Comes request access to class members

Comes request access to class members ..
Snippets

MR. HOLLEY: Good morning, Your Honor. Yesterday there was a request from the plaintiffs for a curative instruction with regard to a question that Mr. Tulchin asked Mr. Bradford about a lawsuit brought by Lantec, a competing maker of network software, against Novell alleging violations of Section 2 of the Sherman Act.

..

MS. CONLIN: Your Honor, my request or an instruction was, in fact, a departure from our normal procedure because for the Defendant to ask such a question was a departure from our normal procedure.

The purpose of testimony with respect to the FTC and the DOJ was to assure that the witness was not vulnerable on cross-examination to a surprise assertion that he was simply a pawn of the government or the government was simply a pawn of his because DOJ, FTC all over the documents in this matter, Your Honor, with respect to this witness and others.

And there is also a difference in that it was Microsoft who was under investigation. Microsoft is a party to this lawsuit. lawsuit. Novell, however, is not a party, and the idea that there needs to be parity, I think, is an erroneous idea.

..

MS. CONLIN: Your Honor, the Court issued an order some time ago which precluded either side from contacting class members without the permission of the Court.

Plaintiffs have honored that order and -- but now we request the Court's permission to contact members of the Plaintiffs' class, all of them. We want to -- we want that opportunity, Your Honor. The Court may have seen the article today, and we thought perhaps it would be time for us to contact our own clients.

THE COURT: Response?

MR. TULCHIN: Your Honor, this is a surprise to us. I didn't know this motion was coming. I'd like an adequate opportunity to respond some point next week.

THE COURT: Very well.

MR. TULCHIN: Thank you, Your Honor.

MS. CONLIN: Well, I thought it would be noncontroversial, Your Honor. I was wrong.

http://antitrust.slated.org/www.iowaconsumercase.org/1.25.07_transcript.txt

Full Text
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

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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

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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

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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

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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