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An Oracle v. Google Trial Transcripts Page - Finally. ~pj
Monday, July 01 2013 @ 01:45 PM EDT

I'm sorry this took so long, but I've finally got a dedicated page done for all the Oracle v. Google trial transcripts. So if you want to know what any of the witnesses had to say, you can find it on that page. You'll also find the trial exhibits and the jury verdict and the judge's order and final judgment, as well as links to Groklaw's coverage from the courtroom. For everything else, of course you'll find it on the Oracle v. Google Timeline page.

We still need to include the transcripts as text (html), and we'll add that to the page as they are done. This seems to be a good time to do this work, as things are relatively quiet, or at least they were over the weekend. Without a dedicated page, it's hard to find the transcripts, even though they are in the Timeline, particularly because the trial was divided into two phases, copyright and patent. Same jury, same judge, the Hon. William Alsup, but separated in time.

As I was working on the page, I reviewed the transcripts from the two days of the trial when we didn't have a reporter present. As a result, we now know exactly what happened with the contradiction between the testimony of Jonathan Schwartz and Scott McNealy.

If you recall, McNealy claimed [PDF] on the stand that Schwartz's blog, when he was CEO at Sun, was a private blog, not a corporate one. And Schwartz testified that it was corporate. So before the jury entered on this day, here's the discussion between the judge and the parties's lawyers, Michael A. Jacobs and David Boies for Oracle and Robert Van Nest for Google: Here's the transcript [PDF] from that day now, May 9th, and here's how the discussion about this went, before the jury came in, beginning on page 3 of the PDF:

MR. JACOBS: Just some housekeeping. 1129 are the demonstratives that were shown during Robert Vandette's testimony. 1130 are the demonstratives shown during Mr. Poore's testimony. And on a non-housekeeping note, we're going to be calling Mr. Sutphin today.

THE COURT: I have forgotten who he is.

MR. JACOBS: I'm sorry, Mr. Sutphin is our witness to respond to Mr. Schwartz's testimony.

THE COURT: All right.

MR. JACOBS: It will be very focused and short. We do not intend by the testimony we are eliciting to be invading the attorney-client privilege. It will be of a nature that

corresponds to the questioning of Mr. Schwartz, which Google asserted in its opposition brief did not amount to a privilege waiver.

So we thought ahead to how we're going to approach this. And Google has identified some exhibits they are going to use to cross-examine. And he'll be up, he'll be down, we'll be done with Mr. Sutphin.

THE COURT: I hear what you're saying. I'm not making any ruling on privilege. I don't know whether what you're saying would or would not waive any privilege. That's for after I hear how it all comes out.

MR. VAN NEST: Your Honor, I would object to this. I've tried to do everything I can to accommodate counsel.

Here's the situation: I agreed to everything they asked for in Phase Two. I said I won't make any reference to Mr. Schwartz' decision. I won't make any reference to the grounds. I won't make any reference to that testimony. I won't call Mr. Schwartz. I'm not going to put it in play in Phase Two.

The only reason for this, according to them, is they want a complete commitment as to Phase Three, also. And what I said about that was it's not that I'm not willing to commit to Phase Three, but I would at least like to know what Phase Three is going to look like before I make that commitment.

And so what they said in response was, well, no,

we've got a witness availability issue. And I said, well, I've been accommodating witness availability issues the whole case.

We had Mr. McNealy in here. We moved Mr. Bornstein all around. We've done all that. I don't think just because of a witness availability issue, on a question like this, we should be injecting Mr. Sutphin into Phase Two and then possibly requiring me to call Mr. Schwartz back to respond, and all that. We really don't want to do that.

I've agreed for everything they've asked for on Phase Two. Given the fact this is likely going to amount to a waiver and I'm going to be asking for documents, and so on, I really think this is something the Court should prohibit in light of the fact that I'm willing to make a commitment and have made a commitment not to raise the Schwartz issue.

And this is only being tendered now based on some witness availability issue, not anything that requires relevant testimony in Phase Two. So I would object to having this witness called now. I think we ought to finish out Phase Two. If he's available end of the day tomorrow and they want to call him at the end of all our Phase Two evidence, that would be a different thing. They want to inject him the middle of sort of the key evidence in Phase Two. This is highly objectionable. I have done I can to accommodate them.

THE COURT: Well, the fact remains that at right in everything your

instance, Mr. Schwartz did say that they thought there were no grounds on which to sue. Even if you don't argue it, the jury may remember it -- it was dramatic testimony -- and hold that against the plaintiff.

So I see that point by Oracle. On the other hand, I see your point that this could open up privilege.

Now, I want to say, I am not blessing Mr. Jacobs' approach ahead of time. If the privilege gets opened, then the privilege gets opened.

I cannot give you a blank check on that, Mr. Jacobs. I hear what you're saying that you don't plan to do it, but that's not enough. You might do it anyway, inadvertently, or due to the way the questioning goes.

So that's for a future hour. I won't say future day. Later on this morning we'll have to address that.

But don't blame the judge if it turns out that this backfires in some way. So I'm not going to -- the answer is, I'm not going to preclude this.

I ask this question just out of curiosity. If you do bring back Mr. -- you said something yesterday that I've been thinking about. If you do bring back Mr. Schwartz, are you then going to put in the fact that the 10-Ks called him out in his blog as a corporate-sponsored way to speak to the public?

MR. VAN NEST: Sure. I mean, that --

THE COURT: Mr. Jacobs, I'm going to allow that in.

So you be aware that if you put your part in, in order to undermine what Mr. Schwartz says about whether or not they had grounds to sue, and Mr. Schwartz comes back, it's fair game for Mr. Schwartz to rebut what you said in reply with Mr. -- who was it, McNealy? Was that it?

MR. VAN NEST: McNealy.

THE COURT: McNealy said that he was not a corporate Did Mr. McNealy sign those 10-Ks? Do you know?

MR. JACOBS: I don't know, Your Honor. I think that the chairman typically doesn't. But I'm not positive.

THE COURT: Somebody ought to look and see.

MR. VAN NEST: Well --

THE COURT: If Mr. McNealy signed those 10-Ks that flat out say that Mr. Schwartz's blog was a communication to the public, you have just as much right to put that in as -- it doesn't even matter whether Mr. McNealy, it's just coloration if he did.

But you have just as much right to put that in to straighten out what was said on that subject as Mr. Jacobs has to put in what he wants to put in.

And I do think both sides might wisely decide to reach a deal on this and not go down this path.

But I cannot -- I feel, as the judge, I cannot prevent you, both sides, from slugging it out in High Noon

style, Gary Cooper style, just the way you have been doing it. And one of you will be carried out of town with bullet holes in them when the trial is over. Maybe both of you.

(Laughter)

THE COURT: And just like the shootout at the O.K. Corral, or whatever analogy you want to use. So if you two want to litigate the case that way, it is relevant enough that I will let you do it.

I also can see reasonable lawyers deciding you are going to focus on the technicalities of the claim limitations and get this part over with.

Mr. Van Nest, I cannot grant your motion.

MR. VAN NEST: Your Honor, I just note that I have Trial Exhibit 971 here. I ask that it be moved into evidence on stipulation. It's the 10-K. It was signed by both McNealy and Schwartz. It's on their exhibit list.

I don't need to call Mr. Schwartz for the purpose of getting this in. We've been stipulating to these the whole trial. I have it. It's exhibit 971.

THE COURT: All right. You're moving 971 in. Any objection?

MR. JACOBS: Let me see it, Bob.

THE COURT: Now, be careful on this, because the way you've said it is that if he concedes this you will not call Schwartz. I don't know if you meant that or not.

MR. VAN NEST: That's not quite what I said.

THE COURT: All right.

MR. VAN NEST: I don't think I need Mr. Schwartz to get this in. That's what I said.

THE COURT: The 10-K.

MR. VAN NEST: That's right. Depends on what Mr. Sutphin says.

THE COURT: Be clear because Mr. Jacobs may be understanding you to say that if he stipulates to this one coming in, you will not call Mr. Schwartz. And if that's what you intend to say, fine. But let's be clear on it. Is that what you intend to say?

MR. VAN NEST: No.

THE COURT: All right. So this is a separate standalone. You're moving in one exhibit. Is there any objection to this?

MR. JACOBS: Give me a minute, Your Honor.

MR. VAN NEST: This is an exhibit on their list, Your Honor.

MR. JACOBS: Your Honor, I object on the following The purpose for which Mr. Van Nest wishes to use this an official imprimatur on blog postings. The jury will be confused about the requirements filings to the SEC. And, ultimately, we may have to governing ask the Court for a legal instruction on this point.

Companies submit materials as part of their 10-Ks, and refer to -- and their regular updates, in order to avoid any complaint that public statements by company officials have not been adequately disclosed to the investing public. That doesn't necessarily put an official imprimatur on Mr. Schwartz's blog postings.

We have blog postings, for example, that are -- from Mr. Schwartz, that are April Fools Day postings, descriptions of pranks. And so while some of his blog postings do talk about the company's business, and it was probably advisable, I imagine, for Sun to make this kind of, in an abundance of caution, securities disclosure, that doesn't mean that a blog posting that says "We welcome Android because it will put rockets on Java" represents a formal statement of Sun's position on whether Android is -- passes legal muster.

That kind of confusion about securities law and implications of securities filings and why companies make securities filings is something we can avoid because this this doesn't need to come into evidence to make the point Google is trying to make, which is that Mr. Schwartz was, in a blog posting before Android was actually publicly released, welcomed Android to the Java community.

So, on those grounds, we would object to it coming in. It's prejudicial and gives rise to jury confusion and ancillary issues.

THE COURT: May I see the page? Hand it up to me, please, the 10-K that has the relevant language.

Is this in the appropriate time frame? Meaning the time frame where the blog in question appeared. Mr. Van Nest?

MR. VAN NEST: I'm looking at the dates, Your Honor. This was on Oracle's exhibit list. I'm looking for the date.

Guys, help me out here. Where does the date appear?

MR. BOIES: It's a funny thing. It's on the front page.

(Counsel confer off the record.)

MR. VAN NEST: June 30, 2008, Your Honor. So, yes.

THE COURT: Here is the relevant statement. This is in part 1 of the 10-K, Item 1, Business under General. And then there is a paragraph that says -- that addresses ways in which investors, the investing public, is notified of material events. Quote:

"We periodically webcast company announcements, product launch events and executive presentations which can be viewed via our Investor Relations web site. Additionally, we provide notifications of our material news including SEC filings, investor events, press releases, and CEO blogs as part of the Official Investor Communications

section of our Investor Relations web site."
Closed quote.

So that a reasonable jury could find that that undermines Mr. McNealy's testimony to the effect that Mr. Schwartz's blog, as CEO, was not speaking on behalf of the company. It's up to the jury to make that call, not for the judge. But this is -- this is in the ballpark of a reasonable response to that. So the objection is overruled.

Now, is this a self-authenticating document?

MR. VAN NEST: Yes, Your Honor. It was on their exhibit list. It's an admission by a party. It's signed by Mr. McNealy and Mr. Schwartz, on page 96.

THE COURT: How could it be on their -- how could it be on their exhibit list as a party admission? They're the party. I don't get that part.

But, it was on their list?

MR. VAN NEST: Yes.

THE COURT: What's the exhibit number?

MR. VAN NEST: 971.

THE COURT: All right. 971 is received in evidence. The objections that have been made are overruled. I'm returning this page to Mr. Van Nest.

(Trial Exhibit 971 received in evidence.)

So there you have it. The matter was established clearly, and the reason Google didn't need to put Mr. Schwartz back on the stand in phase two was because Oracle already had the SEC filing as one of Oracle's exhibits, showing that it was a corporate blog, and the filing was signed by Mr. McNealy and Mr. Schwartz, only one of whom testified accurately about it. If you look at the trial exhibits [PDF] for this phase of the trial, you find this exhibit:
971 - 6/30/2008 - Sun Microsystems, Inc. Form 10‐K for the year ending June 30, 2008, available at http://www.sec.gov/Archives/edgar/data/709519/000119312508187118 /d10k.htm
I've added this as Update 7 to the Groklaw article from that date, of course.

Now, from this you'll see why witnesses are not allowed to sit in the courtroom prior to their testimony, because after the above exchange, Oracle actually put Brian Sutphin on the stand and here is what he told the court:

A. In October of 2009, I was asked to assume additional responsibilities, in addition to -- at the time, I was the -- excuse me, the integration lead executive for the acquisition. And the board asked me to expand my responsibilities to assume operating responsibilities for the company overall.

Q. And when was that latter request made?

A. That was in October of 2009.

Q. Now, as a matter of title, did Mr. Schwartz remain CEO?

A. Yes. His title didn't change.

Q. And how about his authority?

A. I think his authority, at that point, was significantly reduced.

Q. And your authority?

A. Was significantly increased.

Q. In the spring of 2009, after Oracle announced that it would acquire Sun, did your responsibilities change?

A. Yes, they did.

Q. And if so -- and how did they change?

Q. Did Mr. Schwartz maintain a blog while he was at Sun?

A. Yes, he did.

Q. Did you read it?

A. Usually not.

Q. Was Mr. Schwartz's blog an official statement of Sun policy or decisions?

A. No, it wasn't. We had a very clear policy at Sun that any blogs were just personal to the person who posted them, and that they didn't represent any official statements or policies of the company.

Hahahahaha. Here's Mike Dillon, who back then was General Counsel for Sun, telling about getting the SEC to let Sun use the CEO blog as an official way to tell the public about Sun issues. This is a blog entry by Mr. Dillon that was on Sun's website until I dug it up and published it, after which it disappeared, after Oracle had absorbed Sun.

Evidently, Mr. Sutphin responsibilities were not increased sufficiently for him to read SEC filings prior to his being knighted or the company lawyer's blog either. The SEC filing stating that the blog was an official corporate blog was signed by Mr. Dillon's boss, Scott McNealy, prior to Mr. Sutphin's elevation. This is all beginning on page 108 of the transcript as PDF, page 3269 of the transcript itself.

Just in case it disappears again, here's what Mr. Dillon wrote:

We’re trying something different…

On Monday, July 30th, we will release our fourth quarter and fiscal year 2007 financial results.

The standard process for this type of event is to first prepare a press release that has been reviewed by legal, finance, external auditors and the Audit Committee of the board. The press release is then sent to any number of private agencies (we pay a fee for this) that in turn disseminate the information to their paying subscribers. At about the same time, we then post the information on our external website and file the press release with a Form 8-K on Edgar. About 30 minutes after that, we hold our quarterly call with analysts.

Over the last year, we’ve had an excellent dialog with Commissioner Cox and the SEC concerning Reg FD. As part of this exchange, we have discussed the idea that the Internet will increasingly become the accepted platform for providing timely information of importance to shareholders and the public. To this end, our investor relations and press relations teams have been revising our Sun investor website to add additional content (such as Jonathan’s Blog) that will enable investors to have greater access to information about our business. We have as part of this effort also incorporated RSS feeds so that the public can subscribe to receive information directly from Sun (obviously, at no charge).

So, what’s the change? Well, on Monday, we will release our financial information first to the public via our website, RSS feeds and 8-K filing. Then, about 10 minutes later, we will release the information to the traditional private agencies and their paid subscribers.

This change may not seem major, but to be candid, it has some in our company a bit uncomfortable. After all, in the area of securities regulation, being “innovative” is not always considered positively. However, in this situation, our goal is very much aligned with the intent of Reg FD.

Can you believe Oracle put Mr. Sutphin on the stand to say *this*? Is it even conceivable that neither McNealy or Sutphin didn't know that Sun made SEC history this way?

And guess what the judge was thinking right about here?

THE COURT: How could it be on their -- how could it be on their exhibit list as a party admission? They're the party. I don't get that part.

But, it was on their list?

MR. VAN NEST: Yes.

Yup. The same thing you are thinking this very minute.

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