in evidence and they've been 17 ruled against, and merely to give the jury the 18 impression that somehow there is some evidence 19 here of wrongdoing when, again, the reason 20 these were excluded is this is pure argument, 21 opinion and posturing in the hope of getting, 22 as Mr. Frankenberg says -- let me find the 23 reference -- last line of Exhibit 2336, Your 24 Honor. That's the June letter. 25 Mr. Frankenberg says: We are hopeful 10545 1 that Microsoft will want to work towards a 2 settlement of these issues. 3 The issues, all of these issues, were 4 posturing in the hope that Microsoft would pay 5 Novell for what Novell asserted to be these 6 legal claims, including attempts to monopolize 7 the software applications market. 8 There was no claim made by -- Novell 9 at the time didn't bring a lawsuit, as 10 Mr. Bradford testified, and Microsoft said no 11 to the idea that it should pay Novell at the 12 time for any of these claims. 13 So I think the rulings that the Court 14 has made were proper and these documents ought 15 not to be used or read to the jury. 16 MS. CONLIN: The Special Master, Your 17 Honor, said repeatedly in the process that 18 objections could be cured. We're also on 19 redirect. The door has been opened. I have a 20 right to go through it and provide to the jury 21 information which is of substantial importance. 22 On the second point that Mr. Tulchin 23 made, I would be so surprised if Mr. Tulchin 24 has evidence that what they were trying to do 25 was extract money. 10546 1 What they were trying to do was 2 settle -- look at these issues, Your Honor. 3 They're business issues. Novell has never 4 filed a lawsuit against Microsoft until quite 5 recently, and these are issues of business. 6 I'm not going to go to those anyway, 7 Your Honor. All I want is the factual 8 statement in a business record to respond 9 appropriately to Mr. Tulchin's assertions by 10 way of questioning of an inappropriate witness 11 that everything was hunky-dory in terms of 12 Microsoft's provision of Chicago betas to 13 Novell. 14 THE COURT: All right. Anything else? 15 MR. TULCHIN: No, Your Honor. I think 16 that covers it. 17 THE COURT: Objection is sustained. 18 (The following record was made in the 19 presence of the jury at 12:40 p.m.) 20 THE COURT: Sorry, ladies and 21 gentlemen of the jury. 22 Back on the record. 23 BY MS. CONLIN: 24 Q. Mr. Bradford, you indicated that two 25 letters were sent to Mr. Gates from Mr. 10547 1 Frankenberg; correct? 2 A. Yes. 3 Q. Do you recall the dates of those 4 letters? 5 A. Gosh, they seem like August time 6 frame, '94, '95. 7 MS. CONLIN: Your Honor, may I 8 approach the witness for the purpose of 9 refreshing his recollection? 10 THE COURT: Yes, you may. 11 MS. CONLIN: Thank you. 12 A. Okay. 13 Q. Does that refresh your recollection? 14 A. It does. 15 Q. All right. Tell the jury, please, 16 when these two letters were sent. 17 A. One was sent in June of 1995, and the 18 next letter was sent in August of 1995. 19 Q. Do you recall whether or not those 20 letters each contained a reference to the five 21 key bugs that were present in the Chicago beta? 22 A. Yes. 23 Q. And give the jury, if you can, an 24 explanation of why Mr. Frankenberg himself 25 would be contacting the head of Microsoft for 10548 1 that reason, among others. 2 MR. TULCHIN: Objection, Your Honor, 3 unless he knows. 4 THE COURT: You may answer if you 5 know. 6 A. Sure. 7 Bob Frankenberg was CEO of Novell, and 8 we thought that the best way to help resolve 9 all of the frustrations that many Novell 10 employees were feeling about lack of timely 11 receipt of betas and so forth and lack of 12 finally -- timely fixing of computer bugs in 13 Windows 95 and their interoperability with 14 Novell products, the best way to get that 15 resolved was to have the CEO of the company 16 write to their CEO at a high level so that he 17 could drive down whatever commands that he 18 would within Microsoft to make sure that the 19 job got done. 20 Q. All right. And the first letter was 21 in June. The next letter was in August. And 22 during that time frame apparently, what is the 23 fact with respect to the fixing of those bugs? 24 A. I don't think they ever got resolved. 25 Q. And so in June, the release of Windows 10549 1 95 is a couple months away. 2 On August 21st, when the second letter 3 was sent, we're three days away from the 4 release of Windows 95. 5 A. Right. From the broad base consumer 6 release of Windows 95. 7 Q. When we're looking over there, I think 8 -- do you recall the line of testimony that 9 Mr. Tulchin asked you about in terms of whether 10 or not it was Novell's lack of integrating 11 WordPerfect into -- you know, into its company 12 after the merger that caused Windows 95 13 versions of Perfect Office not to be timely 14 released? Do you recall that? 15 A. Yes, I recall that line of 16 questioning. 17 Q. Let's look at the time line and see 18 how many versions of WordPerfect Novell was 19 able to release in this time frame. 20 Do you see September 1994? That was 21 after the merger; correct? 22 A. Yes. 23 Q. And WordPerfect for the Macintosh is 24 released, and then the next month, October 25 1994, WordPerfect 3.0 is released, and then in 10550 1 November 1994 WordPerfect 6.1 for Windows is 2 released, but that would, of course, be Windows 3 3.1 because Windows 95 wasn't out yet; right? 4 A. That's right. It was an earlier 5 version of the Windows operating. 6 Q. All right. And then January 1995, 7 Perfect Office 3.0 -- I'm doing that again. 8 Yes, I am. I'm repeating myself. 9 And then August 24, 1995, Windows 95 10 is released, and January '96 you sold the 11 company to Corel. 12 So, in fact, the product you're not 13 able to get out is a compatible suite with 14 Windows 95; would that be correct? 15 A. That's correct. 16 Q. All these other versions, no problem? 17 A. Right. 18 I wouldn't say that there were 19 problems, but -- you know, they all got out. 20 Q. I'm sure there were. I didn't -- 21 little broad statement. 22 Also, you spent quite a bit of time 23 yesterday talking about how important customer 24 demand is, and certainly you agreed with 25 Mr. Tulchin that customer demand was a very 10551 1 important factor; correct? 2 A. Yes, I do. 3 Q. And do you feel you could share with 4 the jury based on your own knowledge what 5 Novell -- what Novell's approach to increasing 6 customer demand for the products that it was 7 producing would be? 8 And I'm thinking specifically about 9 the products that are competitive with the 10 products at issue in this case, and that would 11 be your DR-DOS product and your WordPerfect 12 product and your Borland product. 13 A. Okay. That was a long one. 14 So can you repeat the question? 15 Q. Really not. Let me break it down a 16 little bit. 17 A. Okay. 18 Q. First of all, do you have the 19 knowledge necessary to talk about customer 20 demand and Novell's approach to increasing 21 customer demand for those products that 22 competed? 23 A. Sure. 24 Q. Okay, good. 25 Would you please tell the jury what 10552 1 Novell's approach was to increasing customer 2 demand for these products that you had? 3 A. Well, first of all, we're always 4 focused on technological innovation, and that's 5 so important to have the latest products, the 6 latest technology so that the end user customer 7 has access to the top technologies in the 8 world. 9 And so first and foremost, the 10 creation of new and superior technologies was a 11 driving factor for what we were trying to do. 12 Another factor would be compatibility. 13 You have to be compatible with the dominant 14 operating system that was out there. 15 And certainly at the time, and up to 16 this day, it's that Windows operating system 17 from Microsoft which was the dominant world 18 supplier for operating systems. 19 So assuring interoperability between 20 your applications and that operating system is 21 critical to your success. 22 So those are two factors, large 23 factors. 24 Q. And the idea was if you were 25 technologically advanced and compatible, then 10553 1 customer demand would fall? 2 MR. TULCHIN: Objection. Leading. 3 THE COURT: Sustained. 4 MS. CONLIN: I'm sorry, Your Honor. 5 Q. What was the result you expected from 6 technological innovations and compatibility? 7 A. That customer demand would increase. 8 Q. Mr. Tulchin also quoted to you from 9 Mr. Frankenberg. In fact, I believe that the 10 deposition -- part of the deposition that was 11 taken of Mr. Frankenberg was shown to the jury. 12 And let me remind you what Mr. 13 Frankenberg said that you were quoted. 14 Question: Can you describe for me the 15 steps that an OEM takes in evaluating an 16 operating system to determine whether or not it 17 ought to be included in its product offerings? 18 Answer: Well, the very first question 19 is what -- what level of demand is there in the 20 marketplace for that operating system. 21 He goes on and explains what he means 22 by that and adds in additional things. 23 Do you know what Mr. Frankenberg 24 thought the very most important issue was with 25 respect to the top OEMs' failure to license 10554 1 DR-DOS? 2 A. I'm certain that he would say things 3 like compatibility issues were big. I'm sure 4 he would say Microsoft's licensing practices 5 were a big barrier to entry. Those 6 exclusionary contracts, et cetera. 7 So those would have been two of the 8 things that I'm sure Bob would have cited. 9 Q. When you say compatibility issues, do 10 you mean compatibility issues in the DR-DOS 11 product or compatibility issues in the 12 Microsoft product, intentional or 13 unintentional, that prevented DR-DOS from 14 running properly? 15 A. Well, what I'm talking about 16 specifically is the things that Microsoft was 17 building the error messages that they were 18 building into their operating system that would 19 say error, you know, trying to load Digital 20 Research DOS, incompatible, warning, warning, 21 warning. That sort of thing. And that became 22 a big problem for people that would see that 23 because then they would be scared that the two 24 would be incompatible. 25 Q. Do you know that Mr. Frankenberg gave 10555 1 a declaration, a signed under oath declaration 2 to the FTC on December 1st, 1992? 3 A. That Bob Frankenberg -- 4 Q. Yes. 5 A. Then he would have been an HP employee 6 when he would have given that testimony before 7 the Federal Trade Commission. 8 Q. Do you know how long a term HP had 9 given Microsoft for HP's licensing of Microsoft 10 products? 11 Let me start again, please. 12 How long a term was HP's contract with 13 Microsoft for the operating system? 14 A. My recollection was four years. 15 Q. In the software industry generally, 16 insofar as you know as former general counsel 17 and senior VP, what would be the standard 18 length of a software contract? 19 A. Very typical one year. 20 Q. And is there -- are there any reasons 21 for keeping the contract to a year? 22 A. Well, yes. Both parties -- you know, 23 business interests may change. They may no 24 longer want to carry the product. We may no 25 longer ship that product, et cetera. 10556 1 So to provide flexibility for both 2 sides, typically one year was the target for 3 most of those contracts. 4 Q. And in the software industry, how fast 5 is the pace of innovation and change? 6 A. Oh, it's very fast. 7 Q. Do you know whether or not typically 8 contracts contain confidentiality agreements? 9 Like a contract between HP and 10 Microsoft, would that be a publicly available 11 document or would that be held under 12 confidentiality? 13 A. There may have been some 14 confidentiality provisions in those contracts, 15 but to the extent that -- typically a 16 confidentiality clause includes language that 17 says if we need to make the document available 18 to a government agency under -- for whatever 19 reason, then you know the confidentiality 20 clause does no longer apply. 21 Q. What I'm getting at, Mr. Bradford, is 22 you were asked some questions yesterday 23 indicating that you should have conducted an 24 investigation yourself, and would you be able 25 to require any OEM to give you contracts for 10557 1 their contracts with Microsoft? 2 A. Oh, no. You know, that again was a 3 big problem. They would not willingly share 4 with us in general the contracts they'd sign 5 with Microsoft because typically there was a 6 confidentiality clause between Microsoft and 7 the OEM. 8 And even beyond that, you know, the 9 intimidation factor that OEMs were afraid to 10 share with other parties what they'd entered 11 into for fear of retribution of Microsoft. 12 MR. TULCHIN: Objection to the last 13 part, Your Honor. No basis or foundation. 14 THE COURT: Sustained. 15 Q. What was Microsoft's reputation in the 16 industry in terms of its business practices? 17 MR. TULCHIN: Same objection. 18 THE COURT: Overruled. 19 A. Particularly in this area, the 20 reputation was that they would take action to 21 withhold betas or some other activity that 22 could possibly hurt the original equipment 23 manufacturer, and so they became very reluctant 24 to share with other people information that 25 might assist people like Novell, for example. 10558 1 Q. If you wanted -- and could you, 2 Novell, make people talk to you if they didn't 3 want to? 4 A. No. In general, no, wouldn't be able 5 to. 6 Q. Novell didn't have any subpoena power? 7 A. No. 8 Q. And so what you would do if you got 9 information indicating some practice that was 10 -- that you felt was anticompetitive in order 11 to investigate it, what would you do? 12 A. In that respect, we would typically 13 turn it over to the government authorities, 14 particularly beginning of June of 1992, so the 15 government authorities who had subpoena power 16 and influence over original equipment 17 manufacturers so that they had an opportunity 18 to investigate us. 19 We'd hear from -- we'd see an E-mail 20 or we'd get information, et cetera. It would 21 be difficult for us to go back to, say, Compaq 22 or Dell or another hardware manufacturer and 23 get that information. 24 So we would submit the information to 25 the U.S. government or the European Commission 10559 1 or the Korean Fair Trading Commission or 2 whoever might be investigating the situation, 3 and then they would follow up, I guess, with 4 the hardware manufacturer. 5 Q. Let me show you a license that 6 Mr. Tulchin shared with you yesterday. It is 7 Defendant's Exhibit 34. 8 MS. CONLIN: May I approach, Your 9 Honor? 10 THE COURT: You may. 11 Q. The DRI license, and it is -- the 12 front page doesn't tell us too much except 13 Digital Research California, Inc., DRI and 14 I.F.C. Computer Company Limited. 15 And then turning to the next page, it 16 does, in fact, say as you suspected, that it 17 was -- or maybe you called this to the jury's 18 attention. It was a Taiwanese corporation; 19 correct? 20 A. Yes. 21 Q. And do you know how large a company 22 this was? 23 A. No, I don't recall ever having heard 24 of them, so I don't think they were very big. 25 Q. Turn, if you would, to page 8, and 10560 1 let's look at number 11.2. 2 You can see there that the period of 3 the license -- and what was that? 4 A. 12 months. 5 Q. And in examining this earlier, did you 6 see any minimum commitment in this contract? 7 A. No, not -- my examination revealed no 8 minimum commitments required in this particular 9 contract. 10 Q. Any -- do you know whether or not this 11 is a contract that would be called a per system 12 contract or a per processor contract? 13 A. I don't know that for certain. 14 Q. All right. At this point in time, 15 which I believe was -- so many attachments to 16 these. 17 All right. June 19th, 1991. And that 18 is -- that's before the merger of the two 19 companies; correct? 20 A. That's right. 21 Q. Do you know, however, during this time 22 frame about what market share DRI would have 23 and what market share Microsoft would have in 24 1991? Rough estimate, please. 25 A. Again, rough estimate, probably 98 to 10561 1 2, 95 to 5. 2 Q. Let's now turn to some documents that 3 may help in this area of the per processor 4 licenses and the other matters that were 5 discussed with you yesterday. 6 This is Plaintiffs' Exhibit 353. 7 MS. CONLIN: May I approach, Your 8 Honor? 9 THE COURT: You may. 10 Q. We're just going to look at one page 11 of this. 12 Do you recall yesterday that you and 13 Mr. Tulchin discussed, among other things, a 14 company called Printaform, a Mexican company? 15 A. Yes, we discussed Printaform 16 yesterday. 17 Q. Turn, please, to page numbered at the 18 bottom 13, and you'll see -- I'm sorry, let's 19 go back to the front and establish what that 20 is. 21 A. Right. 22 Q. This is a Microsoft interoffice memo, 23 international OEM sales August 1990 monthly 24 report to Joachim Kempin from Ron Hosogi with 25 various copies. 10562 1 Now we'll turn to page 13. And this 2 is, I believe, a year or more before the 3 document that Mr. Tulchin shared with you. 4 This is 1990 and my recollection is it was 5 about 1992 or so, maybe '91. 6 Printaform. Felipe Ro and Gary 7 visited Printaform in Hermosillia, Mexico, to 8 meet with George Espinosa -- 9 MR. TULCHIN: Your Honor, again this 10 document is not in evidence. I don't know what 11 it is. I haven't seen a copy of it. But I 12 object to Ms. Conlin reading from a document 13 that's not in evidence. 14 THE COURT: Sustained. 15 MS. CONLIN: Your Honor, I would offer 16 it -- Your Honor, we would offer Exhibit 353. 17 MR. TULCHIN: If I could just have a 18 minute, Your Honor, to look through it. 19 No objection. 20 THE COURT: It's admitted. 21 Q. Page 13 under Printaform. Under 22 customer activities, Printaform -- I'll try to 23 go back to where I was. 24 I met with George Espinosa, VP, to 25 negotiate DOS royalties for the second year of 10563 1 their contract. 2 They did very well in the first year 3 finishing at 120 percent of their M/C and 4 wanted to renegotiate -- the M/C, do you know 5 what that means? 6 A. I assume it's some sort of Microsoft 7 quota. 8 Q. Finishing at 120 percent of their M/C 9 and wanted to renegotiate the license to 10 reflect higher volume. 11 Their current pricing is $15 and $25 12 on 8088/286s respectively. 13 Can you tell the jury what 8088 and 14 286 refers to? 15 A. Yes. Those were chip numbers that 16 Intel would have. So they had the Intel 8088 17 chip and then they had the Intel 286 chip. And 18 then a hardware manufacturer such as Printaform 19 or other ones listed on this document would 20 take those computer chips from Intel and build 21 them into their hardware to sell to end user 22 customers. 23 Q. All right. 24 So 15 and $25 per unit on the two 25 different kinds of chips? 10564 1 A. That's right. 2 Q. The new deal is effective 10-1 for DOS 3 4.01/5.0 and Windows 3.0 on all 286, 386, and 4 future 486 systems. 5 Again, those are Intel processor 6 numbers? 7 A. Yes. 8 Q. They will license DOS 3.3 on the 9 8088's. The new contract is for a three-year 10 term so that we don't have to worry about 11 low-end competition. This will be the first 12 OEM in Mexico bundling Windows 3.0 on its 13 systems and we eliminated DRI's chances with 14 Printaform for at least three years. 15 I'm aware that you haven't seen this 16 document before, but -- and I have a few more 17 with respect to Printaform because it was the 18 subject of some questioning of you yesterday. 19 I would show you Plaintiffs' Exhibit 20 1020. 21 MS. CONLIN: May I approach, Your 22 Honor? 23 THE COURT: Yes. 24 Q. This is a letter to Mr. Kempin from 25 Jorge Espinosa M Zasati, vice president on 10565 1 Printaform letterhead bearing date November 7, 2 1990, and Bates stamped MSC 00054408 to 54410. 3 MS. CONLIN: And we would offer it at 4 this time, Your Honor, as a business record. 5 MR. TULCHIN: No objection. 6 THE COURT: It's admitted. 7 Q. Let's turn to the second page. 8 Mr. Kempin is the vice president of 9 worldwide OEM sales and product support 10 services for Microsoft and -- 11 MS. CONLIN: I'm sorry, Darin, could 12 we go back to the first page, please? 13 Kind of set the stage, okay. 14 Q. You've got the date and the addressee, 15 and then in the middle it says, Microsoft made 16 a proposal to Printaform on April 25, 1989, in 17 which the pricing of the licensing agreement 18 was -- and he sets out the pricing. 19 And then if we could turn to the next 20 page. 21 And that next graph is one where 22 Printaform and Microsoft reach an agreement. 23 And then the text says, the minimum 24 commitment was reduced to 505,000 dlls. Do you 25 know what that means? 10566 1 A. The minimum commitment was reduced to 2 five hundred and five -- 3 Q. I think that's -- 4 A. -- thousand dollars. Dollars. 5 Q. Oh, I thought it was some kind of 6 dynamic library. 7 A. There are DLLs out there, but I don't 8 think this is one of them. 9 Q. All right, thank you. 10 The minimum commitment was reduced to 11 $505,000, but the unit price per operating 12 system was increased substantially. 13 Therefore, at the time of the 14 signature, both parties verbally agreed to sit 15 down for an evaluation of the first-year 16 performance and review the pricing for the 17 second year. The idea was to be able to have 18 the pricing proposed by Microsoft on April 25, 19 1989. 20 Our new strategies of promoting the 21 products with a lot of advertising and lower 22 pricing enabled us to exceed the minimum 23 commitment by 19 percent, but when we sat down 24 to review the pricing issue for the second 25 year, we found very unpleasant surprises. 10567 1 One, new contract with minimum 2 commitment for three years, $600,000 per year. 3 Two, the price reduction of the 4 operating system for our XT now was conditioned 5 to the acceptance of bundling Windows with our 6 AT class computers as follows. 7 And he sets out MS-DOS 3.3, first year 8 pricing $15, second year pricing 9.5, and the 9 conditions he lists are accepting to bundle 10 Windows 3.0 with AT computers for three years. 11 Is this one of the things that you had 12 received reports about; that is to say, the 13 bundling of the Windows GUI with the Microsoft 14 dominant operating system? 15 A. Yes. 16 Q. I know that you've not seen this 17 before, but does this appear to be what you 18 were complaining about or concerned about? 19 A. Yes, I think Jorge described it pretty 20 effectively. 21 Q. All right. Turning to the next page, 22 Printaform's objections were two; (A) the 23 minimum commitment of $600 is a commitment of 24 $1.8 million. 25 And (B) there was not a formula in the 10568 1 contract to reduce pricing if market demanded 2 lower prices. 3 Since our objections were not properly 4 considered and we had a negative answer to 5 include in the contract a royalty pricing 6 formula based as a percent of the retail price, 7 we have decided that we will introduce 8 low-priced models for schools without MS-DOS. 9 And then we'll move to the next in 10 order piece of correspondence, which is 11 Plaintiffs' Exhibit 10022. 12 MS. CONLIN: May I approach, Your 13 Honor? 14 THE COURT: You may. 15 Q. This document is dated January 7, 16 1991. It is from Mr. Kempin to Mr. Jorge 17 Espinosa Mireles on Microsoft letterhead. 18 MS. CONLIN: And we would at this time 19 offer Plaintiffs' Exhibit 10022. 20 MR. TULCHIN: No objection. 21 THE COURT: Admitted. 22 (An off-the-record discussion was 23 held.) 24 THE COURT: No objection to 10022? 25 MR. TULCHIN: Yes, sir. 10569 1 THE COURT: It's admitted. Sorry for 2 the interruption. 3 MS. CONLIN: No problem, Your Honor. 4 Q. Mr. Espinosa is addressed by Mr. 5 Kempin as follows: I am in receipt of your fax 6 letter dated November 7, 1990. I apologize for 7 the long delay as this has just now come to my 8 attention. 9 And the November 7th -- January 7th is 10 the date of the reply. 11 In the middle of the next paragraph, 12 he says, you are the industry leader for PCs in 13 Mexico and Microsoft is the industry leader for 14 operating systems on the desktop. Our truthful 15 -- our mutual customers deserve the best 16 quality hardware and software available. 17 I am now confused about what has 18 happened to our relationship. I understand 19 that you have licensed or have plans to license 20 the DOS product from DRI. While I can 21 empathize with your being upset with our late 22 response, I am unclear as to why you would risk 23 a strategic and long-term relationship for what 24 appears to be a short-term cost gain. 25 And the response from Mr. Espinosa, 10570 1 too late came this letter dated January 8, 2 1991. 3 And I have a few more documents about 4 Printaform. 5 MR. TULCHIN: Your Honor, is there a 6 question? Because the reading of these 7 exhibits without a question seems to me to be, 8 let's say, pointless. 9 MS. CONLIN: Well, Your Honor, I could 10 ask the question as Mr. Tulchin did. 11 Q. Do you see that? 12 A. Yes, I do. 13 Q. Okay. Let's move on to Exhibit 533. 14 MS. CONLIN: May I approach, Your 15 Honor? 16 THE COURT: Yes. 17 Q. This is a document that is an E-mail 18 string, the first one of which is from Ronh, 19 January 23, 1991, to Bradc and Sergiop. 20 MS. CONLIN: We would offer Exhibit 21 533. 22 THE COURT: Any objection? 23 MR. TULCHIN: Your Honor, I think we 24 do object on grounds of relevance and 25 prejudice, and I think we've lodged that 10571 1 objection to the material in the middle of the 2 first page. 3 THE COURT: Just a moment. 4 MS. CONLIN: If it's helpful to the 5 Court, Your Honor, all I wish to call the 6 jury's attention to is on the second page 7 having to do with Printaform. 8 MR. TULCHIN: We have no objection to 9 the second page, Your Honor. 10 THE COURT: Very well. It's admitted. 11 MS. CONLIN: Thank you, Your Honor. 12 Q. Second page from Garype, Monday, 13 January 14th, 1991, to Bradc. And I believe 14 that would be Brad Cole. Subject: Printaform 15 and DRI. 16 Mr. Garyp says, the deal is done. We 17 tried to resolve it, but it was too late. All 18 of this happened over COMDEX. The main problem 19 was that DRI offered great pricing (commit for 20 a one year per system) -- not per processor, 21 per system, and they had 5.0 and we didn't, all 22 caps, three exclamation points. 23 Our plan will be to work with 24 Printaform's competitors and really push MS-DOS 25 5.0 and Windows, but the fact remains that 10572 1 Printaform is market leader with 30 percent of 2 market share. 3 And with this -- let's see, January 4 12th, 1991, when the salesperson is going to 5 push MS-DOS 5.0, and let's see, MS-DOS 5.0 -- 6 do you see where that -- when that's released? 7 Surely I put it on there. 8 Does it seem about right to you that 9 MS-DOS 5.0 was released -- not released until 10 perhaps early or mid 1992? 11 A. I'm sorry. Ask the question again. 12 Q. I will. Let me just be sure I know 13 what I'm talking about here. 14 Let's see, we've got 6.0 released in 15 '93, yes. 16 Would it comport with your 17 recollection that Microsoft released MS-DOS 5.0 18 in I think mid maybe March or thereabouts of 19 1992? 20 A. I don't have a specific recollection 21 of that. 22 Q. All right. 23 A. I think these documents relate to the 24 1990 time frame. 25 Q. Now, this was 1991, early, January 10573 1 1991. 2 A. Okay, we've entered now 1991. So it's 3 just a little while before the Novell/DRI 4 merger. 5 Q. Right. 6 A. And, yes. 7 Q. All right. And finally on this series 8 -- and do you see that? 9 A. Yes, I definitely see the part where 10 it says and we didn't. 11 Q. So that would indicate that 12 Microsoft's MS-DOS 5.0 at that point is not in 13 the market; correct? 14 A. Right. We always felt like we had the 15 superior technological features and 16 functionalities in Novell/DRI DOS over and 17 above that of Microsoft. 18 MS. CONLIN: May I approach, Your 19 Honor? 20 THE COURT: You may. 21 MS. CONLIN: Thank you. 22 Q. Here is Exhibit 10025. 23 And this is a document that's a mail 24 string that begins with one from Joachim 25 Kempin, January 30, 1991, re DRI and is Bates 10574 1 number MSC 00638091 to 8093. 2 MS. CONLIN: And, Your Honor, at this 3 time we would offer Exhibit 10025 as a business 4 record of Microsoft. 5 THE COURT: It's 10025? 6 MS. CONLIN: What did I say? 7 THE COURT: Any objection? 8 MR. TULCHIN: I just need a minute, 9 Your Honor, to look at this. I'm seeing it for 10 the first time. 11 THE COURT: No problem. 12 MR. TULCHIN: No objection, Your 13 Honor. 14 THE COURT: It's admitted. 15 MS. CONLIN: Thank you, Your Honor. 16 Q. And let's look first -- let's start 17 with the second page and incorporate an E-mail 18 from Daven to Chrism. Subject: DRI, January 19 28th -- 29th, 1991, and just right at the 20 bottom it says, I had Phil W. looking into this 21 from his end because he's new to the office and 22 is objective. 23 We just spoke, and he says the reason 24 we lost was a number of factors, some clear and 25 simple and others relationships. The top mostf 10575 1 clear one was our not coming down in price. 2 This he said, the president of Printaform, 3 reconsider the pricing -- tried to make clear 4 to -- I'm sorry -- tried to make clear to 5 Joachim in a letter he sent to him asking him 6 to reconsider the pricing or he would talk with 7 DRI. 8 And we've seen the letter from 9 Mr. Espinosa to Mr. Kempin dated November 7, 10 1990, Exhibit 10020; correct? 11 A. That's correct. 12 Q. And then -- the jury will have this 13 whole document. I just want to look at the 14 front one from Daven to Chrism, subject: DRI. 15 I guess it's a duplicate of one that 16 we looked at and it talks about the top most 17 clear one was not coming down in price. 18 This he said, the president of 19 Printaform tried to make clear to Joachim in a 20 letter he sent to him asking him to reconsider 21 the pricing or he would talk with DRI. 22 Evidently, Joachim never responded to 23 the president's letter which really insulted 24 him. 25 And then skipping down to all of this 10576 1 happened. 2 And then the president of Printaform 3 went to COMDEX where he saw a buddy of his who 4 had started working at DRI. 5 Low price, no commitments, and working 6 with his friend was all it took for him to sign 7 on the spot. 8 He said Felipe is an excellent sales 9 guy and has great customer skills and 10 relationships. He -- and I believe if you 11 look, you will see that the he is the Phil W. 12 who is looking into the loss of Printaform. 13 Do you see that? 14 A. All right, yes. 15 Q. He faults Felipe, who he learned was a 16 salesperson, for not being more forceful in 17 demanding lower prices for corp. and 18 campling -- probably camping -- out in Redmond 19 to get them. 20 Quote, he should have camped out on 21 Ron H's doorstep till -- until senior 22 management in OEM agreed to lower prices was 23 his comment. 24 Can you indicate what you think this 25 says about what competition from DRI may have 10577 1 done in terms of Microsoft's pricing of its 2 competing products? 3 MR. TULCHIN: Objection. Calls for 4 speculation. 5 THE COURT: You may answer, if you 6 know. 7 Q. Do you understand what I'm asking? 8 A. Well, I think it -- yes. The answer 9 would be no, I guess, so the objection was not 10 sustained. So you're going to reask the 11 question. Help me. 12 Q. Sure. 13 Does this tell you anything about the 14 effect on Microsoft's prices of competition 15 from DRI? 16 A. Yes, it does. 17 Q. What does it tell us? 18 A. It would cause them to go down to be 19 more competitive. 20 Q. That's all I have on the Printaform 21 situation I'm thinking. 22 THE COURT: We'll take a recess at 23 this time. 24 Remember the admonition previously 25 given. Be in recess for ten minutes. 10578 1 (The following record was made out of 2 the presence of the jury at 1:29 p.m.) 3 MS. CONLIN: Your Honor, I know there 4 is an exhibit coming up that may cause some 5 controversy. I wonder if we could take it up 6 for a moment. 7 Let me first give it to Mr. Tulchin 8 and give him an opportunity to look at it. 9 THE COURT: Okay. 10 (A recess was taken from 1:30 p.m. to 11 1:40 p.m.) 12 (The following record was made out of 13 the presence of the jury.) 14 THE COURT: What's the record you want 15 to make? 16 MS. CONLIN: Your Honor, with respect 17 to two issues. 18 We would offer Plaintiffs' Exhibit 19 5534, Your Honor, which is a lengthy document. 20 May I approach, Your Honor? 21 THE COURT: Yes. 22 Any objection? 23 MR. TULCHIN: Yes, sir. 24 This is a legal brief, Your Honor, 25 written by Novell's lawyers, Ablondi & Foster, 10579 1 and as you'll see, this is a draft of their 2 brief, I believe, to be submitted to the 3 Federal Trade Commission. 4 This falls in the same category of the 5 other documents that we addressed in the 6 memorandum we submitted to the Court on Monday, 7 and it may even be one of them that we 8 mentioned in the brief, though I don't remember 9 specifically. 10 We also made objections to this during 11 the Special Master process for the same reason 12 as we made objections to the other documents. 13 And when we made those objections, the 14 Plaintiffs withdrew this document. So the 15 Special Master never ruled because they simple 16 withdrew it. 17 But this is just a legal brief, Your 18 Honor. It's not evidence of anything and it's 19 not of evidentiary quality at all. 20 THE COURT: Anything else? 21 MS. CONLIN: Your Honor, I don't wish 22 to argue it at this point. I just simply 23 wanted to seek the Court's ruling and have a 24 record -- a complete record. 25 I will say that we believe that 10580 1 Mr. Tulchin opened the door wide and that we 2 should be permitted to discuss with Mr. 3 Bradford this document in which he participated 4 in the drafting, which establishes almost 5 without question that Microsoft's per processor 6 licenses do not prevent piracy. 7 THE COURT: Objection is sustained. 8 It's denied. 9 Anything else for the record? 10 MS. CONLIN: Yes, Your Honor. 11 As we were discussing this off the 12 record, and I do want to just say on the record 13 that Mr. Tulchin took a good deal longer with 14 this witness on his cross than I took on direct 15 and spending quite a bit of time on documents 16 and materials which were, in my opinion, 17 without foundation, which I then had to respond 18 to, and now indicates that he is not certain 19 that if I stop at 2:30, even if I'm not done, 20 and I think I will not be done, that he cannot 21 guarantee that he will be able to complete his 22 work before 3. 23 I'm concerned about not only my -- a 24 fair redirect for me and for the witness, but 25 also about the jurors' convenience, and most of 10581 1 all, Mr. Bradford's convenience. He's come 2 from a long distance and stayed an extra day, 3 and I think it's unreasonable to even hint that 4 he will not be done today. 5 THE COURT: Anything else? 6 MR. TULCHIN: No, Your Honor, except I 7 just want to say if Ms. Conlin's done at 2:30, 8 I've said it two or three times now, I will do 9 my best to be finished by 3, and I expect I'll 10 be able to do so. 11 MS. CONLIN: One other thing, Your 12 Honor, with respect to that. 13 I would then have an opportunity, you 14 know, to ask a couple of questions, perhaps, 15 and the thing that we're perhaps overlooking, 16 though I suspect given our experience that the 17 jurors would be asking their questions right 18 along as we went, but we do need to leave at 19 least a little bit of time for that purpose as 20 well. 21 THE COURT: Very well. 22 Please get the jury. 23 MS. CONLIN: I assume, Your Honor, 24 that I'll be able to question Mr. Gates however 25 many weeks I wish to as well. 10582 1 THE COURT: I don't put limits on it. 2 MS. CONLIN: I know. 3 (The following record was made in the 4 presence of the jury at 1:47 p.m.) 5 THE COURT: Everyone else may be 6 seated. 7 You're still under oath, sir. 8 THE WITNESS: All right. 9 BY MS. CONLIN: 10 Q. I first want to address an issue that 11 Mr. Tulchin took up with you yesterday, and 12 that was the issue of piracy. 13 A. Sure. 14 Q. In the course of your responsibilities 15 to Novell, as well as were you the chairperson 16 of the Business Software Alliance? 17 A. For a period, yes. 18 Q. And that group was formed in part to 19 address the issues of piracy; correct? 20 A. That's correct. 21 Q. Just tell me from your observation, 22 Mr. Bradford, is a per processor license in any 23 way, does it prevent piracy? 24 A. No. 25 Q. Let's move now to FUD. 10583 1 Have you heard that term? 2 A. Yes. 3 Q. And what does it signify? 4 A. Confusing marketing messages. 5 Q. I'm going to talk for a moment about 6 Sears. 7 Do you remember the Sears deal, the 8 Lapheld, with the federal government? 9 A. Yes, I do. 10 Q. And that was in the 1991 time frame, 11 1991. December of 1991 is when the contract 12 was confirmed by Sears for DR-DOS, and by May 13 Sears had moved to MS-DOS. 14 Do you recall that series of events? 15 A. Yes. 16 Q. Mr. Tulchin spoke with you about it, 17 and in speaking with you, he showed you 18 Plaintiffs' Exhibit 5466. I believe that he 19 offered it at that time. 20 Let me show it to you. 21 My records indicate that it was 22 offered. 23 MS. CONLIN: May I proceed? 24 THE COURT: Yes. 25 MS. CONLIN: Thank you, Your Honor. 10584 1 Q. And he called your attention to a -- 2 this document, Exhibit 5466 dated April 14, 3 1992, and I just want to look at the bottom of 4 the second from the last paragraph, and it 5 says, if we are unsuccessful in resolving 6 compatibility issues between DR-DOS and MS-DOS 7 and Windows, I believe that the government may 8 mandate the replacement of DR-DOS with MS-DOS 9 on the contract. 10 During this time frame, do you recall 11 whether or not Microsoft was engaged in a FUD 12 campaign against DR-DOS? 13 A. Certainly. 14 Q. And I believe that you talked with 15 Mr. Tulchin quite a bit about Mr. Edwards. 16 Mr. Edwards -- remind us, please, who was 17 Mr. Edwards? 18 A. John Edwards was an executive with 19 Novell. He was a vice president in our 20 marketing organization. And after Dick 21 Williams left Digital Research, John Edwards 22 took over as head of that product division, 23 Digital Research for Novell. 24 Q. All right. So he would have been in 25 place as the head of the DR-DOS division at the 10585 1 time that this contract was lost; correct? 2 A. That's right. 3 Q. And he was a part of the 4 decision-making with respect to whether or not 5 to agree to guarantee that future versions of 6 Windows would not break DR-DOS? 7 A. Right. He would have been involved in 8 that decision-making. 9 MS. CONLIN: All right. If we could 10 turn, Darin, to the Edwards deposition, and I 11 will be asking you to play lines 4 through 18 12 of page 128. 13 And before you begin, let me see 14 whether or not Mr. Tulchin has any objections 15 to that. 16 MR. TULCHIN: I do. I'm not sure if 17 this is to refresh recollection, Your Honor. I 18 don't think any needs to be refreshed. 19 Otherwise I do object. 20 MS. CONLIN: Your Honor, let me show 21 you what I'm proposing to do. 22 May I approach, Your Honor? 23 THE COURT: Yes, please. Thank you. 24 MS. CONLIN: This is from the 25 deposition, the videotape deposition of John 10586 1 Edwards in the case of Caldera versus Microsoft 2 taken on June 30, 1998. 3 THE COURT: Anything else? 4 MS. CONLIN: No, Your Honor. 5 And, of course, we offer this to 6 respond to Mr. Tulchin's suggestions during his 7 cross-examination. 8 THE COURT: Objection is overruled. 9 Please play it. 10 MS. CONLIN: Thank you, Your Honor. 11 Before you play, though, this may seem 12 a bit odd because the questioner is reading 13 from a document that Mr. Edwards had signed and 14 sworn to, that's the question. 15 (Whereupon, the following video was 16 played to the jury.) 17 Question: Even though we were 18 eventually able to satisfy Sears and the Navy 19 that DR-DOS 6.0 ran well with Windows 3.1, the 20 fear created was so serious that Sears 21 eventually rescinded its award to Novell 22 because we could not agree to a clause that 23 would have contractually obligated Novell to 24 guarantee future compatibility with future 25 Windows products with significant financial 10587 1 penalties if we were not able to satisfy any 2 future compatibility problems. 3 Answer: I agree with that. 4 Question: Okay. Was that sentence 5 meant to summarize the terms offered you by 6 Sears in Exhibit 833? 7 Answer: That sentence was meant to 8 summarize my understanding of the situation of 9 which this probably would have been one of many 10 pieces of information I would have looked at in 11 concluding this. 12 (Whereupon, playing of video 13 concluded.) 14 Q. Do you agree with that? 15 A. Yes. 16 Q. Let me show you Exhibit 851, an 17 internal Microsoft document, which I would 18 offer at this time in case it's already not in 19 the record, I believe that it is -- 20 THE COURT: Plaintiffs' Exhibit 851? 21 MS. CONLIN: Yes, Your Honor. 22 THE COURT: Any objection? 23 MR. TULCHIN: I don't have it, Your 24 Honor. I'll be right with you. 25 No objection. 10588 1 THE COURT: It's admitted. 2 MS. CONLIN: May I approach, Your 3 Honor? 4 THE COURT: Yes. 5 Q. 851 is an internal Microsoft document 6 dated -- E-mail string from Brad Silverberg. 7 Do you know who Brad Silverberg was? 8 A. He was an executive at Microsoft. 9 What his exact title was, I don't know. 10 Q. In charge of MS-DOS, I think the 11 record reflects. Does that comport with your 12 recollection? 13 A. That could be, right. 14 Q. All right. He is writing to Mr. 15 Gates. I suddenly can't remember who Jonl is. 16 Mike Hall -- Hallenan, I think, or Halleran. 17 He was then the CEO or the president, and Paul 18 Maritz and Rob Glaser and Steve Ballmer, with 19 copies to Mr. Cole and Mr. Lennon. Subject: 20 DOS dated July 22nd. 21 And I just want you to look at the 22 second from the bottom paragraph. 23 Keeping in mind the date of July 22nd, 24 1991, let's look at what Mr. Silverberg says 25 Microsoft is doing. 10589 1 He says, we are engaged in a FUD 2 campaign to let the press know about some of 3 the bugs. We'll provide info a few bugs at a 4 time to stretch it out. 5 I know you've not seen this document 6 before, but you've -- have you seen it now? 7 A. I have seen it now. 8 Q. And, in fact, did you experience this? 9 After you and DRI merged, were you conscious of 10 this FUD campaign to let the press know about 11 some of the bugs a few at a time to stretch it 12 out? 13 A. Sure. 14 Q. Let's look at Plaintiffs' Exhibit 942 15 -- let's skip that one. Keeping an eye on the 16 clock. 17 I'm going to show you Exhibit 5401. 18 MS. CONLIN: May I approach, Your 19 Honor? 20 THE COURT: You may. 21 Q. This is an E-mail string which my 22 records show was admitted with the testimony of 23 Mr. Alepin on 1-16-07. Unless I've made a 24 mistake, we'll go forward. 25 And I want to call your attention to 10590 1 the third page -- I beg your pardon -- the 2 second page in the incorporated E-mail, second 3 from the bottom, from Brad Silverberg again, 4 dated October 24, 1991, and this is right 5 before the merger is consummated; correct? 6 A. That's right. 7 Q. And he says -- and this is -- the 8 subject is Re: DR-DOS. Will they, won't they 9 buy? 10 And Mr. Silverberg says, this is a 11 very important point. We need to create the 12 reputation for problems and incompatibilities 13 to undermine confidence in DR-DOS 6. So people 14 will make judgments against it without knowing 15 details or fats. And we believe that means 16 facts. 17 Again, were you experiencing this as 18 you acquired Novell? 19 A. Yes, I guess the startling thing since 20 I've never seen these documents before is the 21 fact that they would be so explicit in their 22 internal E-mails about what they were doing. 23 Q. And I think that you told us that you 24 did not as a legal department feel that Novell 25 could accept the risk of future 10591 1 incompatibilities with Windows and that's why 2 you vetoed the Sears contract; right? 3 A. That's right. 4 There was a sizable financial penalty 5 if we were unable to ensure compatibility in 6 that particular instance. 7 Q. Well, let me look at Plaintiffs' 8 Exhibit 978 admitted 1-16-07. 9 MS. CONLIN: May I approach, Your 10 Honor? 11 THE COURT: You may. 12 Q. We'll start with the E-mail that -- on 13 the second page from Mr. Silverberg again, 14 dated September 27, 1991, to a whole slew of 15 people, including Mr. Allchin and Mr. Maritz 16 and Mr. Ballmer. Subject: DRI, Novell, IBM. 17 And I just want to look at the bottom 18 sentence beginning DR-DOS. 19 MS. CONLIN: Do I see it? 20 I may have directed you to either the 21 wrong exhibit or the wrong page. 22 I think I said second page. 23 Yes, yes. Right there. 24 Q. DR-DOS has problems running Windows 25 today and I assume will have more problems in 10592 1 the future. 2 And then if we go to the first page, 3 we can see who responds to this. 4 It's Mr. Allchin who responds right -- 5 MS. CONLIN: Actually, right at the 6 bottom, Darin. Just that very bottom. 7 Q. Mr. Allchin from Jim Allchin, 8 September 27, 1991. 9 He responds to Mr. Silverberg's 10 statements that DR-DOS has problems running 11 Windows today and I assume will have more 12 problems in the future with this sentence: 13 You should make sure it has problems 14 in the future. 15 Do you see that? 16 A. Yes, I do. Unbelievable, 17 unbelievable. 18 Q. All right. Let's look at whether or 19 not, in fact, there were incompatibilities 20 between DR-DOS and Windows. 21 This is an internal E-mail admitted 22 into evidence on 1-16-07. It is Plaintiffs' 23 Exhibit 682. 24 MS. CONLIN: May I approach, Your 25 Honor? 10593 1 THE COURT: You may. 2 Q. And this is on the first page from 3 Percyt to Phil Barrett dated Monday, April 15, 4 1991. 5 And the record reflects that 6 Mr. Barrett was the -- I think the product -- 7 high-level executive in MS-DOS development, 8 also Windows, I think. 9 Mr. Percy T. says, last Thursday you 10 asked me for a user's view of DR-DOS 5.0. When 11 I worked for David Weiss's brother Ira, I used 12 DR-DOS 5.0 with a huge number of apps. I found 13 it incredibly, all caps, superior to MS-DOS 14 3.31 and IBM-DOS 4.01. 15 Number one, DOS compatibility. The 16 most important reason to use any version of DOS 17 is to run apps. DR-DOS runs every DOS app I 18 know. 19 Skipping down to the next paragraph. 20 DR-DOS 5.0 works successfully with 21 Windows 2.1, Win 386, 2.11 and Windows 3.0 and 22 3.0A, which I believe that the record will 23 reflect -- and maybe it is even on the time 24 line -- was the released May 22nd, 1990, and 25 was the then current version of Windows on the 10594 1 market. 2 At the bottom of that he lists a 3 number of other applications with which DR-DOS 4 5.0 works successfully and then concludes in 5 that paragraph, we could not find an 6 application that wouldn't run. 7 Do you see that? 8 A. Yes, I do. 9 Q. Under utilities -- I'll skip that and 10 go to the second paragraph under number two. 11 DR-DOS has a user friendly shell 12 called ViewMax. Not as good as MS-DOS 5.0 DOS 13 shell, but is much better than PC DOS 4.01 DOS 14 shell. 15 I'm skipping some of the middle stuff. 16 And he says, in the next paragraph, 17 the setup program is truly great. 18 He goes on about the setup program on 19 the next page. DR-DOS setup program makes -- 20 I'm sorry. 21 DR-DOS's setup program makes setting 22 up any memory option extremely easy. MS-DOS 23 5.0 requires the user to read UMB.TXT or the 24 manual. 25 Now, Mr. Bradford, this may be one of 10595 1 the few documents that you can agree with. Do 2 you agree with Mr. Percy T.? 3 A. Yes, I do. 4 Q. Microsoft also hired NSTL to test 5 DR-DOS with a variety of applications. Were 6 you aware of that? 7 A. Who hired whom? 8 Q. Microsoft hired -- do you know what 9 NSTL is? 10 A. N -- 11 Q. Testing labs? 12 A. Not offhand. 13 Q. Did I not give it to you? 14 A. No. 15 Q. I'm so sorry. 16 A. It was an independent third-party 17 testing lab. 18 MS. CONLIN: May I approach, Your 19 Honor? 20 I apologize to the Court and to Tammy. 21 I seem to have only one copy of this document. 22 THE COURT: That's all right. 23 Q. This is -- it is Plaintiffs' Exhibit 24 5306 and Defendant's Exhibit 742. So I would 25 offer it into evidence as Plaintiffs' Exhibit 10596 1 5306. 2 MR. TULCHIN: No objection. 3 THE COURT: It's admitted. 4 MS. CONLIN: Thank you, Your Honor. 5 Q. This document is headed NSTL final 6 report. Microsoft Corporation, DR-DOS 5.0 7 compatibility testing on networks, June 28th, 8 1991. 9 Then we'll turn to the long list of 10 applications tested, which is Attachment B. At 11 the bottom it is Bates number 2343. 12 And at the very top it says, Windows, 13 and it says there's -- when it says yes, it 14 says -- 15 MS. CONLIN: I don't even look. I 16 just assume you're right there. There you are. 17 Q. At the bottom it says, yes, the 18 application is compatible with DR-DOS 5.0. 19 And then at the very top it lists 20 Windows, and it says, yes, compatible with 21 DR-DOS 5.0. 22 Do you see that? 23 A. Yes, I do. 24 Q. Was that your understanding of the 25 compatibility between your product and Windows? 10597 1 A. At certain moments in time it 2 certainly was, but as time progressed and code 3 was built into Windows to make it not 4 compatible with, then problems resulted. 5 MS. CONLIN: May I approach, Your 6 Honor? 7 THE COURT: You may. 8 MS. CONLIN: Let me show you what has 9 been marked as Plaintiffs' Exhibit 9986. 10 Your Honor, this is a news wire that 11 bears Microsoft's Bates stamp Monday, March 15, 12 1993, and the subject is Novell to launch 13 operating system -- I beg your pardon. Novell 14 to launch operating software to rival 15 Microsoft. 16 We would offer at this time 17 Plaintiffs' Exhibit 9986 not for the truth of 18 the matter asserted, Your Honor, but rather to 19 show notice to the industry as to Microsoft's 20 future plans and intentions. 21 MR. TULCHIN: Objection on grounds of 22 hearsay, Your Honor. 23 MS. CONLIN: What I'm going to use, 24 Your Honor, is down at the very bottom of the 25 page, and it goes over just one sentence at the 10598 1 very top. 2 MR. TULCHIN: Same objection. It's 3 hearsay. 4 THE COURT: Sustained. 5 Q. Do you recall, Mr. Bradford, ever 6 reading anything in trade press in which 7 Microsoft indicated that it would virtually 8 guarantee that DR-DOS would not run on future 9 Windows -- would not run future Windows 10 versions? 11 MR. TULCHIN: Objection, Your Honor. 12 THE COURT: Overruled. 13 A. Yes, I remember that. 14 Q. Did that occur with some frequency? 15 A. Yes, I remember one specific instance 16 where an executive vice president of Microsoft, 17 Mike Maples, made that public statement to the 18 world that they would ensure the 19 incompatibility of Novell DOS or DR-DOS with 20 their Windows product. Mike Maples. 21 Q. Moving now to a somewhat different 22 subject matter. 23 You spoke with Mr. Tulchin yesterday 24 about Plaintiffs' Exhibit 5473. 25 MS. CONLIN: And if I may approach, 10599 1 Your Honor, I will provide that to the witness 2 and to Mr. Tulchin. 3 THE COURT: You may. 4 MS. CONLIN: What you're holding, 5 Mr. Tulchin, is actually 5473A, and here is 6 5473 which I'm going to give you. 5473 -- 7 Here is 5473 and here is 5473A. 8 MR. TULCHIN: There was a ruling, Your 9 Honor, against these two pages. They were 10 excluded. 11 MS. CONLIN: Let me hand it to the 12 Court. 13 Here's 5473. Here's 5473A. Here's 14 for the Court. I'll have to get you one. 15 MR. TULCHIN: According to our 16 records, Your Honor, this has already been 17 ruled on. 18 MS. CONLIN: And, Your Honor, my -- I 19 believe that this is a fair response to 20 Mr. Tulchin's comments yesterday on page 10279 21 with respect to the first two pages that were 22 admitted. 23 He asks Mr. Bradford about this very 24 document, and he in doing so suggests that 25 Lindsey's gathering efforts were only able to 10600 1 come up with that one page. 2 That would be pages 10279 and -80. 3 THE COURT: 5473 has been ruled on? 4 MS. CONLIN: Yes, Your Honor. 54 -- 5 MR. TULCHIN: 5473A, Your Honor. 6 5473A, the two pages have been excluded. 5473 7 is in evidence. 8 MS. CONLIN: 5473 we offer in response 9 to Mr. Tulchin's questioning on 5473. 10 MR. TULCHIN: Same objection, Your 11 Honor. 12 THE COURT: Let me look at it. 13 MS. CONLIN: Would the transcript be 14 helpful, Your Honor? 15 THE COURT: Yes, if you have it. 16 MS. CONLIN: I do. I'm handing a copy 17 to Mr. Tulchin. 18 I'm going to provide you, if I may, 19 Your Honor -- may I approach? 20 THE COURT: Yes. 21 MS. CONLIN: -- with the marked -- the 22 highlighted portion I believe opens the door to 23 these -- to this exhibit. 24 THE COURT: And 5473A was previously 25 presented to the Court for ruling? 10601 1 MR. TULCHIN: Yes, Your Honor, as part 2 of 5473, and the ruling was that only the first 3 two pages can come in. 4 These two pages that now are 5473A 5 were part of 5473. They've just been 6 renumbered as a new exhibit, but they were 7 ruled on. 8 THE COURT: I've got you. 9 Anything else on this? 10 MS. CONLIN: Your Honor, we offer them 11 for the purpose of showing that the two pages 12 are not the only thing that Lindsey was able to 13 gather in her gathering efforts. 14 THE COURT: Objection is sustained. 15 Q. Another thing that you discussed 16 yesterday with Mr. Tulchin was the -- well, let 17 me show you what he showed you, and this is -- 18 MS. CONLIN: May I approach, Your 19 Honor? 20 THE COURT: You may. 21 Q. This is Defendant's Exhibit 6775. 22 And what he called your attention to 23 in connection with 6775, which is a letter to 24 you from Linnet Harlan dated February 27, 1992, 25 he called your attention to the first 10602 1 paragraph, which says, in anticipation of the 2 possibility of litigation by Microsoft, you 3 asked that I draft a memo outlining how DRI 4 acquired the Microsoft code that is currently 5 included in DR-DOS 6.0. 6 Then she goes on to explain that. 7 And asked you questions about the 8 proprietary nature of source code. 9 Did you understand Mr. Tulchin's 10 questioning to be intended to imply that DRI 11 had done something wrong in incorporating 12 Microsoft's source code in its VXD driver? 13 MR. TULCHIN: Objection, Your Honor. 14 My question was what it was. There was no such 15 implication. 16 THE COURT: Overruled. He may answer 17 if he knows. 18 A. Yeah, I inferred from what he said 19 that that's exactly what he was implying. 20 Q. Here is Plaintiffs' Exhibit 5159. 21 MS. CONLIN: May I approach, Your 22 Honor? 23 THE COURT: Yes. Has this been 24 previously admitted? 25 MS. CONLIN: I'm not sure, Your Honor. 10603 1 THE COURT: I'll look. Go ahead with 2 your question. 3 Q. This is a letter of September 4, 1990, 4 on Digital Research stationery from Mr. Abel -- 5 I beg your pardon -- to Rich Abel of Microsoft 6 signed by Mr. Ewald, who identifies himself as 7 the OEM product marketing manager of Digital 8 Research for the America's region. 9 MS. CONLIN: And we would offer 10 Plaintiffs' Exhibit 5159. 11 There's embedded hearsay, Your Honor, 12 in the top, which we do not offer for the 13 truth, but which we offer to show to what 14 Mr. Ewald was responding. 15 MR. TULCHIN: We have no objection to 16 5159. 17 THE COURT: It's admitted. 18 Q. Mr. Bradford, please look at the top 19 paragraph. 20 Did you know Mr. Ewald? 21 A. Yes. 22 Q. And the top paragraph, he writes to 23 Rich Abel of Microsoft, I read with great 24 interest the article which appeared on page 31 25 of PC Week dated August 20, 1990. 10604 1 The article indicates that Microsoft 2 is willing to supply virtual device driver code 3 to companies that provide memory management 4 programs. 5 Virtual device driver code, would that 6 indicate to you that that is source code for 7 the virtual device driver? 8 A. I couldn't say whether it was source 9 or object code. 10 Q. All right. To companies that provide 11 memory management programs. 12 Based on the article, my understanding 13 is that this will allow these products to 14 relocate other device drivers and TSRs into 15 upper memory under Windows 3.0. 16 Skipping down, he says, Digital 17 Research would like to formally request that 18 this driver be provided for incorporation into 19 our memory management program, Memory Max. 20 Do you see that? 21 A. Yes, I do. 22 Q. Did you become aware of the 23 possibility or the fear that Microsoft might 24 sue you over this through Linnet's letter? 25 A. Well, yes. 10605 1 Q. Okay. And then, if I may provide to 2 you Plaintiffs' Exhibit 1020. 3 MS. CONLIN: May I approach, Your 4 Honor? 5 THE COURT: You may. 6 MS. CONLIN: And, Your Honor, the 7 document in question is to Ms. Harlan from Greg 8 Ewald dated October 9, 1991. Subject: VXD 9 driver acquisition. 10 And I would say to the Court -- 11 First I would offer Exhibit 1020 for a 12 nonhearsay purpose and part of which is to 13 respond to Mr. Tulchin's implications and to 14 show what subsequent action was taken. 15 MR. TULCHIN: Your Honor, I object to 16 the little speech about my implications. 17 I have no objection to the document 18 being admitted into evidence, and I don't 19 believe it is hearsay. 20 THE COURT: It's admitted. 21 MS. CONLIN: Thank you. 22 Q. Look, if you will, at the first page 23 and specifically -- and then that second 24 paragraph, please. 25 Mr. Ewald of Digital Research says, 10606 1 beginning in June of 1990, shortly after the 2 release of Windows 3.0, articles began 3 appearing in the industry trade publications 4 regarding the subject. 5 The articles indicated that Microsoft 6 was providing to third-party memory management 7 developers code that Microsoft developed which 8 facilitated the uses of upper memory area 9 during Windows sessions. 10 Skipping down, after reading these 11 articles, I wrote a letter to Mr. Rich Abel at 12 Microsoft, which we've seen. 13 This letter requested the release of 14 the subject code to us for incorporation in our 15 memory management software trade marked as 16 Memory Max. 17 As we discussed, this letter was 18 reviewed with counsel prior to posting. 19 And he goes on to say, approximately 20 two weeks later I received in a floppy mailer 21 one diskette with no other documentation from 22 Microsoft. 23 I attempted to read this diskette on 24 my PC and found that the diskette was blank. 25 Turning to the second page, first full 10607 1 paragraph. I immediately called Mr. Abel and 2 left him a voice mail message regarding the 3 fact that the diskette was blank. 4 About two weeks later I received a 5 call back from Lori Sill in Mr. Abel's office 6 apologizing for the mix-up. She indicated that 7 another diskette would be forthcoming. 8 Another week or so passed before the 9 corrected diskette was received, again with a 10 handwritten label and no documentation. 11 The diskette was verified and the code 12 was placed on the EDCBBS for the engineers to 13 work with. 14 After reviewing this matter, were you 15 satisfied that Novell and its predecessor DRI 16 had done nothing -- tell me this, Mr. Bradford, 17 after reviewing all of the information 18 available, did you conclude that Novell was or 19 was not in violation of any agreement or lack 20 thereof in connection with Microsoft? 21 MR. TULCHIN: Objection. Leading. 22 THE COURT: Overruled. 23 Please answer. 24 A. I conclude from all of the 25 documentation that I've seen that everything 10608 1 was in order at Novell's end and our actions 2 were appropriate. 3 Q. Moving on. 4 The last subject matter I want to deal 5 with, do you recall the first -- that the 6 discussion yesterday with Mr. Tulchin in 7 connection with exhibit -- Defendant's Exhibit 8 2491? 9 Are you tired, Mr. -- 10 A. Well, I'm sorry, I yawned. 11 But 2491 -- I'm energized. We're 12 going to get this finished. 13 Q. Yes, we are. 14 A. 2491, I don't recall what this exhibit 15 was in reference to. 16 MS. CONLIN: May I approach, Your 17 Honor? 18 THE COURT: Yes. 19 MS. CONLIN: I gave away all my 20 copies. 21 Q. This was on April 22, 1994 letter from 22 Mr. Neukom to Mr. Thompson. 23 Do you recall that -- Mr. Tulchin 24 called your attention specifically to the last 25 paragraph, which is -- it says, although you 10609 1 raised -- I'm sorry, I'm going to need to say a 2 little more about what's on this letter. 3 This is about a letter to Mr. -- from 4 Mr. Thompson to Mr. Neukom about the proposed 5 nondisclosure agreement provided to 6 WordPerfect? 7 A. It's a letter from Mr. Neukom the 8 general counsel of Microsoft, to Duff Thompson 9 who was the general counsel of WordPerfect. 10 Q. Okay. And he's responding to a letter 11 from Mr. Thompson to Mr. Neukom about the 12 Windows beta? 13 A. Yes. 14 Q. Chicago beta? 15 A. Yes. 16 Q. And he calls your attention to the 17 last paragraph. Although you raised no 18 objection to the period during which 19 individuals who have access to the prerelease 20 Chicago product may not work on a product or 21 technology that competes with Chicago, we have 22 reduced that period to extend only through the 23 commercial release of Chicago. 24 Do you recall being questioned about 25 that? 10610 1 A. Yes. 2 Q. And I believe that the questions were 3 to the effect that Microsoft voluntarily and 4 out of the goodness of its corporate heart had 5 made these changes in connection with the 6 Chicago beta. 7 Do you recall that line of 8 questioning? 9 A. Yes, I do. 10 Q. And let's also look at -- just, I 11 promise, a couple more. 12 Here is the agreement. It is 13 Plaintiffs' Exhibit 5652A. And the agreement 14 is contained as a part of a letter to 15 Mr. Neukom from Felipe Kohn of Borland. 16 MS. CONLIN: May I approach the 17 witness, Your Honor? 18 THE COURT: You may. 19 Q. I just want to call your attention to 20 the agreement itself, the exhibit -- 21 MS. CONLIN: Let me offer Plaintiffs' 22 Exhibit 5652A. 23 MR. TULCHIN: No objection, Your 24 Honor. 25 THE COURT: It's admitted. 10611 1 Q. And let's turn to the page that's 2 numbered Kohn Exhibit 00011 -- I'm sorry, let's 3 skip that one and go instead to Kohn 14. 4 And the letter from Mr. Kohn indicates 5 that this is the beta agreement to which he 6 objects. 7 And we're not going to go through the 8 letter, but I do want the jury to see the 9 section to which Mr. Kohn expressed -- with 10 which Mr. Kohn expresses disagreement on page 11 15. 12 And it begins -- 13 MS. CONLIN: You see where it says 14 consideration, Darin? It says in 15 consideration. 16 Maybe you could blow that up a bit. 17 Q. In consideration of the license 18 granted herein for a period of three years, 19 company agrees -- the company would be the 20 person signing the beta; correct? 21 A. Right. The one to be the recipient of 22 the beta. 23 Q. -- the company agrees to prohibit any 24 authorized individuals who have had access to 25 the product from participating in the design 10612 1 and/or development, feedback, or guidance of a 2 company product or technology that is 3 competitive with the product. 4 And then it lists a number of products 5 that Microsoft at that time considered to be 6 competitive. 7 Three years after the beta was made 8 available to a company, could that be even 9 after the product was released to the market? 10 A. Oh, it would likely be after. 11 Q. Do you know whether or not this 12 particular clause was covered by the Department 13 of Justice consent decree, which is Plaintiffs' 14 Exhibit 5664 which is a part of the record? 15 A. My recollection is that it was. 16 Q. All right. I want to show you an 17 excerpt from the last exhibit that I will be 18 touching on, and it is 3096. I'm providing 19 only those sections -- 20 MS. CONLIN: We have the whole 21 document in court, Your Honor, if necessary. 22 Our records indicate that this has 23 been -- 24 May I approach, Your Honor? 25 THE COURT: Yes. 10613 1 Q. Exhibit 3096 is an E-mail from James 2 Plamondon, Tuesday, January 11, 2000 -- James 3 Plamondon, Tuesday, January 11, 2000, to Peter 4 Plamondon, forwarding Windows evangelism. 5 MS. CONLIN: And, Darin, if you would 6 just look at those attachments that Mr. 7 Plamondon sends to Mr. Plamondon. 8 Q. And the attachments are effective 9 evangelism, evangelism is war, generalized 10 evangelism time line, power evangelism, and 11 then I can't read the last one. 12 Let's turn to page ending 147 in the 13 document, and it says, these are a series of 14 slides that I believe the record reflects 15 Mr. Plamondon presented to other evangelists. 16 Effective evangelism. 17 And then the next page is 49. We're 18 just here to help developers. 19 And the next page is one of those -- 20 next page is 50. Kind of a stop sign. 21 And then the next page, which is 51, 22 says, we are here to help Microsoft. 23 And the next page -- 24 MS. CONLIN: Which I hope you have, 25 Darin. 10614 1 Q. -- it says, so we're just here to help 2 developers; right? 3 MS. CONLIN: Okay. Good, you found it 4 before I did. 5 Q. And the next page is we're here to 6 help Microsoft. 7 Microsoft pays our wages, provides our 8 stock options, pays our expenses. We're here 9 to help Microsoft by helping those developers 10 that can best help Microsoft achieve 11 Microsoft's objectives. Did anyone miss the 12 point here? 13 Now, Novell was an ISV; correct? 14 A. Yes, we were a third-party developer. 15 Q. The next one is titled too many to 16 help. 17 A. That I have here. 18 Q. Some of these are not numbered. That 19 makes the process a bit more difficult, which I 20 didn't notice until right this very minute. 21 70. We've taken a long time to turn 22 all those pages. 23 Too many to help. Can't help them 24 all. This refers to the ISVs. We help those 25 who can help us. If they can't or won't help 10615 1 us, screw 'em. Help their competitors instead. 2 A. Yes, I see that. 3 Q. Finally, the next page 71, we're here 4 to help Microsoft by helping those ISVs that 5 can help Microsoft achieve its objectives. 6 Was that a philosophy that Novell 7 shared? 8 A. Not the screw 'em part. 9 Q. Did you feel that Mr. Plamondon's 10 evangelism was something that Microsoft had 11 experienced? By that I mean the -- his ideas 12 about what evangelists and Microsoft were 13 supposed to do? 14 A. Right. That seemed to be the 15 prevailing view within Microsoft in terms of 16 helping themselves first and foremost. 17 And the last people that they cared 18 about were those people that had products that 19 could have been competitive with them and, you 20 know, became very discouraging to us over the 21 years having to deal with Microsoft on that 22 basis. 23 It felt like when they own the 24 operating system that -- I guess if you were to 25 create an analogy with a basketball game, and 10616 1 you had the University of Washington against 2 the University of Iowa, for example, and 3 they're playing basketball and every time 4 University of Washington shoots a shot, it's 5 worth ten points. There's a 3-point line but 6 now it's worth ten points. 7 And the other side, the University of 8 Iowa, every time they make a shot, it only 9 counts for two points. 10 And so it just felt like, you know, in 11 that kind of environment where they own the 12 operating system, then continued to create 13 actions to secure their monopoly on that 14 desktop, that it became impossible in many, 15 many instances to compete, compete fairly. 16 MS. CONLIN: Iowa would win anyway. 17 Perhaps. 18 I have no further questions, Your 19 Honor. 20 THE COURT: Cross? 21 MR. TULCHIN: I have a few, Your 22 Honor, if I may. 23 THE COURT: Yes. 24 MR. TULCHIN: Thank you. 25 RECROSS-EXAMINATION 10617 1 BY MR. TULCHIN: 2 Q. Mr. Bradford, good afternoon again. 3 I want to look, if we could, at 4 Plaintiffs' Exhibit 3406, which is one of the 5 documents that Ms. Conlin showed you on her 6 reexamination. 7 Maybe we can put it up on the screen 8 so you don't have to search in your pile. 9 A. Sure. 10 Q. This is Plaintiffs' Exhibit 3406, and 11 the re line says prerelease ODBC and Windows 95 12 beta. 13 Do you see that? 14 A. Yes. 15 Q. And then in the body of the first 16 page, there are two headings. One says Windows 17 95 beta software and the other one -- I just 18 want to see the heading. And the other one 19 says ODBC 2.0. 20 A. Yes. 21 Q. Now, you testified on redirect about 22 ODBC 2.0, did you not? 23 A. I may have said something about it, 24 yes. 25 Q. Well, didn't you say that ODBC 2.0 was 10618 1 part of the Windows 95 beta? 2 A. No, it looks like it's a separate and 3 distinct -- 4 THE COURT: Just a minute. 5 A. -- product. 6 Q. I'm asking you what you said on 7 redirect in response to questions from 8 Ms. Conlin. 9 MS. CONLIN: And I'm going to object 10 to the question because it misstates the 11 record. 12 THE COURT: He can answer if he knows. 13 Overruled. 14 A. I don't recall saying that ODBC 2.0 15 was part of the Windows 95 beta software. If I 16 said, I misspoke. 17 Q. Well, don't you recall discussing the 18 material that is contained underneath that 19 heading on pages 1 to 2 on redirect? 20 A. Yes, in general. 21 Q. And what is ODBC 2.0? 22 A. That refers to some form of object 23 oriented, I believe, database that Microsoft 24 had. 25 I think the DB in that particular 10619 1 instance relates to database. 2 Q. Do you know whether or not the ODBC 3 SDKs, which is what's referred to just under 4 the heading in the first line, software 5 development kits, were ever part of the Windows 6 95 beta? 7 A. I don't know if they were part of that 8 or if it was a separate and distinct product. 9 Q. That's what I'm asking because -- and 10 perhaps I'm mistaken, but I thought I 11 understood your testimony on redirect to be 12 that the problems that are set forth here by 13 Mr. Richards, the lawyer who worked for you; 14 correct? 15 A. Yes, uh-huh. 16 Q. Mr. Richards was in your office; he 17 was a Novell lawyer, and he worked for you? 18 A. Right. 19 Q. And he's writing a letter to someone 20 at Microsoft contending that there's certain 21 problems with ODBC, and I just want to make 22 sure that I understand whether your testimony 23 is that that's part of the Windows 95 beta 24 problem that you say existed. 25 A. No. My testimony is that those are 10620 1 separate and distinct issues that we were 2 having problems with Microsoft. 3 Q. And, again, I want to make sure we all 4 understand it. 5 Does this have anything to do with the 6 Windows 95 beta or with some effort to make 7 DR-DOS compatible with Windows or any 8 application at Novell compatible with Windows? 9 A. With the Windows operating system, no, 10 I think this is a separate issue from making 11 Windows compatible. It certainly relates to 12 making ODBC compatible with Novell 13 applications. 14 Q. And, again, how does ODBC relate to 15 any of the complaints that you've told the jury 16 about? 17 A. It's another example of withholding of 18 information from Novell. 19 Q. It has nothing to do with the 20 applications that run on Windows 95, does it? 21 A. I think if we read that, I think 22 that's what it's telling us. 23 In other words, Ryan Richards was an 24 attorney that worked for the applications 25 division primarily. 10621 1 He's writing to David Curtis, who, by 2 the way, was an attorney in the Microsoft legal 3 department, outlining a series of complaints 4 that he had. 5 So I assume they all relate to the 6 applications division. 7 Q. Okay. I understand that you assume 8 that, but these are lawyers writing to lawyers, 9 not software engineers; correct? 10 A. You're right. 11 Q. And I just want to make sure that it's 12 your testimony that you don't know exactly what 13 ODBC is; correct? 14 A. Not exactly. 15 Q. All right. Then let's look at 16 Plaintiffs' Exhibit 1020, 1-0-2-0, and you were 17 asked some questions on redirect about this 18 document. 19 It's dated in October of 1991, and if 20 we could look at the next two pages just very 21 quickly so I can refresh your recollection as 22 to what this is about. 23 This is about the VXD driver; correct? 24 A. Yes. 25 Q. And what happened is that someone 10622 1 named Greg Ewald at Digital Research requested 2 from Microsoft code -- we don't know what kind 3 of code -- for the VXD driver; right? 4 A. Yes. 5 Q. And the VXD driver was something that 6 Microsoft had developed; correct? 7 A. Yes, it appears from that context. 8 Q. And what happened was that someone at 9 Microsoft, namely Mr. Abel, voluntarily sent 10 the code for VXD driver to Digital Research? 11 A. Yes. I think to be accurate, though, 12 whatever he sent showed up blank the first 13 time, and then there was another floppy mailer 14 -- there was a series of mailings, but 15 eventually, it appears that Greg received 16 something. 17 Q. Without charge to Novell; correct? 18 A. Yeah, I don't know if there was a 19 charge associated with this or not. 20 Q. You don't know. 21 In any event, isn't this an example of 22 Microsoft cooperating with Digital Research? 23 A. It appears it took a while, but in 24 this particular instance, Greg eventually got 25 something that DRI could incorporate into its 10623 1 products. 2 Q. Now, during redirect examination, 3 Ms. Conlin mentioned in a question to you the 4 phrase Bates numbers. 5 Do you remember that? 6 A. Yes. 7 Q. And you're familiar with that phrase 8 as lawyers use it, Bates numbers? 9 A. Yes. 10 Q. The phrase refers to numbers that are 11 stamped on the bottom of a page that's being 12 produced in a lawsuit pursuant to a document 13 request or to a subpoena; correct? 14 A. Yes. 15 Q. And this is something that lawyers and 16 paralegals commonly do, they use a device that 17 stamps what are called Bates numbers on a 18 document? 19 A. Yes, that's right. 20 Q. All right. Can we look at Defendant's 21 Exhibit 6773? 22 And I asked you about this on cross. 23 Ms. Conlin asked you about it a couple of days 24 ago on direct. 25 MR. TULCHIN: Let's bring up the text 10624 1 for just a moment. 2 Q. This is this memo -- 3 MS. CONLIN: I'm sure you don't mean 4 to misstate this. I never asked him about it. 5 It's your exhibit. 6 MR. TULCHIN: I don't want to argue 7 about it. 8 MS. CONLIN: Okay. 9 Q. In any event, you saw this during your 10 examination? 11 A. I did. 12 Q. And it's 10-16-95. It says five big 13 bugs now. 14 What I want to point out at the 15 bottom, and this is the document that says Dave 16 doesn't think the bugs are any big deal. DRB, 17 referring to you wrote a letter and so on. 18 I don't know if you want to see that 19 again. 20 A. Okay. 21 MR. TULCHIN: Let's bring that up, 22 Chris, if we could at the top. 23 Q. It says Dave Miller, 10-16-95, five 24 big bugs. 25 Dave thinks the August 21 letter went 10625 1 out from DRB. And you said that probably 2 refers to you. Those are your initials; right? 3 A. That's correct. 4 Q. DRB and others believe that this bug 5 deal is a big deal, but the apps people do not. 6 Dave thinks it's mostly our fault, et cetera. 7 And we talked about this, and there 8 was some question of whether Dave meant Dave 9 Miller, whose name is here, or whether it might 10 be other Daves because it's a common name at 11 Novell and it's a name you and I share, so we 12 both like the name. 13 A. Yes. 14 Q. Now, during your testimony, I believe 15 you expressed some uncertainty as to what this 16 document was. You said it didn't look like 17 something that you would ordinarily see at 18 Novell; is that right? 19 A. That's correct. 20 Q. Okay. And I want to now point out for 21 you the Bates numbers at the bottom of this 22 page. There are two sets of numbers here, 23 correct, NL2 0000389? 24 A. Okay. 25 Q. And then NOV-25-0003888. 10626 1 Do you see that, sir? 2 A. Yes, I do. 3 Q. And that would be what we would think 4 of as Bates numbers; correct? 5 A. I assume so. I'm not a litigator, 6 but, you know I'll take your word for it. 7 MR. TULCHIN: All right. Well, I 8 wonder if we could put on the right screen -- 9 if it's possible, for example, to put up there 10 Plaintiffs' Exhibit 2132. 11 Q. And this was a document that you were 12 shown during your examination. It's meeting 13 minutes called by Dave Miller. You remember 14 this Microsoft conference call? 15 A. Yes, I do. 16 Q. And this certainly looks to you like a 17 Novell document, does it not? 18 A. Yeah, it's a little more formed, 19 right. 20 Q. Well, let's look at the Bates numbers 21 on this exhibit. NL2 0003953. It looks like 22 someone is using the same kind of production 23 numbers on Plaintiffs' Exhibit 2132 as on 24 Defendant's Exhibit 6773; isn't that right? 25 A. Yes. 10627 1 Q. And then there's a second set of 2 numbers on the Plaintiffs' Exhibit 3 NOV-25-003955. 4 Do you see that, sir? 5 A. I do. 6 Q. And that certainly looks very similar 7 to the production numbers, the Bates numbers on 8 Defendant's Exhibit 6773; correct? 9 A. Yeah, it looks similar. 10 Q. Now, wouldn't it be reasonable to 11 conclude, sir, that the same company that had 12 produced Plaintiffs' Exhibit 2132 and used 13 these Bates numbers had also produced from its 14 files in litigation Defendant's Exhibit 6773? 15 A. Yeah. 16 Q. All right. Well, let's just look at 17 one more. 18 Let's look at Defendant's Exhibit 2507 19 on the right. 20 MS. CONLIN: Your Honor, we'd be happy 21 to stipulate to this. 22 MR. TULCHIN: If the Plaintiffs are 23 stipulating that Novell produced from its files 24 in Provo, Utah, Defendant's Exhibit 6773, then 25 there's no further need to go through any more, 10628 1 Your Honor. If that's clear. 2 THE COURT: So stipulated? 3 MS. CONLIN: Absolutely, Your Honor. 4 We never contested it. 5 THE COURT: Very well. The 6 stipulation is made. 7 Q. Well, then let's just look at 6773 for 8 just a moment, and let's look at the text. 9 This is the document that you said 10 didn't quite look like a Novell document. 11 A. That's right. 12 Q. Now that you heard the Plaintiffs' 13 lawyer say that this is a document that was 14 produced from Novell's files in litigation, 15 does that help you conclude that this indeed 16 probably is a Novell document that came from 17 the files maintained in Provo, Utah? 18 A. Well, first Dave Miller wasn't in 19 Provo, Utah, and so Dave was in northern 20 California. But again, it doesn't look like a 21 Novell document. It could well have been a 22 Novell document, but I can't testify that it 23 was a Novell document. 24 Q. Let me ask you a slightly different 25 question. 10629 1 A. Sure. 2 Q. And I probably shouldn't have said 3 Provo -- 4 A. Okay. 5 Q. -- in my question. 6 A. Okay. 7 Q. Now that you've heard the Plaintiffs' 8 lawyer agree that this is a Novell document 9 produced from Novell's files, does that give 10 you a little more comfort or assurance that 11 indeed this is a document written at Novell? 12 A. It could well have been. 13 MR. TULCHIN: Your Honor, during my 14 cross-examination, I neglected to offer two 15 exhibits into evidence at the time. One is 16 Defendant's Exhibit 117 and the other is 17 Defendant's Exhibit 170, and I'd like to offer 18 them both now. 19 THE COURT: Any objection? 20 MS. CONLIN: No, Your Honor, no 21 objection. 22 THE COURT: They're admitted. 23 MR. TULCHIN: No further questions on 24 recross, Your Honor. 25 THE COURT: Thank you. Any 10630 1 reredirect? 2 MS. CONLIN: Yes. 3 REDIRECT EXAMINATION 4 BY MS. CONLIN: 5 Q. I'd like to take a look at 2306, 6 Plaintiffs' Exhibit 2306. 7 That is the letter that you talked 8 about earlier and that Mr. Tulchin talked with 9 you as well. 10 And you see that the top -- if you 11 could go back to the very top thing, and we 12 won't have to bother with it much any longer. 13 It talks about a prerelease ODBC and a 14 Windows 95 beta. And prerelease means beta; 15 correct? 16 A. In many instances it did, that's 17 correct. 18 Q. And so there's a prerelease ODBC and a 19 Windows 95 beta, and they're separately dealt 20 with in the body of the document as well. 21 Do you recall that? 22 A. Yes, I do. 23 Q. Did you ever suggest to your knowledge 24 in your testimony anything but the fact that 25 these were two separate documents? And the 10631 1 jury could also see that, of course. 2 A. I didn't think so. 3 Q. Let's look at 1020, Plaintiffs' 4 Exhibit 1020. 5 And that is the Linnet Harlan -- 6 MS. CONLIN: Let me see, could you 7 turn to the Greg Ewald and blow that up, if you 8 would just a bit. 9 Q. That's the Ewald, October 9, 1991 VXD 10 driver acquisition, and that's the question of 11 whether or not you had some -- 12 THE COURT: Ms. Conlin, could you turn 13 the microphone? When you move, the jury has 14 trouble hearing you sometimes. 15 MS. CONLIN: I'm sorry. 16 All right. Can you blow up the body 17 of the document, please? 18 Thank you. 19 Q. This is Mr. Ewald's recounting of the 20 events leading to our acquisition of the VXD 21 driver functions directive from Microsoft. 22 And what Mr. Tulchin asked you is was 23 this an example of Microsoft's cooperation with 24 Novell. And you said yes, it could be; 25 correct? 10632 1 A. Yes. On a limited basis, that's 2 right. 3 Q. Well, let us take a look at 4 Plaintiffs' Exhibit 487, which was offered and 5 admitted on 1-16-07. And let me show it to you 6 and provide copies to all concerned. 7 MS. CONLIN: May I approach, Your 8 Honor? 9 THE COURT: Yes. 10 Q. Okay. This is kind of confusing. It 11 sort of goes back and forth. 12 MS. CONLIN: Darin, if you'd turn to 13 the page that starts with -- at the top with 14 from Bradsi. That I believe is the first in 15 order. It's dated December 11, 1990, and it 16 ends with Bates 13. 17 There we go. 18 Q. All right. This is Mr. Silverberg 19 again. December 11th, 1990, which you will 20 recall was right around the time that Mr. Abel 21 -- Mr. Abel's letter was in September of 1990 22 and got the VXD shortly or sometime thereafter, 23 and this is Mr. Silverberg's response to that. 24 He sends to Mr. Cole, Mr. Barrett, and 25 Mr. Abel. 10633 1 I have a few questions, he says. When 2 the VXD was sent out to the 20 or so companies, 3 did we get licenses from every one of them? If 4 not, which ones did we not and why not? 5 I want to ensure that in the future 6 when we make sure kind of software available, 7 we get licenses before we send out the 8 software. 9 Do we have a license for DRI? If not, 10 did we just send it out because they called? I 11 think that's supposed to be called. 12 And then we can turn to two. The 13 second, I think, in order, which is also from 14 Mr. Silverberg Wednesday, December 12th to 15 Mr. Cole, Mr. Barrett, and Mr. Abel, re, memory 16 manager VXD. 17 And he says, there is a step I'm 18 missing here. We send them the disk, but don't 19 have a license from them. How do they know 20 they can't ship it? They could certainly say 21 we didn't tell them that they need a license. 22 And then if you skip down to the last 23 paragraph there, it says, I want to make sure 24 that in the future DRI gets nothing from us. 25 No Windows betas, no DOS betas, no help. 10634 1 Is that the kind of cooperation that 2 you usually got from Microsoft? 3 A. That's correct. 4 MS. CONLIN: I have nothing further, 5 Your Honor. 6 MR. TULCHIN: Nothing, Your Honor. 7 THE COURT: Very well. 8 At this time, ladies and gentlemen, 9 we're going to recess until Tuesday at 8:30 10 a.m. 11 THE WITNESS: See you folks. 12 THE COURT: Before you leave, I'm 13 going to read to you the admonition. 14 Under your oath as jurors in this case 15 you are admonished that it is your duty not to 16 permit any person to speak with you on any 17 subject connected with the trial of this case. 18 You are not to talk with any of the 19 parties, their attorneys, or witnesses during 20 the trial, even upon matters wholly unrelated 21 to this trial. 22 Should anyone try to discuss this case 23 with you or in your presence, you should not 24 listen to such conversation. You should 25 immediately walk away. If a person should 10635 1 persist in talking to you, try to find out 2 their name and report it immediately to the 3 Court. 4 You also are admonished not to 5 converse among yourselves or with anyone, 6 including family members, on any subject 7 connected with the trial of this case. 8 You should not form or express an 9 opinion on this case and you should keep an 10 open mind until you have heard all of the 11 evidence, the statements and arguments of 12 counsel, the instructions of the Court and the 13 case is finally submitted to you and you have 14 retired to your jury room to deliberate. 15 Not only must your conduct as jurors 16 be above reproach, but you must avoid the 17 appearance of any improper conduct. 18 You must avoid reading and listening 19 to or watching news accounts of this trial, if 20 there should be any. You should also avoid 21 looking at any Internet or websites on your 22 computer or computers you may have concerning 23 anything about this case. 24 Sometimes such accounts are based upon 25 incomplete information or contain matters which 10636 1 would not be admissible in Court. They can 2 unduly influence your ultimate decision. 3 As a jury, you are the Judge of the 4 facts, while the Court is the Judge of the law. 5 During the course of this trial, I 6 will be required to decide legal questions, and 7 before you leave to deliberate this case, the 8 Court will instruct you in the law you are to 9 follow in reaching your verdict. 10 You should give careful attention to 11 all of the testimony as it is presented to you, 12 for you will only hear it once and you must 13 depend upon your recollection of the testimony 14 when deliberating in your jury room. As I 15 stated before, do not form an opinion and keep 16 an open mind until all of the evidence has been 17 received. 18 From time to time during the trial the 19 Court will be required to confer with the 20 attorneys upon points of law which require only 21 the consideration of the Court. These 22 conferences will be conducted outside the 23 presence of the jury. It is impossible to 24 predict when these conferences will be required 25 or how long they may last. However, these 10637 1 conferences will be conducted so as to consume 2 as little of your time as possible while still 3 being consistent with the orderly progress of 4 the trial. 5 Also, from time to time during the 6 trial the Court will be required to rule on 7 objections or motions of the lawyers. You 8 should not infer anything by reason of the 9 objection, nor may you infer anything from the 10 rulings on the objections or that the Court has 11 any opinion one way or the other concerning the 12 merits of the case. 13 If an objection to a question of a 14 witness is made and the objection is sustained 15 and the witness is not permitted to answer, you 16 should not speculate as to what the answer may 17 have been nor may you draw any inference from 18 the question itself. 19 Additionally, in your jury room you 20 must not refer to or give consideration to any 21 testimony which may have been given but then 22 was stricken from the record by the Court. 23 Also, the lawyers in this case are 24 under an obligation not to talk with you. Do 25 not consider them to be aloof if they do not 10638 1 greet you outside of the courtroom. They are 2 merely abiding by their own rules of ethics and 3 the rules of this Court. 4 MS. CONLIN: Your Honor, I'm terribly 5 sorry. I have a housekeeping matter. I need 6 to offer some of the exhibits that I didn't 7 offer as I went. 8 THE COURT: Very well. 9 MS. CONLIN: Plaintiffs' Exhibits 10 9982, 5305, 5473, 9052, 1797, 2270, 2399A, 11 1793, and 2266. At this time, Your Honor, 12 Plaintiffs offer those exhibits. 13 MS. NELLES: Your Honor, if I may. 14 As we were going along, I knew what 15 was in and what was not in, but I no longer 16 have each one, and if I could simply have over 17 the weekend to check the status on each of 18 these, and if we can address it first thing 19 Tuesday morning? 20 THE COURT: You may. 21 MS. NELLES: Thank you. 22 THE COURT: Drive careful. Leave your 23 notebooks here. 24 (A recess was taken from 2:59 p.m. 25 to 3:12 p.m.) 10639 1 (The following record was made out of 2 the presence of the jury.) 3 THE COURT: Ready to proceed on -- is 4 it Joachim? 5 MR. GRALEWSKI: Joachim. 6 THE COURT: Joachim. 7 MR. GRALEWSKI: Good afternoon, Your 8 Honor. 9 THE COURT: Good afternoon. 10 MR. GRALEWSKI: As you just indicated, 11 we're here to handle objections concerning the 12 Joachim Kempin transcripts. 13 All of the issues that will be 14 presented to Your Honor today have not been 15 presented to the Special Master. 16 They are all issues stemming from 17 either collateral estoppel or recent orders of 18 the Court concerning the consent decree order 19 that the Court recently entered I believe it 20 was last Saturday. 21 THE COURT: Okay. 22 MR. GRALEWSKI: And the motion in 23 limine order regarding foreign antitrust 24 proceedings. 25 And if I may hand up a rulings chart 10640 1 and the transcripts, Your Honor. 2 THE COURT: You may. 3 Thank you. 4 MR. GRALEWSKI: You're welcome. 5 Your Honor, I will be addressing the 6 objections that Microsoft has asserted 7 concerning the consent decree and the foreign 8 antitrust proceedings, and Mr. Cashman will 9 then address the collateral estoppel issues. 10 THE COURT: Great. Please begin. 11 MR. GRALEWSKI: As Your Honor will 12 notice from the rulings chart, there are three 13 designations, the first one, the second one, 14 and the last one that are consent decree 15 related objections. 16 The parties have spent a considerable 17 amount of time and have narrowed the objections 18 quite a bit. 19 THE COURT: Good. 20 MR. GRALEWSKI: What we are left with 21 is a -- I think a disagreement that applies 22 equally to all three of these, which I'd like 23 to address globally, and then we can look at 24 each designation individually. 25 The position that I believe Microsoft 10641 1 will take as we've discussed during our meet 2 and confers is that these lines of testimony 3 will create the impression in the jury's mind 4 that the consent decree was not a voluntarily 5 entered into agreement. 6 The reason that Microsoft is taking 7 this position is because the testimony talks 8 about what the consent decree requires 9 Microsoft to do. 10 There's a very important distinction. 11 The testimony does not suggest that the 12 entering into of the agreement was anything 13 other than voluntary. 14 So essentially what we have, Your 15 Honor, is -- and this is applicable across the 16 board with all types of agreements, and 17 certainly all consent decrees. 18 You can voluntarily enter into an 19 agreement, but once you enter into the 20 agreement, you are required to comply with it. 21 Otherwise, there would be no sense in having an 22 agreement in the first place. 23 So it is Plaintiffs' position that in 24 each of these instances, all that's occurring 25 is testimony concerning what the requirements 10642 1 are of the agreement once the consent decree is 2 entered into. 3 I should note that even if this was an 4 issue, which it shouldn't be because of the 5 reasons I just indicated, there is an 6 instruction that the Court has finalized. And 7 I frankly don't know whether it's been given to 8 the jury or not, but there is an instruction 9 that makes crystal clear -- there's an 10 instruction that makes crystal clear that 11 Microsoft entered into the decree voluntarily. 12 So with that preliminary global 13 argument, we can look at each individual 14 designation. 15 The first one is -- this is from the 16 Caldera transcript -- 84, 5, to 85, 8. 17 And Mr. Kempin is being asked about 18 Microsoft's -- changes in Microsoft's practices 19 as a result of the agreement. 20 And the question is: And there were 21 changes in the licensing policy and practices 22 that were required by the consent decree; 23 correct? 24 Answer: That is true. 25 Consistent with what I just said, this 10643 1 does not suggest that Microsoft did not 2 voluntarily enter into the agreement, but it 3 certainly does suggest that once entering into 4 the agreement, they're required to comply with 5 it. 6 I'm happy to quickly do the next two 7 or we can look at each one individually. 8 They're all very similar issues. 9 THE COURT: Ms. Bradley? 10 MS. BRADLEY: We're happy to deal with 11 them all as a group. 12 MR. GRALEWSKI: Thank you. 13 THE COURT: Individually or all 14 together? 15 MS. BRADLEY: All as a group. Go on 16 ahead. 17 MR. GRALEWSKI: I should proceed. 18 The next designation at issue, Your 19 Honor, also from the Caldera transcript is on 20 page 89, lines 4 and 5. 21 And really, to be most clear, only a 22 phrase that starts with the which at the end of 23 line 4 and then the entire line 5. So all 24 that's at issue is the phrase which contained 25 the terms that were prohibited. 10644 1 Again, this isn't testimony that 2 suggests or states in any way that Microsoft 3 was forced into the agreement. Simply that 4 Microsoft was required to comply with the 5 agreement, and it indicates what the agreement 6 was about and what it prohibited, which was the 7 substance of the agreement, the per processor 8 contracts. 9 And lastly, the third and final 10 consent decree type objection is from 11 Mr. Kempin's March 18, '98 DOJ/CID transcripts. 12 And for the record -- I know it's on 13 your rulings chart -- it's again just two lines 14 108, 2 to 3. And specifically the phrase since 15 the consent decree prohibitions on per 16 processor licenses became effective. 17 Again, this simply discusses and asks 18 Mr. Kempin about what the requirements of the 19 consent decree were and not that Microsoft did 20 not enter into the consent decree voluntarily. 21 I will note, Your Honor, that this is 22 testimony at this point that's highly probative 23 with the defense that Microsoft asserts, which 24 is that per processor contracts -- the purpose 25 of them was to prevent piracy, and this 10645 1 testimony is offered to directly debunk that 2 assertion. 3 Mr. Kempin testifies that after they 4 stopped using the per processor agreements, he 5 did not see any increase in OEM shipments of 6 PCs without operating systems going to an issue 7 related to the piracy issue. 8 Thank you, Your Honor. 9 THE COURT: Thank you. 10 Ms. Bradley? 11 MS. BRADLEY: Your Honor, Microsoft, 12 as you can see, has objected in an extremely 13 narrowly tailored way to just the testimony 14 from Mr. Kempin that runs an extreme risk of 15 confusing the jury as to your instruction 16 regarding the consent decree. 17 If I may hand that up so that we can 18 all have it in front of us. 19 THE COURT: Thank you. 20 MS. BRADLEY: Your Honor instructed 21 that the consent decree was a voluntary 22 agreement and that type of language, the 23 voluntariness of the consent decree pervades 24 the instruction. 25 And Microsoft has objected to, as 10646 1 you've heard, three very narrow portions of 2 testimony that seem to either contradict this 3 or run the risk of confusing the jury as to the 4 voluntariness of Microsoft's participation or 5 entry into the consent decree. 6 Plaintiffs' argument that the 7 testimony at issue is highly probative doesn't 8 go to the narrowly tailored objected-to 9 testimony but rather to the larger designations 10 which Microsoft concedes should be presented to 11 the jury. 12 The testimony that Mr. Gralewski just 13 referred to from the DOJ/CID transcript, the 14 piracy rationale testimony still comes in, and 15 only the line in the questioning attorney's 16 statement that these were prohibitions 17 indicating some sort of involuntariness is 18 objected to here. 19 The same is true in the Caldera 20 transcript at 84 -- at lines -- pages 84 and 21 89. 22 At page 84, Microsoft objects to the 23 questioning attorney's statement or question 24 that the policies and practices were required 25 by the consent decree. And as with the other 10647 1 designations, bears the risk of confusing the 2 jury as to the voluntariness of the agreement. 3 Extricating those four lines of 4 testimony doesn't detract at all from the 5 probativeness of the remainder of the line of 6 questioning and could easily be done without 7 harm to the probativeness of the remainder of 8 the testimony. 9 The same is true at page 89 where the 10 questioning attorney's attempt to put a gloss 11 on the consent decree, which contained the 12 terms that were prohibited, would be a simple 13 way to remove a potentially very confusing 14 portion of the question from being presented to 15 the jury that runs the risk of contradicting 16 your instruction that the agreement was 17 voluntary. 18 So for that reason, we ask that Your 19 Honor sustain Microsoft's relevance and 20 prejudice -- really it's a prejudice argument, 21 prejudice objection to these three very 22 narrowly tailored portions of testimony. 23 THE COURT: Anything else on these 24 three? 25 MR. GRALEWSKI: Just one issue, Your 10648 1 Honor, and that is I just noticed in looking at 2 the instruction again that it mimics actually 3 the exact language from at least one of the 4 questions. 5 If Your Honor would refer to the 6 Caldera testimony at page 89, the question 7 talks about prohibited terms, and I would note 8 that the instruction that the parties have 9 agreed to uses those same exact terms about 10 right in the middle of the instruction. 11 THE COURT: Yeah, but that's referring 12 to what the -- contains provisions by their 13 terms -- that by their terms prohibit or 14 restrict -- that's what the agreements did. 15 MR. GRALEWSKI: That's right. And 16 what the instruction -- 17 THE COURT: She's talking about what 18 the consent decree did, isn't she? 19 MR. GRALEWSKI: No, perhaps I'm -- 20 perhaps I didn't begin my rebuttal argument 21 correctly. 22 THE COURT: Maybe I'm reading it 23 wrong. Go ahead. I'm sorry. I shouldn't have 24 interrupted you. Go ahead. 25 MR. GRALEWSKI: Not at all, Your 10649 1 Honor. 2 The instruction in the middle of the 3 page is explaining what the consent decree 4 provides for. 5 THE COURT: Right. 6 MR. GRALEWSKI: And one of the things 7 the instruction says is that -- you have to go 8 back up a little bit to the start of the 9 sentence, Microsoft also agreed not to enter 10 into any license agreements with OEMs for 11 operating systems software that, and then skip 12 down to contains provisions that by their terms 13 prohibit or restrict an OEM's licensing of 14 non-Microsoft operating systems. 15 So in the instruction itself that the 16 parties have agreed to, the jury is going to be 17 told that Microsoft, even though they entered 18 into something voluntarily, they're still 19 prohibited by the agreement from doing 20 something, and that's the essence -- that's the 21 essence of the argument. 22 THE COURT: I understand what you're 23 saying now. 24 MS. BRADLEY: But, Your Honor, I have 25 to say that I think that your initial reading 10650 1 of this was exactly right, which is that this 2 -- the consent decree, the agreement governed 3 what Microsoft could do. Among those things 4 was that the OEMs could not be prohibited from 5 doing something. 6 So just to clarify on that. 7 And, Your Honor, the questioning 8 attorney's statements in the -- in the 9 testimony to which we've objected does not 10 contain any such context that implies the 11 voluntariness of such prohibitions. 12 MR. GRALEWSKI: I'm sorry, just -- I 13 think I need to state this for the record that 14 the instruction nor -- neither the instruction 15 nor the consent decree attempt to control OEMs' 16 ability to do things or not do things. 17 What the consent decree did and what 18 this instruction makes clear to the jury is 19 that by the consent decree, Microsoft was 20 prohibited -- to use that word again -- from in 21 their OEM license agreements putting provisions 22 in there that prevented OEMs from licensing 23 non-Microsoft software. 24 So it's not a situation where you're 25 attempting to control the actions of the OEM. 10651 1 It is again identifying something that 2 Microsoft was prohibited from doing, and which 3 is entirely consistent with these three 4 designations we've just talked about. 5 THE COURT: Are these -- you guys went 6 through all these? 7 You guys did a good job if you 8 narrowed it down to just these. There's a lot 9 of testimony here. 10 MR. GRALEWSKI: Thank you, Your Honor. 11 THE COURT: Thank you. 12 MR. GRALEWSKI: Eight hours of 13 testimony. 14 THE COURT: Excellent job. 15 MS. BRADLEY: Although I will say, 16 Your Honor, that we have maintained quite a few 17 collateral estoppel objections, which -- 18 MR. CASHMAN: Your optimism may be a 19 little bit premature. 20 MS. BRADLEY: I didn't want you to get 21 too excited. 22 MR. GRALEWSKI: But eight hours of 23 testimony and no hearsay issues to present to 24 the Judge and other issues. 25 THE COURT: 231 now? 10652 1 MR. GRALEWSKI: Yes, Your Honor. 2 This is from the Caldera transcript. 3 THE COURT: I'm there. 4 MR. GRALEWSKI: 231, 14 through 24, 5 and then there's an objection interposed, and 6 then there's a couple lines thereafter that's 7 the same issue, 232, 2 to 5. 8 THE COURT: Okay. 9 MR. GRALEWSKI: And I believe we've 10 agreed that these can be not only addressed 11 together now, but also your ruling should -- I 12 suppose be the same for each of them. I guess 13 they could have been put on the rulings chart 14 together. 15 What is going on here, Your Honor, is 16 Mr. Kempin is being examined about one of his 17 own documents that he wrote. It's an 18 admissible Microsoft business record and 19 admission -- the testimony starts, if you go 20 back just a couple -- or actually just one 21 page, page 230, line 18, the document is 22 introduced and as his compilation of OEM sales 23 reports, there's -- they discuss what the date 24 is. 25 And then at the bottom of 230. 10653 1 Question: And on the second page of 2 this you have a discussion of DRI? 3 And he says, yeah, I see that. 4 And then there's some questions about 5 DRI, and then we get to the objected to 6 testimony, which starts at line 14. 7 Despite the fact that this is not true 8 generates a bad atmosphere. 9 Again, this is quoting from Mr. 10 Kempin's own document. 11 These are Mr. Kempin's own words. 12 Continues we, meaning Microsoft, have 13 some indications that the Korean government is 14 trying to challenge our per processor contracts 15 under Korean trade law. 16 And then the question comes: And 17 that, in fact, it happened, did it not? 18 That is true. 19 And then there are -- then there's a 20 question about -- not unlike the consent decree 21 that we've been arguing, the question basically 22 talks about well, what was the effect of the 23 investigation. 24 And Mr. Kempin states a fact, which is 25 they stopped using per processor agreements in 10654 1 Korea. 2 And then it goes on, you were involved 3 in deciding how to respond to the Korean 4 government's investigation? Yes, I was. 5 That's the totality of the issue here. 6 Again, the objection is prejudice. 7 I need to remind the Court that 8 Defendant brought a motion in limine to exclude 9 on a global basis all references to foreign 10 antitrust proceedings, and the Court denied 11 that motion. 12 The Court said -- the Court had 13 considered the motion and finds that it should 14 be and is denied. The Defendant's motion is 15 very broad. 16 And then Your Honor went on to state 17 that issues concerning foreign antitrust 18 proceedings should be dealt with on a 19 case-by-case basis. 20 I would think to recognize the fact 21 that certain testimony may not cross the line 22 while other testimony could be inflammatory, 23 unsubstantiated or the like. 24 Here, I would submit that these are 25 just facts. Indeed, it's Mr. Kempin's own 10655 1 words, and he actually testifies that he was 2 involved in this, it was correct. 3 And all he does is say as a result of 4 the investigation, we stopped using per 5 processor contracts in Korea. 6 It's highly probative to an issue in 7 the case and it doesn't seem to cross that line 8 into, you know, undue prejudice that is what 9 the objection is to this testimony. 10 Thank you, Your Honor. 11 MS. BRADLEY: Your Honor, I will say 12 first that the document itself, which I wish I 13 had brought a copy with me to hand up today, 14 but doesn't reference the Korean FTC's actions 15 in any way, and so that argument is inapposite 16 here. 17 THE COURT: What's he reading from in 18 line 14 to 17? Is he reading from something? 19 MS. BRADLEY: Not reading. He's 20 describing the situation in which he was 21 involved with respect to the Korean -- 22 THE COURT: So the questioner when he 23 says on line 14, page 231, despite the fact 24 that this is not true, it generates a bad 25 atmosphere, that's part of the question there? 10656 1 Do we have some indication? 2 MS. BRADLEY: That portion is the 3 document. 4 THE COURT: So he is reading part of 5 the document? 6 MS. BRADLEY: That portion, yes, Your 7 Honor. 8 MR. GRALEWSKI: And the next sentence, 9 Your Honor. Sorry to interrupt. 10 THE COURT: All right. So we have 11 some indication. 12 MS. BRADLEY: But it doesn't tell us 13 any action the Korean government took with 14 respect to, for instance, banning per processor 15 agreements in Korea. And, in fact, that's one 16 of the problems with this whole line of 17 testimony is we do not know, nor do Plaintiffs 18 know, nor is it described anywhere in all of 19 this pile of Mr. Kempin's testimony or 20 elsewhere exactly what the Korean government 21 did, what actions they took. 22 We have some indication that what 23 happened with the Korean FTC was that Microsoft 24 entered into something akin to a consent 25 decree; that there were perhaps some letters 10657 1 exchanged. 2 But we have no substantiated evidence 3 that there was any -- ever any order that 4 Microsoft cease using per processor licenses in 5 Korea, and the suggestion here is otherwise. 6 And that, Your Honor, is highly prejudicial to 7 Microsoft's case, especially considering all of 8 the other evidence that shows that at least in 9 the United States, and as far as we can tell 10 everywhere in the world, nobody's found per 11 processor licenses to be per se illegal. 12 I will hand up -- 13 THE COURT: It seems like when he's 14 reading this, he's reading from Mr. Kempin's 15 own document; is that right? 16 MS. BRADLEY: That portion, yes, Your 17 Honor. 18 THE COURT: And he says we have some 19 indications that the Korean government is 20 trying to challenge our per processor contracts 21 under Korean trade law. That's the end of the 22 reading there; right? 23 MS. BRADLEY: Yes, Your Honor. 24 THE COURT: Then the questioner says, 25 and that, in fact, did happen, did it not? And 10658 1 the answer is that is true. 2 MS. BRADLEY: Your Honor, Microsoft 3 doesn't dispute that the -- that Microsoft was 4 challenged by the Korean FTC on its practices 5 in Korea. 6 And to give a little bit of context 7 for what was happening here, it was a highly 8 politically charged issue for the Korean 9 government, and the issue is -- and if we look 10 at the testimony up above, it gives a little of 11 this, but not quite the full flavor of it, and 12 that is that the Korean OEMs were concerned 13 that Microsoft was giving better prices to 14 Taiwanese OEMs than it was to Korean OEMs, and 15 so there was a certain amount of national pride 16 or conflict that was implicated here that sort 17 of pervades this whole issue of the Korean FTC 18 instigated an investigation into Microsoft's 19 activities in Korea. 20 That issue is irrelevant and has 21 virtually no probative value in this case, this 22 case, which is about whether Iowa consumers 23 were overcharged for their software. 24 It's just -- I've never heard 25 Plaintiffs be able to make a link from the 10659 1 Korean FTC's investigation of Microsoft's 2 practices in Korea that were as far as we can 3 tell a result of a sort of nationalistic 4 conflict and for which we have no real 5 understanding of the outcome of that 6 investigation. For instance, whether Microsoft 7 entered voluntarily into an agreement to cease 8 such practices in Korea or whether it was 9 ordered to do so. 10 It's just difficult to conceive of the 11 potential probativeness of that testimony being 12 shown in this courtroom to this jury and bears 13 the risk of substantial prejudicial effect 14 because the -- because the jury runs the risk 15 of coming to the conclusion that these per 16 processor licenses were similarly impermissible 17 in the United States. 18 Now, if I may hand up Microsoft's 19 motion in limine on foreign antitrust 20 proceedings. 21 THE COURT: This is what I already 22 ruled on? 23 MS. BRADLEY: Yeah, you've already 24 ruled on this. 25 And this -- to this motion in limine, 10660 1 Microsoft attached and I've attached here a 2 declaration from a Korean attorney stating that 3 Korean antitrust law and American antitrust law 4 are very different. 5 And so the risk that the jury will 6 conclude that because it appears -- it may 7 appear from this testimony that the Korean 8 government had challenged Microsoft's use of 9 per processor licenses and perhaps found them 10 to be unlawful in Korea, that the jury would 11 make the leap to finding that per processor 12 licenses were somehow unlawful in America, 13 which has never been found, is just too severe. 14 THE COURT: This is the affidavit of 15 Mr. Ahn. 16 MS. BRADLEY: Yes, Your Honor. 17 THE COURT: Isn't it true that -- 18 MS. BRADLEY: And I'll point you -- 19 THE COURT: I'm sorry, go ahead. 20 MS. BRADLEY: It's at paragraph two 21 you'll see that he states that the K FTC's 22 procedures bear little or no resemblance to the 23 procedures applicable in U.S. courts and -- 24 THE COURT: That has to do with 25 procedures, not whether it's in violation of a 10661 1 particular act, isn't it? 2 MS. BRADLEY: Well, Your Honor, the 3 issue being and the point of this being that 4 because Your Honor and we all understand that 5 Korean antitrust law is distinct and that the 6 Korean procedures are distinct, that to somehow 7 draw the link, which the -- it seems that 8 Plaintiffs are attempting to do through their 9 designation of this testimony that because 10 Korean trade commissioners found a practice to 11 be unlawful in Korea that they're somehow 12 improper here is a highly improper conclusion 13 to draw and one that we -- that we're sort of 14 tempted to reach from just hearing this 15 testimony. 16 THE COURT: Is paragraph three in this 17 declaration by Mr. Ahn supposed to be all 18 inclusive of what Microsoft is alleged to have 19 violated in the Korean Fair Trade Law? 20 MS. BRADLEY: There were actually a 21 few different -- as far as I understand it, 22 there were a few different issues that came up 23 with respect to the Korean FTC, and this 24 declaration refers specifically to a different 25 issue, and that is the streaming media. 10662 1 THE COURT: And instant messaging? 2 MS. BRADLEY: Instant messaging. 3 As Your Honor recalls, when the Court 4 ruled on this motion in limine on foreign 5 antitrust proceedings, it found that foreign -- 6 evidence related to foreign antitrust 7 proceedings would be evaluated on a 8 case-by-case basis and that evidence would be 9 permitted if it were found to be relevant and 10 excluded if it were found to be irrelevant. 11 We would submit that this evidence at 12 issue here falls clearly on the irrelevant side 13 of that line, and particularly in light of the 14 danger of prejudice of submitting such 15 testimony before the jury that suggests to them 16 and to the rest of us that there's some 17 impropriety or illegality involved in this type 18 of behavior. 19 THE COURT: Mr. Gralewski? 20 MR. GRALEWSKI: Yes, Your Honor. 21 Thank you. 22 It seems that particularly a few 23 moments ago when Ms. Bradley was making 24 Microsoft's argument that really Microsoft is 25 attempting to reargue their global objection, 10663 1 and it seems like -- it seems like what they 2 want, despite Ms. Bradley referencing at the 3 end that you need to look at things on a 4 case-by-case basis, it seems really what they 5 want is for the Court to hold that nothing 6 having to do with foreign antitrust proceedings 7 could be relevant to the case. 8 You do say in your order the Defendant 9 must make specific objections when the exhibits 10 in evidence are offered and they do that here 11 so that the Court can rule on their 12 admissibility in the context that they are 13 presented. 14 So I do think based on the argument we 15 have to go back a little bit, and I will 16 attempt to demonstrate to you this is highly 17 relevant and highly probative in the context 18 that this is presented. And of course, the 19 Court is well aware of all the testimony that's 20 been in the record about DRI. 21 And that's actually what's going on 22 here. 23 At the top of 231, the examining 24 attorney points out a portion of Mr. Kempin's 25 own document where Mr. Kempin says basically 10664 1 that we aren't getting MS-DOS 5.0 out there and 2 as a result, DRI is gaining momentum. And 3 basically what he's saying is, you know, we're 4 in trouble. 5 He finishes by saying, I need some 6 help here. 7 And then the question is what kind of 8 help did you need? 9 He says -- you know, he says we got to 10 get to the MS-DOS product out. 11 And then the examining attorney goes 12 back to the document. 13 Mr. Kempin himself says, their 14 aggressiveness -- again continuing the DRI 15 conversation. Their aggressiveness is causing 16 us pain in Korea. 17 So Mr. Kempin -- to demonstrate the 18 relevance of this testimony, Mr. Kempin 19 acknowledges and admits that DRI and their 20 product and the way they're selling the product 21 is causing difficulties to Microsoft. 22 And he says what Mr. Williams is -- 23 manner in which Mr. Williams is competing. 24 So this is all tied into competition 25 with DRI, and I would submit, Your Honor, that 10665 1 competition with DRI is one of the 2 fundamentally relevant things of the case. 3 THE COURT: Very well. 4 Anything else on this issue? 5 MS. BRADLEY: If I may just respond 6 for one moment, Your Honor. 7 The testimony about Microsoft's 8 competition with DRI in Korea is not objected 9 to and is -- will come in with Mr. Kempin's 10 testimony. 11 That's -- the Korean FTC's 12 investigation of Microsoft's practices does not 13 bear on that and is improper. 14 And again I will ask and I will note 15 that Plaintiffs have as of yet failed to 16 provide any link between the Korean FTC's 17 investigation of Microsoft and the price Iowa 18 consumers paid for their products. It's just 19 not relevant here and it's prejudicial and 20 inadmissible, and we'd ask that Your Honor 21 sustain Microsoft's objections to this line of 22 testimony. 23 THE COURT: Anything else? 24 MR. GRALEWSKI: No, Your Honor. Thank 25 you. 10666 1 THE COURT: Collateral estoppel then. 2 MR. CASHMAN: Your Honor, good 3 afternoon. 4 THE COURT: Good afternoon. 5 MR. CASHMAN: I'm going to hand up to 6 the Court -- I'm not sure if Mr. Gralewski, 7 what he handed up included the rulings chart on 8 collateral estoppel. 9 MR. GRALEWSKI: It did not. 10 MR. CASHMAN: So I will hand a copy of 11 that up to the Court. 12 THE COURT: Thank you. 13 MR. CASHMAN: And I'm also going to 14 hand to the Court a copy of the transcript from 15 December 7, 2006, page 3433 and 3434 where the 16 Court made its oral ruling, its last 17 pronouncement on collateral estoppel issues 18 just for the Court's reference. 19 THE COURT: Okay. 20 MR. CASHMAN: I want to start by first 21 pointing out for the Court that what we're 22 talking about here are designations from four 23 -- pardon me -- five different transcripts, and 24 I want to identify those for the Court and for 25 the record. 10667 1 The first are designations from a 2 transcript -- a deposition taken on October 2, 3 1997, in the DOJ/CID investigative demand. 4 Those designations are on page 1 and 5 part of page 2 of your rulings chart, Your 6 Honor. 7 THE COURT: Okay. 8 MR. CASHMAN: The next transcript is 9 from the Caldera case, a deposition transcript 10 from the Caldera case, and that was taken on 11 December 18, 1997. 12 Those designations are reflected on 13 your rulings chart starting on page 2 and 14 continuing on to page 3. 15 THE COURT: Okay. 16 MR. CASHMAN: Next, there are 17 designations from a deposition transcript from 18 a DOJ civil investigative demand. That was by 19 the Department of Justice and by the Texas 20 Department of Justice, State of Texas attorney 21 general. That deposition is March 18, 1998. 22 THE COURT: Okay. 23 MR. CASHMAN: That's on your rulings 24 chart starting on page 3 and continuing to page 25 4. 10668 1 THE COURT: Nope. Doesn't go to page 2 4. 3 MR. CASHMAN: Pardon me? 4 THE COURT: Doesn't continue on to 4. 5 MR. CASHMAN: It might end on page 3. 6 THE COURT: Yeah. 7 MR. CASHMAN: And then on page 4, 8 continuing through most of the page 7 is a 9 deposition taken of Mr. Kempin on October 1, 10 1998. 11 THE COURT: Got it, yeah. 12 MR. CASHMAN: In the government case. 13 And then lastly, there's a deposition 14 transcript from which designations have been 15 made and collateral estoppel objections 16 asserted by Microsoft to the JCCP proceeding in 17 California, and that deposition was taken on 18 January 24, 2002. That's on page 7, I think 19 the last entry. 20 THE COURT: All right. 21 MR. CASHMAN: The Plaintiffs are going 22 to ask the Court to overrule all of these 23 collateral estoppel objections and make that 24 ruling before we determine whether or not we 25 need to address these collateral estoppel 10669 1 objections on a line-by-line basis. 2 And I'd like to explain the reason 3 why Plaintiffs think that is the appropriate 4 way to proceed, and if it's necessary to 5 address line by line, Plaintiffs submit that it 6 would be appropriate to do that only after the 7 Court makes its ruling. And we could do that 8 on Monday, if necessary, but Plaintiffs would 9 like to explain why they think this is the 10 appropriate way to proceed. 11 First of all, the Court in its ruling 12 on December 7, 2006, has already ruled from the 13 plain language of what the Court has stated on 14 the transcript that Plaintiffs are entitled to 15 use any evidence from the Department of Justice 16 case that relates to facts or issues which have 17 not been collaterally estopped. 18 I think it's also clear that the Court 19 has ruled, and this was in connection with its 20 rulings on the collateral estoppel objections 21 for Mr. Gates' deposition, that issues which 22 have not been collaterally estopped include at 23 a minimum, include causation, harm to Iowa 24 consumers, credibility and demeanor, willful or 25 flagrant conduct, anticompetitive conduct 10670 1 affecting the applications market, 2 anticompetitive conduct affecting the operating 3 systems market either before or after the 4 period of time at issue in the government case, 5 exemplary damages, contracts or combinations 6 which unreasonably restrain trade, and 7 Plaintiffs believe that the Court has said 8 these are all issues upon which there's no 9 collateral estoppel. 10 When the Court issued its ruling on 11 the Gates deposition, it denied all of the 12 objections globally for Mr. Gates and stated 13 for the reasons stated by Plaintiffs in their 14 memo relating to Mr. Gates. 15 And in our memo and in the argument 16 that we had with the Court, you may recall that 17 all of the issues which I just mentioned were 18 issues that are new in this case and on which 19 there's no collateral estoppel. 20 So the only evidence potentially 21 subject to collateral estoppel would be 22 evidence actually considered by Judge Jackson 23 in the Department of Justice case in 24 formulating his findings. 25 Of course, Plaintiffs are not going to 10671 1 be -- they're not proving that same case that 2 we -- that was at issue in the government case 3 so because Plaintiffs are not here attempting 4 to prove liability in the operating systems 5 market for 1994 through 1998, the evidence that 6 we're offering from the Department of Justice 7 case for these other purposes could not be 8 solely for the purposes of bolstering what 9 happened in the Department of Justice case. 10 So collateral estoppel simply would 11 not apply under the Court's order of December 12 7th. 13 There is not a single piece of 14 testimony in the designations by Mr. Kempin 15 that are being offered to prove operating 16 system viability for 1994 to 1998 since that's 17 not what the Plaintiffs are proving here. 18 Rather, everything in Mr. Kempin's 19 testimony is being offered for other purposes. 20 Now, to back up for just a moment, 21 Your Honor, I'd like to point out just how far 22 afield Microsoft is in asserting these 23 collateral estoppel objections that they have 24 asserted. 25 The fact that their collateral 10672 1 estoppel objections are unfounded is further 2 demonstrated by the fact that the evidence to 3 which Microsoft is now objecting, specifically 4 these Kempin designations, Microsoft has failed 5 to prove even as an initial matter that any of 6 this testimony was considered by Judge Jackson 7 in issuing these findings. 8 Mr. Kempin testified as a witness in 9 the Department of Justice trial. 10 That was the evidence from Mr. Kempin 11 that Judge Jackson had available to him when he 12 made his findings. 13 Here, by contrast, and this is some 14 examples, Microsoft is asserting collateral 15 estoppel objections to testimony given in a 16 deposition by Mr. Kempin in the Caldera case. 17 Well, the Caldera case was an entirely 18 different case than what was involved in the 19 Department of Justice government case. 20 As the Court has heard testimony 21 already and argument concerning what happened 22 in the Caldera case, that's all about DRI, per 23 processor licenses, et cetera, et cetera, and 24 that wasn't what the government case was about. 25 So on its face, any of their 10673 1 objections to Caldera are just blatantly 2 improper. Any of the designations to Caldera 3 are blatantly improper. 4 Furthermore, Microsoft even as it 5 relates to the Department of Justice 6 depositions in the CID proceedings or in the 7 Department of Justice deposition itself, that's 8 not the evidence upon which Judge Jackson 9 relied and Microsoft has failed to present any 10 evidence to suggest otherwise. 11 So Microsoft has even -- has 12 essentially failed to show that any of the 13 evidence is the same evidence. 14 So given your December -- the Court's 15 December 7th order, the fact that the 16 Plaintiffs are submitting the testimony for 17 Mr. Kempin on multiple other issues where 18 there's no collateral estoppel, Microsoft's 19 basic failure to establish that any of the 20 testimony was even considered by Judge Jackson 21 or available to be considered by Judge Jackson 22 and given the fact that the Plaintiffs are not 23 -- not using any of this testimony solely to 24 bolster collaterally estopped facts in terms of 25 proving liability for the operating system for 10674 1 1994 to 1998, Plaintiffs think that it is 2 appropriate to overrule all of these collateral 3 estoppel objections without the necessity of 4 going line by line. 5 And that is again underscored by what 6 we did with Mr. Gates and the tremendous amount 7 of time that is going to be required -- would 8 otherwise be required to do line-by-line 9 argument on issues where the Plaintiffs have 10 multiple other reasons for submitting this 11 testimony. 12 There is just no -- really, there's no 13 way that Microsoft can carry its burden to 14 establish a collateral estoppel objection for 15 any designated testimony from Mr. Kempin. 16 So Plaintiffs would request, Your 17 Honor, that the collateral estoppel objections 18 be denied and that before we determine whether 19 line-by-line argument is appropriate or 20 necessary, that the parties take guidance from 21 whatever ruling you issue on this request. 22 THE COURT: Any response? 23 MS. BRADLEY: Your Honor, as a 24 preliminary matter, it seems that the 25 Plaintiffs have the standard that this Court 10675 1 has set out for what evidence may be presented 2 on collaterally estopped facts all wrong. 3 Nowhere in any of Your Honor's rulings 4 or orders have I seen anything that says that 5 the Court will preclude only evidence that was 6 considered by Judge Jackson in formulating his 7 findings of fact. 8 The issue is, the facts of 9 collaterally estopped findings of fact are 10 already in evidence. They've been read to the 11 jury by Your Honor. The jurors have them in 12 their notebooks. Plaintiffs continue to read 13 them throughout their case in chief. And for 14 Plaintiffs to attempt to put in evidence, that 15 goes to those exact same facts, in fact mirrors 16 those facts, is simply improper. 17 Plaintiffs noted for Your Honor that 18 this process of walking through the testimony 19 line by line will take a tremendous amount of 20 time, and I have to agree. 21 But I have to say, that that's a 22 result of Plaintiffs' failure to provide a 23 single alternate purpose for a single line of 24 testimony that they've designated regarding 25 these collaterally estopped facts. 10676 1 Microsoft took the time and marched 2 through all of Plaintiffs' eight hours of 3 designations from this stack of prior testimony 4 from Mr. Kempin and linked the testimony 5 directly to collaterally estopped findings of 6 fact. 7 Microsoft then requested of Plaintiffs 8 that Plaintiffs either provide some argument as 9 to why the facts stated in the Kempin testimony 10 are somehow distinct from the facts as 11 collaterally estopped in the findings or to 12 provide some alternate purpose or use for that 13 testimony. 14 Plaintiffs have failed to do so, and 15 Microsoft wishes to and plans to take the Court 16 through each of these designations and to 17 demonstrate that the facts stated in the 18 testimony are collaterally estopped and that 19 there is no conceivable alternative purpose and 20 that Plaintiffs have as of yet failed to 21 provide a single alternative purpose for any of 22 these designations. 23 And if we may just turn to the first 24 designation on the list, DOJ/CID, October 2 -- 25 MR. CASHMAN: May I respond to the 10677 1 general argument before we go on a specific -- 2 THE COURT: Sure. 3 MR. CASHMAN: First of all, Ms. 4 Jackson -- pardon me, Ms. -- 5 THE COURT: Bradley. 6 MR. CASHMAN: Bradley, pardon me. I 7 was going to say Bradford, and I knew that 8 wasn't right. 9 I just want to touch on a couple of 10 the issues. 11 First of all, the fact that evidence 12 would have to have been considered by Judge 13 Jackson is obviously fundamental, and Ms. 14 Bradley has clearly forgotten about all of the 15 way that Mr. Holley and Mr. Tulchin postured 16 this when we argued collateral estoppel before 17 when they kept referring to the underlying 18 evidence for the findings of fact. 19 And the underlying evidence for the 20 findings of fact issued by Judge Jackson 21 necessarily means that evidence that he 22 considered in issuing his findings of fact. 23 So as of -- as I would say as a matter 24 of law, but at the very least as a matter of 25 logic, the 2002 testimony from the JCCP 10678 1 deposition clearly could not have been 2 underlying evidence for the Department of 3 Justice action. 4 The testimony in the Caldera case, 5 because it's a wholly different case with 6 wholly different subjects, clearly could not 7 have been underlying evidence for the findings 8 of fact issued by Judge Jackson. 9 Now, we get a little bit closer when 10 we're talking about depositions taken in the 11 DOJ discovery, but there is no, no proof in the 12 record here, Your Honor, that the evidence in 13 those transcripts was considered by Judge 14 Jackson. What he looked at, what Judge Jackson 15 looked at was the testimony that Mr. Kempin 16 gave in court. 17 That's what was the basis for his 18 findings. 19 So I think it's clear -- absolutely 20 clear that the collateral estoppel objections 21 for Caldera and the JCCP case need to be 22 dismissed summarily. 23 I think that it's also true as it 24 relates to the DOJ deposition and the DOJ/CID 25 depositions, but even more importantly, given 10679 1 the Court's December 7th ruling, which is the 2 right ruling, that if it goes to any other 3 purpose, it's appropriate. 4 And the Plaintiffs, contrary to 5 Ms. Bradley's assertions, have provided 6 multiple reasons in the briefing associated 7 with Mr. Gates and repeated here why the 8 testimony that we have designated for 9 Mr. Kempin is going to go to other issues 10 besides proving liability for operating systems 11 market from 1994 to 1995. 12 And just so the record is clear, 13 demeanor, credibility, causation, harm to Iowa 14 consumers, anticompetitive conduct affecting 15 the applications market, contracts or 16 combinations that unreasonably restrain trade, 17 willful or flagrant conduct, exemplary damages, 18 and last but not least, and not to make this an 19 exhaustive list either, but anticompetitive 20 conduct in the operating systems market for 21 time not at issue in the government action. 22 And I want to focus on that particular 23 criteria for just a moment. 24 Let's take that as the most extreme 25 example of getting, if you will, closest to the 10680 1 line on what might be collateral estoppel. 2 Because let's say Mr. Kempin is giving 3 testimony that is -- let's say he gave 4 testimony in his testimony at trial before 5 Judge Jackson in which he testified about some 6 operating system issue that was the basis for a 7 finding by Judge Jackson on liability for 8 operating systems market between '94 and '98. 9 That evidence would be subject to use 10 by the Plaintiffs for other purposes, 11 specifically the operating systems -- 12 anticompetitive conduct in the operating 13 systems market before or after that government 14 time period. 15 So even in the -- what you might 16 characterize as the closest example, the 17 collateral estoppel objection would be 18 inadequate, and that's why Plaintiffs submit 19 here that all of these objections can be denied 20 in global just as they were in Mr. Gates 21 because these -- the evidence at issue here 22 goes to multiple other issues in the case and 23 in no way are Plaintiffs going to be proving 24 liability for the operating systems market from 25 1994 to 1998. 10681 1 So Plaintiffs submit that the best way 2 to proceed would be to rule on the -- our 3 request to deny these in global, and depending 4 on how the Court rules, if necessary, we can 5 take up the specifics on Monday. 6 And to make use of the Court's time 7 till 4:30, that's another reason why Mr. 8 Williams is here, is because we're ready to 9 fill the available time by arguing the Laurence 10 matter also and give the Court time to consider 11 our request for a global ruling on the Kempin 12 collateral estoppel objections. 13 Thank you. 14 THE COURT: Anything else? 15 MS. BRADLEY: Your Honor, if I may 16 just turn to the first designation on the 17 rulings chart just to give a single example of 18 why this testimony must be excluded. 19 Microsoft would appreciate the 20 opportunity to at minimum do that. 21 THE COURT: Okay, go ahead. 22 MS. BRADLEY: I've prepared -- if I 23 may approach, I have a set of the collaterally 24 estopped findings as issued to the jury. 25 I'm sure you're very familiar with 10682 1 them, but just for our reference during the 2 argument. 3 And let's turn to the October 2nd, 4 1997, DOJ/CID transcript, which should be in 5 your pile somewhere, and to the first 6 designation on the list, and that's at pages 7 15, line 3 to 16, line 23. 8 And here Mr. Kempin is asked about 9 whether versions 1.0, 2.0, and 3.0 of Internet 10 Explorer were required by Microsoft to be 11 loaded with Windows 95 by OEMs. 12 The related finding of fact, if I may 13 turn to it, we've given a range here, Your 14 Honor, but if you'll just look to Finding of 15 Fact 158, it becomes very clear that the fact 16 about which Mr. Kempin testifies is precisely 17 the fact that is collaterally estopped by 18 Finding 158. 19 In Finding 158, Judge Jackson writes, 20 and the jury has before them, that Microsoft 21 did manage to bundle Internet Explorer 1.0 with 22 the first version of Windows 95 licensed to 23 OEMs in July 1995. 24 It also included a term in its OEM 25 licenses that prohibited OEMs modifying or 10683 1 deleting any part of Windows 95, including 2 Internet Explorer, prior to shipment. 3 The OEMs accepted this restriction 4 despite their interest in meeting consumer 5 demand for PC operating systems without 6 Internet Explorer. 7 After all, Microsoft made the 8 restriction a nonnegotiable term in its Windows 9 95 license. 10 If you'll look at the testimony, 11 that's exactly what Mr. Kempin is asked about 12 and what he testifies to. 13 The questioner asked about Internet 14 Explorer 1.0 through 3.0 and whether Microsoft 15 required that OEMs preload the Internet 16 Explorer as well as the rest of Windows 95. 17 Mr. Kempin answers in the affirmative, 18 and asks -- the questioner goes on to ask about 19 the contract mechanisms or license mechanisms 20 that require that OEMs preload Internet 21 Explorer with Windows 95, and the testimony 22 goes on like that. 23 Plaintiffs have never suggested an 24 alternative purpose for these facts to which 25 Mr. Kempin testifies, which are precisely the 10684 1 facts that are laid out in Finding of Fact 158. 2 MR. CASHMAN: Your Honor, Finding of 3 Fact 158 -- you know, it's got a lot of words 4 there that Ms. Bradley read, but boiled to its 5 essence, 158 stands for the proposition that 6 Microsoft used OEM licenses that prohibited 7 OEMs from removing Internet Explorer. 8 That's what it boils down to in 9 essence. 10 In the testimony in 1997 in the CID 11 deposition, Mr. Kempin tells the DOJ that IE is 12 a part of Windows and OEMs are contractually 13 obligated to preinstall it and that they don't 14 have a choice under the standard Windows 95 15 license agreement. 16 Preinstalling is different than being 17 precluded from removing it. 18 However, I'm going to move on and just 19 highlight for the Court a couple of easily 20 identifiable reasons why there's other purposes 21 for this. 22 The first and most obvious kind of 23 example would be the general example that I 24 gave to the Court earlier about when the 25 closest to the line you could ever get on 10685 1 collateral -- the collateral estoppel kind of 2 objections that Microsoft is asserting. 3 And even if you took everything as 4 Ms. -- if Ms. Bradley said is true, it still 5 would only apply to 1994 to 1998, and there's 6 other periods of class time involved here, as 7 the Court knows. 8 However, there's other more -- even 9 more substantive issues to which this testimony 10 relates. 11 As the Court will recall, Count II of 12 our petition, of Plaintiffs' petition alleges 13 that Microsoft entered into contracts, 14 combinations, or conspiracies in restraint of 15 trade. 16 Plaintiffs have the burden of proving 17 that Microsoft entered into contracts or 18 combinations that unreasonably restrained 19 trade, and we're, obviously, entitled to 20 introduce relevant evidence indicating that the 21 contracts or combinations described in the 22 findings unreasonably restrained trade. 23 These designations right here that 24 Ms. Bradley cited are relevant to whether 25 Microsoft's contracts unreasonably restrained 10686 1 trade. 2 And it's highly probative of that 3 issue that Mr. Kempin concedes that the way 4 Microsoft writes the license agreements for 5 Windows 95 gives OEMs no choice in that these 6 are strict rules. 7 So that testimony right there goes to 8 another issue in the case, highly important 9 probative issue. 10 Furthermore, we've got this civil 11 investigative demand, which began, obviously, 12 before the suit was filed and while the DOJ was 13 still determining whether it would bring a 14 government enforcement action against 15 Microsoft. 16 The testimony designated here and 17 throughout Mr. Kempin's deposition showing how 18 Mr. Kempin, a senior vice president, was lying 19 or about whether -- about whether IE was really 20 part of Windows 95 to the DOJ during its 21 investigation in an effort to lead enforcement 22 authorities astray and not to pursue any 23 litigation is extremely probative of whether 24 Microsoft's conduct was willful or flagrant. 25 So Microsoft's prelitigation efforts 10687 1 to mislead the authorities indicate an 2 awareness of the illegality of Microsoft's 3 actions, that's another purpose for this 4 testimony. 5 THE COURT: You're going to introduce 6 evidence which shows that this portion or parts 7 of it were made -- are you going to impeach the 8 credibility of the witness here somehow? 9 MR. CASHMAN: I don't know that I can 10 answer that question, Your Honor, but this 11 testimony is part of the case to show willful 12 or flagrant conduct; that Microsoft was not 13 being forthcoming during the investigative 14 stages of the DOJ proceedings. 15 Again, because Mr. Kempin is a senior 16 executive for Microsoft, all of this testimony 17 will go to willful or flagrant conduct. 18 So there's multiple reasons why 19 Microsoft is wrong. And just to -- I tried to 20 come up with a couple of demonstratives that 21 really illustrate the point here, Your Honor, 22 and again why I think you can decide these 23 things globally, and with your permission, I'll 24 hand them up. 25 I'm giving a copy of these to 10688 1 Microsoft and one to the Court. 2 The first of these two demonstratives 3 I have titled the DOJ case, and the second one 4 is titled the Comes case. 5 And the first one, what I've tried to 6 convey is, obviously, what happened in the DOJ 7 case. And the left box where we have DOJ 8 facts, exhibits, and testimony, I used the 9 hypothetical one through five facts, and those 10 would be the facts that Judge Jackson 11 considered, and then he issues his findings 12 over in the box on the left. 13 That would be -- that's the government 14 case boiled down to a simple picture. 15 And now if we turn to the 16 demonstrative which I provided to the Court for 17 the Comes case, up at the top I still have the 18 DOJ situation, and then below that, of course, 19 we have new facts, exhibits, and testimony. 20 And then along the bottom, the 21 multiple examples of additional types of issues 22 that arise in this case. 23 And what I've tried to indicate here 24 is in proving those various issues, Plaintiffs 25 are entitled under the Court's order from 10689 1 December 7th to use any combination of evidence 2 from the DOJ case or new evidence to assist in 3 proving those new matters. 4 And that's all that's going on here 5 with the testimony of Mr. Kempin. It's going 6 to be used to prove a multitude of the 7 additional claims that the Plaintiffs have in 8 this case. 9 And we believe it's -- it should be a 10 straightforward matter that all of these 11 objections should be overruled without taking 12 the time, which really isn't necessary in 13 Plaintiffs' view, to address them on a 14 line-by-line basis. 15 THE COURT: Anything else? 16 MS. BRADLEY: Your Honor, just to say 17 I have yet to hear anything from Plaintiffs 18 about this line of testimony that we're 19 discussing now that's not bolstering, sheer 20 bolstering. 21 Plaintiffs argue that somehow 22 Mr. Kempin's testimony establishes that 23 Microsoft forced OEMs to -- that OEMs felt they 24 had no choice in taking Microsoft's deal. 25 The finding of fact establishes that 10690 1 the contracts were nonnegotiable and that OEMs 2 were required to preload Internet Explorer with 3 Windows, and so on and so forth. 4 If that's bolstering and it's 5 inadmissible, Microsoft's happy to over the 6 weekend and moving forward before we come back 7 to you, Your Honor, again to meet and confer 8 with Plaintiffs further on this, provided that 9 Plaintiffs will agree to provide Microsoft with 10 genuine bona fide alternative purposes for each 11 of the designations to which Microsoft objects 12 and to which Microsoft has linked a 13 collaterally estopped finding of fact. 14 THE COURT: All right. We'll take 15 this matter up on Monday at 8:30. And I'll 16 think about what you said over the weekend and 17 I'll decide on the weekend how we're going to 18 proceed, so be ready to go -- 19 MR. CASHMAN: Thank you, Your Honor. 20 THE COURT: -- at 8:30. 21 (Proceedings adjourned at 4:27 p.m.) 22 23 24 25 10691 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 25th 19 day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25 Okay, go ahead. 22 MS. BRADLEY: I've prepared -- if I 23 may approach, I have a set of the collaterally 24 estopped findings as issued to the jury. 25 I'm sure you're very familiar with 10682 1 them, but just for our reference during the 2 argument. 3 And let's turn to the October 2nd, 4 1997, DOJ/CID transcript, which should be in 5 your pile somewhere, and to the first 6 designation on the list, and that's at pages 7 15, line 3 to 16, line 23. 8 And here Mr. Kempin is asked about 9 whether versions 1.0, 2.0, and 3.0 of Internet 10 Explorer were required by Microsoft to be 11 loaded with Windows 95 by OEMs. 12 The related finding of fact, if I may 13 turn to it, we've given a range here, Your 14 Honor, but if you'll just look to Finding of 15 Fact 158, it becomes very clear that the fact 16 about which Mr. Kempin testifies is precisely 17 the fact that is collaterally estopped by 18 Finding 158. 19 In Finding 158, Judge Jackson writes, 20 and the jury has before them, that Microsoft 21 did manage to bundle Internet Explorer 1.0 with 22 the first version of Windows 95 licensed to 23 OEMs in July 1995. 24 It also included a term in its OEM 25 licenses that prohibited OEMs modifying or 10683 1 deleting any part of Windows 95, including 2 Internet Explorer, prior to shipment. 3 The OEMs accepted this restriction 4 despite their interest in meeting consumer 5 demand for PC operating systems without 6 Internet Explorer. 7 After all, Microsoft made the 8 restriction a nonnegotiable term in its Windows 9 95 license. 10 If you'll look at the testimony, 11 that's exactly what Mr. Kempin is asked about 12 and what he testifies to. 13 The questioner asked about Internet 14 Explorer 1.0 through 3.0 and whether Microsoft 15 required that OEMs preload the Internet 16 Explorer as well as the rest of Windows 95. 17 Mr. Kempin answers in the affirmative, 18 and asks -- the questioner goes on to ask about 19 the contract mechanisms or license mechanisms 20 that require that OEMs preload Internet 21 Explorer with Windows 95, and the testimony 22 goes on like that. 23 Plaintiffs have never suggested an 24 alternative purpose for these facts to which 25 Mr. Kempin testifies, which are precisely the 10684 1 facts that are laid out in Finding of Fact 158. 2 MR. CASHMAN: Your Honor, Finding of 3 Fact 158 -- you know, it's got a lot of words 4 there that Ms. Bradley read, but boiled to its 5 essence, 158 stands for the proposition that 6 Microsoft used OEM licenses that prohibited 7 OEMs from removing Internet Explorer. 8 That's what it boils down to in 9 essence. 10 In the testimony in 1997 in the CID 11 deposition, Mr. Kempin tells the DOJ that IE is 12 a part of Windows and OEMs are contractually 13 obligated to preinstall it and that they don't 14 have a choice under the standard Windows 95 15 license agreement. 16 Preinstalling is different than being 17 precluded from removing it. 18 However, I'm going to move on and just 19 highlight for the Court a couple of easily 20 identifiable reasons why there's other purposes 21 for this. 22 The first and most obvious kind of 23 example would be the general example that I 24 gave to the Court earlier about when the 25 closest to the line you could ever get on 10685 1 collateral -- the collateral estoppel kind of 2 objections that Microsoft is asserting. 3 And even if you took everything as 4 Ms. -- if Ms. Bradley said is true, it still 5 would only apply to 1994 to 1998, and there's 6 other periods of class time involved here, as 7 the Court knows. 8 However, there's other more -- even 9 more substantive issues to which this testimony 10 relates. 11 As the Court will recall, Count II of 12 our petition, of Plaintiffs' petition alleges 13 that Microsoft entered into contracts, 14 combinations, or conspiracies in restraint of 15 trade. 16 Plaintiffs have the burden of proving 17 that Microsoft entered into contracts or 18 combinations that unreasonably restrained 19 trade, and we're, obviously, entitled to 20 introduce relevant evidence indicating that the 21 contracts or combinations described in the 22 findings unreasonably restrained trade. 23 These designations right here that 24 Ms. Bradley cited are relevant to whether 25 Microsoft's contracts unreasonably restrained 10686 1 trade. 2 And it's highly probative of that 3 issue that Mr. Kempin concedes that the way 4 Microsoft writes the license agreements for 5 Windows 95 gives OEMs no choice in that these 6 are strict rules. 7 So that testimony right there goes to 8 another issue in the case, highly important 9 probative issue. 10 Furthermore, we've got this civil 11 investigative demand, which began, obviously, 12 before the suit was filed and while the DOJ was 13 still determining whether it would bring a 14 government enforcement action against 15 Microsoft. 16 The testimony designated here and 17 throughout Mr. Kempin's deposition showing how 18 Mr. Kempin, a senior vice president, was lying 19 or about whether -- about whether IE was really 20 part of Windows 95 to the DOJ during its 21 investigation in an effort to lead enforcement 22 authorities astray and not to pursue any 23 litigation is extremely probative of whether 24 Microsoft's conduct was willful or flagrant. 25 So Microsoft's prelitigation efforts 10687 1 to mislead the authorities indicate an 2 awareness of the illegality of Microsoft's 3 actions, that's another purpose for this 4 testimony. 5 THE COURT: You're going to introduce 6 evidence which shows that this portion or parts 7 of it were made -- are you going to impeach the 8 credibility of the witness here somehow? 9 MR. CASHMAN: I don't know that I can 10 answer that question, Your Honor, but this 11 testimony is part of the case to show willful 12 or flagrant conduct; that Microsoft was not 13 being forthcoming during the investigative 14 stages of the DOJ proceedings. 15 Again, because Mr. Kempin is a senior 16 executive for Microsoft, all of this testimony 17 will go to willful or flagrant conduct. 18 So there's multiple reasons why 19 Microsoft is wrong. And just to -- I tried to 20 come up with a couple of demonstratives that 21 really illustrate the point here, Your Honor, 22 and again why I think you can decide these 23 things globally, and with your permission, I'll 24 hand them up. 25 I'm giving a copy of these to 10688 1 Microsoft and one to the Court. 2 The first of these two demonstratives 3 I have titled the DOJ case, and the second one 4 is titled the Comes case. 5 And the first one, what I've tried to 6 convey is, obviously, what happened in the DOJ 7 case. And the left box where we have DOJ 8 facts, exhibits, and testimony, I used the 9 hypothetical one through five facts, and those 10 would be the facts that Judge Jackson 11 considered, and then he issues his findings 12 over in the box on the left. 13 That would be -- that's the government 14 case boiled down to a simple picture. 15 And now if we turn to the 16 demonstrative which I provided to the Court for 17 the Comes case, up at the top I still have the 18 DOJ situation, and then below that, of course, 19 we have new facts, exhibits, and testimony. 20 And then along the bottom, the 21 multiple examples of additional types of issues 22 that arise in this case. 23 And what I've tried to indicate here 24 is in proving those various issues, Plaintiffs 25 are entitled under the Court's order from 10689 1 December 7th to use any combination of evidence 2 from the DOJ case or new evidence to assist in 3 proving those new matters. 4 And that's all that's going on here 5 with the testimony of Mr. Kempin. It's going 6 to be used to prove a multitude of the 7 additional claims that the Plaintiffs have in 8 this case. 9 And we believe it's -- it should be a 10 straightforward matter that all of these 11 objections should be overruled without taking 12 the time, which really isn't necessary in 13 Plaintiffs' view, to address them on a 14 line-by-line basis. 15 THE COURT: Anything else? 16 MS. BRADLEY: Your Honor, just to say 17 I have yet to hear anything from Plaintiffs 18 about this line of testimony that we're 19 discussing now that's not bolstering, sheer 20 bolstering. 21 Plaintiffs argue that somehow 22 Mr. Kempin's testimony establishes that 23 Microsoft forced OEMs to -- that OEMs felt they 24 had no choice in taking Microsoft's deal. 25 The finding of fact establishes that 10690 1 the contracts were nonnegotiable and that OEMs 2 were required to preload Internet Explorer with 3 Windows, and so on and so forth. 4 If that's bolstering and it's 5 inadmissible, Microsoft's happy to over the 6 weekend and moving forward before we come back 7 to you, Your Honor, again to meet and confer 8 with Plaintiffs further on this, provided that 9 Plaintiffs will agree to provide Microsoft with 10 genuine bona fide alternative purposes for each 11 of the designations to which Microsoft objects 12 and to which Microsoft has linked a 13 collaterally estopped finding of fact. 14 THE COURT: All right. We'll take 15 this matter up on Monday at 8:30. And I'll 16 think about what you said over the weekend and 17 I'll decide on the weekend how we're going to 18 proceed, so be ready to go -- 19 MR. CASHMAN: Thank you, Your Honor. 20 THE COURT: -- at 8:30. 21 (Proceedings adjourned at 4:27 p.m.) 22 23 24 25 10691 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 25th 19 day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25