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To read comments to this article, go here
1992 David Frasure Deposition, Part 1 - as text
Friday, January 07 2005 @ 08:45 PM EST

When SCO filed a substitution on Exhibit 19 to the Declaration of Jeremy Evans, which was listed as "Cited Excerpts" from David Frasure's 1992 Deposition [PDF -226 pages] in the BSDi case, I realized we never did a transcript of the Frasure deposition. So here you are, part one of the transcript as text. If you don't want to download a 226-page PDF, and why would you, but you do want to see the original, here it is broken up into three segments:

Segment 1
Segment 2
Segment 3
This transcript is for Segment 1, and Segments 2 and 3 will follow [Update: text of Segment 2 and Segment 3]. I think you will enjoy this segment, because you get to watch an aggressive lawyer at work in a deposition. Watch AT&T's lawyer, James Kennedy, as he makes sure Mr. Frasure doesn't say anything harmful to AT&T's position in the lawsuit back then. Nevertheless, the attorney for BSDi, Leslie Fithian, is able to get Mr. Frasure to say some things that are not so helpful for SCO today.

One of the differences between educational licenses and the commercial kind IBM had was that the educational license mentioned methods and concepts. The University of California had an educational license. In one place, nevertheless, Frasure seems to be saying that even in educational licenses, modifications and derivatives were the property of the licensee, so long as no AT&T code was found in it.

More accurately, he starts to say that, and then you'll see the AT&T lawyer cut in. In fact, every time Mr. Frasure tried to say anything that AT&T might not like, in leaps Mr. Kennedy, which is, of course, exactly what a lawyer is supposed to do. It's intriguing to watch his technique. It's impossible to know for sure if his lectures to Ms. Fithian, with their noticeably chauvinist overtones -- he "teaches" her how to lay a foundation, and complains about her style of questioning -- were just a technique to block Mr. Frasure from saying what Mr. Kennedy didn't want him to say or if he was just that kind of guy. Maybe a little of both, but I see technique.

It would be clearer if BSDi's attorney had been a man. Some men simply can't see competence in a female, not because they've made a decision, but just because it's some kind of subliminal thing. That used to be more true than it is a decade later, but it's still true. I just saw an interview with a scientist studying how people react to voices, and if a computer speaks in a female voice, it is perceived as being less knowledgeable about math and physics and better at providing information about relationships than if the computer speaks with a man's voice.

A computer.

So, it runs deep. Anyway, whatever Mr. Kennedy's motives or inclinations, he did manage to direct the event largely his way. I would hire him. We wouldn't, however, go to dinner.

You'll notice that when Mr. Frasure is asked about a document at one point, he says he couldn't answer without more time to read it, and Ms. Fithian says to read it by all means. As Mr. Frasure begins to read, Mr. Kennedy notes the time for the record, and then when he finishes, he notes the time again for the record. Why? Likely so later, if Mr. Frasure said something at trial that contradicted the deposition testimony on this letter, he could bring out that Mr. Frasure only had 10 minutes or whatever to read the letter. The guy is on the ball throughout, which is a bit annoying from our standpoint today. You can kind of tell what matters just by when you see him appear, so I've marked all his contributions in brown text, even the standard "Objection to form" types of interruptions. If you look at the question just before his more substantive interventions, you will see what he apparently thought was important.

After the lunch break, when presumably Mr. Kennedy and Mr. Frasure spoke, we find Mr. Frasure correcting something he had said in the morning session as soon as the afternoon session opens.

A lawyer in a deposition is limited in what he can say and do, if it isn't his deposition. Here, when you read it, you see that the deposition was apparently called by BSDi. But that doesn't mean the lawyer for the deposed can't help. I read the session as Mr. Kennedy sending Mr. Frasure hints by his interruptions, which not only seemed to indicate what questions to watch out for but also provided Mr. Frasure extra time to think about his answer, while Mr. Kennedy lectured Ms. Fithian on her questions and sneered at her skill set. Kennedy and Fithian don't seem enamored of each other anyway, and he mentions at one point that she's done the same thing he objects to with "many" witnesses, so there is some water under the bridge here.

Clearly, he's throwing her off her stride, deliberately or not, in some places. Did she hate his guts by the end of the day? Probably not. Lawyers don't take things personally usually. They expect the other side to try to knock them off their horse. It's their job. They joust for a living.

Despite all that, still on her horse, she is able to get Mr. Frasure to say some helpful things by reading to him directly from the license. Of course, without Mr. Kennedy, no doubt he would have said a great deal more. Here is the exchange:

Q. Well, the language in 101-A, again focusing on the little subparagraph two says:

Such results, enhancements . . .

A. And modification. . .

Q. . . . and modifications, all to the extent that they do not include any portion of licensed software . . .

A. Yes, I . . .


Q. . . . are made available to anyone.

A. And I -- yes. Yes, and I agree.

MR. KENNEDY: Let me talk to Mr. Frasure. I don't think there's -- that's just a statement by opposing counsel, and it sounds very argumentative to me. She's got to frame her question. I know you're trying to help her out, and I appreciate that; I'm sure she does as well. But she hasn't asked you a question.

See what I mean? SCO, I would guess, presented this deposition because in it Mr. Frasure mentions methods and concepts, which they probably hope contradicts what he said in his 2004 declaration, which IBM submitted as part of the great cloud of witnesses all testifying that modifications and derivative works were fully the property of IBM, so long as no original code was used. Here's a piece of what Mr. Frasure said in 2004:

24. . . .To my knowledge, no one at AT&T Technologies ever intended to assert ownership or control over any portion of a modification or derivative work that did not contain our licensed UNIX System V code. Our licensees, including IBM and Sequent, were free to use and disclose the modifications or derivative works they created, provided they did not use and disclose any portion of the licensed UNIX System V source code except as permitted by the license agreements.

25. In fact, some of AT&T Technologies' licensees later developed technology that AT&T Technologies wished to integrate into the UNIX System V software. We entered into cooperative development agreements with a number of these licensees, because we did not otherwise have rights to their modifications or derivative works, or their otherwise standalone works. Indeed, under the license agreements, we did not even have copies of the modifications and derivative works developed by our licensees in either source or object code form.

Notice there is an absence of any mention of methods and concepts. That is probably because we find that language in the educational license that the University of California had, not the commercial one that IBM signed. When Mr. Frasure was deposed in 1992, he was being asked about the University's educational license, and so he does mention methods and concepts. This had relevance in that context. But all Mr. Kennedy's technique was for naught, because Mr. Frasure's boss, Otis Wilson, in his April 26, 2004 declaration in the current case, tells us what we need to know about IBM's license obligations with respect to modifications and derivative works:

14. As my staff and I communicated to our licensees, this provision was only intended to ensure that if a licensee were to create a modification or derivative work based on UNIX System V, any material portion of the original UNIX System V source code provided by AT&T or USL that was included in the modification or derivative work would remain subject to the confidentiality and other restrictions of the software agreement. As we understood Section 2.01, any source code developed by or for a licensee and included in a modification or a derivative work would not constitute "resulting materials" to be treated as part of the original software product, except for any material proprietary UNIX System V source code provided by AT&T or USL and included therein.

15. AT&T and USL did not intend to assert ownership or control over modifications and derivative works prepared by our licensees, except to the extent of the original UNIX System V source code included in such modifications and derivative works. Although the UNIX System V source contained in a modification or derivative work continued to be owned by AT&T or USL, the code developed by or for the licensee remained the property of the licensee, and could therefore be used, exported, disclosed or transferred freely by the licensee. . . .

29. I understand that plaintiff claims that IBM and Sequent have breached the IBM Agreements and the Sequent Agreements by improperly using, exporting, disclosing or transferring AIX and Dynix/PTX source code, irrespective of whether IBM or Sequent have disclosed any specific protected source code copied from the UNIX System V source code provided by AT&T or USL. In my view, these claims are inconsistent with the provisions of the IBM Agreements and the Sequent Agreements. I do not believe that anyone at AT&T or USL intended these agreements to be construed in this way. In all cases, modifications and derivative works are not subject to the confidentiality and other restrictions contained in the license agreements (except for any protected UNIX System V source code provided by AT&T or USL actually included therein) because they are owned by the licensee.

30. In my view, any claim that the IBM Software Agreement and the Sequent Software Agreement prohibit the use, export, disclosure or transfer of any code other than UNIX System V code is clearly wrong. Not only did we at AT&T not intend the agreements to be read that way, but we also went out of our way to assure our licensees that this is not what the agreements meant.

I have marked in blue all the portions that seemed particularly pertinent. You may notice other things. I'm guessing SCO particularly likes the section I have highlighted on page 28.

Note that the pagination matches the original document, not the PDF, and is one page different. I chose to follow the original so that later, if this deposition is referred to at trial, if there ever is a trial, if they refer to a page number, you will be able to follow along.

*********************************

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

_________________________

Civil Action No. 92-1667

_________________________

UNIX SYSTEM LABORATORIES, INC.,

Plaintiff

vs.

BERKELEY SOFTWARE DESIGN, INC.,
and THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA,

Defendant.

_______________________

December 8, 1992
Greenville, North Carolina
9:20 o' clock A. M.


DEPOSITION

OF

DAVID FRASURE


KING'S COURT REPORTING SERVICES
[address, phone]

LAURI S. CROWDER
Court Reporter
PENNY HARPER
Court Reporter

2

APPEARANCES:

LAW OFFICES OF PAUL, HASTINGS, JANOFSKY & WALKER,
by JAMES W. KENNEDY, ESQ., and

UNIX SYSTEM LABORATORIES, INC., by
THEODORE M. WEITZ, ESQ.
appearing on behalf of the Plaintiff.

HELLER, EHRMAN, WHITE & McAULIFFE, by
LESLIE A. FITHIAN, ESQ.
appearing on behalf of Berkeley Software
Designs, Inc.

CROSBY, HEAFEY, ROACH & MAY, by
CARLA J. SHAPREAU, ESQ.
appearing on behalf of the University of
California.

________________________

KING'S COURT REPORTING SERVICES
[address, phone]

LAURI S. CROWDER
Court Reporter
PENNY HARPER
Court Reporter

3

WHEREUPON, at 9:20 a.m.:

DAVID FRASURE, first having been duly sworn, testified as follows during DIRECT EXAMINATION by MS. LESLIE A. FITHIAN:

Q. Okay, can you state your name for the record, please?

A. It's David Frasure.

Q. Okay. And can you tell me your home address?

A. Yes; [address].

Q. Have you ever been deposed before?

A. Yes.

Q. How many times?

A. Twice.

Q. What kind of lawsuit was it?

A. One was -- well, they were both witnesses to - - to traffic accidents.

A. I see; okay. Well, just as a reminder, I'll go over some of the basic procedures today. You've been sworn in, so you're testifying under oath just as though you were in a court of law, and the penalty of perjury applies just as though you were in a court of law despite the informal appearance of the setting.

As I question you, if you have any problem understanding the question, feel free to ask for

4

clarification as necessary. Everything you say and everything I say or -- or the attorneys here say will be turned into a transcript which you'll have an opportunity to read and if necessary correct after the Deposition. If you make substantive changes to the answers, we can comment upon that later; but you'll also have the opportunity to just correct things like typographical errors and that sort of thing.

Are you under any type of disability today, such as medication or illness that would prevent you from testifying accurately?

A. No.

Q. Okay. When were you last -- well, let me ask where -- you were employed with Unix System Laboratories at one point; is that right?

A. No.

Q. No? Were you employed by AT and T or an affiliate of AT and T?

A. Yes.

Q. Okay. Can you tell me what the name of that company was?

A. Well, I was employed with originally Western Electric Company, and then the federal government divested AT and T and there was a corporate name change to AT and T. And then the last company name that I was

5

with was AT and T Information Systems, so it was really three different names, though I worked with the company. I was with them for almost eighteen years.

Q. Okay. When did you first join and when I say the company, I mean AT and T or the affiliate that you were employed by?

A. I first was employed with the -- I worked with AT -- or with Western Electric as a consultant for a little over three years. I began in I believe it was October of 1968, then effective February of 1972 -- I'm not sure of the date -- I became a direct employee with Western Electric Company.

Q. What year was that?

A. 1972. I really don't know the year in which Western Electric, at least the division I was with, was renamed AT and T. It was probably 1982-83 time frame, then I was -- the division I was with was renamed to AT and T Information Systems.

Q. What division was it? Can you describe it?

A. With Information Systems?

Q. Right.

A. The division, I was in the Unix software licensing organization.

Q. When did the Unix software licensing organization come into existence?

6

A. I do not know.

Q. Was it already in existence in February of 1972?

A. I -- I really don't know. I have to assume that it was, but I -- I don't know.

Q. When you joined the company, was it in existence?

A. I was not familiar with it when I joined the company.

Q. Okay. When you first joined the company, what was your position?

A. I was a programmer, computer programmer.

Q. What type of programming were you doing?

A. Was doing technical engineering programs as well as business programming. Wrote systems software, applications software for business applications as well as technical applications for the company.

Q. Did you work on the Unix Systems software?

A. Not at that time, no.

Q. Did you at a later time?

A. When we say work on the systems software, I did not -- I have never worked on Unix operating system software. I have used -- been a user . . .

Q. I see.

A. . . of the software, but I have never

7

developed any of the Unix System code.

Q. Okay. And when did you join the licensing organization?

A. It was either late '83 or early '84; I -- I really don't recall.

Q. What was your position when you first joined?

A. The licensing organization?

Q. Yes.

A. I was an assistant manager, which was an AT and T management structure. They went from department chief to assistant manager to manager. Of those I was a -- received a promotion and went -- went in as an assistant manager.

Q. Promotion from your programming position, or was there an intervening promotion?

A. There was an intermediate promotion.

Q. And what was that?

A. That was department chief.

Q. And which department was -- was it?

A. I was -- at that time I was with the data center; had nothing to do with -- with Unix software, and I was in the assistant programming area at that time, and I was promoted to a department chief, which is a second-level supervision within AT and T at the time. I'm not sure what their structure is today, and worked with

8

assistant programming and then I received a lateral transfer to where I was responsible for all the computer system corporate instructions.

The company had a set of corporate instructions that controlled how we deal with computer software and procedures for use of computers throughout the entire company.

Q. This was internal procedures?

A. Yes, that's correct. And then I was promoted from that job into the Unix software licensing position.

Q. Okay. And what were your responsibilities when you joined the Unix software licensing organization?

A. I was the -- responsible for the software licensing agreements. I had a number of account executives that worked for me who were the customer interfaces, and they, you know, they -- they were the customer interface for the -- the software agreements and the sublicensing agreements, and they reported to me and -- and I got involved in negotiations of -- of agreements, that type thing.

Q. When you said you were responsible for software licensing agreements, did -- did you have any responsibilities other than being involved in negotiations?

A. Such as? I'm not sure what you're asking.

9

Q. I guess I'm trying to just find out more specifically what types of responsibilities you had with respect to the licensing software -- of software.

A. Well, yes, I -- there was what we called a --a Unix strategy was an internal nomenclature, and one of the things that was my responsibility was I was trying to proliferate the use of binary Unix in the marketplace, and we had goals and objectives by which means we would achieve that. So in addition to having the licensing responsibility, I was also in marketing of the -- of Unix software products.

Q. What Unix software products were you marketing at that time?

A. The operating system. We had Programmer's Workbench. We had a number of compilers. There was -- I don't really recall all the products, but they were all source code oriented products that we were licensing, trying to get the computer OEM's to those products on their -- on their computers.

Q. Okay, and when you said you were trying to proliferate the use of binary . . .

A. Yes.

Q. . . . Unix, how were you going about that?

A. We were working with the -- we had targeted major computer equipment manufacturers such as IBM and

10

Digital Equipment Company that actually produced computers, and we also worked with major software companies, and we were trying to encourage them to provide Unix on a variety of host machines, be they personal computers or large mainframes or so on. We worked with corporations and so on, so what we are trying to do was to encourage them to provide a binary product to the marketplace.

Q. Did AT and T or its affiliates ever provide a binary Unix product to the marketplace?

A. Yes.

Q. Can you tell me what binary products were . . .

A. They provided the operating system. At the time, AT and T was producing -- Western Electric was producing a -- a series of computers they called 3-B's.

Q. Uh-huh.

A. They were 3-B2's and 3-B5's; I really don't remember all the numbers, but they were all provided with -- with Unix operating system on them.

Q. In binary only or . . .

A. Binary only.

Q. Uh-huh.

A. Yes. And they had various other compilers, products that -- Programmer's Workbench and so on that

11

they provided on -- on those computers. They also introduced the Unix PC personal computer and several other work stations, personal computer types that provided a -- a binary copy of the operating system.

Q. Okay. Now, other than marketing of the software products and the responsibility in licensing negotiations, did you have any other responsibilities when you joined the licensing organization?

A. I think those were my primary responsibilities. I -- I'm sure I had other little things that -- that I was responsible for, but they -- I don't recall what they were.

Q. Okay.

A. But those were my main objectives.

Q. Okay. And did your position change from assistant manager to some other position at some point?

A. No.

Q. Okay. Who was your boss who you were working for?

A. His name was Otis Wilson.

Q. Okay. And was that throughout the entire period?

A. Yes.

Q. Now in your -- in your capacity as assistant manager, were you ever involved in communications with

12

The University of California?

A. Yes.

Q. Can you describe what involvement you had with The University of California?

A. That's kind of a wide-open question. I mean, spans a number of years. I'm not sure what -- can you be more specific?

Q. Was it your responsibility on an ongoing basis to have contacts with The University of California?

A. No. I had one of my account executives, her name was Gertrude Williams, who was the -- the prime interface between The University of California and AT and T, and I was only involved on an as-need-be basis.

And that's really the way the relationship worked with all of our customers. I was -- just kind of got involved as need be if -- if thing -- anything got out of the ordinary.

Q. Do you recall any particular instances in the case of The University of California in which you got -- you were involved . . .

A. Yes.

Q. . . . in some type of issue?

A. Yes.

Q. Can you tell me which instances you recall? A. Well, and I really don't know where to start

13

here, I guess. It's -- I've kind of lost track of -- of time frames of things, but I was made aware indirectly from another licensee through one of my account executives that The University of California had plans to distribute a product in source-code format that -- to non-licensees and -- of AT and T. And at that point one of my jobs I guess as part of -- and perhaps this goes back to the previous question, what other things did -- did I do. I did enforce contracts to the best of my ability, I did -- I was responsible for -- for trademark violations and anything that would relate to the Unix product.

When I received this information and requested -- requested more details, I then took it upon myself to -- I asked Gertrude Williams, my account executive, to find out who I should be talking to at the university, and I made -- and I -- and I made contact with -- attempted to make contact with an attorney at The University of California. Her name was Mary McDonald. I believe it was . . .

Q. Can you tell me when you made that contact, the approximate time frame we're talking about?

A. Sometime in 1985. I would have to say that it was mid-1985.

Q. You contacted Mary McDonald?

14

A. Yes. Yes. And I finally had a verbal conversation with Mary. I had left numerous messages and she never returned any of my calls, and by chance one day she just happened to answer the telephone and I introduced myself to her. And she really did not want to talk with me, and she requested something in writing from -- from me, from AT and T, as to who I was and that -- if I had the -- the authority that -- that I said I did.

So I sent her a letter on AT and T stationery introducing myself and -- and what my job was, and I really didn't hear back from her in response to that.

I finally got ahold of her again, and she said she would not accept the letter, that she needed a letter from -- signed by Otis Wilson since all the previous contacts had been from Otis . . .

Q. Uh-huh.

A. . . . and I was a new player.

So a letter was prepared for Otis's signature that verified that the letter that I had sent was indeed who I said I was, and -- and then Mary and I after that talked on a number of occasions about source code exchange and what we had -- we had heard is a -- a -- I'm not sure what the correct term is, rumor or hearsay or what, but we heard they were going to make a distribution of the software to non-licensees.

15

Q. Where did you hear that?

A. I'd heard it through another licensee who had reported it to one of my account executives, Chuck Green, and Chuck came to me about it, and one of the things that -- like I say, that I did pursue, if you want to consider me a -- to be a policeman of -- of some type, but we did pursue all such claims to see if they were -- they were valid or not, or rumors or whatever.

And as a result of the conversations with Mary, we set up a meeting at the university and I -- I do not recall the date. I -- I think it was late 1985, in the fall of 1985 and we -- we had a meeting with Mary and actually a large number of people from The University of California.

Q. Do you recall who was present at the meeting?

A. Well, from the AT and T side was Otis Wilson, an attorney by the name of Geoff Green -- G-E-O-F-F -- Green, and myself. Mary was there, and I believe -- and I'm not sure of the -- the structure within the . . .

I believe Mary had a -- a boss who is -- was a lady and also an attorney. I'm . . .

Q. Uh-huh.

A. I'm not sure of her name. I don't recall what her name was, but she was present at the meeting. And then there was a number of gentlemen present. I don't

16

recall any of their names and -- and throughout the meeting, the meeting took place afternoon, took place really till -- till after 5:00 o'clock in the afternoon, probably started somewhere 1:00, 1:30. There was a number of people in and out that appeared to be students. They were casually dressed, so I'm -- I'm not sure. Some of them asked questions as we talked, but the meeting proceeded throughout the afternoon.

Q. Do you recall what was discussed at the meeting?

A. Yes. The primary objective of the meeting was to discuss the various licenses that AT and T provided and -- such as an educational license, an administrative license, a commercial license for the software itself, sublicensing agreements, contractor provisions, source code exchange provisions, those type of things.

We also at the time had a number of licensees for various versions of the operating system. By versions, I mean those that would run on a Motorola machine and those that would run on a National Semiconductor base machine and -- and Intel machine and so on, and -- and we license those as separate products, and we discussed the rules of source code exchange regarding those products.

Q. Can you tell me on that subject what was said

17

at the meeting?

A. There was a . . .

Q. General substance.

A. Well, the general substance was on the source code exchange. We also got into the methods and concepts issues that were in the license, but basically we were -- Unix started out long before I was in the organization, thirty-two -- System Thirty-two many releases, and they had a System Three -- Roman numeral three release, and we went to System Five, and we discussed how you could exchange source code that a -- that a Thirty-two V customer could provide that source code, for instance, to a System Three or a System Five customer, but a System Five customer could not provide their code to someone who did not have an equivalent license.

So we went through the exchange provisions and then we also went through examples of methods and concepts and contractor provisions and -- and the use of the code, modifications to it and further license. We had an interest, I guess, is probably the right word in -- in anything that was developed as an enhancement or an improvement or a change based on our source code and that if our code was part of the product then we considered that it was governed by the license.

Q. And if your code was not part of the product?

18

A. Well, if it was used as part of the development -- I really need to be careful here on words, I guess.

If the source code, the Unix source code was -- was required, was used to generate the enhancement, was required to have the -- the rest of the enhancements work, then we had an interest in it.

It's been a long time. I'm not sure of the right -- the right key words to use, but we went through those discussions with them and what we felt the, you know, the agreement said.

We also discussed contractor provisions which allowed a licensee to contract with someone to develop software and then when that development was done everything had to come back to them and we expressed concern I guess with -- Otis and I used the term mental contamination, that if you have been exposed to the source code and its methods and concepts, even though you give something back to the -- the licensee, there was --there was concern there that someone could go off on their own and develop what they thought was their own product but really using the methods and concepts and techniques that were in the product that they had previously used.

Q. What was said on that subject at the meeting

19

that you recall?

A. I just recall discussing it. We -- there was a lot of the hypothetical-type things that were provided, that -- that were discussed at the meeting, and I do recall -- I do not know this. I would assume that they were graduate students. I had no idea who their -- their names was, but they were -- they were asking a number of questions and we kind of discussed, okay, well, if you've got a group of people over here developing a set of source code and they have never seen the Unix source code, they've never been too exposed to it and the develop a product completely on their own, than that's one thing. But if they're developing a product with the benefit of Unix or perhaps they have used it for -- for a number of years, ten years, and then they think they're going to go off and develop something on their own that's an operating system that may look like Unix, we had -- we expressed our concern that -- that we had an interest in that product.

Q. What was the University's response at the meeting?

MR. KENNEDY: Excuse me. The response generally, or the response to any specifics?

A. Response to what, I guess.

Q. To that particular point that you just

20

mentioned.

MR. KENNEDY: To the particular hypothetical?

Q. Right. If that hypothetical was ever discussed.

A. Just -- just -- just listened.

Q. They didn't have any response, verbal?

A. If they did, I don't -- I don't recall it.

Q. Okay. Do you recall anything else being discussed at that meeting?

A. I'm not sure how to -- how to answer that --that question. Being discussed, I mean, the whole -- the whole discussion was oriented around the licensing agreement and what its provisions were. We did -- at the meeting we -- we had went out there -- we had heard from one of our other licensees, as I had indicated, that -- that Berkeley University was planning to make a distribution sometime in the -- in the spring of 1986 of a source code product to non-licensees, and that subject was brought up at the meeting.

I don't recall specific words, but I believe it was acknowledged that there was at least some thought or some intent of doing that, and really, right -- right at the conclusion of the meeting, and I -- and I think it's probably one of the things that terminated the

21

meeting, because Otis Wilson spoke up and said, well, if you continue to pursue that we will consider that you are in violation of your software agreements and we'll --we'll have to bring a suit against you to stop that, and within minutes the meeting was over.

Q. Was the nature of the planned release discussed at the meeting?

A. The type of software. . .

Yeah, I -- I do not recall what the product - - product was. I'm not sure if it was a networking product or -- or -- I don't think it was a -- I think it was a what I would consider in my terminology being add-on type product. It was not the operating system as such, but the operating system contained a bunch of different things more than just operating code.

It -- it -- some of the -- the original licensing agreements contained compilers and text editors and everything else, and I'm really not sure it had networking software, UUCP, a variety of things, and I really don't recall what specific part of that that there was an intent to distribute. But there was some type of an acknowledgement that they were -- they had such plans, because that's when Otis Wilson told them that if they pursued that that we would consider them in violation of the agreement.

22

Q. And what was it about what they were planning to distribute that caused you to consider that possibly a violation of the agreement if they pursued it?

A. Because Unix source code had been instrumental in its development.

Q. Was the Unix source code -- was Unix source code included in the product they were planning to distribute?

A. I don't know, 'cause we were never told.

Q. Was that something that you asked about at the meeting?

A. I'm sure we did. I don't recall a specific instance of -- of that. I wish I could recall the specific software that we were talking about, but the --we considered at the time that the -- the product was a - - it was based on Unix, it was -- could be an enhancement or a modification to the operating system.

Q. Now, did anything come out of this meeting in terms of later conclusions or communications?

A. We heard from the same licensee probably -- I don't know the time frame -- I really don't know if it was the end of 1986 or early -- I'm sorry -- at the end of 1985 or early '86. But the same licensee who had notified us of the previous intent also notified us that they had suspended their -- their plans to not distribute

23

that software.

Q. And do you recall which licensee that was?

A. Yes, it was Mount Xinu -- Unix spelled backwards.

Q. Did you -- are you aware of any further communications with the University in connection with that subject?

A. No, the -- the only other thing that I can recall I think that -- I had a number of -- of conversations with Mary McDonald after that meeting. I really don't remember too much their content. I did tell her that I had heard that their -- their plans had been stopped. I don't know that she really acknowledged that or not, but however she did convey to me on one of the occasions I talked to her that -- that the University was planning to release a new version of their software product, and I believe it was four point three if I'm not mistaken, and that she did confirm to me at that point that it only contained Thirty-two V software and nothing -- nothing beyond that.

And I think she conveyed that to me because of our meeting. She wanted to make sure that there was no misunderstanding that the new version of the software contained something that -- that it shouldn't contain in accordance with the licensing agreement.

24

Q. Okay. I'm going to refer to the next exhibit, which is D-34.

MR. KENNEDY: Actually it's a group of documents.

Q. Yes; D-34.

Okay, we've marked as Exhibit D-34 a group of documents produced by the Plaintiff in this action and numbered P-210 through 246. If you want to just take a moment to look through it.

A. (Complied.)

Were these produced stapled together?

Q. I believe so. I don't think we stapled them ourselves other than how they were when we got them.

A. Okay.

**** BRIEF PAUSE ****

A. Well, I forgot one of the company names, I see. AT and T Technology is . . .

Q. Okay. Okay, now if you'll look at the page of this group of documents that's Bates number 243. . .

A. Uh-huh.

Q. . . . it's a letter dated May 15, 1985. In looking down about -- looking at the second paragraph in the letter regarding the definition of licensed software in the granting clause, comma, AT and T does not assert any ownership interest in any modification or derivative

25

work made by licensee and does not consider that such definition claims such an interest. Do you see that paragraph?

A. Yes.

Q. Were you involved at all in the preparation of this letter, by the way?

A. I -- I don't recall what I . . .

Maybe if I can digress for a minute and . . .

Q. Okay.

A.. . . tell you procedures that we followed.

During this time frame of 1985, by that time I -- I think I was probably six to nine months before I really got up to speed on -- on all the licensing agreements within the organization. At this time, I was very much involved in negotiation of contracts.

Side letters, such as this, this type of letter should be called a contract side letter, once the language had been developed in conjunction with our attorneys, AT and T attorneys that -- that were pretty much dedicated to the licensing of the product and we felt comfortable with that language and we negotiated it one time, then that language -- that paragraph became a standard paragraph that we would provide -- use to provide clarifications or something to any other licensee that had a -- that had a question.

26

So whether I was involved with the actual preparation of this letter, I don't know. I was involved with the language associated here, but I really don't recall . . .

Q. This particular letter?

A. Yes.

Q. Okay.

A. They were standard type clarifications paragraphs that -- that we provided, and I would think you would see that same paragraph verbatim in a number of letters with licensees.

Q. And why did -- why was that paragraph written, not necessarily in this particular letter, but you're saying as a standard clarification?

MR. KENNEDY: Objection to form. I'm not sure you've laid a foundation.

Q. Were you -- were you involved in this particular paragraph, this is the second paragraph of the page Bates number 243?

A. Was I involved in the development of that language?

Q. Right.

A. Yes.

Q. Okay. And can you tell me why that language was developed, or written?

27

A. Yes, it was -- that -- that language was provided to a number of licensees in educational software agreements as -- as well as commercial type software agreements that -- that if a licensee on their own developed modifications to the operating system, that was -- that was theirs to the extent that it did not include -- and I really need to watch my words here, it"s been a number of years, so I -- I hope I'm saying things the right way, but to the extent that it did not include Unix source code or the methods and concepts and stuff that -- that were -- that were associated with it, so if someone wrote two or three lines of code as a system modification to put in there, that code was theirs, but the embodiment of that code and all the other things around it were -- AT and T had an interest in; I mean, it was ours.

Q. Okay. And looking at the third paragraph, it says:

. . . However, for clarification, AT and T proposes to amend such definition by substituting the following therefor . . .

And after that it has a definition of licensed software.

Were you involved in the preparation of that language?

A. To the best of my knowledge I was.

28

Q. Okay. Now, if you look at the definition of licensed software in the agreement, the July 1, 1983 System Five agreement that this letter refers to, it's on page -- page number 212 of this same exhibit, D-34 . . .

Yes, a preliminary question, is that language paragraph clarifying licensed software -- is that clarifying the provision that's on page Bates number 212 in the first paragraph after agree as follows.

MR. KENNEDY: Objection to form.

You may answer.

You're asking -- well, if you're asking him for a legal conclusion, then I object as to form.

Q. Your understanding as to whether the letter clarifying licensed software is clarifying the definition of licensed software contained in the paragraph on page Bates number 212, the first paragraph after agree as follows.

A. I -- I can't answer that. This -- I need to look at . . .

Q. I'll direct your attention to -- if you look in the middle of that paragraph, it says licensed software in capital letters means all or any portion of the computer programs, other information documentation and then it has three subparts. There's little I -- I and there's two little I's and three little

29

I's.

A. Uh-huh.

MR. KENNEDY: Same objection.

**** Brief Pause ****

A. What was your question again?

Q: Okay. Let me -- let me re-ask the question. Looking at the page Bates number 243, the third paragraph says:

. . . For clarification, AT and T proposes to amend such definition by substituting the following therefor.

And at the top of the same page it talks about a clarification to amend the definition of licensed software.

Is it your understanding that the definition of licensed software being clarified is the definition on page 212 of this agreement, Bates number 212?

A. It would appear that way, but I really -- I really don't know. There's not reference here to the -- to the software agreement number.

MS. SHAPREAU: There's reference to the date.

Q. If you look at the re line . . .

A. Uh-huh.

Q. . . . on the top of the letter.

MR. KENNEDY: Are we both arguing with Mr.

30

Frasure?

MS. FITHIAN: No, I'm just directing his attention to the re line on the letter , the letter being Bates number 243, July 1, 1983 educational software agreement relating to Unix Five. . .

A. It would appear that it's -- that it's changing that definition, yes.

Q. Okay. And as I look at the amended definition, it appears to drop out the subparagraph three, the three little I's; is that correct?

MR. KENNEDY: Objection to form.

A. I can't say that it -- that it does drop out the three little I's.

Q. Why not?

A. Well, there's other things at the end of that paragraph about designated CPU's and stuff that are not repeated here, so I -- I really . . .

Q. Okay, just let's focus for a moment on the language in the subparagraph three, which says:

. . . Prepared by licensee as a modification of or a derivative work based on any of the materials so listed or furnished.

That language was removed from the definition of licensed software in the May 15, 1985 letter; isn't that right?

31

MR. KENNEDY: Objection to form.

A. I -- I don't know whether I agree with that or not. I . . .

Q. Well, do you see that language in the letter?

A. No, I don't see it. No, I don't see it here.

MR. KENNEDY: Why don't you point him to the other language, Counsel?

A. My only hesitation is there's, you know, there is no reference . . .

I'm -- I'm just not sure.

Q. So the answer was, though, you don't see that particular language in the May 15, 1985 definition of licensed software?

A. No, it's not there. I don't know that it eliminates the -- the little three -- three I in -- in that paragraph, though.

Q. But the language that was in little three I . . .

MR. KENNEDY: Objection to form.

Q. . . . has been eliminated?

MR. KENNEDY: Objection to form.

Don't answer that question. Let her go to the judge and -- and get you to be required to answer that question.

Let's move on; you've asked the question

32

3 three times, Ms. Fithian. The language -- you can show it to the judge, you can show it to the jury, and the judge or the jury can see whether the language is there or is not there.

MS. FITHIAN: Just so I understand, though, you . . .

MR. KENNEDY: They can also see the other language.

Ms. FITHIAN: Just so I understand, you are instructing him not to answer that question?

MR. KENNEDY: That's correct.

MS. FITHIAN: Okay.

MR. KENNEDY: Move on.

I tell you what, because Mr. Frasure lives in Greenville, I'll withdraw that instruction. You reframe it appropriately, he can answer it, but it's already been answered twice.

(As requested Court Reporter read back the last question.)

MR. KENNEDY: Is that the question you want him to answer?

MS. FITHIAN: Yes.

MR. KENNEDY: That's not the last question you asked.

MS. FITHIAN: Well, let's just -- we'll go

33

forward with that question.

WITNESS MR. FRASURE: Can I hear it again; I didn't . . .

MS. SHAPREAU: No, the record has to reflect the question that was asked.

MR. KENNEDY: Yeah, the question that was asked was whether the language at paragraph little three I has been removed from the agreement. As to that question . . .

MS. FITHIAN: From the definition of licensed software . . .

MR. KENNEDY: Right.

MS. FITHIAN: . . . in the agreement.

MR. KENNEDY: As to that question, I have an objection to form and am losing patience with this inquiry. If you want to ask Mr. Frasure whether he can find that identical language followed by the Roman numeral three in the proposed amended definition, and if he sees it there, if you think that advances the inquiry, go ahead and ask him that.

A. Well, the language of little three . . .

Q. Well, specifically the language of little three says:

. . . Prepared by licensee as a modification of or a derivative work based on any of the

34

materials so listed or furnished.

MR. KENNEDY: Please try to refrain from interrupting him.

Q. That's the language. I wanted to clarify the question.

A. Well, that language is not in the May 15th letter.

Q. Okay.

A. You see, by reading it, I don't know that it was the intent of this letter to remove that language. That's my -- my answer.

Then I have reasons for my hesitation as to why I think it was -- was not to delete that language, based on other things that we had did at times in side letters. In other words, we had issued side letters where it -- it -- it may have something -- as an example, if we were to delete three, we would have said three and then we would have said deleted behind it, so I think we can probably find references in side letters where we specifically, where "I" things were itemized, they were -- it would show that it was deleted.

So that's why I can't answer that question in -- in reading this, because I know what we did in other situations, so that's what leads me to think that we had not -- it was not the intent to -- to delete that; I

35

don't know.

MR. KENNEDY: To the extent it could be regarded as an objection to form under any construction, if you were to -- to attempt to utilize this testimony, I would ask the Court to read to the jury the entire paragraph, including the last sentence which you have failed to read at this point.

Q. I'm getting to the last sentence. I'm getting to the last -- I'm getting to the last sentence.

Okay, now looking back at the May 15, 1985 letter, which is Bates number P-243 being Exhibit D-34, the last sentence reads -- the last sentence of licensed software definition reads:

. . . Licensee agrees that any modification or derivative work prepared by it that contains any licensed software shall be treated as licensed software hereunder.

So under this definition of licensed software, a derivative work would be treated -- require to be treated as licensed software if it contained licensed software; is that your understanding?

A. Yes, if it contained licensed software in accordance with the -- the -- the agreement. There's more to the agreement than -- than just that paragraph, though, which there's other portions of paragraphs that

36

cover methods and concepts and -- and stuff, so I would say to the extent that you're -- you're talking about licensed software as covered by the agreement, the entire agreement, then I would assume that's correct.

Q. Okay. And do you know why this clarification letter was written?

A. At the request of the University. I mean we - - we do not generate these letters without some inquiry to cause them.

Q. Did you receive such a request?

A. I don't recall receiving such a request specifically from the University. We received other type requests for clarifications from other licensees, but I - - I don't specifically recall this request.

Q. Did your requests from other licensees similar to the request from the University that led up to this letter of clarification?

A. I think we provided similar language or the same language to other licensees, so -- as a result of a request from them, yes.

Q. Now, looking at the page that's Bates number P-215 on Exhibit D-34, there's subparagraph 101-A of the license agreement, and 101-A states:

. . . Uses for academic and educational purposes means uses directly related to teaching and

37

degree-granting programs and use in non-commercial research by students and faculty members, including any uses made in connection with the development of enhancements or modifications to the licensed software provided that neither the results of such research nor any enhancement or modification so developed is intended primarily for the benefit of a third party.

And then there's subparagraph two:

. . . Such results, enhancements and modifications all to the extent that they do not include any portion of licensed software are made available to anyone, including AT and T and its associated companies, without restriction on use, copying or photodistribution, notwithstanding any proprietary right such as a copyright or a patent right that could be asserted by licensee, its students or faculty members.

And I'll stop there.

Under this provision, is it your understanding that to the extent the University made enhancements or modifications to a licensed software that did not include licensed software, they were supposed to distribute that to anyone, make it available to anyone?

A. Well, it says here the results is the results of your research, which may not include a software -- piece of software at all. It could be a discovery, it

38

could be anything that -- that the -- the software was used for.

If the modifications -- I don't know -- I just need to read the language again; it's been a long number of years since I've read this.

**** Brief Pause ****

I would have to conclude that by reading this paragraph, the 101-A which you -- which you reference here, I guess it was little -- little I two, long as it's in accordance with paragraph 408 of the same agreement on page 216, then it could be -- it could be made available to someone.

It's -- it's hard, I think, to discuss what a specific sentence or items means in here without taking it in context of the entire agreement. First, outline what the provisions are, and then once all those are known I think you can probably go back and -- and discuss it, but to take something in context just by itself without the benefit of the rest of the agreement, I think that's hard to answer a question like that.

Q. Well, do you need time to look at the rest of the agreement to -- before you answer that question or . . .

A. Well, I just -- I -- no, I answered the question.

39

Q. Okay. And when you referred to paragraph four point oh eight, can you read what you were referring to in there, please?

A. This is a licensing agreement.

It shall hold the -- the licensed software in confident for AT and T and its associated companies. Licensee further agrees that it shall not make any disclosure of the licensed software, including methods or concepts utilized therein to anyone.

Well, this -- this paragraph 408 that we were just talking about says does not make any disclosure of the licensed software including methods or concepts utilized therein to anyone except students and faculty members of licensee to whom such disclosure is necessary to the something or other for which rights are granted hereunder, but then if you -- if -- if you read that paragraph and when it talks about that whoever you make it available to, whether they're students or faculty, they have to be made aware of the provisions that they can't disclose it, so I think one -- one thing kind of leads to another in -- in the agreement. So if I read that 408, it -- it doesn't say you can't make it available to -- you can't make it available to anyone except students and faculties and -- and that by itself was not -- say well, they're -- they're free of this

40

agreement.

It doesn't say that, because there's other parts of this agreement that say that if you expose it, they have to be aware of it and they have to, you know, they have to abide by the agreement as well, so . . .

Q. So if I understand what you're saying, are you saying that if they were distributing products and modifications in accordance. with 101-A, so long as they did not include any portion of licensed software or so long as they did not disclose the methods or concepts utilized in licensed software, that they could be distributed or made available to anyone? Was that your understanding?

A. Well, I need to go back -- I really want to be careful in the words that I use here.

I would -- I would think what this is saying is that if the software -- if it did not contain any portion of the -- of the licensed software product, the - - or in some method reveal methods and concepts and techniques, that it's possible, I can't say for sure. I'd have to sit down and read the entire agreement and reread the side letter.

Some of these things, I think, become nebulous, because if you develop your own system modifications and you use -- and it works with the

41

software that was licensed, there is a -- there is a very good chance you are revealing methods and concepts just strictly through the interface technique that -- that's used, so . . .

Q. But assuming -- when you said it's possible, you were saying it's possible that this agreement was saying they should distribute it to anyone so long as it did not include the licensed software of disclose methods or concepts used in the licensed software?

MR. KENNEDY: Objection to form.

A. My interpretation of this is if -- if you were developing software modifications without the benefit of the licensed software, then you could distribute those, but if you developed them with the benefit of the licensed software that you could not distribute them to anyone in this case if you mean anyone who is a non-licensee.

So I believe this -- this . . .

Q. What do you base that on in the agreement.

MR. KENNEDY: Excuse me; I don't think he was through with his answer.

Q. Oh, I'm sorry.

A. I believe that if you were to use the licensed software as a research tool and -- or -- and you had made modifications to that software to derive certain

42

equations or perform certain investigations, then I think the fruits of that -- that research are made available to anyone who would request it.

I do not believe that the -- the software product -- licensed software and the enhancements that you may have made to perform that research should be made available to everyone. I -- I . . .

Q. But if you look at the results -- at the paragraph 101-A, it says that such uses include uses made in connection with the development of enhancements or modifications to the licensed software, and then if you look at . . .

A. What part were you reading from then?

Q. I'm looking in 101-A.

A. Uh-huh. -What . . .

MS. SHAPREAU: Fifth line down.

A. Fifth line down?

MS. SHAPREAU: That's correct.

Q. Right. Including uses made in connection with the development of enhancements or modifications to a licensed software. And then if you look at little two, subparagraph little two -- two little i's, says:

. . . Provided that such results, enhancements and modifications all to the extent that they do not include any portion of licensed software are

43

made available to anyone without restriction on use.

MR. KENNEDY: Is that a question?

Q. First I want him to read the -- the language.

So isn't it true that that language includes enhancements and modifications in what is supposed to be distributed, and not purely the results?

MR. KENNEDY: Objection to form. Legal conclusion, argumentative, violates the rule of completeness.

A. I guess I'm -- I'm really having a hard time following your -- your question. I -- perhaps we're reading this paragraph completely different. I -- I don't know.

Let me just read it here again if I can.

Q. Sure.

**** Brief Pause ****

A. I guess I -- I feel like we're -- we keep saying the same thing over and over.

Q. Well, can I -- I'll ask a new question.

You indicated before that you thought only the results of research and not enhancements and modifications were to . . .

A. No, I -- I didn't mean to say that.

Q. Maybe. I misunderstood you.

A. I was saying as an example the results of the

44

research can -- should -- I think the agreement is -- is clear that if the results of the research, in other words, if you use the software to do research, you perform calculations . . .

Q. Uh-huh.

A. . . . with it or analyze it or however you want to interface with the software, that the results of that research, which are non-software oriented, need to be made available to everyone.

Q. And then this -- isn't it true also that it says enhancements and modifications to the extent they not -- do not include any portion of licensed software. . .

A. Yes; that's right.

Q. . . . are also to be made available?

A. Yes, and I'll -- and again, I think that's where reading the -- reading the agreement differently, because the licensed software to me encompasses methods and concepts techniques, so that's why I go back to my previous statement that if -- if you develop such enhancements without the benefit of the source code, then I think those can be made available to anyone.

As an example, if -- if you were to say to write me a device driver that I want to -- to drive this machine that monitors the heart or something, and you --

45

you do that without the benefit of the source code, then I think that belongs to the licensee. In other words, they can do whatever they want to with it, but to the extent at some point where it gets involved with the source code, then I -- and its methods and concepts, then I think there -- there's a restriction on its -- on its use, so . . .

Q. Where do you find that restriction in the agreement?

MR. KENNEDY: Excuse me. Merely to preserve an objection, I wanted to preserve one objection to the prior question. The exchange was somewhat rapid-fire. Go ahead.

A. I -- I'm really not trying to be stubborn, I just don't follow your -- your question.

Q. Well, the language in 101-A, again focusing on the little subparagraph two says:

Such results, enhancements . . .

A. And modification. .

Q. . . . and modifications, all to the extent that they do not include any portion of licensed software . . .

23 A. Yes, I . . .

24 Q. . . . are made available to anyone.

25 A. And I -- yes. Yes, and I agree

46

MR. KENNEDY: Let me talk to Mr. Frasure.

I don't think there's -- that's just a statement by opposing counsel, and it sounds very argumentative to me. She's got to frame her question. I know you're trying to help her out, and I appreciate that; I'm sure she does as well. But she hasn't asked you a question.

Q. So under that language where it says that results, enhancements and modifications to the extent they do not include any portion of licensed software, the -- are to be made available, isn't it correct, to anyone so long as they do not include the licensed software?

MR. KENNEDY: You're asking his understanding as . . .

Q. Yes.

MR. KENNEDY: . . . as it reads in the. text?

Q. Your understanding.

A. I'll go back to what I said a little bit ago. I believe that sentence is being read out of context with the rest of the agreement.

Q. Well -- and then, my follow-up question is what in the agreement do -- what else in the agreement do you think one needs to look at in order to . . .

A. Method -- the -- the paragraph . . .

Q.. . . provide. . .

47

A. . . . four point oh eight that was on page 216, and that's where we're talking about that the licensee is going to hold the software in confidence and shall not make any disclosure of the licensed software including methods or concepts utilized therein to anyone.

Q. Uh-huh. So as long as the enhancement or modification does not include any portion of licensed software in it and so long as it does not disclose methods or concepts used in the licensed software, is it your understanding that it was to be distributed to anyone?

MR. KENNEDY: Objection to form. You may answer.

A. I would say that it -- that it -- it would have to be made available to anyone if it was made available to someone, anyone that would request it would -- would get it -- would be able to receive it, but I guess that -- that's all I can say. I -- I think you're trying to get me to say something that I don't agree with. I don't think the agreement said that.

Q. Well, do you not -- do you disagree with my prior . . .

MR. KENNEDY: Excuse me. He wasn't . . .

Q. I'm sorry; you're right.

MR. KENNEDY: . . . through with his answer.

48

Q. I'm sorry; go ahead.

A. No, I'm just saying that this agreement, I think, is -- is -- is very comprehensive, and to look at any one specific statement with -- again, without looking at the entire agreement I think is -- just can't be done, so if we were to sit here and -- and review all of it and then try to go back and assemble it, you can't say everything in one sentence, so there are provisions here that we have to be I guess concerned with as -- as I answer that question.

That's why I wanted to look at the rest of the agreement.

Q. Okay, why don't we take a break now, and during the break why don't you go ahead and look at the rest of the agreement and then we'll come back and . . .

A. Well, do you have more questions about this agreement?

Q. Well, I -- to the extent that you think looking at the agreement will . . .

A. I -- I meant that, I guess, in a general sense, that I, you know we were -- we were stuck on -- on that one paragraph, that one subitem, little two, and again, I think that's a -- a statement that we're talking about out of context without reviewing other parts of the agreement, and I think that's where -- where 408 . . .

49

Q. Are there any parts other than 408 that you think would affect how you read or understand that section 101?

A. I think that's the . . .

MR. KENNEDY: Objection. Objection to form.

Counsel, we've not designated Mr. Frasure as an expert witness to offer opinion testimony concerning how he construes the meaning of these agreements today, and I just want that to be clear in the record, because candidly I'm puzzled by we've spent in excess of thirty minutes asking him how walking into this Deposition today he would understand or what he understands these agreements to mean. I don't think it's relevant. I think it's a waste of time, but it's your Deposition.

A. I don't have any other -- I have scanned this agreement, and I think the -- the thing that's of most concern to me in discussing that paragraph is 408 with methods and concepts.

Q. In section -- looking now just at section 408, that provides that licensee may not make any disclosure of the methods and concepts in the licensed software.

A. Uh-huh.

Q. Is that your understanding?

A. In addition to other restrictions, that's -- that's my understanding; yes.

50

Q. Okay. But with respect to the methods and concepts, what is restricted in that paragraph is the disclosure of those methods and concepts.

MR. KENNEDY: Objection to form.

Q. Is that right? Is that your understanding, in this paragraph?

A. Disclosure has many forms, so it -- if I look at the -- the word disclosure as having many forms, then -- then I would agree with that.

Q. Okay.

A. Not just -- not just one form, but many.

You can reveal how things are done by the way you do other things, and that's a disclosure.

Q. In looking at paragraph four point oh nine on the same page, that's page number 216 of Exhibit D-34 -- actually, I don't mean -- is it? Yes.

Four point oh nine, it states:

. . . The obligations of licensee and of its students and faculty members under section four point oh eight shall survive and continue after any termination of rights under this agreement; however, such obligations shall not extend to any information relating to the licensed software which is now available to the general public or which later becomes available to the general public by acts not attributable to licensee, its students

51

or faculty members.

A. Uh-huh.

Q. So under that provision, section four oh eight would restrict disclosure of methods and concepts utilized in the licensed software only to the extent that those methods and concepts are not available to the general public or do not later become available to the general public through acts not attributable to licensee, its students or faculty members; is that your understanding?

MR. KENNEDY: Objection to form.

A. Well, that's -- I -- I guess we have to interpret that. One of the things that general public means, there's a number of textbooks that are published about Unix operating system, and -- and how it operates and -- and things, so there's -- I -- I think that's one piece of information that's made available to the general public, but . . .

Q. so -- oh, excuse me.

A. And I would not interpret this, though, that if another licensee was to go out and to make copies of the Unix software and distribute them overnight to the world, I don't think that that would constitute that it was -- that it was available.

In other words, if someone has violated their

52

-- their agreement . . .

Q. But if something were in a textbook, for example, a method or concept was discussed in a textbook that one could buy in a bookstore, then that method or concept could be disclosed?

MR. KENNEDY: Are you . . .

A. No, I would not agree with that.

MR. KENNEDY: Okay.

A. Someone may have published it incorrectly, so I -- I can't agree with that statement, because there --there are people who are very familiar with the operating system who -- who may write a textbook that would inadvertently disclose something that they should not --not disclose. True, it's been put -- it's been put out and -- and made available, but someone could also be in - - in violation of their -- their agreement, so I just can't agree with your statement without taking some exception to it.

Q. What if it were a textbook that was put out with -- either by AT and T or its affiliates or with the consent of AT and T?

Let's take the first instance -- by AT and T itself?

A. If -- if the text was a . . .

MR. KENNEDY: Objection to form.

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You may answer.

A. If -- I would assume that if the text was freely made available to the public and it was published by AT and T, then -- then anything that was in there, someone could use.

Q. And what if the book was sold in bookstores that was -- with the consent of AT and T?

A. If AT and T . . .

MR. KENNEDY: Objection to form.

You may answer. I just think it's very . . .

Q. I'm almost finished.

MR. KENNEDY: . . . unclear what it is that you're getting at with -- with what I think are ambiguous hypotheticals. But to the extent Mr. Frasure can give you his understanding today, I'm not preventing you from getting at it.

Q. (To Mr. Kennedy:) Thank you.

A. Well, I think if AT and T -- appropriate people within AT and T had reviewed the text and approved it, then, I mean I would just have to assume that someone -- anyone could use it.

Q. All right. Let's take a break now.

**** RECESS ****

by Ms. Fithian:

Q. You mentioned earlier something you called

54

source code exchange. Can you describe what you meant -- what that is?

A. There are provisions in the software license agreement that would allow one licensee that had a specific license to exchange source code with another licensee. There are certain restrictions that are based on that source code exchange.

Unix had a number of release levels or versions how -- whatever terminology you would want to use to it. Thirty-two V was -- was one; System Three, the Roman numeral three was -- was another; System Five was another. And the provisions were that if you were a System Three licensee you could exchange source code with any other System Three licensee, and you could receive code from a Thirty-two V licensee, but you could not give your System Three code to someone who had a lower license level, for instance, a Thirty-two V. So you could -- a Thirty-two V could provide source code to a System Five licensee, but a System Five licensee could not provide it to a -- to someone who was on a license for a Thirty-two V or for System Three.

So there were restrictions on it. On the System Five license, there were also a number of versions of system Five software that were designed to run on specific machines. They were designed to run, as I

55

recall, I -- I don't recall if there was -- there was four or five, but there was -- there was a version to run on Digital Equipment Company machines, those machines that used Intel processors, those machines that used National Semi processors, those that used Motorola, and there was -- there was one other one that -- that really named -- never really truly blossomed into -- into fruition, so if you were a Vax or a Dec licensee of System Five, you could only exchange source code with another Dec licensee of System Five. You could not exchange source code with someone who had a -- an Intel version license because you would be obtaining the technology outside of the scope of the license, so the -- the System Five licenses were specific in the version that you had.

So one of the provisions of the contract, they'll allow you to exchange source code with certain restrictions with other -- with other licensees of Unix operating system.

Q. And if I understand you correctly, if you had a System Five license, you could obtain System Three, System Five or Thirty-two V from another licensee.

A. If -- if you were -- you have to be careful with system -- with your type of System Five. You had to be licensed in the product family of technology,

56

whether it be Digital Equipment Company on Intel or someone, so . . .

Q. Within a product family . . .

A. Yes.

Q. . . . if you had a System Five license, you could obtain System Five, System Three or Thirty-two V source code from another licensee?

A. That's right.

Q. Okay. Let's mark as the next exhibit D-35, a document, it's numbered P twelve eight twenty-three through P twelve eight forty-five.

Can you identify what the document that's been marked as D-35 is?

A. No.

Q. No? Okay.

Have you ever seen the document before?

A. Not to my knowledge. It was issued after I left AT and T.

Q. I see. Let me -- actually I should get back to the chronology and complete that. When did you leave AT and T?

A. The last day of March of -- last working day of March of 1987.

Q. And I believe you said before that your position did not change once you joined the licensing

57

organization; is that correct?

A. That's correct.

Q. Did your responsibilities change at all?

A. I took on additional responsibilities. My -- my original responsibilities did not change. There was a -- one of the other assistant managers that was in the organization who is responsible for interfacing with customers in terms of technical support or technical questions left the organization and went to Summit. So his people reported to me, so I took on additional . . .

Q. Who was that?

A. Who was that? Dave Syndell was his name.

The public relations people came to work for me and the -- the technical support staff came to work for me and the -- excuse me -- that maintained our machine and that would interface with customers and answer questions.

Q. Okay, let's mark this as D-36. It's documents produced by Plaintiff with Bates numbers P five five seven zero through P five five seven three.

Take a moment to look through the document, and let me know when you're done looking at it.

A. (Complied.) All right.

Q. Now, I noticed in the second paragraph, it

58

says:

. . . We propose to furnish you a copy of Unix System Five eleven seven fifty version and to grant you the right to use such version and any other software identified in the attached Software List for Unix System Five for an upgrade fee of one thousand U. S. dollars.

And if you look at the last page of the Exhibit D-36, there's a document called Software List for Unix System V.

Under this letter, is the software listed on System V all available for the one thousand dollar upgrade fee?

A. Say that again; I didn't understand your question.

Q. Okay. Looking at the second paragraph on the first page of D-36 . . .

A. Uh-huh.

Q. it says:

. . . We grant you the right to use such version and any other software identified in the attached Software List for Unix System V for an upgrade fee of one thousand U. S. dollars.

A. Uh-huh.

Q. So looking now at the last page of the list,

59

all of the different versions listed on here were available for one thousand -- a one thousand dollar upgrade fee?

A. It -- no, it says that you're allowed to use those.

Q. Okay. And looking at the last page, there is a distribution fee next to the various versions. Does that mean that these versions were available for the distribution fee?

MR. KENNEDY: Objection to form.

A. It means that they could obtain them from AT and T for four hundred dollars, which included the -- at that time, as I recall, the magnetic media with the software on it and the -- and the documentation. I believe this -- well, I'll let you ask the questions.

Q. Okay. So the one thousand dollars gave the right to use it and then for each particular version the -- the licensee wanted to obtain from AT and T they would in addition pay the distribution fee?

A. Yes.

Q. Is that the. . .

A. If they . . .

MR. KENNEDY: I'm sorry. To use -- you said to use it?

Q. It.

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MR. KENNEDY: What is it?

Q. Okay, let me clarify the question.

Okay, the one thousand dollar upgrade fee, I believe you said, was granting -- to grant the right to obtain the right to use . . .

A. It granted the right to use that -- that software; that's correct.

Q. And by that software, what do you mean?

A. That's on the attachment.

Q. Okay. By -- the attachment is Bates number P-5573?

A. Yes.

Q. Okay.

A. What . . .

Q. So you obtain the right to use the software listed on page 5573 for the one thousand dollar upgrade fee, and in addition, you paid a distribution fee in order to obtain the particular version you wanted?

A. You paid to AT and T that distribution fee if you elected to get that software from AT and T.

Q. Okay. And could get that software without paying the distribution fee by getting it from somebody else?

A. Yes.

Q. You would get it from another licensee?

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A. Another licensee of that technology; yes.

Q. Okay.

MR. KENNEDY: Could -- I think the record may be unclear. Could you clarify -- I mean, we kept going back and forth with that software and it and -- and the like.

Q. I think the last question was clear, but we were talking about the software listed in the software list for Unix System Five contained on page P-5573.

That was your -- that's what you were answering to; is that right?

A. Yes, well I -- what I said was that for the thousand dollar upgrade fee, in -- this corporation receives which we term the Vax version or Dec version of the Unix System Five, that's where the eleven slash seven fifty -- that was a Dec computer model number -- that for that upgrade fee they were allowed to use these versions of the software, and they had the optioin of either paying AT and T a distribution fee to obtain those or they could go to another licensee and obtain them.

Q. Okay.

MR. KENNEDY: By those, are you referring to the software on the software list page 5573?

A. Yes.

MR. KENNEDY: Okay. Thanks.

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Q. Okay. And, then, let's mark as the next exhibit . . .

So this is D-37?

Okay, D-37 is page Bates number P-5241 through P-5253, again documents produced by the Plaintiff in this action, and I'll direct your attention to the page Bates number P-5243, paragraph number two point oh two. If you want to read that paragraph and let me know when you're finished.

A. (Complied.)

Q. Before I ask -- are you finished reading that portion?

A. Uh-huh.

Q. Before I ask you a question specific to that, I'll ask you a more general question about this particular agreement. It's called Software Agreement Between Western Electric Company and Advanced Business Communications, Inc., for Unix System Five, and it's --it says:

Effective as of January 15, 1984.

Do you know if this is a standard form agreement that was used for commercial licensing agreement System Five?

A. It appears that it was.

Q. Looking at the first page after the title

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page, which is Bates P-5242, at the very top of the page there is some letters and numbers that says W six Roman numeral five corp oh seven oh one eight three dash one.

Is that a revision number of the agreement?

A. Yes. Uh-huh.

Q. Okay. And the last numbers where it says seven oh one eight three one, is that a -- is that a reference to a date?

A. It was -- it -- normally a date. This is really prior to my coming with the organization, but our general method was -- with the number was the date that the form was revised and was put into effect to be used, yes.

Q. Okay. And I think you said that you had joined the license organization in either late '83 or early '84?

A. Early '84, uh-huh.

Q. Okay. So this one -- this particular agreement, which is effective January 15, 1984, maybe went into effect around the same time as you joined the licensing organization?

A. Yes. The -- I did not -- I guess probably for the first -- I was more of an observer, really, for probably four to six months and sat with the attorneys and with Otis in various meetings and was, you know, in

64

the process of learning . . .

Q. Uh-huh.

A. . . . so this agreement would have been entered into some time, if I was with the organization, in my early -- early introduction to the organization. I really don't recall the date.

Q. Okay. Did you -- can you tell from looking at this agreement whether this was an agreement that was in use when you completed your sort of training process?

MR. KENNEDY: You mean whether this form of agreement?

Q. Right.

A. I don't believe so. I believe we had modified it again.

Q. Again?

A. Uh-huh.

Q. Okay. Now, looking at the page with Bates numbers 5243, paragraph two point oh two, it states:

. . . Within a reasonable time after a CPU becomes a source CPU pursuant to Section two point oh one C, other than by replacing another source CPU, Western or one of its affiliates will furnish to licensee without payment of a distribution fee, one copy of the version of software requested by licensee from the available versions in the attached issue of the software

65

list for Unix System Five. Such list identifies the various versions of Unix System Five and other Unix operating systems that may be used under this agreement and their applicable distribution fees. Now, is the list referenced in this paragraph the list that's the last page of the Exhibit Bates numbered 5253?

MR. KENNEDY: Counsel, I don't have any particular concern with that question other than to as to its form, but I don't see the point in asking Mr. Frasure about this agreement in view of his testimony that this agreement really predates his active involvement in the licensing operation and when he became more actively involved following training, the agreement had changed, at least without laying additional foundation.

Q. Is it your understanding that . . .

A. It appears to be the list that's referenced, yes.

Q. Okay. And it appears to be similar to the letter that we saw in Exhibit D-36, doesn't it, in that the software . . .

A. Without comparing, it appears to be the same.

Q. Okay. And as with that letter, the software listed on page Bates 5253 was all available to the System Five licensee for the distribution fee; is that your

66

understanding?

A. If they -- yeah, what it said was you got one of these at no cost. I mean, it was included in the cost of the license. The cost of the license at that time included a distribution.

Q. I see.

A. And then you could obtain other ones for a -- for an appropriate fee.

Q. I see. Okay. And like with the letter, could one also obtain these from another licensee without having to pay a distribution fee to AT and T?

A. Yes.

Q. Okay.

Okay, Exhibit D-38 is documents P-8539 through P-8543 produced by Plaintiff in this action.

Now, if you'll look -- and the document appears to be a letter written to Digital Equipment corporation and signed by Otis Wilson.

Now, looking at the paragraph down of the letter, it says:

. . . With respect to point four, object software is not limited to machine executable object code but may include the source coding of files listed in the section entitled Object Software in the Schedule for Unix System Three attached to the referenced software

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agreement or the schedule for Unix System Five attached

to the proposed letter agreement. See the definition for object software in the referenced software agreement.

Is it -- was it your understanding when you were involved in licensing that -- and particularly in licensing or sublicensing of object code, that the object software included some source code . . .

A. Yes.

Q . . . as well?

A. Yes.

Q. Okay. And -- okay, let's mark this the next exhibit in order, D-39, which is a copy of a document produced by The University of California in this action.

Now, looking at page eight . . .

MS. SHAPREAU: Excuse me.

MS. FITHIAN: Uh-huh.

MS. SHAPREAU: What -- could you tell me what this is?

MS. FITHIAN: It's Unix Version System Three commercial.

MS. SHAPREAU: Thank you. What is the date?

MS. FITHIAN: The date is -- it says effective as of December 1, 1982 between AT and T and The Regents of the University of California Unix System Three.

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MS. SHAPREAU: Thank you.

MR. KENNEDY: Has -- has the University made only one production of documents to BSDI?

MS. FITHIAN: I believe that's the case.

MR. KENNEDY: Okay. So I -- may I assume that. . .

MS. SHAPREAU: I'm assuming this has been produced . . .

MR. KENNEDY: . . . that we've -- because we don't have -- they weren't Bates numbered. My understanding is everything that was given to BSDI has since been given to us.

MS. SHAPREAU: That's correct, and I --- I believe the second batch will be Bates numbered.

MR. KENNEDY: Okay.

by Ms. Fithian:

Q. Okay, looking at page eight under the definitions appendix, there is a definition of object software in this agreement that states:

. . . Object software means all or any portion of licensed software comprising the computer programs and other information listed in the section entitled Object Software and the documentation listed in the sections entitled. . .Document and On-Line Documentation in the attached schedule for Unix System

69

Three.

And attached to the agreement there is a schedule for Unix System Three, and under this definition of object software, when you look at the schedule page four item number three is entitled Object Software in the System Three schedule.

Is it correct that all of the programs under the object software number three heading were to be treated as object code -- object software under the agreement?

MR. KENNEDY: Objection to form.

Q. Was it your understanding?

A. I don't -- I can only assume by reading the words there that we read that that's what it means, that these items that are -- that are listed are considered to be object software.

Q. Okay.

A. As part of not only object software, part of the object software.

Q. Okay. And looking at the list of files under object software, and particularly looking at three point five, the user file system, does that include source files as well?

A. I couldn't tell you for sure by looking at the names of some of the files. I would -- I would say that

70

it includes non-object code. It may be text.

For instance, I spot here at the top of the third column a file called Ben slash Help . . .

Q. Uh-huh.

A. . . . which is normally written text that when you ask for help on the computer it -- it brings it up. There are other files that were used that you're familiar with, shells that were in the provider's part of Unix. They are executed in real time. In other words, they are -- those items are not compiled into object code and sent out as -- as binary or object code, they -- they're interpreted is the correct term at the time that you want to execute that, so they -- you consider those to be source code. I'm not familiary with . . .

If you look down at the fourth item from the -- from the bottom on the -- on page six, there's a file there Games slash Vibes slash Quiz.

Q. Uh-huh.

A. Slash and macros, and macros are normally a source code type of product or of any type that could be called into a program dynamically to be used, so there is -- I'm sure that -- I can only theorize that these contain some -- some type of source code, based on my previous exposure to the system.

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Q. Looking at the next page on the list, page seven . . .

A. Yes.

Q. . . . that include files, are those source files?

A. I can't . . .

MR. KENNEDY: Objection to form.

Go ahead.

A. Typically, an include file is a a source file; however, I can't speak for these. I'm -- I'm not a -- a Unix System programmer, so I'm not that familiar with the system, but I can only say that typically an include file is some type of a source file.

Q. Do you know what a -- an include file, what the purpose of an include file is?

A. So you don't have to keep repeating the same code over and over and over again to -- you just --there's a term called include. There's a difference between call and include. Include is the ability to bring in source code in -- in a repetitive method so you don't have to -- your programs don't have to be so big, so hard.

Q. Is that a -- would you call that a text file?

MR. KENNEDY: Could we establish a context?

Q. That meaning an include file?

72

MR. KENNEDY: I mean, you've made no effort to lay foundation whatsoever, and he's testified that he wasn't involved in programming Unix.

So if you could . . .

MS. FITHIAN: I'm just asking for his understanding. He was the . . .

WITNESS MR. FRASURE: The only thing I can . . .

MS. FITHIAN: . . . did say that he used the Unix System as a programmer.

MR. KENNEDY: Just as long as there's a context. I don't have any problem with you asking about the area as long as we have context.

by Ms. Fithian:

Q. So the question was, do you -- did you know -- would you consider that the include files should be text files as you used that term a few questions ago?

A. They could be. I'm sure they -- they would include some type of text, yes. And they may include some type -- a code that can be interpreted. I mean, I - - I'm just not that familiar with these files.

Q. Okay. Okay, in looking at the same document, the same exhibit, at least, Exhibit D-39, there is another document called supplemental agreement attached to the main agreement after all the schedules.

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MS. SHAPREAU: What was the date of the supplemental agreement?

MS. FITHIAN: The supplemental is -- it states effective as of December 1, 1982, and it's called Supplemental Agreement, Time Sharing.

MR. KENNEDY: Let the record reflect that it predates Mr. Frasure's involvement with licensing.

by Ms. Fithian:

Q. Do you know what is meant by time sharing, or do you have any understanding what is meant in the supplemental agreement in Exhibit D-39 when it says time sharing?

A. Time sharing is a -- is -- is a phrase that can have many definitions, and it really is a -- I can -- I can read this if you'd like and theorize what it --what it means, but I'm -- you know, time sharing, I --I'm not familiar with this agreement. I'd have to read it and . . .

Q. Have you . . .

A. . . . but I think it -- it looks like -- at least by paragraph 301 they're talking about someone dialing in remotely to access the computer.

Q. Have you been involved in or have any familiarity with time sharing agreements, supplemental agreements such as this one, even if it's not necessarily

74

the identical agreement?

A. The same type of things were covered under System Five agreements under a sublicensing agreement, and the royalties paid under the sublicensing agreement were a function of how many users could use the object computer. So there was a fee for a one-to-two-user system and a fee from two to six or eight or whatever those numbers were, but fee was structured on basically at that time on how large the machine was or its ability to handle people who were dialed into it on a -- on a -- a remote terminal.

So the same type of things were covered under the System Five agreement in a little bit different terminology; it wasn't called time sharing, it was called number of users.

Q. I see. And so someone under the System Five agreement, if a licensee wanted to sublicense the object software and source -- source files included in the object software schedule, they could provide that on a time-sharing basis, on a dial-up basis in other words?

A. That's correct.

MR. KENNEDY: Objection to form.

Q. And the fees would depend on how many users could dial up a particular computer at a given time?

A. That's correct.

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Q. Was there a limit on the total number of users that -- other than a technical limit, was there a limit placed by AT and T?

A. There was -- there was parameters established, like I said, from one to two and -- and from three to six or three to eight. I don't recall the amount, but it got up to a point and I don't know if it was greater than a hundred and twenty-eight or greater or whatever if your machine had that -- that amount of technical speed to -- to handle it then you -- you paid appropriate fee for that.

So the -- I believe the term time sharing disappeared.

Q. I see. And would the -- what we've been referring to as the time sharing rights tend to be provided in a separate supplemental agreement from the basic binary sublicensing right?

A. Are you talking about this specific agreement?

Q. Well, just in general in your experience.

A. No, they were provided as part of the System Five sublicensing agreement.

Q. I see.

Okay, we've marked as Exhibit D-40 a two-page document with Bates numbers P-5524 through P-5525. Just take a moment to look at it.

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A. (Complied.)

Q. Okay. Now, this letter -- looking at paragraph two, and by the way, it's a letter to Mr. William Gates at Microsoft with original signed by G. Baldwin. Now, it states in the second paragraph:

. . . This letter is written approval from Western Electric for you to transmit object code binary software to any of the countries listed in the attached schedule pursuant to such customer agreements with your customers and to approve transmittal of such software to such countries.

Looking at the particular schedule attached here, is it true that the object version of the software could be furnished to any customer in these countries, any-of the countries listed on the schedule?

MR. KENNEDY: In view of the date, I'd really appreciate it if you would lay a foundation . . .

Ms. FITHIAN: I'll start by asking his understanding, and then I'll -- I will . . .

MR. KENNEDY: Well . . .

MS. FITHIAN: . . . ask him about his own personal experience.

MR. KENNEDY: I gotta tell you. I try not -- I mean, it's your Deposition, and I try not to direct the areas that you get into; that's your decision. But

77

you persist in getting -- and you've done this with numerous witnesses -- the understanding, subjective understanding of individual witnesses, views of what agreements mean when agreements or letters are either the best evidence of what they mean or they speak for themselves with no indication of other communications, whether the subjective understandings were communicated to other persons and the like, all of which I think is very much irrelevant and a waste of time, and while -- while I wouldn't cut you off, Mr. Frasure no longer works for AT and T or USL, and time is limited. And to the extent that we're -- we're -- we're in a position where we need to call him back, I am not threatening to bring to the judge's attention such inquiry, but I certainly reserve my right to do so.

I do wish we would proceed in a somewhat more orderly fashion by establishing so that I don't have to go back and -- and do it on the record whether documents have been seen before or whether Mr. Frasure -- he may well very -- may well be familiar with letters like this, but some reference.

MS. FITHIAN: I mean to get into that if I am allowed to ask any further questions.

by Ms. Fithian:

Q. Do you remember the question?

78

A. No.

Q. Looking at this particular letter, is it your understanding that the -- that it permits the object software to be distributed to any customer in any of the countries listed on the attached schedule?

A. It appears that, yes.

Q. Now, when you were involved in licensing, was there a similar provision in place such that binary or object versions of software could be distributed to anyone within a particular list of countries?

A. If -- yeah, they -- they could be distributed to a specific set of countries; that's correct. Yeah.

Q. Uh-huh.

A. There were restrictions on the countries.

Q. Okay. And anyone within the countries on the particular list that was current at a given time could obtain the binary or object software?

A. Yes.

MR. KENNEDY: Objection to form.

Q. I'm sorry; I didn't hear your answer.

A. I would -- I would assume so, yes. I'm hesitant in asking. I need to . . .

Q. As far as you know; your understanding?

A. Well, the term anyone in those countries bothers me, and I'd say within -- within reason there

79

were -- that if -- if a copy was being sold, licensed to someone in that country that they just didn't enter that country for the sole purpose of obtaining the software to go back and take it to some other country where it wasn't licensed.

But I think as a -- probably as a general statement that's true.

Q. Did AT and T have any involvement in the licensing of the binary version by its licensees?

MR. KENNEDY: Object.

A. What do you mean by involvement? I -- I'm not sure what you're asking.

Q. When a licensee with a sublicensing agreement wanted to license -- sublicense an object version of Unix software to someone in any of the countries listed, assuming they entered into the appropriate agreement with that licensee, was there any restriction by AT and T on who could enter into such agreements?

MR. KENNEDY: Objection to form.

A. I'm still not clear what you're asking. There was -- the sublicensing agreement had a -- a number of provisions that the holder of that agreement, when they distributed a binary product, had to fulfill, and if they fulfilled those and other federal requirements that --that govern certain things that could be shipped out of

80

the country, long as they were in compliance with that, then, I mean yeah, we -- we did have something to say about its distribution, but everything we had to say was in -- was in the sublicensing agreement.

Q. Okay.

A. But the sublicensing agreement, I just might add, is not -- is not the sole restrictions placed on the product, because there were federal export restrictions and otherwise there are rules in effect by the federal government that they had to be aware of as well.

MR. KENNEDY: Excuse me.

You referenced an agreement but didn't direct Mr. Frasure to any of the provisions of it. Do you intend to come back . . .

MS. FITHIAN: Well, I think he referenced an agreement in his testimony.

MR. KENNEDY: No, he referenced his -- his understanding of . . .

MS. FITHIAN: Right.

MR. KENNEDY: . . . of agreements -- commercial sublicense agreements. I simply want to reserve my right to move to strike any testimony to the extent that it is -- it is to be used or attempted to be used in any way to be difinitive as to what the agreement said in light of the fact that you haven't shown the

81

agreements to Mr. Frasure.

And for you to understand that what rights were granted were in our view granted under the license agreement and that license agreements are the best evidence, so I -- to the extent that that can be construed as an objection to form, I want my position to be clear on this record so that if later you attempt to cite to Mr. Frasure's testimony and we say that testimony doesn't do it, you've got to go to the agreements, and you want Mr. Frasure back, I want you to understand I'm objecting to form now so that we understand each other.

MS. FITHIAN: Can I just take a short break so I can. . .

**** BRIEF RECESS ****

by Ms. Fithian:

Q. Let me know when you're done . . .

A. I'm just perusing; I'm not sure what you're after.

Q. Okay. Right. I just wanted you to glance at it before I started asking questions.

Okay, we've marked as Exhibit D-41 documents with Bates number P-5559 through P-5569, and looking at the third page in the exhibit with Bates number 5561 that's called AT and T Technologies, Inc., Sublicensing Agreement.

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Is this a sublicensing agreement for object software of the Unix operating system?

A. To distribute object software, yes.

Q. Okay. And are you familiar with this particular version of the sublicensing agreement?

A. Yes.

Q. Is this one that you -- or that was in use while you were . . .

A. It was one of them that was in use, yes. We -- revised it again, I believe.

Q. Okay. And if you look at page two of the agreement Bates number 5562, under the Roman numeral two heading, Grant of Rights, you see section two point oh one.

Does that section contain the limitations on sublicensing of the object software?

MR. KENNEDY: Objection to form.

If you're going to be asked to give your understanding of this agreement today, Mr. Frasure, I'd like you to make sure that you take the time necessary to review it. It's a nine-page agreement.

I also object to the extent the question calls for a legal conclusion.

A. I don't think I can answer that question without reading it. I mean, it's been -- it's been right

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-- it's been five or six years since I read this agreement. I can't really answer that question without taking the time to read it.

Q. Okay, why don't you go ahead and take the time to read the agreement?

MR. KENNEDY: Let the record reflect that by my watch, which I think is accurate, it's now 12:17 p.m.

A. (Complied.)

by Ms. Fithian:

Q. Okay, now . . .

MR. KENNEDY: Let the record reflect it's 12:28 p.m.

Q. Now, if you'll look at page two of the agreement, and again looking at paragraph two point oh one, it states:

Notwithstanding any provisions to the contrary in the software agreement, AT and T grants to licensee personal nontransferrable and nonexclusive rights . . .

And then under subparagraph A it states:

. . . To make copies of sublicensed products and to furnish either directly or through distributors such copies of sublicensed products to customers anywhere in the world subject to U. S. government export restrictions for use on customer CPU's save for each such

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customer's internal business purposes provided that the entity furnishing the sublicensed products obtains agreement as specified in section two point oh two from such a customer before or at the time of furnishing each copy.

That provision -- is it your understanding that that provision permits the licensee to distribute copies of the sublicensed products to customers anywhere other than in countries subject to U. S. government export restrictions?

A. No, I don't -- I don't interpret it that way.

Q. Can you explain?

A. Well, it refers back to the software agreement, and in the software agreement, I believe it specified countries that -- that were allowed to -- we were allowed to have products go into, so . . .

Q. Allowed under the Export Administration laws?

A. I'd have to go back and look at that language. All I'm saying is I don't think this is an inclusive paragraph right here. I mean, I think there's other things that says notwithstanding any provision to the contrary in the software agreement, so I'm -- I think there are things that are in the basic software agreement that also control this.

Q. That control sublicensing of object software?

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A. Well, no; I'm just saying I think it would control -- I'd -- I'd have to go back. I -- I'm not clear to the countries that are specified in the software agreement. I mean, I'd have to go back and read that and see how that ties into this, but there are restrictions about the distribution of the source -- source code to certain countries, and I'm not sure how that implies, how it's -- how it's related to this. I mean it.

Q. Well, then. . .

A. It's been too long ago. I -- I just -- I would have to go back and look at it and see.

Q. So you're not sure how that applies to the object distributions?

A. Today I'm not.

MR. KENNEDY: Counsel, do you know whether this is an agreement for Unix System software or for some other product?

Q. (To Mr. Kennedy:) I believe it is, but it looks like you need to refer to the agreements number soft zero zero zero six four.

A. Well, with . . .

MR. KENNEDY: David, I'm sorry; there's no question again.

Q. Mr. Frasure, do you know whether this is an agreement that refers to the Unix software?

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A. No, I -- my comment I was going to make is you've got to look at the software agreement because it references the products and the fees paid for -- to be paid.

This unto itself I don't think will tell you.

Q. Okay. But if you looked at the approval slip, the second page of the exhibit, it says covering software products covered by agreement number soft zero zero zero six four; does that indicate that the products covered by this agreement are the same as those covered by agreement number soft zero zero zero six four?

A. I would think not.

Q. You would think no?

A. I -- I don't think it does.

The reason I say that is you could -- you could license source code for twenty different products, but you only may sublicense one. So there's language in here that says if you paid the appropriate sublicensing fees and so on, which I read earlier today, and you've notified AT and T and all the -- the appropriate things, then you can sublicense, so there's many many companies that -- that license source code that do not sublicense all the products. . .

Q. Well, how would you -- how would you determine which particular products this agreement was covering for

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sublicensing?

A. I'd look at the software agreement.

Q. Right, and isn't that the agreement number soft zero zero zero six four?

A. Uh-huh. Yeah.

Q. So looking at that agreement, you could determine what products were being sublicensed -- sublicensed and rights were being granted for? Is that correct?

A. I don't know. I mean, I'd have to look at it and see. I don't know how to answer your question.

Q. Okay.

A. There's got to be verification that the appropriate sublicensing fees had been paid with -- for the -- that gave you the right to sublicense the product and so on, so I mean, I don't recall in detail what everything was on those agreements. I'm not sure if it did say that you paid the sublicensing fee or not.

Q. Okay. The next exhibit, D-42, is a letter to Ms. Mary McDonald dated November 28, 1984.

Is that your signature on the letter?

A. Yes.

Q. Okay. And did you . . .

(Brief Pause.)

Okay, if you look at page two of this. . .

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Well, before I -- before we go on, why don't you identify what agreement is attached to the letter in Exhibit D-42 if you can.

A. Well, it says that it's for thirty -- Unix Thirty-two V Time Sharing System, Version one.

Q. Now looking at the re line on the letter, it says:

re: License agreement between American Telephone and Telegraph Company and The Regents of The University of California for the Fourth Berkeley Software Distribution.

If you look at the agreement that's attached, is that the agreement for the fourth -- a proposed agreement for the fourth Berkeley software distribution?

A. It appears that it is.

MR. KENNEDY: Could we establish whether this is Mr. Frasure's signature and if he has any recollection . . .

MS. FITHIAN: I thought I just asked him that.

MR. KENNEDY: Have you done that? I'm sorry. And did you establish whether he recalls this instance at all so you know whether he's testifying based on what he remembers or interpreting something today?

Q. Do you recall writing this letter?

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A. Yes.

Q. And were you involved in the preparation of the agreement that's attached to the letter?

A. No.

Q. Do you know who was involved in preparing the agreement?

A. I believe the attorney that was involved in this was Geoff Green, which I had mentioned earlier, and I believe Otis Wilson was involved in this.

Trying to establish a -- a time frame in in my mind about this, but I -- I can't.

Q. Okay. Let me just mark the next in order -- keep -- keep that one; don't give that one back yet. Okay, document 43 is a document that was produced in this action by The University of California and it is -- appears to be a letter to Mr. Frasure from Mary McDonald.

Do you recall receiving this letter?

A. Yes, uh-huh.

Q. Okay. And looking at page two of the letter in item number four, it states:

. . . Paragraph seven, sublicensing. I need to discuss with you the proposed provision that object code sublicenses may be in the form of a notice as I am not certain what this means.

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Do you recall any discussion with Mary McDonald on that point?

A. Let me just read paragraph seven, please.

(Brief Pause.)

Would you repeat your question?

Q. Yeah. The question is looking at the letter marked Exhibit D-43 where it talks about paragraph seven, the statement:

. . . I need to discuss with you the proposed provision that object code sublicenses may be in the form of a notice as I am not certain what this means.

Do you recall having any discussions with Ms. McDonald on that subject?

A. No, not specifically. I -- I'm trying to recall.

I -- I really don't recall if I talked with Mary about the notice or not. I do not know.

Q. Okay. Now, looking at Exhibit D-42, the agreement that was attached to your letter to Ms. McDonald, in paragraph seven it states:

. . . Such object . . . sublicenses may be in the form of a notice.

Do you know or do you have an understanding as to what was meant by that provision?

A. To the best that I recall, that was what we

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called a -- a shrink wrap agreement where the license was put on the product and it was covered in shrink wrap and the laws said that if someone obtained that package and opened the shrink wrap, then they abided by the areement, and to the best of my recollection, that's what we. . .

Q. And did AT and T permit sublicensees to distribute the object version via -- using the shrink wrap license as you defined it?

MR. KENNEDY: The object version of what?

MS. FITHIAN: Of Unix operating code.

MR. KENNEDY: This -- this is not an agreement dealing with Unix, I take it.

MS. FITHIAN: Well, no.

Now I'm clarifying . . .

MR. KENNEDY: As long as we understand.

MS. FITHIAN: Sure.

MR. KENNEDY: . . . that it's an agreement dealing with codes derived from Unix . . .

MS. FITHIAN: Fine. . . . but admittedly so.

Let's talk . . .

MR. KENNEDY: Well, yeah; I mean . . .

MS. FITHIAN: Let's just talk about . . .

MR. KENNEDY: What's been referenced is not a proposed draft, not -- but --

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you're not dealt with the signed agreement.

MS. FITHIAN: Right.

MR. KENNEDY: I just want you to understand, Mr. Frasure, we're shifting gears now, and now we're not talking about Berkeley four dot two BSD Software but again about Unix software.

A. I can only go back to the document that I requested to read . . .

Q. Uh-huh.

A. . . . a little bit ago and -- and -- and on page 5563 of your Exhibit 41, paragraph 202, I believe that it says the United States and other jurisdictions were enforceable copyright covering the computer programs of the sublicensed product, whatever that product is.

The agreement specified in 201 may be a written agreement signed by the customer or a written agreement on the package containing the sublicensed product that is fully visible to the customer. Says in all other jurisdictions such agreement must be a written agreement signed by the customer. So I believe you asked did we make a shrink wrap agreement available as a feature or . . .

Q. Uh-huh.

A. Yes. That's correct; yes.

Q. Okay. I'll show you Exhibit D-44, a letter

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that was produced by The University of California in this action, to Ms. Mary McDonald from Mr. Frasure.

Do you recall -- well, first of all, is that your signature on the letter?

A. Yes.

Q. Do you recall sending Ms. McDonald this particular letter?

A. Yes, I remember. Uh-huh.

Q. Okay. And looking at the second paragraph, it talks about a revised paragraph seven, and it talks about that revised paragraph being unacceptable because of the limitation on AT and T's sublicensing rights.

Do you recall what issue was being addressed in that paragraph?

A. I'd need to see the letters.

Q. Okay. I don't have a copy of the September 24 and 25 letter, but looking at Exhibit D-43, item number 4-B . . .

A. What one are we looking at again?

Q. Looking at Exhibit D-43, this is the letter to you from Ms. McDonald . . .

A. Uh-huh.

Q. . . . dated January 17, 1985. She's proposing in item 4-B that certain words be added. If you'll read that . . .

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A. Uh-huh.

Q. . . . provision, the words that she wants added are:

. . . Provided that AT and T sublicense with sublicensees and their sublicense with others contain the covenants and restrictions of paragraphs eight, nine and ten of this agreement.

MS. SHAPREAU: I'd like to object that there's a lack of foundation here, and I think that . . .

MS. FITHIAN: Well, I'm. . .

MS. SHAPREAU: . . . there's a lack of foundation. But we may be able to eliminate at the break . . .

MS. FITHIAN: Are you finished with all the letters?

MS. SHAPREAU: I have one of them, and I believe it's been produced, but I'm not certain about that.

A. To me there's -- there's eleven months between these letters. I don't know what's -- I can't in any way relate this letter to. . .

Q. You don't . . .

Okay. And you don't, looking at this letter, recall what restrictions were being proposed?

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A. No.

MS. FITHIAN: Okay. Okay, why don't we go ahead and break for lunch?

**** LUNCHEON RECESS ****

DIRECT EXAMINATION of MR. FRASURE by MS. FITHIAN (continued):

Q. Mr. Frasure. . .

A. In reviewing these documents at the beginning . . .

Q. Are these documents . . .

MR. KENNEDY: I'm sorry; are you taking this down?

(Court Reporter responded in affirmative.)

MR. KENNEDY: Oh, okay. Go ahead.

A. Somewhere near the beginning of the Deposition, I had made a statement that we had a meeting at The University of California in late '85 about a product that I thought was -- we had heard was going to be released in -- in early '86; and after reviewing these documents, I think I'm a year off. I believe the meeting was probably in late '84 or about in '85 early, simply because I see at this time that -- that Mary McDonald and I were freely corresponding with each other, and prior to this, she didn't know who I was.

As I had indicated, I had to send her a

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letter to say who I was and . . .

Q. Uh-huh.

A. . . . my boss had to send a letter, and after that meeting, we pretty much -- the correspondence between Mary and AT and T was -- was through me. So I believe I was a year off in my . . .

Q. So late '84 is the meeting you . . .

A. Yeah.

Q. . . . talked about this morning?

A. Yes. Yeah, rather than 1985, so I was just a year off in my timing. It's been a -- it's been a . . .

Q. It's a long time.

A.. . . long time. Yeah.

MS. SHAPREAU: Okay, so are we ready to plunge ahead?

WITNESS MR. FRASURE: Sure.

MS. FITHIAN: I'm going to turn it over to Carla now, and . . .

WITNESS MR. FRASURE: Okay.

MS. FITHIAN: . . . then I may have some follow-ups.

****************

Examination of MR. FRASURE by MS. CARLA SHAPREAU:

Q. Okay. As I mentioned to you before the Deposition started, my name is Carla Shapreau, and I

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represent The University of California.

And I just want to state for the record that the University has not answered yet in this case, and it has raised some objections regarding jurisdiction.

However, we're appearing here today for the convenience of all the parties in the cause so that we can proceed with discovery, and by doing that we're not waiving any objection to jurisdiction.

Okay, Mr. Frasure, the document that's been just marked as Exhibit 45 is a document dated April 1985. And on the face sheet it says AT and T, and there's a dollars sign and then the word "echo" in small case letters, and it's identified by Bates numbers P-10702 through 10713.

And I want to direct your attention just specifically to one page, okay, which is page Bates number 10708.

Okay, and could you just take a minute -- I'm just concerned with the right-hand column of this page. Take a -- the time you need to review that.

A. The entire right-hand column?

Q. Actually, yes.

A. (Complied.)

Q. At the first paragraph references your name, and I wanted to ask you, do you first of all recall being

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involved in any way with providing any information for this publication which has been marked as Exhibit No. 45?

A. Yes. Uh-huh.

Q. Okay. And did your involvement -- well, why don't you tell me what your involvement was with this specific issue to the best of your recollection.

A. With this specific issue?

Q. Uh-huh. Yes.

A. I -- I couldn't tell you.

Q. Did you have ongoing involvement with providing information for this publication. . .

A. This publication was put out by Otis Wilson's organization, and there was another gentleman whose name I'd mentioned earlier, Dave Sandell, who had responsibility at that time. He was at my level; he was an assistant manager also. He had responsible for technical customer interface, he had responsibility for the public relations people and so on, and the public relations people at this date were reporting to Dave Sandell, and he -- his people basically collected this information and -- and we put this letter out. It was just trying to be a vehicle, constant communications with our -- with our licensees.

I can't say that I had any direct input to this -- this particular issue. It was a -- I -- I see

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that the column you directed my attention to was a -- was a result of some seminars that we held throughout the United States with our licensees providing them with information.

Other than that, I mean, we -- we published a number of these documents called Dollar Echo and -- on a -- on a periodic basis, so I really can't tell you how much of a direct involvement in this particular issue that I had.

Q. Okay. So did you -- did you -- do you recall seeing this specific issue when it came out?

A. I think so. Yes, uh-huh.

Q. Okay. And the first paragraph states that the business and technical seminars held March 3rd through 4th, and again this document is dated April 1985 . . .

A. Yes.

Q. . . . and March 6th and 7th, Dave Frasure, Sales Manager, Software Sales and Licensing, described several modifications that will be made to AT and T's software contracts. Do you recall -- does that accurately reflect the general substance of . . .

A. Yes.

Q. Let me finish my question or the transcript will be broken.

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Okay. This accurately reflects the general substance of the modifications that AT and T was going to be making to its software contracts.

A. Well, each one of these is just a one-sentence synopsis, so . . .

Q. Right. Okay.

A. . . . you know, the language change wound up to be significant.

Q. Specific.

A. Yeah. But this was -- this was a highlight of items, yes.

Q. Okay. Now, the second paragraph states these changes are in response to direct feedback from AT and T -- AT and T's licensees and are intended to make the contracts more responsive to the needs of the licensees. And then there's a summary of a list of highlights.

Do you have a specific recollection -- well, let me -- let me strike that and go to the very last highlight on this page in the right-hand colum which is entitled Clarification of Ownership of Derived Works, and the language of the highlight reads:

. . . Language changes will be made to clarify ownership of modifications or derivative works prepared by a licensee.

Could you describe for me what was meant by

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