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To read comments to this article, go here
Erik Hughes Deposition Excerpts - as text
Thursday, August 18 2005 @ 07:16 AM EDT

Here's the Erik Hughes deposition [PDF] (excerpts) as text, thanks to the very patient Dan Smith and Scott David Daniels. This is the deposition where we find out what SCO employees call computer geeks. The context is interesting too. Hughes is asked if SCO continued to make the 2.4 kernel available as late as August of 2003. He tries hard to say that he never went to look and various other strategems, but of course, they did.

I wrote about it myself on August 21, 2003. By then they had the notice up about the downloads being just for customers. But on June 5, 2003, I wrote an article about being able to buy OpenLinux from the Caldera store online, as well as from Tucows and other places. And on June 18, 2003, I repeated that OpenLinux 3.1.1 was still available by ftp. At that time, I saw no legal notice at all. And of course, SCO was put on notice about the distribution being improper, because they received a Notice of Copyright Infringement from a German programmer, who charged them with violating his copyright. That was in mid-June of 2003.

In the deposition, we find out that SCO employees read on the Internet that they were still distributing, and reporters wrote to them about it too. So at some point, they added the legal notice, and that is discussed in the deposition, but at first there was distribution without any legal notice. That is the way I remember it too, and the deposition confirms it. So at a minimum, we're talking about GPL violations.

This deposition also shows me just exactly how SCO's ship foundered, when Hughes says this in answer to a question originally sent to them by LWN's Jonathan Corbet and picked up by the IBM attorney:

"What is SCO's position regarding the licensing of the code found in the 2.4 kernel it is distributing?". . .

A. I'm not familiar enough with the terms of the GPL to know whether it was or was not in violation of the GPL.

Yup. Assuming he was being truthful, that's their problem, in a nutshell. And their strategy shipwrecked precisely because of that lack of familiarity with the GPL, in my opinion. And the thing about the GPL is, once you mess up, there really is no way to recover unless the copyright holder lets you.

With respect to the LKP, I found this page, documentation about UnixWare 7.1.3. It indicates to me that they shipped the LKP on a separate CD. But take a look, as I'm not positive. It mentions it on the CD #2 base installation also, but not in a way that is clear to me. So I'll have to leave it up to you brainiacs.

Remember that these are excerpts from the deposition only; that is why the pagination is off here and there and why it begins in the middle of a sentence on page 9. Transcripts of depositions are hard to do, because they normally put 4 pages together on one page, and they number each line. It is hard to duplicate in text, and if anyone has a bright idea on how to do it better, do let me know. I drop the numbers because it gets hard to read, but we've kept the line breaks. I tried formatting several ways, and I'm still not thrilled with the look, but I hope you can read it without confusion.

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

In the Matter of:

the SCO Group, Inc. v.
INTERNATIONAL BUSINESS MACHINES CORPORATION

________________

ERIK W. HUGHES

May 11, 2004

________________

CONFIDENTIAL

LEGALINK MANHATTAN
[Address, phone, fax]

HUGHES, ERIK W.

1

Page 9

its behalf on a particular subject matter pursuant to
what I'll refer to, or what we'll refer to, as Federal
Rule of Civil Procedure 30(b)(6)?

A. Yes, I do.

Q. Okay. Could I show you what's been marked
as Deposition Exhibit 1.

THE WITNESS: Thanks.

Q. BY MR. GREENWALD: And I'd like to ask
to please turn to Pages 6 and 7. For the record I'll
note that Deposition Exhibit 1 is
Defendant/Counterclaim-Plaintiff IBM's Amended Notice
of 30(b)(6) Deposition dated March 19th, 2004.

Directing your attention again to Pages 6
and 7, you understand that the topics about which you
have been designated to testify are Topics Number 5,
as to Linux products only, 13, 14(a), 14(b), and 18?

A. Yes.

Q. All right.

Now, Mr. Hughes, in preparation for your
deposition today, I take it you met with SCO's
lawyers?

A. Yes, I did.

Q. And I take it you also, in the course of
your preparation, reviewed certain documents with
them?


Page 10

A. That's right.

Q. Did those documents help you to refresh
your recollection as to certain of the topics that the
lawyers covered with you?

A. I, being in the position that I've been in
for five years, as well as having my own files that I
studied, as well as meeting with any attorneys, helped
refresh my memory, yes.

Q. And is it your position that none of the
documents you reviewed helped you refresh your
recollection ?

A. Pardon me?

Q. Is it your position that none of the
documents that you reviewed with them helped you
refresh your recollection?

A. Yes, they did help me with --

Q. They did help you.

A. Yes.

Q. Okay.

Were all the documents that you reviewed
with your attorneys documents that had been produced
to IBM in this litigation, in this case? And if you
can't answer that, perhaps your counsel can, but I'll
first ask you.

A. Im trying to think through. I believe


Page 11

all of the documents that we reviewed were court
documents.

Q. What do you mean by court documents?

A. Documents like this (indicating).

Q. Pleadings, documents filed in court?

A. Yes.

Q. So it's your testimony that none of the
documents you reviewed were documents that had been
produced in this litigation, though not filed in
court?

A. The documents were documents like this, as
well as our own internal documents.

Q. Okay. With respect to your internal
documents, were all those documents documents that had
been produced to IBM in this litigation; and again,
you may or may not --not --you may or may not know.
Answer only if you know.

A. I don't know.

Q. All right. I'll direct the question,
then, to your counsel.

MR. HEISE: The documents --any documents
that were reviewed with the witness were -- have been
produced in this litigation.

MR. GREENWALD: Including all internal
documents?


Page 12

MR. HEISE: The only documents that were
not produced in this litigation were documents that
were created by the witness to assist in answering his
questions for you here today to expedite this process.
For example, spreadsheets that were created.

MR. GREENWALD: And they have not been
produced to us?

MR. HEISE: No.

MR. GREENWALD: All right. I'd ask that
you just retain those for the moment. We may be
sending you follow-up correspondence concerning them.

MR. HEISE: Sure. If the questions come
up today, they --

MR. GREENWALD: Sure.

MR. HEISE: -- they -- be relevant.

MR. GREENWALD: Okay.

All right. I'd like to -- you can put
that exhibit aside.

Q. I'd like to now hand you what's been
marked as Deposition Exhibit 2. And I'd like you to
turn to Pages 15 and 16.

Now, to speed things along, I'm going to
represent to you that what appears at Pages 15 and 16
is SCO's answer to IBM's Interrogatory Number 11, and
to further speed things along I'm going to represent

3 (Pages 9 to 12)

2

Page 13

to you that that interrogatory, as you can see on
Page 14, sought the identification of all products
ever marketed, sold, or distributed by SCO. With that
in mind, please review the list appearing on Pages 15
and 16.

All right. I'd like to ask you to tell me
which of the products listed on Pages 15 and 16 are
products that either included the Linux kernel or were
intended for use with computers running the Linux
operating system. And by Linux operating system I'm
referring to the GNU/Linux operating system.

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

A. Those --

MR. GREENWALD: Hold on. I --I take the
objection. Let me rephrase that.

Q. Could you first tell me which of the
products listed there are products that include --
that included the Linux kernel;

A. SCO Linux Server 4. OpenLinux 3.1.1
Server, Workstation, the entire OpenLinux product line
included. Do you want me to read each one of them ?

Q. Please do, for the record. In fact,
please read each -- each name, and each product as it
appears exactly on the list.


Page 14

A. From this top --

Q. From the --from --

A. Okay Top.

Q. Yeah.

A. SCO UnixWare 7 --

Q. No, no, no. I mean -- I mean starting
with SCO Linux Server 4.0.

A. Okay.

"SCO Linux Server 4.0, OpenLinux
3.1.1 Server, OpenLinux 3.1.1
Workstation, OpenLinux 3.1 64 bit,
OpenLinux 3.1 Server, OpenLinux 3.1
Workstation, OpenLinux eServer 2.3.1,
Linux Technology Preview,
eDesktop 2.4, eServer 2.3,
OpenLinux 2.3, OpenLinux 2.2,
OpenLinux 1.3, OpenLinux Base 1.2,
OpenLinux Standard 1.2, OpenLinux
1.1, OpenLinux 1.0, Caldera Network
Desktop."

Q. Let's focus on those for one moment.
Could you tell me for each of those
products which version of the Linux kernel those
incorporated?

A. I believe that's already been provided to


Page 15

you in -- in the software products themselves. I
don't -- if you have the products, I'd be happy to
look at them. I don't know which version of the
kernel each of those include.

Q. So your answer is you don't know?

A . Yes.

Q. Can you tell me for each of those products
what was the approximate -- or for that matter if you
know the exact date of release of each of those
products.

A. I joined the company in May of '99 and
OpenLinux 2.2 had been released just prior to my
joining the company.

OpenLinux 2.3 was released sometime later
in 1999, and --yeah, I --I don't recall the exact
dates of some of the rest of these.

OpenLinux Server or SCO Linux Server 4.0
was released in November of 2002.

Q. Do you know the months and/or years of
release of any of the other -- of the products you've
just testified about?

A. Let's see. eDesktop and eServer were
released probably in 2000.

Q. So that would be eServer 2.3.1,
eDesktop 2.4, and eServer 2.3?


Page 16

A. The eDesktop 2.4 and eDesktop 2.3.

Q. Would be -- eServer 2.3 you mean?

A. Yes.

Q. Would be in 2000?

A. Yes. The Linux technology preview was
released right when -- right after the Linux 2.4
kernel was released --

Q. Which was when?

A. -- and I can't recall the date --

Q. Do you recall the year?

A. -- when that came out.

Q. Did it incorporate the 2.4 kernel Linux --

A. Yes, it did.

Q. -- technology preview?

A. And then the rest of these OpenLinux 3
series products were all released between then and
November of 2002 when SCO Linux 4 was released.

Q. So is it fair to conclude that SCO Linux
Server 4.0, OpenLinux 3.1.1 Server, OpenLinux 3.1.1
Workstation, OpenLinux 3.1 64 bit, OpenLinux 3.1
Server, and OpenLinux 3.1 Workstation all encompassed
or included the Linux kernel version 2.4 or higher?

A. Yes.

MR. HEISE: Objection to the form.

You may answer. Sorry for the delay on

4 (Pages 13 to 16)

3

Page 17

that.

MR. GREENWALD: That's okay.

Q. To your knowledge, do any of the other
products -- or do any of the products listed on
Page 16, in addition to Linux Technology Preview,
include the 2.4 kernel?

A. There was a release of SCO Linux Ware
release 7.1.2 that included the Linux kernel
personality and SCO Linux release 7.1.3 included the
Linux kernel personality. At first when it first
shipped it did include the Linux kernel packages which
were subsequently removed.

Q. Which kernel packages did they include?

A. The Linux kernel packages. I -- I don't
know which specific ones.

Q. Would it have been a Version 2.4 or
higher?

A. Yes.

MR. HEISE Object to the form and the
whole line of questions is exceeding particular scope
of this witness's designation.

Q. Now, you said that as originally produced
the Unix Ware releases included the Linux kernel
personality, and that at first the Linux kernel
personality had the Linux kernel in them; is that


Page 18

correct?

MR. HEISE: Same objection.

MR. GREENWALD: Is that -- you have to
answer audibly.

A. Yes.

Q. BY MR. GREENWALD: During what period of
time did those products -- that is, the Linux kernel
personality -- include the Linux kernel?

MR. HEISE: Same objection.

MR. GREENWALD: You may answer.

THE WITNESS: Is this -- is this my area?

MR. HEISE: No, but he's allowed --

MR. GREENWALD: You may answer .

MR. HEISE: He's allowed to ask the
questions even though these are not the areas upon
which you've been designated so they don't bind the
company but you're free to provide him with
whatever --

MR. GREENWALD: For the record, I disagree
with that characterization, but you may proceed.

A. UnixWare 7 Release 7.1.2 shipped somewhere
after the consummation of the transaction between
Caldera and acquiring the assets from SCO, so the date
is late 2001 or early 2002.

Q. Okay. And what about 7.1.3?


Page 19

MR. HEISE: Same objection.

You may answer.

MR. GREENWALD: You can have a standing
objection to this line of questions.

MR. HEISE: Okay.

A. Yes. It -- 7.1.3 included the Linux
operating. system, including the Linux kernel packages,
until SCO suspended Linux and removed those packages
from the media kit.

Q. Which was when?

A. Which was May of last year.

Q. So until May of last year, Unix -- those
two UnixWare 7 releases included the Linux kernel?

A. That's correct.

MR. HEISE: Objection. Form.

Q. BY: MR. GREENWALD: And it was a version of
the kernel that was either 2.4 or higher?

A. That's correct.

MR. HEISE: Objection to form.

Q. BY MR. GREENWALD: Now, are there any
other products listed on Page 15 or 16, other than
those you've just tested -- testified about, that,
though not including the Linux kernel, were
nonetheless intended for use with computers running
the Linux operating system?


Page 20

MR. HEISE: Objection. Exceeds the
scope.

(There was a discussion held off the record.)

MR. HEISE: Exceeds the scope of the
designation.

MR. GREENWALD: You may answer. Do you understand the question?

THE WITNESS: Yes, I do.

MR. GREENWALD: Good.

A. And the answer is no.

Q. BY MR. GREENWALD: Focusing on SCO Linux
Server 4.0, could you tell me what was its intended
function.

A. SCO Linux Server 4.0?

Q. Yes.

A. It's intended function was --

MR. HEISE: Objection. I'm sorry,
objection.

You may answer.

MR. GREENWALD: What's the basis for the
objection?

MR. HEISE: Again, exceeding the scope of
what this witness has been designated to testify
pursuant to the items in your notice as well as our
objections to that notice.

5 (Pages 17 to 20)

4

Page 21

MR. GREENWALD: You may answer.

A. The function of that product is to run a
personal computer.

Q. BY MR. GREENWALD: Using the Linux
operating system?

A. That's right.

Q. What about the function of OpenLinux 3.1.1
Server?

A. Same function.

Q. What about Open Linux 3.1.1 Workstation?

MR. HEISE: You know, David let me just
interrupt, because as you said before, you'd rather I
just put a standing objection. If we can mark as
Deposition Exhibit 3 our objections, so that those are
part of the record, and --

MR.GREENWALD: Let's mark it as a
different number, if it's all right.

MR. HEISE: I think the agreement
previously was that all deposition exhibits are just
marked numerically, not by plaintiff or defendant.

MR. GREENWALD: Right.

MR. KAO: That's how we're going to do it.

MR. GREENWALD: The problem is we -- can
we go off the --

MR. HEISE: You've premarked.


Page 22

MR. GREENWALD: We've premarked, so --

MR. HEISE: Do you want to call it 2(a)?

MR. GREENWALD: If you want to call it
2(a) that's fine.

MR. HEISE: That's fine.

MR. GREENWALD: That's fine. Let's call
it 2(a).

MR. HEISE: We can just mark it during a
break and I'll just --

MR. GREENWALD: Okay.

MR. HEISE: -- designate on it so she
doesn't have to stop.

Q. BY MR. GREENWALD: Where were we?

3.1.1 Workstation, what does --what was its function?

A. Same function.

Q. What's the function of OpenLinux 3.1 64
bit?

A. Same function.

Q. What about the function of OpenLinux 3.1
Server?

A. Same function.

Q. What was the function of OpenLinux
Workstation?

A. Same function.


Page 23

Q. How, if at all, did any of these products
differ in their function; and when I say these
products, I mean the products that you've just been
testifying about.

A. OpenLinux Server 3.1.1 was geared towards
being optimized on server hardware.

Workstation was optimized for workstation
hardware and also providing that type of a solution
for a server or a workstation.

Same with 64 bit, was for --optimized for
64 bit hardware.

Q. What is the difference between a server
and a workstation?

MR. HEISE: Just continuing my objection.

A. A server is something that generally runs
in the -- in the back office. A work station is
something that someone uses as a client.

Q. All right. So now let's turn to the
products on Page 16, and I'll ask you for each one of
those, what their intended function was.

MR. HEISE: I'll just have a standing
objection to this whole line.

MR. GREENWALD: Well, you've already --

MR. HEISE: I don't know when you're
switching, so I just don't want --


Page 24

MR. GREENWALD: Thats fine.

MR. HEISE: -- the record to be unclear.

MR. GREENWALD: That's fine.
Okay. Continue.

A. eServer is a server function. Linux
Technology Preview was neither geared towards a server
or a workstation or a -- a preview of the Linux 2.4
technology.

Desktop is a workstation function.
eServer 2.3 is a server function. OpenLinux 2.3 is
just a generic PC operating system solution as well as
2.2, 1.3. OpenLinux Base 1.2, Standard 1.2, OpenLinux
1.1 --

Q. Youre going too fast I think both for the
record and for comprehension.

OpenLinux 2.3, what was its intended function?

A. As a general operating system solution.

Q. What does that mean, a general operating system solution?

A. We generally included -- to provide a
solution we we integrated our own technology and
third-party technologies and open-source technologies
to create something more than just a technology CD.

Q. Is it fair to say that it had comparable

6 (Pages 21 to 24)

5

Page 33

that none of the other Linux distributions had.

Q. Do you think there were any other reasons
or factors that accounted for the success of OpenLinux
2.2?

MR. HEISE: Objection to form. Exceeds
the scope.

You may answer.

A. It included other technologies such as a
Netware client so it could work with Netware servers.

Q. BY MR. GREENWALD: Anything else?

A. No.

Q. Did Caldera ever make a profit from the
sale of Linux products?

MR HEISE: Objection to form.
You may answer.

A. I believe at the time we were shipping
OpenLinux 2.2, there was a period of profitability,
but the company was in a hiring mode and that didnt
last for very long.

MR. GREENWALD: Let me ask the question
again.

Q. Did Caldera ever make a profit from the
sale of Linux products?

MR. HEISE: Objection to form.

THE WITNESS: Profit as in overall company


Page 34

profitability, profit on cost of goods, or --

MR. GREENWALD: Profit in terms of overall
profitability of the Linux division.

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

MR. GREENWALD: If there was such a
division.

A. There was -- Caldera in its -- the years
that I joined the company, was a development company,
and they were -- the objective of the company was not
profitability .

Q. BY MR. GREENWALD: We1l, is it not the
case that between 1994 and 2001, the -- Caldera sold
Linux products exclusively?

MR. HEISE: Objection to form.

THE WITNESS: What do you mean by "Linux
products"?

MR. GREENWALD: Products that either
included the Linux kernel or intended for use with
computers running the Linux operating system.

MR. HEISE: Same objection.
You may answer.

A. I wouldn't characterize it as Linux
products. We were trying to sell some kind of a
solution. They did include Linux.


Page 35

Q. BY MR. GREENWALD: But the solutions were
Linux Solutions?

A. They were computing solutions that
included Linux.

MR. GREENWALD: Okay.

Q. During those years 1994 to 2001, did
Caldera ever make a profit?

MR. HEISE: Objection to form.

THE WITNESS: '94 to when?

MR. GREENWALD: 2001.

A. No.

MR. GREENWALD: All right. I'd like to
hand you what has been marked as Deposition Exhibit 3.

(There was a discussion held off the record.)

Q. BY MR. GREENW ALD: Do you recognize this
document?

A. Yes, I do.

Q What is it.

A. It's a product announcement.

Q. For what product?

A. For the SCO Linux Server 4.0 product.

Q. And what is the date of the product
announcement?

A. 14th of Apri1 2003.

Q. What was Linux Server 4.0?


Page 36

A. It was an operating system so1ution
product.

Q. Linux operating solution?

A. Yes.

Q. System solution?

A. It was an operating system solution
product, yes.

Q. All right. I'd like to direct your
attention to the second page of this document, the
fourth paragraph headed Linux 2.4.19 kernel, where it
says, quote,

"The core of SCO Linux Server 4.0 is
the 2.4.19 Linux kernel." Close
quote.

What does that mean?

A. It means the version of the Linux kernel
that was included within this product.

Q. Did SCO Linux Server 4 contain the
entirety of that -- the 2.4.19 kerne1?

MR. HEISE: And I'll just have a
continuing objection to this line because this -- it
likewise exceeds the scope of what he's been
designated on.
You may answer the question.

MR. GREENWALD: Well, one moment.

9 (Pages 33 to 36)

6

Page 37

As -- I'm looking at Topic 5 upon which
Mr. Hughes has been designated and it includes the
dates on which SCO has marked it as --those products.

I see. Your position is SCO Linux
Server 4.0 is not listed in response to --

MR. HEISE: No, that's not my position. I
think your question is exceeding the scope of the --

MR. GREENWALD: Well, I don't see that
because SCO Linux Server 4.0 is clearly included in
response to Interrogatory Number 11, and I'm asking --

MR. HEISE: I'm not contesting that.

MR. GREENW ALD: My question is: When did
SCO start selling Linux Server 4.

MR. HEISE: Then I misunderstood your
question. If that's your question, I apologize.

MR. GREENWALD: I believe that was my
question. If I'm --if I'm misrecalling it, I
apologize, but could you answer that.

A. Certainly. On the -- just right after the
14th of Apri1 2003 it started selling this product.

Q. BY MR. GREENWALD: Did there come a time
that it stopped -- SCO stopped selling Linux Server
4.0?

A. Yes.

Q. When?


Page 38

A. May of 20O3.

Q. And why did it stop?

A. I believe that's --

MR. HEISE: Let me also interpose an
objection on that. That's a topic with another
witness designated, so it exceeds the scope of the
designation.

MR. GREENWALD: You may answer.

MR. HEISE: You may answer.

THE WITNESS: The question was when?

Q. BY MR. GREENWALD: Why. What accounted
for it stopping?

A. The company made a strategic decision to
suspend its Linux business.

Q. When you say "strategic decision" what do
you mean by that?

A. It was made in in the executive group.

(There was a discussion held off the record.)

A. The executive group.

Q. BY MR. GREENW ALD: Are you familiar -- are
you a part of the executive group?

A. No, I am not.

Q. Are you familiar with the reasons that the
executive group had for reaching its decision?

MR. HEISE: I'll just have a standing


Page 39

objection to this whole line.

A. I'm familiar with the reasons; and that
was there was concern about our intellectual property
making its way into Linux, and that the company had
to -- until these issues were resolved, had to suspend
the sales and marketing of its Linux products.

Q. BY MR. GREENWALD: Now, during the period
that SCO was selling Linux Server 4, how many sales
did it make in terms of units?

A. I --I don't know the exact number. Very
few. It was only a month.

Q. How many sales did it make in terms of
revenues?

A. Probably next to nothing.

Q. Well, when you say "next to nothing" was
it more than $100,000?

A. No.

Q. Was it more than $50,000?

A. I would need to go back and look, but I
don't believe it was more than $100,000.

Q. Where would you need to go back and look
in order to determine that?

A. In the -- we have a product sales report,
and I'd need to look down particularly and find the
SKU and then find tile total revenue for the - the


Page 40

SKU.

Q. Do you know what the SKU number was?

A. There are a few SKU numbers located on
Page 5 -- this isn't numbered -- under Number 5, New
Model Numbers and Pricing.

Q. Page 5?

A. Under Section 5.

Q. Section 5. I see.
So youd need to go to your product sales
report and look at each of the model numbers listed in
the third column of that table on Page SCO1269795?

A. Im sorry, where did you see that?

MR. HEISE: He's reading off the bottom
corner there.

THE WITNESS: Oh, yes.

Q. BY MR. GREENWALD: Do you know what -- the
identities of any customers to whom sales were made?

A. I do not. We have thousands of these
SKUs, and so I would need to go in -- if you want
information on a particular product and what the
revenue or who they are sold, I would need to go in
and look at that.

Q. Is that an inquiry that you could make
during a break during questioning this morning and
come back and give an answer?

10 (Pages 37 to 40)

7

49

Q. BY MR. GREENWALD: Would -- did those
discussions take place -- well, first I'll ask with
whom of the members of the -- of that group did you
have those discussions?

A. Pretty much all of them.

MR. HEISE: Do you want me to make a
running objection or do you want me to --

MR. GREENWALD: It's a standing objection.

MR. HEISE: All right.

MR. GREENWALD: I've heard it.

MR. HEISE: I don't want to keep
interrupting on the same line.

MR. GREENWALD: Yeah, you've got it.

A. The entire executive group.

MR. GREENWALD: Okay.

Q. Focusing on your discussions with -- who
did you say, Jeff Hunsaker, H-u-n-s-a-k-e-r?

A. Hunsaker, yes.

Q. Hunsaker. Did those discussions take
place before or after the suspension announcement?

A. Before the suspension announcement.

Q. And what was the nature of those
discussions?

A. The nature of those discussions were
that -- that the company needed to suspend the sales


50

and marketing of Linux products, and operationally we
had discussions on what that would entail and what --
you know, what was covered, what needed to be done.

Q. Did he explain to you the reason why that
was a necessary decision?

A. Yes.

Q. What did he say to you?

A. The explanation to me was that upon
discovering evidence of our intellectual property
being misappropriated into the Linux kernel, that --
that we needed to -- until the issue was resolved, we
needed to suspend the sales and marketing of Linux.

Q. Did he indicate to you when that discovery
had been made?

A. No.

Q. Do you know independently when that
discovery had been made?

A. No, I do not.

Q. Why -- what is the relation or why was it
necessary to suspend distribution of Linux products
solely because of the -- solely because SCO discovered
that there was SCO intellectual property encompassed
within those products?

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


51

A. The determination was that it was
disingenuous of the company to continue to market and
distribute Linux with our unauthorized intellectual
property showing up in Linux.

Q. BY MR. GREENWALD: Did you agree with that
decision?

A. Yes, I did.

Q. Why did you agree with it?

A. Because the company had spent countless
numbers of years and hundreds of millions of dollars
developing the intellectual property, then Caldera
became the rightful owner and heir of the contract and
rights to that intellectual property.

Q. Which company had spent hundreds of
millions of dollars?

A. All the companies that had ownership of
the intellectual property had added to it.

Q. Which companies specifically are you
referring to?

A. AT&T, USL, Novell, the original SCO, and
then subsequently Caldera and SCO.

Q. So when you say the original SCO, I take it
you're referring to the Santa Cruz Operation?

A. That's correct.

Q. Did you have discussions with Reg


52

Broughton --

A. Yes, I did.

Q. -- about the decision to suspend?

A. Yes.

Q. What -- when did those discussions take
place?

A. All at the same time.

Q. What did -- what was the nature your
discussions with Mr. Broughton?

A. His responsibility being over
international, it was what we do about pipelines
that had been built, existing customer discussions
that were underway, what do we say to customers,
and -- and operationally what -- when does this take
effect, and what do we do with customers that have
existing contracts.

Q. Did he agree or disagree with the
decision?

A. He agreed with the decision.

Q. And what was the -- what if anything was
the determination with respect to existing SCO Linux
customers?

A. With existing SCO customers we wanted to
fulfill our contractual obligations. We've always
been a company that wanted to uphold our contracts,

13 (Pages 49 to 52)

8

57

A. That we had just shipped the SCO Linux 4
product the prior November, and here it was only six
months later with a new -- new product, and it -- you
know, from just a product point of view -- purely
a product point of view, that's not a lot of time
to -- to see a product mature in the market.

Q. Just so I'm clear, again, SCO Linux 4
shipped in November 2003 -- is it November 2002 or --

A. That's correct.

Q. -- or March 2003.

A. November of 2002.

Q. 2002. Okay.

Did Mr. Sontag -- how powerful did he or
you find that argument.

MR. HEISE: Objection to form.

Q. BY MR. GREENWALD: how powerful did he --
how powerful did he find that argument.

MR. HEISE: Objection to form.

You may answer.

A. It was a tough decision internally. You
have customers that you've just sold the product to.
It was not an easy decision.

The company had always supported its
customers, had been know for working with customers
for 20-plus years, and had some customers for as long


58

as 10 and 15 years, so we had great relationship with
our customers.

We didn't take lightly just --
discontinuing a line of business.

Q. BY MR. GREENWALD: Well, you said the
company had customers for 10 or 20 years?

A. Sure.

Q. When was Caldera founded?

MR. HEISE: Objection. Exceeds the scope.

You may answer.

A. The original Caldera was founded before I
joined the company. I believe it was 1994.

Q. BY MR. GREENWALD: So who were the
customers who had been with the company for 20 years?

A. So when you acquire the company, you
acquire the customers as well, and so customers had
been running our platform for those periods of time.

Q. My understanding, though, is that the
asserts you -- you acquired were the Unix assets, not
Linux assets.

A. That's correct.

MR. HEISE: Again, objection. All this is
exceeding the scope of this witness's designation.
This is Topic Number 1 for which this witness is not
designated --


59

(there was a discussion held off the record.)

MR. HEISE: -- of this witness's
designation. This is all Topic Number 1 for which
this witness is not designated.

MR. GREENWALD: Well, let's stick with
your conversation with Mr. Sontag.

Q. What ultimately persuaded -- well, did --
let me ask you this: Was Mr. Sontag ultimately
persuaded that it was -- the right decision was to
suspend Linux from distribution?

MR. HEISE: Same objection.

You may answer.

THE WITNESS: Your question is what
persuaded Mr. Sontag?

Q. BY MR. GREENWALD: Was he -- was he
ultimately persuaded that that was the right decision?

A. Certainly.

Q. Are you aware -- well, I'll withdraw that
question.

Did you receive complaints from purchasers
of SCO Linux 4.0 about the suspension of Linux
distributions?

MR. HEISE: Same objection.

You may answer.

A. I don't have any personal knowledge of any


60

complaints that came in.

Q. BY MR. GREENWALD: Do you have any
knowledge through other persons?

A. I don't.

Q. Now let's focus on your conversations
or discussions with Darl McBride about the suspension of
Linux products.

Did you have such discussions?

A. Yes, I did.

Q. When did those discussions take place?

A. May of 2003.

Q. May of 2003?

A. Uh-huh.

Q. Before or after the suspension
announcement?

A. Before the suspension announcement.

Q. What was the nature of your discussions
with Mr. McBride?

A. The same as the others. It was -- it is
disingenuous for the company to continue to distribute
and sale and market Linux with -- with the company's
intellectual property in -- in that product, and so we
needed to suspend sales and marketing of the product,
and how best to -- to get that done.

Q. Did Mr. McBride perceive any impediments

15 (Pages 57 to 60)

9

65

Linux code?

A. Linux as in Linux operating system --

Q. Yeah.

A. -- or Linux kernel?

Q. Well, let's start with Linux kernel.

A. I don't know.

Q. Do you know whether it contained Linux
operating system code?

A. Likely, because it was in the
OpenLinux 3.1.1 directory.

Q. All right. What's the difference between
Linux operating system code and Linux kernel code?

A. There's a common misperception in the
industry that Linux is -- is an entire operating
system, but really, most of what Linux operating
system consists of is Unix-compatible software, just
compiled for a Linux kernel.

Q. Now, you'll agree that the Linux kernel is
distributed pursuant to the GPL, correct?

MR.HEISE: Again, object to exceeding
the scope of the designation.

You may answer.

A. That's right.

Q. BY MR. GREENWALD: And you'll also agree
that the Linux operating system is distributed


66

pursuant to the GPL?

A. The Linux operating system?

Q. Yes.

A. No.

Q. Are -- did SCO, when it distributed --
when Caldera or SCO distributed the Linux operating
system, did it distribute it pursuant to the GPL?

A. Caldera distributed its solutions pursuant
to the terms of its end-user license agreement.

Q. But that -- that software, did it not,
included a code that was subject and hence distributed
pursuant to the GPL, correct?

A. That's correct.

Q. And I take it that -- is it not correct
that OpenLinux 3.1.1 was distributed pursuant to the
GPL?

A. OpenLinux 3.1.1 I believe was distributed
pursuant to the EULA.

Q. To the EULA?

A. Yes.

Q. What is the EULA?

A. End user license agreement.

Q. So that's E-U-L-A?

A. That's correct.

Q. Is it your testimony, then, that 3.1.1 was


67

not distributed pursuant to the GPL?

A. There were parts of it. My testimony is
that parts of it were distributed by the GPL, and the
EULA had no force or effect over the components that
were GPL. But the product or the solution was
distributed according to the EULA.

Q. Well, with respect to the file -- the SRNP
file that Mr. Spraul is referring to, do you agree
that that file was available for download from SCO's
FTP server on the date of this email; that is,
June 15th, 2003?

A. It appears that the person that wrote the
email thought that the file was available when he sent
the email.

Q. Yes. But what is your independent
knowledge of that? Do you have independent knowledge
of that?

A. I -- I don't.

Q. Well, wasn't it part of your
responsibilities, as the person in charge of
distribution of Linux, to be aware of what code was or
was not available for distribution on SCO's FTP
servers?

A. We respected all of the license agreements
that we had, whether they were third party, whether


68

they were open source. The fulfillment of all of
those obligations required many people in the company.
Engineering or someone associated with a technical
group would be the ones that actually posted code to
an FTP site.

MR. GREENWALD: Well, could -- could I
have the question again that I just asked.

(The pending question was read back.)

MR. GREENWALD: Could you answer that
question again. I don't believe your last answer responded to it.

A. I believe that --

MR. HEISE: Objection to form.

You may answer.

A. When you asked me what my responsibilities
were earlier in the day, I testified that they were
business related, and so it was --

My responsibilities were to bring together
all of the -- the groups inside the company that
needed to run a product; and each of the details
associated with running a product, such as posting
some code to an FTP site, was not something I did
personally.

Q. BY MR. GREENWALD: But it was within the
scope of your overall responsibilities to be aware of

17 (Pages 65 to 68)

10

69

what codes are on the FTP sites, correct?

A. No.

Q. Whose job was it?

A. I believe that responsibility is in engineering.

Q. Who in Engineering?

A. Development manager over -- over each
individual product would be responsible for their --

Q. Who is the development manager for 3.1.1?

A. I believe at that time the gentleman's
name was Ed Orcutt.

MR. GREENWALD: I'd like to hand you
Deposition Exhibit 7.

Q. Do you recognize this document?

A. No.

Q. All right. You'll agree with me, though,
that it appears to be an email from a man named
Jonathan Corbet to Blake Stowell, dated August 5th,
2003?

A. That's right.

Q. And you'll agree with me that the subject
of the email appears to be SCO and the GPL?

A. Yes.

Q. Do you know a Jonathan Corbet?

A. No, I do not. It appears from his email


70

alias that he works for Linux Weekly News or something
like that.

A. Yes.

Q. What is Linux Weekly News?

A. It's a publication.

Q. Is it a publication that you subscribe to?

A. No.

Q. Is it a publication that you've read?

A. I may have read it.

Q. What would you -- how would you describe
its standing within the Linux community, that
publication?

MR. HEISE: Objection to form.

MR. GREENWALD: Let me withdraw.

Q. How would you with describe that
publication's reputation within the Linux community?

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

A. I have no basis on determining what its
standing is in the Linux community.

Q. BY MR. GREENWALD: Directing your
attention to the sentence in which Mr. Corbet states,
quote,

"I verify this morning that it is still possible to download source for a 2.4 kernel from ftp.sco.com,"
close


71

quote.

Is that true; that is, that as of
August 5th, 2003 it was possible to download source for -- from the 2.4 kernel from SCO's FTP servers?

MR. HEISE: Objection to form and exceeds
the scope of this witness's designation.
You may answer.

A. It appears that the author thinks that
he -- that he can download the 2.4 kernel from
ftp.sco.com.

Q. BY MR. GREENWALD: Well, my question is:
Are you aware that that was true on August 5th, 2003?

MR. HEISE: Same objections.

You may answer.

A. I didn't ever go up there and look.

Q. BY MR. GREENWALD: Do you have any basis
for knowing one way or the other?

MR. HEISE: Same objections.

A. I assume that -- that for customers that
needed to get some of these things, they were still
there.

Q. BY MR. GREENWALD: Why would a customer
have needed to get some of these things, as you put
it?

A. Well, our FTP site -- well, let me


72

rephrase that.
Our FTP site remained active for customers
that need what we generally put up there.

Q. And that included the Linux 2.4 kernel?

A. I don't know.

Q. If it did -- if it included the 2.4
kernel, would that have been consistent or
inconsistent with the May 14th, 2003 suspension of
Linux distributions?

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

Exceeds the scope as well.

THE WITNESS: I'm sorry, what was your
question again?

Q. BY MR. GREENWALD: If the server -- if the
FTP site included the Linux 2.4 kernel, would that
have been consistent or inconsistent with the
company's May 14th, 2003 suspension of Linux distributions?

MR. HEISE: Same objections.

A. I don't know whether it would be
consistent or not with our suspension of sales and
marketing of Linux, but we were providing the -- to
customers that were under contract, we were continuing
to provide what they needed to run their business.

Q. BY MR. GREENWALD: Well, are there any

18 (Pages 68 to 72)

11

73

circumstances -- why do you say you don't know?

A. I don't know if it's --

MR. HEISE: Same objections.

A. -- with the decision to suspend the Linux.

Q. BY MR. GREENWALD: Well, it would seem to
me that it is, isn't it, because distribution of Linux
encompasses distribution of the Linux 2.4 kernel,
correct?

MR. HEISE: Same objections.

A. I believe that I have stated that we
suspended the sales and marketing of Linux but we
continued to honor the contractual obligations we had
with existing customers, and providing them support
and maintenance.

Q. BY MR. GREENWALD: But under what
circumstances would a preexisting Linux customer need
a whole new version of the kernel?

MR. HEISE: Same objections.
You may answer.

A. I don't know.

Q. BY MR. GREENWALD: Can you think of any
circumstances?

A. They lost their media kit.

Q. They lost their media kit?

A. Yeah, maybe they lost their media kit.


74

That's --

Q. So --

A. That's one instance where I could think
they may need a new kernel.

Q. And it was SCO's policy that if a customer
lost a product, to replace that product free of
charge?

A. No.

Q. And Now, in the same email Mr. Corbet asked
the question, quote,

"What is SCO's position regarding the licensing of the code found in the 2.4 kernel it is distributing?" close quote.

What -- had you been posed that question
on August -- well, let me not ask it that way.
What is your answer to that question?

MR. HEISE: Objection. Exceeds the scope
of the witness's designation.
You may answer.

MR. GREENWALD: Well, let me ask that
again.

Q. Directing your attention to the question
in the second paragraph, quote,

"What is SCO's position regarding the


75

licensing of the code found in the 2.4 kernel it is distributing?" close quote.

What is the answer to that question?

MR. HEISE: Objection as stated earlier.

A. From -- I'm going to answer this question
from a product point of view and not a company
of view.

From a product point of view, when we
distributed Linux, our position was that the licensing
of the code in the 2.4 kernel was under the terms of
the GPL.

MR. GREENWALD: Could you read back the
question for me -- the answer for me.

(The previous answer was read back.)

Q. BY MR. GREENWALD: Would distribution of
the Linux kernel 2.4 on August 5th, 2003 have been
under the terms of the GPL?

MR HEISE: Same objections.

A. If it was a product-related delivery, yes.

Q. BY MR. GREENWALD: And if on August 5th,
2003, SCO was in breach of the GPL, would that
distribution have been pursuant to the GPL?

MR HEISE: Same objections, including
objections to form.


76

You may answer.

A. I'm not familiar enough with the terms of
the GPL to know whether it was or was not in violation
of the GPL.

Q. BY MR. GREENWALD: I'd like now to focus
on the second question in Mr. Corbet's email. Quote,

"Does SCO feel entitled to infringe
upon the copyrights of contributors
to the Linux kernel?" close quote.

What is the answer to that question?

MR. HEISE: Objection to form. Also
exceeds the scope of this witness's designation.

A. From a product point of view, the company
has always honored licenses of third-party commercial
software packages that we distribute a lot of, as well
as our own intellectual property, as well as
open-sourced packages.

MR. GREENWALD: I'd like to hand you
what's been marked as Deposition Exhibit 8.

THE WITNESS: Thanks.

(There was a discussion held offthe record)

Q. BY MR. GREENWALD: Do you recognize
Deposition Exhibit 8?

A. No, I don't.

Q. Do you know who Kieran O'Shaughnessy is?

19 (Pages 73 to 76)

12

77

A. Yes, I do.

Q. Is it a man or a woman?

A. It's a man.

Q. Who is Mr. O'Shaughnessy?

A. He is a country manager for Australia.

Q. And who is Porter Olsen?

A. Porter Olsen is a product manager.

Q. Directing your attention to the first line
of email, quote -- in which Mr. O'Shaughnessy writes,
quote,

"I have just had enquiring email from an Open Source guy that among other things, asserts that we are still making a version of our Linux based on the 2.4 kernel" -- sorry -- "available on our ftp site under the GPL."

What was the answer to Mr. O'Shaughnessy's
question as of July 23rd, 2003?

MR. HEISE: Same objections.

You may answer.

A. When a question like this comes in, we're
not the legal department, and so we would just bring
this attention -- to the attention of -- of our legal
department.


78

Q. BY MR. GREENWALD: Do you know as -- on
July 23, 2003, would you have known the answer to
that question?

MR. HEISE: Same objection to form.

You may answer.

Q. BY MR. GREENWALD: Did you know the answer
to that question on July 23?

MR. HEISE: Objection to form.

You may answer.

A. Our FTP site was still active, and -- at
that time in August, July.

Q. BY MR. GREENWALD: So the answer is yes?

A. Yes.

MR. HEISE: Objection.

Q. BY MR. GREENWALD: Did there come a time
that the 2.4 kernel has ceased to be available on the
FTP site.

MR. HEISE: Objection. Same objections.

A. I think I've stated I don't know if it's
up there. I haven't been up there to look at it. We
haven't shut down our FTP server.

MR. GREENWALD: I'd like you now to turn
to what's been marked as Deposition Exhibit 9.

Q. Do you recognize Deposition Exhibit 9?

A. No, I do not.


79

Q. Who is John Boland?

A. John Boland is one of our support
personnel in Europe.

Q. And who is Rhonda P?

A. Rhonda -- her last name is not coming
right now. She's an employee.

Q. Here in Utah?

A. In Santa Cruz.

Q. In Santa Cruz?

A. Uh-huh.

Q. Direct -- directing your attention to the
bottom of the page where John Boland is quoted as
saying, quote,

"Can I request that the SCO Linux 4.0
for Itanium Processor link be removed
from
www.sco.com/support/download.html as
we never officially shipped this
product."

And my question to you is whether --
whether you recognize a distinction between official
and unofficial shipments of a SCO product?

MR. HEISE: Objection to form.

You may answer.

A. Yeah. The product announcement went out a


80

month before the Linux suspension --

MR. GREENWALD: Yes.

A. -- and so I -- I would need to go back and
check and see if we actually ever did ever ship a
version, if a customer had ever ordered it, or we
fulfilled it or not.

I don't -- I don't recall whether we
officially shipped the product or not.

Q. BY MR. GREENWALD: Well, if I'm not
mistaken we looked earlier at a set of invoices that
showed clearly shipments of Linux Server 4.0; isn't
that correct?

A. That's for --

MR. HEISE: Objection to form.

A. -- Linux Server 4.0. This is for Itanium,
which is a high-end 64-bit processor.

MR. GREENWALD: Oh, I see.

Q. Was the Linux Server 4.0 product you --
that was -- whose -- whose shipments were reflected in
the invoices we looked at earlier, what version of the
kernel did that product contain?

MR. HEISE: Objection to form.

You may answer.

A. The 2.4 series kernel.

Q. BY MR. GREENWALD: Okay. And when was

20 (Pages 77 to 80)

13

Page 81

that -- when was that product's introduction -- when
was that product's introduction announced?

A. You're -- you're referring to SCO --

Q. SCO Linux 4.0, not 4.0 for the Itanium
processor.

A. We tried to -- it doesn't always work out.
We try to send our product out -- announcements out
four to six weeks before the product ships, so since
the product shipped in November we probably tried to
send out the product announcement in October of 2002.

Q. So if I understand your testimony, Linux
Server 4.0 shipped in November 2002, and it contained
the 2.4 kernel?

A. That's correct.

Q. And if I also understand your testimony,
Linux Server 4.0 for the Itanium processor was
announced in --

A. -- April.

Q. -- April 2003?

A. That's correct.

Q. Did that product ever ship?

A. I don't know.

Q. Were there any -- ever any sales of the
latter product?

A. I -- we can look and see but I don't know.


Page 82

Q. All right. If you could also, in the
break, determine that as well. I'd like to ask that
question.
I'd like --

MR. HEISE: I don't mean to interrupt,
just make sure that -- because I -- I'm trying to make
accurate notes, what you want to know is the dollar
amounts --

MR. GREENWALD: Dollar amounts.

MR. HEISE: -- of SCO Linux 4.0, and SCO
Linux 4.0 for Itanium processor.

MR. GREENWALD: Correct.

MR. HEISE: And -- sorry.

MR. GREENWALD: And also dates of -- last
date of shipment of each.

MR. HEISE: And just as housekeeping
matter, because we've got witnesses --

MR. GREENWALD: Yep.

MR. HEISE: -- kind of lined up, any
idea -- and I'm not trying to rush you -- whatever is
appropriate --

MR. GREENWALD: I think I can finish with
him in the next -- and I hope -- my game plan is to
finish with him in the next 20 minutes.

MR. HEISE: Okay. And then maybe what


Page 83

we'll do is take a break, then he can make some phone
calls if he can find out the answers, and then I
don't know, if you want to pop him back in -- or maybe
he can do it during the break and we can just, you
know excuse him for the day.

MR. GREENWALD: Sure.

MR. HEISE: Okay?

MR. GREENWALD: Sure.

Okay. I'd like to hand you now what's
been marked as Deposition Exhibit 10.

Q. Do you recognize 10?

A. No, I do not.

Q. I believe you've testified earlier who
Jeff Hunsaker is. Who is Larry Gasparro?

A. Larry Gasparro is on the sales team?

Q. Is he still on the sales team?

A. Yes, he is.

Q. Who is Dean Zimmerman?

A. Dean Zimmerman is in marketing.

Q. I'd like to direct your attention to the
bottom email. Quote,

"Reading some of the comments on the internet, the long hair smelly's (sic) are indicating that we have not turned off our Linux downloads?"


Page 84

Close quote.

Who are the long hair smellies?

A. That's a common stereotypical name of
computer geeks.

Q. And do you know what comments of theirs
were being referred to?

MR. HEISE: Objection to form.

You may answer.

Q. BY MR. GREENWALD: Or do you know what
comments were being referred to in this email?

A. I do not.

Q. Was it correct that as of July 31st, 2003,
Linux code was -- was available for download from
SCO's website?

A. As I mentioned before, the FTP Server was
still running. I am not personally aware of what's
been running on the FTP site.

MR. GREENWALD: I'd like to hand you
what's been marked as Deposition Exhibit 11.

Q. Do you recognize it?

A. I do not.

Q. Who is Steven Shankland?

A. Steven Shankland is a writer, computer
technology writer.

Q. Is he employed by SCO or no?

14

Page 85

A. No.

Q. And who is Blake Stowell?

A. Blake Stowell is someone that works in
marketing.

Q. Directing your attention to the last line,
what are the Linux RPMs?

A. That's the common packaging mechanism for
Linux packages, is to package them as an RPM.

Q. Do you know what that's an acronym for?

A. Stand for RPM Package Manager.

Q. Okay. Now, do those Linux RPMs include
Linux code?

A. Yes, they do.

Q. Do they include kernel code?

A. Some can, yes, if they are kernel
packages.

Q. Do you know whether, as of July 31st,
kernel packages were available?

A. I do not.

MR. HEISE: Object to the form.

You may answer.

Q. BY MR. GREENWALD: Are Linux RPMs still
available for download?

A. We have a mirror site where we pass
through updates from UnitedLinux that our customers


Page 86

can access, by password.

Q. I'd like to hand you what's been marked as
Deposition Exhibit 12.

Do you recognize this document?

A. I do not.

Q. Do you know who Jay Petersen is?

A. Yes, I do.

Q. Who is he?

A. Jay Petersen is a part of the New Jersey
engineering group.

Q. Who is Lesley M?

A. Lesley Mazerwitz, if I pronounced her name
correctly, is on a team that runs online services in
Santa Cruz.

Q. Do you know how to spell her last name?

A. I don't.

Q. How about Karen AD?

A. Karen Adams.

Q. Karen Adams, who is she?

A. Same group in Santa Cruz.

Q. Now, I'd like you to look it over, the
email.

A. Okay.

Q. Okay. Are you familiar with the general
subject of this email?


Page 87

A. Yeah, it's what we've been talking about
for the last little bit.

Q. All right. What was this email, I guess,
from -- initially now from Rhonda -- seeking to
accomplish, from Rhonda to Jay Petersen?

MR. HEISE: Objection to form.

You may answer.

A. It looks like she is changing the FTP site
a little bit and putting a notice for visitors to that
FTP site.

Q. BY MR. GREENWALD: Why is she putting --
what does the notice say, first of all?

A. The notice is as it says is on Page 2.

Q. All right. What was -- wy did she want
to put the notice there?

MR. HEISE: Objection to form.

You may -- excuse me -- you may answer.

Q. BY MR. GREENWALD: From what you can tell
from the email.

A. From what I can tell from the email, she
put the notice there to answer the questions that were
coming up from some of the long-haired Smellies on --
on why there was some of these products up on the FTP
site.

Q. And I take it that that answer was, if you


Page 88

will, embedded in the second sentence of the notice;
that is, quote,

"SCO will, however, continue to
support existing SCO Linux and
Caldera OpenLinux customers
consistent with existing contractual
obligations," close quote.

A. I think the notice speaks for itself.

Q. Now, is it fair to conclude that as of
this email, Rhonda Petersen had determined that SCO's
website contained Linux code available for download?

A. Rhonda Powers?

Q. Excuse me. Excuse me. Rhonda Powers,
that's right. Rhonda Powers had determined that SCO's
website obtained Linux code available for download?

MR. HEISE: Objection to form.

You may answer.

A. That appears so.

Q. BY MR. GREENWALD: Now, directing your
attention to Jay Petersen's response where he says,
quote,

"This looks good except that I don't
want to have this notice come up with
Volution," V-o-l-u-t-i-o-n, "SCO
Office or sco/pub/opensource. This

22 (Pages 85 to 88)

15

Page 89

should really just apply to our Linux
OS products, not Open Source applications," close quote.

Why -- do you understand why Mr. Petersen
held that view?

MR. HEISE: Objection to form.

You may answer.

A. Volution and SCO Office were application
products. Volution was a systems management product,
SCO Office was a collaboration product, and in his
opinion looks -- it appears he didn't think they
applied to what she was doing.

Q. BY MR. GREENWALD: I'm not sure I
understand why.

Why wouldn't they apply? Why would it
follow, from what you just said, that the notice
wouldn't apply to those?

A. From this email I really -- I don't see --
I can't speculate why Jay Petersen felt they didn't
apply, other than that they were -- they were
products, they were not operating systems.

Q. Do you feel that distinction -- I'm just
trying to understand the basis of the distinction.

Can you articulate the basis for it?

MR. HEISE: Objection to form.


Page 90

You may answer.

A. As I said, it appears Jay sees our
application products, Volution and SCO Office, as not
having to fall under the same notice as operating
system products.

Q. BY MR. GREENWALD: Do -- do those -- do
Volution and SCO Office, for example, contain Linux
operating system code?

A. They do not include Linux kernel code, no.

Q. Okay. But they do include operating
system code?

A. What do you mean by operating system code?

Q. Well, you just said it, so -- do they
include code that is a part of the operating system,
the GNU/Linux operating system

MR. HEISE: Objection to form.

You may answer.

A. They include some code that is open source
software, but they may or may not -- we didn't
consider them a part of the operating system. We
included them as part of these applications.

Q. BY MR. GREENWALD: All right. Are you
familiar with the term "SCO Education" as it was used
within SCO?

A. Yes, I am.


Page 91

Q. What did that term refer to?

A. SCO Education referred to an education
initiative that we had which was chartered as a profit
center, profit loss.

We had course that were instructor-led
courses that we sold. We had online courses that we
sold, and certification, where it's pretty much
standard in the industry to provide some kind of --
some level of certification that -- that could have
some value in the industry. And that -- that's what
SCO Education was about.

MR. HEISE: I don't man to interrupt, but
you sound like you just switched gears.

MR. GREENWALD: Yes, I did.

MR. HEISE: When we come back, if we could
just take a short break, and I can try and get the
answers to your questions and also take care of some
other business real quickly.

MR. GREENWALD: Let's go off the record
for a moment.

VIDEOGRAPHER: Off the record 11:28.

(There was a discussion held off the record.)

(There was break taken.)

VIDEOGRAPHER: We're on the record at
11:49. Counsel may proceed.


Page 92

Q. BY MR. GREENWALD: Could you tell me the
volume of sales of Linux Server 4.0.

A. Sure. For SCO Linux 4, 32 bit, there were
several different SKUs. The first one was the OEM
SKU, there were zero sales. For the NFR, not for
resale, there were $4,688.75 -- actually I know it was
a return -- how about I just give you the total?
Would you like the total?

Q. How many SKUs are there in total?

A. There are five. Three of those have a
return that happened recent quarters that I haven't
subtracted out.

Q. Let's just take the total.

A. The total is 175,861.

Q. 175,861?

A. That's right.

That represents the total dollar revenues
derivable from sales of SCO Linux 4.0?

Q. And what was the last date on which a
version of that product was shipped?

A. The 31st of December, 2003.

Q. Let's -- all right. Now let's turn to SCO
Linux 4.0 for the Itanium processor. What was the
dollar revenues associated with that product?

23 (Page 89 to 92)

16

Page 93

A. Zero.

Q. I suppose it may follow -- well, how many
units of that product shipped?

A. Zero.

Q. All right.

MR. HEISE: If you're switching back, let
me just put on the record, you know, we've provided
these materials that are through the first quarter of
2004 from which he derived this information; and in
preparing for this deposition, the Interrogatory 11
did not include some of the products that are now
incorporated in all of the items incorporated in
Item 3 are both Unix and Linus products, so now that
encompasses every single product, including the few
that were missing from Interrogatory 11, in
preparation for this deposition.

MR. GREENWALD: And when you say "these
documents" you're pointing to what?

MR. HEISE: Exhibit 3(a).

MR. GREENWALD: What's been marked as
Exhibit 3(a)?

MR. HEISE: Correct.

MR. GREENWALD: Do these documents have
Bates numbers on them?

MR. HEISE: No, they're just -- they're


Page 94

divided by year, and they -- I believe chronologically
they're --

MR. GREENWALD: Okay. Why don't I then
take a look at -- are they all in the same format?

MR. HEISE: Yes.

MR. GREENWALD: All right. Maybe then if
I could just go through one so we can understand what
each column is and how to read them.

THE WITNESS: Sure.

Q. BY MR. GREENWALD: What I'm looking at is
a seven-column spreadsheet. Are all the documents in
that format, they're seven-column spreadsheets?

A. Yes, they are.

Q. All right. Now, could you tell me what
the first column represents. In -- in my -- well,
actually it's more complicated than that.

I have on the heading a -- well, the
heading -- the heading page I have says product
revenue for the period of fiscal year 2004 to one FQ
04 November 2003 to January 2004. I think that's
self-explanatory, but --

MR. HEISE: Obviously we're not working
off the same one. Ours says --

MR. GREENWALD: Yeah.

MR. HEISE: -- you know, fiscal year 2003


Page 95

November 2002 to October 2003. I think that's

Q. BY MR. GREENWALD: How do you define
product --

(there was a discussion held off the record.)

Q. BY MR. GREENWALD: No to be too picky
here, but is there an agreed-upon definition of
product revenue here that I should be aware of?

A. This is all product revenue.

Q. I see a row entitled sum of total EXT NET.
What does that mean?

A. That's -- this printout is from a finance
application --

Q. Right.

A. -- and that -- I don't know what that
specific abbreviation means.

Q. Underneath I see headings for seven
columns. One is entitled Grouping. What does
Grouping refer to?

A. Grouping means the -- the product family.

Q. What are -- how many product families does
SCO have?

A. There are Unix products, Linux products,
layered products I believe are -- are all the main
product families. OpenServer, UnixWare are separate
product families.


Page 96

Q. What does "layered" mean?

A. Layered on top of the operating system.

Q. I see.

I see another column entitled Product Line
Description. What does that refer to?

A. A description of the -- the product line.

Let me find an example. So a product
family of Linux, a product line description is SCO
Linux 4.

Q. What about the column entitled Item?

A. Item Number is our product number, part
number.

Q. Does that correspond to a SKU number?

A. Yes, it does.

Q. The next column is entitled Item --
D-E-S-C-P one. I guess Item Description One?

A. That's right.

Q. What does that mean?

A. That's describing each of the different
SKUs and what they are.

Q. Next column says Sold to Name. What does
that refer to?

A. That's the name of the customer.

Q. The next column says Invoice Date. What
does that refer to?

24 (Pages 93 to 96)

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