6864 1 IN THE IOWA DISTRICT COURT FOR POLK COUNTY ----------------------------------------------- 2 JOE COMES; RILEY PAINT, ) 3 INC., an Iowa Corporation;) SKEFFINGTON'S FORMAL ) 4 WEAR OF IOWA, INC., an ) NO. CL82311 Iowa Corporation; and ) 5 PATRICIA ANNE LARSEN; ) ) TRANSCRIPT OF 6 Plaintiffs, ) PROCEEDINGS ) VOLUME XXVI 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation, ) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 8:30 a.m., January 8, 14 2007, in Room 302 of the Polk County 15 Courthouse, Des Moines, Iowa. 16 17 18 19 20 HUNEY-VAUGHN COURT REPORTERS, LTD. 21 Suite 307, 604 Locust Street 22 Des Moines, Iowa 50309 23 (515)288-4910 24 25 6865 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 RICHARD M. HAGSTROM 7 MICHAEL E. JACOBS MICHAEL R. CASHMAN 8 Attorneys at Law Zelle, Hofmann, Voelbel, 9 Mason & Gette, LLP 500 Washington Avenue South 10 Suite 4000 Minneapolis, MN 55415 11 (612) 339-2020 12 STEVEN A. LAMB Attorney at Law 13 Zelle, Hofmann, Voelbel, Mason & Gette, LLP 14 550 South Hope Street Suite 1600 15 Los Angeles, CA 90071 (213) 895-4150 16 ROBERT J. GRALEWSKI, JR. 17 Attorney at Law Gergosian & Gralewski 18 550 West C Street Suite 1600 19 San Diego, CA 92101 (619) 230-0104 20 KENT WILLIAMS 21 Attorney at Law Williams Law Firm 22 1632 Homestead Trail Long Lake, MN 55356 23 (612) 940-4452 24 25 6866 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY SHARON L. NELLES 3 Attorneys at Law Sullivan & Cromwell, LLP 4 125 Broad Street New York, NY 10004-2498 5 (212) 558-3749 6 ROBERT A. ROSENFELD KIT A. PIERSON 7 Attorneys at Law Heller Ehrman, LLP 8 333 Bush Street San Francisco, CA 94104 9 (415) 772-6000 10 STEPHEN A. TUGGY HEIDI B. BRADLEY 11 Attorneys at Law Heller Ehrman, LLP 12 333 South Hope Street Suite 3900 13 Los Angeles, CA 90071-3043 (213) 689-0200 14 MICHELE M. RAMSEY 15 Attorney at Law Duncan, Green, Brown & 16 Langeness, PC Suite 380 17 400 Locust Street Des Moines, IA 50309 18 (515) 288-6440 19 RICHARD J. WALLIS STEVEN J. AESCHBACHER 20 Attorneys at Law Microsoft Corporation 21 One Microsoft Way Redmond, CA 98052 22 (425) 882-8080 23 24 25 6867 1 (The following record was made out of 2 the presence of the jury at 8:30 a.m.) 3 MR. LAMB: Your Honor, on the initial 4 day, Thursday, when we began testimony with 5 Mr. Alepin, starting at page 6461 running 6 through 6463 of the transcript, Mr. Holley made 7 a rather extensive speaking objection in front 8 of the jury. 9 We had already briefed this. We had 10 already discussed this and argued this before. 11 We then went back in chambers and we 12 argued it further, and then the Court came out 13 and issued a ruling, and the ruling was then 14 stressed to the jury, and the expression was it 15 was half of this, half of that. 16 And it's our position, Your Honor, 17 that we would request that the Court actually 18 read the ruling because it leads to unfairness 19 on the Plaintiffs' part because it's our 20 position that they tried to create some issues 21 in some areas of testimony that we never had 22 any intention of having Mr. Alepin testify to. 23 And on a broader matter, and we 24 discussed this, I believe, Friday in chambers, 25 we believe it is inappropriate to make these 6868 1 types of speaking objections in front of the 2 jury and then request a ruling. 3 What should happen is either party, 4 either us or the Defendants, should ask for an 5 out-of-the-jury's-presence conference back in 6 your chambers. It should be argued, and then 7 the Court should rule. There's no need to tell 8 the jury what the ruling is. 9 And if the argument is going to be on 10 the record, certainly the ruling needs to be on 11 the record for fairness. 12 THE COURT: Do you have the ruling? 13 MR. LAMB: I do, Your Honor. 14 It starts on 6487, Your Honor. 15 THE COURT: Do you want me to read 16 this to the jury? 17 MR. LAMB: Yes, Your Honor. 18 MR. HOLLEY: We have no objection, 19 Your Honor. 20 THE COURT: Very well. 21 As far as the other thing, if we have 22 an objection, just make your objection, and 23 we'll go back outside the presence of the jury 24 or dismiss the jury to make record on the 25 objection. 6869 1 MR. LAMB: Greatly appreciate that, 2 Your Honor. 3 THE COURT: Anything else? 4 MR. LAMB: No, sir. 5 THE COURT: Can we get the jury? 6 MR. LAMB: Yes, sir. 7 MR. TULCHIN: Your Honor, just one 8 minor thing. 9 We did hand the Court -- I hope Your 10 Honor got it -- a letter this morning about the 11 pending motions. 12 THE COURT: I left it in my office. 13 Thank you very much. I appreciate it, 14 too. I read it real quick, and thank you. 15 MR. TULCHIN: Sure. 16 THE COURT: That cuts it down. 17 (The following record was made in 18 the presence of the jury at 8:35 a.m.) 19 THE COURT: Everyone else may be 20 seated. 21 Court is going to first read to you a 22 ruling on an objection regarding the witness. 23 Court had an objection by the 24 Defendant and a resistance thereto. Record was 25 made outside your presence. The Court made a 6870 1 ruling, but not in your presence. I'll make a 2 ruling now in regard to the witness, 3 Mr. Alepin. 4 The witness may not offer opinions on 5 the following: Legal opinions, including 6 whether conduct is or is not anticompetitive, 7 whether the Defendant has complied with decrees 8 and court orders and judgments, and any 9 interpretation by the Defendant of any decrees, 10 judgments, orders, conclusions of laws -- 11 conclusion of law or findings of fact. 12 I guess that should be by the witness, 13 shouldn't it? 14 MR. LAMB: Yes, Your Honor. 15 THE COURT: Sorry. 16 He may not offer economic opinions. 17 He may not offer opinions on consumer behavior 18 or demand. 19 He may not give testimony on design of 20 PC operating systems. 21 He may testify as to how operating 22 systems in general are designed and developed 23 since I believe he does have some expertise in 24 that area. 25 He may also testify as to applications 6871 1 systems; how in general they are designed and 2 developed, and may testify as to what impact 3 the conduct or acts of the Defendant has had on 4 competitors or developers and the computer 5 industry from the standpoint of a person who 6 has expertise in the computer industry. 7 He's qualified to testify as to the 8 impact of companies' developments and 9 activities and conduct in regard to the 10 technological aspect of the industry itself, 11 but not economic and legal opinions. 12 Such opinions may include effects on 13 others in the industry, such as on technology 14 that was advanced or inhibited, but nothing 15 regarding economic success, opinions, or 16 consumer acceptance of things that may or may 17 not have been produced. He can't testify as to 18 what that would have been. He has no expertise 19 in that area. 20 He may state but for the alleged 21 conduct or acts of the Defendant that there may 22 have been or not have been advances in specific 23 computer technologies that he is an expert in 24 or knows of or has qualifications in or the 25 industry in general because he has expertise in 6872 1 the industry in general to say whether or not 2 but for certain conduct, acts of the Defendant, 3 there may have been advances in technology. 4 Did I read it all right? 5 MR. LAMB: Yes, sir. 6 THE COURT: I think you may have the 7 witness resume the stand. 8 He's got his water with him. You're 9 still under oath, sir. 10 RONALD ALEPIN, 11 recalled as a witness, having been previously 12 duly sworn, testified as follows: 13 DIRECT EXAMINATION (CONT'D) 14 BY MR. LAMB: 15 Q. Good morning, Mr. Alepin. 16 A. Good morning, Mr. Lamb. 17 Q. How are you this morning? 18 A. I'm fine, thank you. 19 Q. When we broke on Friday we were 20 reviewing the conclusions of law in relation to 21 the technology. 22 The first Conclusion of Law 4.1 is 23 Microsoft maintained the monopoly power in the 24 operating systems market by the following, 25 quote, anticompetitive conduct, end quote, 6873 1 i.e., conduct which caused harm to the 2 competitive process and thereby harm to the 3 consumers. 4 One, preventing OEMs from removing 5 visible means of user access to IE, parens, IE 6 desktop, icons, folders and start menu entries, 7 closed parens. 8 Sir, can you explain to the jury what 9 the phrase visible means of user access refers 10 to? 11 A. Sure. 12 The Windows operating system provides 13 several means by which a user can cause a 14 program to be activated. 15 For example, on the desktop, there can 16 be an icon that says Quicken, and if you click 17 on it, it launches the Quicken program for you. 18 Another way that a user could visibly 19 see a program and then launch it might be on 20 the start menu. 21 When you click the start button on 22 Windows 95 and the successor programs, you can 23 see an entry for the Internet Explorer, for 24 example, or Quicken, and if you click on it, 25 that will cause the program to launch. 6874 1 There are other ways that it can be 2 launched, including, for example, if you click 3 on the start menu and then you go to the 4 programs choice, you then get a submenu of 5 programs that are installed on your computer, 6 and you can click there, and that would be 7 another visible way of gaining access to a 8 particular program, in this case here the 9 Internet Explorer. 10 MR. LAMB: If I may, Your Honor, I 11 think we've got a bit of an echo, unless my 12 hearing is completely off, and I'm wondering if 13 that additional mike is on and that's causing 14 it. 15 Q. Mr. Alepin, can you describe for the 16 jury the ways that Microsoft prevented OEMs, 17 for example like IBM, from removing visible 18 means of user access to Internet Explorer? 19 MR. HOLLEY: Objection, Your Honor. 20 THE COURT: Overruled. You may 21 answer. Go ahead. 22 A. Well, Microsoft made as part of the 23 license agreement that OEMs needed to enter 24 into in order to be able to preinstall Windows 25 95 product on their computers a condition that 6875 1 stated if the OEM -- IBM could not remove any 2 of the icons that Microsoft placed on the 3 desktop when Microsoft handed the software to 4 the OEM, the Windows software to the OEM. 5 So that was one way in which Microsoft 6 prevented OEMs from removing the visible means 7 of access. 8 Q. Sir, can you explain to the jury 9 during what time period this conduct occurred? 10 A. This conduct began in the runup to the 11 launch of Windows 95 from 1995 therefore till 12 1999, I believe. 13 Q. Thank you, sir. 14 MR. LAMB: Could I get the next slide, 15 Darin? 16 Q. Conclusion of Law 4.2. 17 THE COURT: Just a minute, please. 18 Can you turn the mike off and turn the 19 other one on? The court reporter prefers the 20 other one. 21 Q. Conclusion of Law 4.2. Microsoft 22 maintained the monopoly power in the operating 23 systems market by the following, quote, 24 anticompetitive conduct, end quote: i.e., 25 conduct which caused harm to the competitive 6876 1 process and thereby harm to the consumers. 2 Two, prohibiting OEMs from modifying 3 the initial boot sequence of Windows. 4 Sir, could you explain to the jury 5 what initial boot sequence of Windows is? 6 A. Yes. The initial boot sequence of 7 Windows, or of a personal computer more 8 generally, is what happens when you turn on the 9 computer. 10 There is a set of prescribed steps 11 that take place, including I mentioned earlier 12 the power on self test that determines whether 13 everything is working properly from a hardware 14 perspective, to the hand-off, if you will, to 15 the operating system and the start-up of the 16 operating system. That's the initial boot-up 17 sequence. 18 What happens from power on until the 19 operating system launches and begins to present 20 the screens -- its screens to the user. 21 Q. Sir, your slide has a bullet point 22 option to go to AOL or Netscape initially taken 23 away. 24 Can you explain what that means? 25 A. Yes. In the time frame that we're 6877 1 talking about here, and a little bit before, in 2 the 1994-95 time frame, companies like AOL and 3 Netscape had made arrangements with OEM 4 computer vendors to show a screen to the user 5 during the initial boot-up sequence before the 6 operating system started that would ask the 7 user a series of questions and make the user 8 some offers or opportunities, for example, to 9 become a subscriber to America Online in this 10 particular case here. 11 So part of the initial boot-up 12 sequence for some of the OEM computers would 13 involve an opportunity to take -- become a 14 subscriber to AOL. 15 Microsoft's licensing provisions 16 prohibited OEMs from inserting that interaction 17 with the users during the initial 18 out-of-the-box experience that users were going 19 to have when they first turned on their 20 computer. 21 Q. And is this also the time period '95 22 to '99, sir? 23 A. This is -- well, it was prevented 24 during this 1995 to '99 period. 25 Q. Okay. 6878 1 MR. HOLLEY: Your Honor, may we 2 approach the bench? 3 (The following record was made out of 4 the presence of the jury at 8:47 a.m.) 5 THE COURT: Go ahead. 6 MR. HOLLEY: So, Your Honor, we're 7 exactly where I predicted we would be at 10 8 minutes to 3 on Friday, which is not only is 9 Mr. Lamb asking Mr. Alepin to define technical 10 terms in the conclusions of law, but he's 11 asking him to interpret them. And he's not 12 asking about any time period other than the 13 government case. 14 I let this go for two 15 question-and-answer series to make clear that 16 he's talking about the '94 to '99 time period 17 covered by the government case. 18 That's precisely what is covered by 19 collateral estoppel and what the Court's ruling 20 says that this man is not entitled to do. 21 As I said on Friday, I don't object to 22 saying what does the initial boot-up sequence 23 mean because presumably it would be helpful for 24 the jury to know that. But the Court has said 25 that Mr. Alepin cannot interpret the finding, 6879 1 not legally, not economically, not technically. 2 No one is supposed to do that. 3 The court instructed the jury that 4 they have to accept those findings, so I think 5 this is very improper, Your Honor. 6 MR. LAMB: Your Honor, first of all, I 7 think he is entitled to explain to them what 8 happened during that time period, okay. For 9 many instances the time period is the time 10 period as Mr. Holley refers to as the 11 government case. There are some that are 12 outside the time period, and he needs to be 13 able to explain that. 14 I don't think it's appropriate to 15 leave it in a vacuum to want to be forthright 16 and up front and explain to the jury what time 17 period applies. That's all we're doing. 18 Otherwise, it would be subject to cross- 19 examination. It's still subject to 20 cross-examination, but we're entitled to show 21 that. We want to not look like we're trying to 22 deceive the jury. Just pick out a couple and 23 say, "Hey, this is the real bad conduct." 24 In addition, in relation to all the 25 conclusions of law, there are technical terms. 6880 1 And I believe he's entitled and your ruling 2 comports with the fact that he's entitled to 3 explain to the jury what happened. 4 All he's telling them in relation to 5 the initial boot sequence is what it is, what 6 they were restricted from doing and what the 7 impact of that was. And I believe he's 8 entitled to do that technologically speaking. 9 MR. HOLLEY: I don't disagree at all 10 that it's improper to ask Mr. Alepin what does 11 the initial boot sequence of Windows mean, and 12 that question was asked and it was answered. 13 But then we go to this slide, Your 14 Honor, which now goes behind this conclusion of 15 law and asks Mr. Alepin to bolster the findings 16 of fact on the question of what Microsoft did 17 to limit OEM modification of the initial boot 18 sequence. 19 There are findings on this question. 20 We don't need Mr. Alepin to interpret for the 21 jury what Judge Jackson meant with those 22 findings of fact, and it's exactly the sort of 23 bolstering that Your Honor said is not going to 24 happen in this case. 25 He's also doing, frankly, precisely 6881 1 what you said he can't do, which is interpret, 2 and that doesn't matter whether it's 3 technologically. You just said he cannot 4 interpret the findings and conclusions, and 5 that's what he's doing. He's interpreting 6 them. 7 MR. LAMB: Well, I don't think he's 8 interpreting them, Your Honor, number one. 9 Number two, what Your Honor was 10 referring to principally was restricting us 11 from going to a document cited by whatever 12 example in a finding of fact and then showing 13 that document and reviewing that document and 14 going over it to bolster the finding of fact. 15 We have no intention of doing that. 16 MR. HOLLEY: I don't think, Your 17 Honor, that it makes sense to say that the only 18 violation of the Court's order is that the 19 document is up on the screen. Testimony about 20 the findings and the facts behind them is 21 equally objectionable. 22 The findings are the findings. The 23 jury has been instructed that they must accept 24 them, and the court has issued a ruling that 25 neither side is supposed to go behind those 6882 1 findings and bolster them. And then beyond 2 that, there's a ruling as to this particular 3 witness, that he's not supposed to interpret 4 them. 5 So, Your Honor, I really believe that 6 it's quite clear that what is going on here, 7 beyond defining terms in the conclusions, is 8 improper. 9 MR. LAMB: Well, under that theory, if 10 the conclusion of law says that Microsoft can't 11 uplift the downstroke of the schism, there's no 12 way he can explain what that means or what the 13 impact of that is. And we believe that's 14 ridiculous. 15 MR. HOLLEY: The first part is a straw 16 man, Your Honor. 17 I'm not objecting to having Mr. Alepin 18 explain technical terms to the jury either in 19 conclusions or findings. We're not objecting 20 to that. But I am objecting to his 21 interpretation of the findings, and I'm also 22 objecting to his bolstering of the findings by 23 repeating in his own words what Judge Jackson 24 has already found and what the jury has already 25 been instructed they must accept. 6883 1 MR. LAMB: Well, aside from conceding 2 counsel's expertise in straw man arguments, I 3 believe that that is sufficient for you to make 4 a ruling, Your Honor. 5 MR. HOLLEY: I have nothing further to 6 say on this point, Your Honor. 7 THE COURT: Anything else? 8 MR. HOLLEY: No, sir. 9 THE COURT: He'll be allowed to state 10 if there's some technical terms in there or 11 just give what happened. He can explain what 12 that is and what the -- technologically what 13 the effect would be within my ruling previously 14 given. 15 You can't go beyond that and say what 16 Judge Jackson meant or what the ruling meant. 17 But he can say, you know, like you have been 18 doing, that what technical terms in there mean 19 and practical application of what happens to 20 explain to the jury those technical terms. 21 MR. HOLLEY: Thank you, Your Honor. 22 MR. TULCHIN: Your Honor, may I just 23 ask, if that's so, if he can go beyond an 24 explanation of what the terms mean and say what 25 happened, presumably Microsoft can have a 6884 1 witness do the same thing and we will be into 2 an argument about what happened and what really 3 happened. 4 THE COURT: Well, I guess I mean what 5 happened, is that in the context that if 6 there's a technical term -- I don't know, you 7 can just use -- 8 MR. HOLLEY: I'm sorry, Your Honor. 9 Like the initial boot-up sequence. 10 THE COURT: Yeah, initial boot-up 11 sequence and explain what that does and how it 12 does it and what the effect is. 13 MR. LAMB: Okay. Understand, Your 14 Honor. 15 MR. HOLLEY: And, Your Honor, just so 16 the record is clear, I don't want to be up and 17 down interrupting this examination on this same 18 point. 19 So can I -- I'm not sure exactly what 20 Iowa practice is in this regard, but can we 21 have a continuing objection -- 22 THE COURT: Sure. 23 MR. HOLLEY: -- on this point? 24 THE COURT: Yes. 25 MR. HOLLEY: Because I don't want to 6885 1 interrupt Mr. Lamb. 2 THE COURT: Yeah, that's fine. So 3 what I mean is, is he can say what the effect 4 of the technical procedure is. 5 You understand what I'm saying? 6 MR. LAMB: Yes, sir. 7 THE COURT: Not the anticompetitive 8 effect, but the technical effect, okay, what it 9 does. 10 MR. HOLLEY: Thank you, Your Honor. 11 MS. CONLIN: Thank you, Your Honor. 12 THE COURT: So how do you want me to 13 rule out there in front of the jury? 14 MS. CONLIN: Well, overruled. 15 MR. LAMB: No. I don't think anything 16 needs to be said. I think that's the last 17 point. I think that these type of in 18 chambers -- I think what you do then is next 19 question, and then I just go on. 20 MR. TULCHIN: That's fine, Your Honor. 21 MR. HOLLEY: I don't disagree with 22 that, Your Honor. 23 MR. LAMB: Okay. 24 THE COURT: I just want to get it 25 clear before I go out. 6886 1 (The following record was made in 2 the presence of the jury at 8:55 a.m.) 3 THE COURT: Next question, please. 4 MR. LAMB: Thank you, Your Honor. 5 Q. Up on your slide you have Be. What 6 was Be? 7 A. Be was a company that had an operating 8 system called the BeOS for personal computers. 9 Q. And what type of applications did they 10 have? 11 A. They were an operating system vendor 12 that had multimedia capabilities. They were an 13 operating system that was very well-suited for 14 multimedia kinds of applications. 15 Q. Okay. I'm sorry, what type of -- 16 THE COURT: I didn't say anything. 17 Q. What types of applications ran on Be? 18 A. There were multimedia types of 19 applications, video recording, video editing 20 kinds of applications in particular. 21 Q. Okay. 22 And were those similar to or different 23 from the type of applications that ran on 24 Windows? 25 A. Not in particular there -- Be was 6887 1 intended to be a general purpose operating 2 system for personal computers, although it had 3 particular skills or abilities in the 4 multimedia arena. 5 Q. Okay. How about RealNetworks? What 6 was RealNetworks? 7 A. RealNetworks is a company that makes 8 media players and media server software. 9 Q. Okay. And during this time period, 10 was RealNetworks, was that icon not able to be 11 put up on the desktop then? 12 A. No. RealNetworks icon could be placed 13 on the desktop. 14 Q. Okay. 15 What is Tinkerbell? 16 A. Tinkerbell was a software product that 17 was created by RealNetworks to enable OEMs and 18 RealNetworks to get around the restrictions on 19 the initial boot-up sequence. 20 Q. Okay. 21 Did the restrictions on the initial 22 boot-up sequence affect Be? 23 A. Absolutely, yes. 24 Q. Can you explain to the jury how? 25 A. Well, Be as an operating system wanted 6888 1 -- to get onto the hard drives of users you 2 need to install an operating system on a hard 3 drive typically in order to be able to use the 4 operating system. 5 OEMs, the personal computer 6 manufacturers, were installing Windows 95 as 7 the dominant operating system on virtually all 8 of their computers at the time. 9 Be decided to approach OEMs with the 10 idea that they would also install the Be 11 operating system on the same hard drive as the 12 Windows operating system in what we call a dual 13 boot configuration. That is, when the user 14 turns on the computer, the user in a dual boot 15 environment could choose one or another 16 operating system installed on its hard drive. 17 That's a dual boot. 18 Be, the company, said we will install 19 -- we would like to install our operating 20 system on your PC OEM computers and give the 21 users the opportunity to boot into Windows or 22 to boot into the Be operating system. 23 Q. So Be wouldn't replace Windows; right? 24 A. No. 25 Q. Okay. It would run alongside it? 6889 1 A. It would be available to the user to 2 choose. So it would coexist, yes. 3 Q. Okay. Did the restriction regarding 4 the initial boot sequence affect RealNetworks? 5 A. Yes. 6 Q. Can you explain to the jury how it 7 did? 8 A. Well, the restrictions on boot-up and 9 initially loaded software prevented 10 RealNetworks from having the same kind of 11 out-of-the-box interaction with the user as the 12 user opened the computer for the first time and 13 was presented with opportunities to subscribe 14 to this or that, to choose media player and 15 media services, and media services in the case 16 of RealNetworks. 17 Q. And I think you testified that 18 Tinkerbell was designed to -- I don't know if 19 you said get around or work around this. 20 What did you mean by that, sir? 21 A. Tinkerbell was designed to start when 22 the system started, but not to appear until 23 after the initial boot-up sequence. 24 Q. Can you explain that a little bit 25 more? I don't understand. 6890 1 A. Sure. 2 Tinkerbell was, as I said, software. 3 The idea was that the Tinkerbell 4 software would be started during the start-up 5 process of the computer and it would not appear 6 on the user's screen or display before the 7 initial boot-up sequence of the Windows system 8 was completed. So that it would, in fact, 9 comply with the restrictions that Microsoft had 10 placed on OEMs concerning this initial boot-up 11 sequence. 12 Q. Okay. And did Microsoft within the 13 industry have a reaction to Tinkerbell? 14 A. Yes. 15 Q. Can you explain to the jury what that 16 was? 17 A. Microsoft indicated that this was also 18 part of the restrictions and would not be 19 consistent with the terms of the license 20 agreement, as I understand it. 21 Q. So they told OEMs not to do it? 22 A. Precisely. 23 Q. Okay. In relation to Be, how was this 24 dual boot configuration with Windows and Be 25 prevented by Microsoft? 6891 1 A. Well, they -- terms of the license 2 agreement were read to prohibit this kind of 3 arrangement where the user had a choice of 4 operating systems when his computer was turned 5 on. 6 Q. Is it your understanding that 7 Microsoft took that position with OEMs? 8 A. It took that position with OEMs, yes. 9 Q. Okay. 10 You also have a bullet point up here 11 that says by the time Microsoft stopped doing 12 this. Would that be around 1999? 13 A. Yes. 14 Q. No optional vendors. 15 What do you mean by that, sir? 16 A. Well, there were no longer any vendors 17 who were seeking to create or offer these kinds 18 of additional services through that mechanism. 19 There were no longer a browser company 20 like Netscape who was interested in pursuing 21 that. 22 Q. Okay. 23 MR. LAMB: Darin, could you put up 24 Finding of Fact 214? 25 Q. Mr. Alepin, Finding of Fact 214 reads 6892 1 the several OEMs that in the aggregate 2 represented over 90 percent of Intel-compatible 3 PC sales believed that the new restrictions 4 would make their PC systems more difficult and 5 more confusing to use, and thus less acceptable 6 to consumers. 7 They also anticipated that the 8 restrictions would increase product returns and 9 support costs and generally lower the value of 10 their machines. 11 Those OEMs that had already spent 12 millions of dollars developing and implementing 13 tutorial and registration programs and/or 14 automatically loading graphical interfaces in 15 the Windows boot sequence lamented that their 16 investment would, as a result of Microsoft's 17 policy, be largely wasted. 18 Gateway, Hewlett-Packard, and IBM 19 communicated their opposition forcefully and 20 urged Microsoft to lift the restrictions. 21 Emblematic of the reaction among large 22 OEMs was a letter that the manager of research 23 and development at Hewlett-Packard sent to 24 Microsoft in March 1997. 25 He wrote, Microsoft's mandated removal 6893 1 of all OEM boot sequence and auto start 2 programs for OEM licensed systems has resulted 3 in significant and costly problems for the HP 4 Pavilion line of retail PCs. 5 Sir, about six lines down, it refers 6 to tutorial programs. Do you see that? 7 A. I do. 8 Q. Can you explain to the jury what a 9 tutorial program is? 10 A. A tutorial program is a piece of 11 software that the purpose of which is to 12 introduce the user to a particular software 13 package or to -- for example, his computer, 14 when the user first purchases a computer, you 15 might, as an OEM, provide the user with a 16 tutorial program, a program that teaches them 17 and introduces them to the features and 18 functions available to them on the computer. 19 Q. Sir, the finding of fact also refers 20 to a registration program. Could you explain 21 to the jury what a registration program is? 22 A. A registration program is a program 23 that seeks to obtain from the user registration 24 information, including his name, his address, 25 and other contact information that's very 6894 1 valuable to the OEM, to the computer 2 manufacturer in establishing and maintaining a 3 relationship with that user going forward. 4 Q. And, finally, the finding of fact 5 refers to an automatically loading graphical 6 interface or automatically loading graphical 7 interfaces. 8 Can you explain to the jury what that 9 term means? 10 A. Yes. 11 Windows, like other operating systems, 12 provides a capability to auto start a program 13 once the operating system has finished booting 14 itself up and is ready to run. 15 You can designate that program to be 16 auto started, and, in fact, OEMs designated a 17 program to be auto started upon completion of 18 the boot-up process that would take the user 19 into what we refer to as a shell, an 20 environment that with a graphical user 21 interface that had certain characteristics or 22 attributes, such as ease of use or familiar 23 metaphorical seams, like a house, for example, 24 and would enable the user to think of his 25 computer, his new computer, something like a 6895 1 house, with different rooms and different 2 functions in each of those rooms. 3 So different approach to using the 4 computer. Particularly important for users who 5 were new to computers in their houses as 6 personal computer users. 7 MR. LAMB: Can we have the next slide, 8 Darin? 9 Q. There you go. 10 What is this, sir? 11 A. This is a screen shot, again a screen 12 shot, a picture of a computer screen, and this 13 is taken from a program that we just talked 14 about, a graphical user shell, developed by 15 Packard Bell, who at the time -- this is the 16 1994-95 time frame -- was the largest OEM, I 17 believe, for home user computers. 18 And this shell here that you're 19 looking at in the screen shot was Packard 20 Bell's user interface for its computer. 21 Users would auto start into this, what 22 Packard Bell called the Navigator shell. 23 Q. And what does this do? 24 A. Well -- excuse me. 25 You can see on the desk in the front 6896 1 left-hand portion of the screen, you can see a 2 telephone, a fax machine. You can see a 3 printer on your desktop in your room -- in this 4 room. And the idea here is to using familiar 5 icons in familiar rooms and allow the user to 6 connect to a printer, to use his fax machine, 7 to do other activities not by navigating a menu 8 structure like you would on a desktop, but 9 rather to navigate rooms with objects that are 10 familiar to you as a home user. 11 Q. Okay. So you click on the fax machine 12 to send a fax? 13 A. That's correct. And -- that's 14 correct. 15 Q. Okay. And was this allowed? 16 A. This kind of program -- 17 Q. Right. 18 A. -- auto started was prohibited. 19 Q. Okay. Now, let's go back to the Be or 20 the Be operating system because we were talking 21 about the time frame '95 to '99. 22 What was the time frame that the Be 23 operating system and the dual boot sequence was 24 not allowed by Microsoft? 25 A. Approximately the same time period, 6897 1 '95 through '99. 2 MR. LAMB: Could we get the next 3 slide, please? 4 Q. You have a bullet here that says, 5 Microsoft's mandated removal of all OEM boot 6 sequence and auto start programs made PC 7 systems more difficult and more confusing. 8 Can you explain that to the jury? 9 MR. HOLLEY: Objection, Your Honor. 10 THE COURT: Overruled. You may 11 answer. 12 A. Well, the auto start and boot-up 13 sequence restrictions prevented OEMs from 14 developing and delivering -- in many cases they 15 had already developed, but prevented them from 16 delivering to their customers these kinds of 17 programs and making them available to the user 18 as the first part of the out-of-box experience. 19 This was what did you see, what were 20 you introduced to when you first started the 21 computer. 22 And it was this kind of -- providing 23 this kind of software as part of the 24 out-of-the-box experience was viewed by OEMs as 25 being very important to helping the user get 6898 1 the computer up and working and could become 2 the environment in which they would continue to 3 use their computer; but at least for the 4 initial interactions with the computer, it was 5 going to get you going. 6 Q. Okay. 7 A. And if you didn't have that, it was 8 going to result in more user frustration and 9 more user calls to service, and calls to 10 service are very expensive and they result in 11 frustration and dissatisfaction with the 12 computer that you've purchased, and you don't 13 want that. 14 MR. LAMB: Could I get the next slide, 15 please? 16 Q. Conclusion of Law 4.3 is Microsoft 17 maintained the monopoly power in the operating 18 systems market by the following, quote, 19 anticompetitive conduct, end quote: i.e., 20 conduct which caused harm to the competitive 21 process and thereby harm to the consumers. 22 Three, prohibiting OEMs from adding to 23 the Windows desktop icons or folders different 24 in size or shape from those supplied by 25 Microsoft. 6899 1 What does that mean, icons different 2 in size or shape? 3 A. The icons on the desktop could -- all 4 had to be the same dimension on the screen. An 5 OEM could not call attention to one icon by 6 making it larger in shape or by making it 7 perform certain tricks, like flickering or 8 being in bold fonts or other kinds of 9 attributes. So the icons all had to be of the 10 same shape. No icon could stand out on the 11 desktop. 12 Q. Well, from a technological 13 perspective, could OEMs physically change the 14 icons? 15 A. The -- as a technology matter, it was 16 possible to make the icons appear differently, 17 yes. 18 Q. And flash and do all kinds of things? 19 A. Yes. 20 Q. What time period did this apply, sir? 21 A. This was in the same time frame, the 22 1995 through '99. 23 Q. And based on your experience and 24 understanding in the industry, were OEMs 25 desirous of having different types of icons? 6900 1 A. Well, yes. Yes. OEMs sought to 2 communicate to the users important information. 3 It's a sad fact of life in our 4 business that even though you spend a lot time 5 and money developing a users' guide or 6 read-me-first instruction. 7 That the first thing that you do is 8 ignore the read me first and you turn on the 9 computer, and quite naturally, you want to 10 begin interacting with this new and exciting 11 computer. 12 So you as an OEM, you keep wanting to 13 get the user to engage with some of the 14 software and information that you want him or 15 her to read when they first get started on the 16 computer. 17 Creating an icon that calls attention 18 to it once the user gets the computer up and 19 running is one of those ways that says read me 20 first or use this or click this or do this. 21 Q. Okay. 22 MR. LAMB: Could we get the next 23 slide, Darin? 24 Q. The Conclusion of Law 4.4 reads, 25 Microsoft maintained the monopoly power in the 6901 1 operating systems market by the following, 2 quote, anticompetitive conduct, end quote: 3 i.e., conduct which caused harm to the 4 competitive process and thereby harm to the 5 consumers. 6 Four, prohibiting OEMs from using the 7 active desktop feature of Windows to promote 8 third-party brands. 9 MR. LAMB: Could we go to the next 10 slide, Darin? 11 Q. Okay. Active desktop, I believe you 12 described this briefly before, but could you 13 tell the jury again what active desktop is or 14 was? 15 A. Active desktop was software Microsoft 16 developed that was -- tied together the 17 Internet Explorer and the Windows desktop 18 operating system and allowed the user to put 19 pieces of web pages on their desktop and they 20 would be active. They would be -- in a limited 21 way, they would be updated from content 22 available off the Internet. 23 Q. Okay. 24 MR. LAMB: Could we get the next 25 slide, Darin? 6902 1 Q. You note that active desktop was 2 bloated, unreliable, and caused symptoms to 3 crash. Could you explain that to the jury 4 please? 5 MR. HOLLEY: Objection, Your Honor. 6 THE COURT: Overruled. 7 You may testify as to what these are 8 in relation to active desktop. 9 A. Well, let me start with bloated. 10 Q. Okay. 11 A. Bloated is an attribute that we use to 12 describe software that is larger than it needs 13 to be and larger than can comfortably fit into 14 the system on which it's intended to run. 15 So a piece of bloated software is 16 software that's got lots of additional size and 17 componentry that is unnecessary to achieving 18 the purpose or function of the system. 19 Unreliable is not much different from 20 unreliable elsewhere. Unreliable software is 21 software that fails, restarts, crashes. That's 22 what I mean by unreliable. 23 And ultimately this combination of 24 bloated, which put a heavy demand on the 25 resources of the computer, and the 6903 1 unreliability combined to cause systems with 2 the active desktop software enabled to crash 3 more frequently than would occur if they 4 weren't running the active desktop. 5 Q. Okay. And you note there the, quote, 6 white screen of death, unquote. 7 Can you explain to the jury what that 8 is? Some of them may have seen that. 9 A. The white screen of death is similar 10 -- there was a blue screen of death that 11 sometimes abbreviated as BSOD. It is what 12 happens when the Windows operating system 13 crashes. What happens is you see a blue screen 14 and the computer becomes unresponsive. 15 With the active desktop, what would 16 happen when the active desktop software -- 17 because it was linked into the shell of the 18 operating system, when it failed, it would show 19 a white screen and it would apologize, I 20 believe, but say we have to restart your 21 desktop because we've encountered an error. 22 I'm paraphrasing, but that's the intent of 23 this. 24 So the user would be all of a sudden 25 confronted with this white screen with this 6904 1 error message and quite possibly could lose the 2 work that he or she was in the middle of as a 3 result of this failure. 4 Q. Mr. Alepin, you then go on in one of 5 your bullet points to say, by technologically 6 bundling and tying IE with active desktop with 7 Windows, Microsoft disrupted Netscape's plans 8 for comparable software. 9 When you use the term bundling and 10 tying technologically, what are you saying, 11 sir? 12 A. Technologically, the software ships in 13 the same box, on the same disk, is installed on 14 the same computer. That's bundling. 15 So in the case here, the Internet 16 Explorer software was installed on the same 17 computer with the Windows 95 operating system 18 bundled together. 19 You could not buy Windows 95 without 20 the Internet Explorer in a bundle. 21 The tying, technologically speaking 22 here, is when you create dependencies in one 23 piece of software on another separable piece of 24 software. 25 So, for example, the browser becomes 6905 1 tied to the operating system the moment the 2 operating system starts making requests of the 3 browser to do stuff for it. Then there is a 4 dependency from the operating system or from 5 the kernel to components at higher levels in 6 the software package. So that is technological 7 tying. 8 MR. LAMB: Could we get the next 9 slide, please? 10 Q. Then you note kept, quote, live feeds, 11 end quote, from PC users for five years. What 12 does that mean, sir? 13 A. Well, this is more in the way of an 14 observation. 15 We had multiple different new kinds of 16 technologies that were emerging as part of the 17 Internet revolution. Some really interesting 18 and great ideas coming out in the form of 19 technology from companies like Point Cast and 20 Marimba, which were talking about broadcasting 21 software -- broadcasting live feeds and -- much 22 like a television set. So you would dial to 23 different channels to get content delivered to 24 your desktop. 25 Netscape had announced in the 1996 6906 1 time frame its vision for a browser product 2 separate from all operating systems that would 3 provide a mechanism to have live content on 4 your desktop and that you could simply navigate 5 to these different channels of live content. 6 Microsoft's adoption of active desktop 7 and tying it into the operating system made the 8 Netscape vision, along with other conduct, made 9 it not practical or possible to pursue that 10 kind of vision for live content or in fact for 11 other visions of live content for quite some 12 time. 13 In fact, it's only been recently, in 14 the 2001 and thereafter time frame, where we've 15 started to look at a different approach to the 16 distribution of live content in the form of 17 really simple syndication and other 18 Internet-based standards, technologies that are 19 going to deliver live content to users. 20 Q. Your next point is Microsoft knew 21 active desktop was a nonstarter before it 22 shipped active desktop and recommended to users 23 that they disable it by default. 24 Was it, in fact, disabled by default? 25 A. As an -- I believe in the 2001 time 6907 1 frame the software was disabled by default, and 2 ultimately it was -- it's removed from the 3 Windows Vista software. 4 Q. Okay. During what time periods were 5 OEMs prohibited from using active desktop 6 feature of Windows to promote third-party 7 brands? 8 A. During the '97 through '99 time 9 period. 10 Q. Okay. 11 MR. LAMB: Could we get the next 12 slide, please? 13 Q. Conclusion of Law 4.5 reads, Microsoft 14 maintained the monopoly power in the operating 15 systems market by the following, quote, 16 anticompetitive conduct, end quote: i.e., 17 conduct which caused harm to the competitive 18 process and thereby harm to the consumers. 19 Five, excluding IE from the add/remove 20 programs utility in Windows. 21 Sir, what is the add/remove program? 22 A. The add/remove program -- here is a 23 screen shot picture of a screen from a Windows 24 computer showing the add/remove program 25 program. 6908 1 And what you can see here is in the 2 middle of the screen the names of the programs 3 that are currently installed on the computer. 4 The first one that's highlighted in 5 blue and appears in white is called Adobe 6 PhotoShop Element. That's an application 7 software program that's installed on this 8 computer. 9 The add/remove program is the means 10 that Microsoft has identified that OEMs should 11 use to -- I'm sorry, OEMs -- independent 12 software vendors should use to add or remove 13 programs from their -- from the system. 14 Q. Okay. Is the add/remove programs 15 utility designed to completely deinstall a 16 program or application and completely remove it 17 from the hard drive? 18 A. That's correct. 19 And I apologize. I think that I may 20 have contributed some confusion in my last 21 answer. 22 The add/remove program program is a 23 mechanism that Windows operating system 24 provides that allows users to install or remove 25 or modify the installation of an application 6909 1 software package on the system, and using the 2 add/remove program users can -- the add/remove 3 program feature will remove completely a piece 4 of software from the user's computer. 5 Q. Okay. The top left one says change or 6 remove programs. Do you see that, sir? 7 A. I do. 8 Q. What is that supposed to do? 9 A. That's what we're -- what's actually 10 activated here. That's what is the point at 11 which a user can remove a program. So he is -- 12 you press that button, you get to a list of 13 programs, and then you select the program you 14 want to remove. 15 Q. Okay. Such as Adobe PhotoShop 16 Element? 17 A. That's correct. 18 Q. And then if you do that, that's 19 supposed to completely remove it from the hard 20 drive; right? 21 A. That's correct. If you choose the 22 remove button, that's what will happen. 23 Q. Okay. And then below that there's 24 something that says add new programs. What is 25 that supposed to do, sir? 6910 1 A. Add new programs provides you with a 2 means to begin the installation of a new 3 software application. 4 Q. Okay. So you could load it through 5 that program utility; right? 6 A. You can indeed, yes. 7 Q. And then if you decide at some point 8 in time you didn't like it, you could remove it 9 from the change or remove programs; right? 10 A. Those are the preferred -- those are 11 the best ways to do it. That's what you're 12 supposed to do. 13 Q. That's what it's designed to do; 14 right? 15 A. That's exactly what it's designed to 16 do. 17 Q. Then there's another one below add new 18 programs. It says, add/remove Windows 19 components. What is that, sir? 20 A. There are additional components, 21 optional components of the Windows product that 22 you can add or remove from your system, and you 23 use that -- you use that button to get there 24 and to choose what you want to add or remove. 25 Q. Does that completely remove them from 6911 1 the hard drive? 2 A. It completely removes them from your 3 system if -- in earlier times it would, yes. 4 Q. How about now? 5 A. Now, for several of the components, it 6 does not remove them from the operating -- from 7 the hard drive at all. 8 Q. Such as? 9 A. Such as Internet Explorer and media 10 player. 11 Q. Okay. And then down below there's 12 something that says set program access and 13 defaults. What is that? 14 A. Set program access and defaults is -- 15 sometimes referred to as SPAD -- is a piece of 16 software provided in the Microsoft operating 17 system in, I believe, 2002 that allows the user 18 to choose the -- to set his preferences or her 19 preferences for certain types of middleware 20 software, including the browser, the media 21 player, the Instant Messenger, the -- an E-mail 22 program. So those types of programs. 23 The set program access defaults 24 function in the operating system allows you to 25 set the default and to determine whether or not 6912 1 a user can -- whether or not access to the 2 Microsoft software is to be allowed or not. 3 So you can choose, let's say, Netscape 4 Navigator as your default browser, and then you 5 can say do not allow access to Microsoft's 6 Internet Explorer. 7 That's what set program access default 8 function in the Windows operating system 9 provides you. 10 Q. Okay. What is the technological 11 impact of excluding Internet Explorer from the 12 add/remove programs utility? 13 A. It should -- as a technical matter it 14 should prevent the program from being accessed. 15 Q. Okay. So when it's not on add/remove 16 programs, you can't get rid of it? 17 A. You can't get rid of it. 18 Q. Okay. And where is it now, in the 19 add/remove Windows components? 20 A. No, I don't believe so. 21 Q. Where is it? 22 A. It's not there. It's available -- 23 it's accessible -- I'm sorry. 24 It is accessible through the 25 add/remove Windows components, but that simply 6913 1 performs the same function as the set program 2 access defaults. 3 In other words, it doesn't remove the 4 software from the computer disk. It doesn't 5 remove it as the add/remove programs would do. 6 It simply describes itself as saying remove 7 access to the Internet Explorer. 8 Q. Okay. So that's true today; right? 9 Internet Explorer is not an add/remove program 10 utility? 11 A. It's not part of that, no. 12 Q. And you can't remove it from the hard 13 drive; right? 14 A. Cannot remove it from the hard drive. 15 Q. So the bottom line is, no matter what 16 you do, you can't get rid of Internet Explorer? 17 A. You cannot get rid of it. 18 Q. Now, you mentioned Windows media 19 player. 20 Can that be deinstalled? 21 A. No, it cannot be deinstalled pursuant 22 to the mechanisms that Microsoft provides as a 23 normal user. 24 Q. Okay. Yeah, I guess I should back up. 25 I mean, as far as add/remove programs, 6914 1 is it -- can you take Windows media player off 2 your hard drive through the add/remove 3 programs? 4 A. No, you can't. You can -- if you 5 would install a second version of it, you can 6 back up to an earlier version, but you can't 7 take it off. 8 Q. Okay. Can you get rid of it at least 9 on your system on this add/remove Windows 10 components? 11 A. You can't get it off your system, no. 12 Through that mechanism. 13 Q. And has Windows taken the position 14 within the industry that Windows media player 15 cannot physically be deinstalled? 16 MR. HOLLEY: Objection, Your Honor. 17 THE COURT: Overruled. You may 18 answer. 19 A. Microsoft has taken the position that 20 as a technical matter you can't remove the 21 Windows media player. 22 Q. Now, aside from the program utilities 23 that Windows provides, such as the add/remove 24 programs, is there technologically a way to 25 remove Windows media player from the hard 6915 1 drive? 2 A. Yes, there are. 3 Q. Okay. Are you familiar with those 4 ways? 5 A. I am. 6 Q. How are you familiar with those ways? 7 A. I've done it. Or I've done them. 8 Q. You have personally done it? 9 A. Personally, yes. 10 Q. And how did you do it, sir? 11 A. I did it in three different ways, the 12 first of which was through a reconstruction of 13 the original add/remove program instructions 14 that Microsoft provided when it first 15 introduced the media player. 16 That is, with Microsoft's original 17 media player, you could add or remove it from 18 the system using the add/remove program 19 program. And by bringing forward those 20 instructions, I was able to remove the media 21 player from the system. 22 I should point out that in some of the 23 software that's available here, the -- I could 24 by simply changing a line that has a semicolon 25 in front of it, I could cause the Windows media 6916 1 player to show up in the list of programs to be 2 added or removed. 3 Microsoft's developers commented that 4 line of -- that statement. What they did was 5 they -- when we say commented, in software 6 development you can -- you write statements, 7 and some statements you write as if you're 8 speaking to a person, so it's for a programmer 9 to read, and some statements are for the 10 computer to read. 11 We call the statements for programmers 12 to read comments, and they have a special 13 notation at the beginning of the line in some 14 environments that says ignore this computer, 15 but if you want to read it, as a programmer you 16 can read it. 17 Other times what we do is if we want 18 to disable that line and make the computer 19 ignore that line of -- that statement or that 20 instruction, we put this notation to make it a 21 comment. 22 Microsoft in the course of moving 23 between these media players and making Windows 24 media player tied to -- as a technical matter, 25 tied to the Windows operating system, Microsoft 6917 1 commented a line that said show the Windows 2 media player on the add or remove program menu. 3 That was one way in which -- I realize it's a 4 long time since your question. 5 This was one way I removed the media 6 player. I restored the media player or removed 7 the media player from the system using a 8 reconstruction of the original add/remove 9 statements that Microsoft had included with the 10 media player. 11 Q. What was the second one, sir? 12 A. The second one was that I took the -- 13 Microsoft provides a tool to third parties 14 that's called Windows XP embedded. 15 It's a software package that allows a 16 company to, kind of like going through a 17 department store or a large grocery store and 18 to pick the individual components of the system 19 that they want to include when they're building 20 a special purpose copy of Windows XP; for 21 example, an ATM kiosk or an airline check-in -- 22 self check-in counter. So those could be 23 Windows XP embedded operating systems. 24 And certain things are not necessary 25 to have in the operating system. In fact, they 6918 1 make it bigger and slower and have more stuff 2 in it. 3 The Windows media player is identified 4 as an optional component to the Windows XP 5 operating system, and in almost -- in looking 6 at the results of the Windows XP embedded 7 system and Windows XP software packet operating 8 system that you would purchase at retail, 9 they're the same software. It's the same 10 stuff. 11 So I took the process using the 12 Windows XP embedded software and created a copy 13 of Windows XP that didn't include the Windows 14 media player, and it's possible to do that, and 15 as I think I just said, Windows media player 16 was identified as an optional component, not 17 necessary for building Windows XP systems. 18 And the third way was to look at the 19 software files that Windows media player 20 installed and the changes that it made to the 21 operating system as it installed itself. 22 It's important to remember that going 23 back to the beginning, media player was not 24 part of the operating system at all and was 25 installed by users. 6919 1 And what I did was I looked at the 2 changes that the media player made to the 3 system during its installation process and 4 essentially undid those changes, removed those 5 files without using the automated mechanism or 6 restoring the automated mechanism and without 7 using Windows XP embedded as a mechanism to do 8 that. 9 Q. Mr. Alepin, bottom line, then, is that 10 Windows here, at least in Iowa, you can't get 11 it without Windows media player on it; right? 12 A. In Iowa, you can't get it without 13 media player. 14 Q. Okay. How about in Europe? Can you 15 get it in Europe without Windows media player? 16 A. You can get it without media player in 17 Europe. 18 MR. LAMB: Your Honor, would this be a 19 good time for a break? 20 THE COURT: No. Keep going. 21 MR. LAMB: No? 22 THE COURT: Keep going. 23 Q. Is there a more current example that 24 you have or you've tried to either install 25 software and you've had some difficulties in 6920 1 this same regard? 2 A. Yes. 3 Q. Can you explain to the jury what that 4 was? 5 A. Well, over the weekend, I was -- 6 Mr. Hagstrom behind you, Mr. Lamb, has a large 7 room that we've been using to congregate, maybe 8 watch the ball games over the weekend. 9 And Mr. Hagstrom purchased a router, a 10 piece of networking equipment that would enable 11 us to check our E-mail continuously over the 12 weekend. And they -- he and a couple of his 13 colleagues were trying to get the router to 14 work. 15 And I can only watch people with 16 boxing gloves try and install software for so 17 long before I get up and have to do something 18 about it. So I took the Net -- this is a Net 19 Gear router product. And I took the CD, and 20 using my computer I was going to install and 21 configure the -- this piece of networking 22 equipment for them. 23 And -- excuse me -- when you insert 24 the CD, it auto starts or auto plays the 25 content on the CD. 6921 1 And the first thing that it did, said 2 would you like to install or read the 3 documentation. Of course I said I don't want 4 to read the documentation, I want to install 5 the software. So true to practices. 6 First thing I did was press the 7 install the software button. And Microsoft's 8 Internet Explorer showed up on the screen with 9 the Net Gear software. 10 Q. Is that a problem? 11 A. Well, it's a problem because on my 12 computer, my preference is set through the set 13 program access defaults to Mozilla, a browser 14 that's made by a company -- well, an 15 organization called Mozilla, a Firefox browser. 16 And I checked this again. My set 17 program access default said don't let the 18 Internet Explorer start. Disable access to 19 Microsoft Internet Explorer. 20 So I was quite surprised that 21 Microsoft's Internet Explorer was, in fact, 22 launched by the Netscape installation CD 23 contrary to what I had established as the rules 24 for operating on my computer. 25 Q. What did you do next? 6922 1 A. Well, I tried to get the Internet -- I 2 tried to get it to run using my Mozilla 3 software, and it kept insisting on running 4 using the Internet Explorer. 5 Q. What's the technological impact of 6 that? 7 A. Well, the technological impact is that 8 I'm not able to prevent the Internet Explorer 9 from launching, from reaching out and getting 10 onto the network and being active in spite of 11 whatever policies I may have concerning access 12 and how I want to control access and use on the 13 computer networks. 14 The second thing is that because it's 15 always there and it can always be activated, 16 regardless of my choices and my preferences and 17 my policies for my computer, a third-party 18 company, a hardware vendor, in this case Net 19 Gear, or a software company, knows that it's 20 there and they will do what they just did, and 21 that is reach out and grab the Internet 22 Explorer on the disk installed in my computer. 23 Q. Okay. So you set your preferences 24 through SPAD; right? 25 A. Yes, I did. 6923 1 Q. And SPAD is what Microsoft designs to 2 allow you to set your preferences or your 3 choices; right? 4 A. Yes. 5 Q. And then ultimately Microsoft overrode 6 your choices? 7 A. That's correct. 8 MR. LAMB: Can we go to the next 9 slide, please? 10 Q. Conclusion of Law 4.6 is Microsoft 11 maintained the monopoly power in the operating 12 systems market by the following, quote, 13 anticompetitive conduct, end quote: i.e., 14 conduct which caused harm to the competitive 15 process and thereby harm to the consumers. 16 Six, commingling code related to 17 browsing and other code in the same files in 18 Windows. 19 Sir, could you explain to the jury 20 what commingling code means? 21 And with the Court's permission, if 22 you could maybe go to the board and graphically 23 display that, that might be helpful. 24 MR. HOLLEY: Objection, Your Honor, to 25 the extent that this relates to the design of 6924 1 Windows. 2 THE COURT: He may testify as to what 3 the questioner asked, what commingling code is. 4 Overruled in that regard. 5 Go ahead. Turn your mike on. 6 A. Commingling is, as the term might 7 suggest, blending or the presence of multiple 8 different pieces in the same container. 9 A file is a container, and in our 10 world we can create files that contain multiple 11 different subroutines, for example, multiple 12 different functions. 13 And when we commingle, as a technical 14 matter what we do is we can put different 15 functions in the same file in the same 16 container. 17 These functions here may be related to 18 one component of the system. Let's say it's 19 related to the graphical user interface. So I 20 may have some functions in here that are 21 related to the graphical user interface. 22 I may have some other functions that 23 are related to the file system in the same file 24 or in the same container. 25 As a practical matter, that would be 6925 1 an unfortunate thing to do when you're 2 developing software, to commingle pieces of 3 different components of the system in the same 4 file, but that's what I mean by commingling. 5 Q. Why do you say it would be an 6 unfortunate thing, sir? 7 A. Well, it would be unfortunate for a 8 couple of reasons, one of which is that 9 typically the groups of people who are working 10 on the file system, for example, are different 11 from the people who are working on the 12 graphical user interface. 13 They're working on different time 14 schedules, different goals and release dates, 15 perhaps. They have different levels of the 16 system against which they're testing. 17 So when you combine them together, 18 you're increasing the chances that things are 19 not going to be -- are not going to work 20 properly together. That's the biggest risk. 21 So the fact is that you have different 22 things blended together in a file that were 23 tested under different environments and may not 24 work together, and so that's the unfortunate 25 consequence of this kind of blending or 6926 1 commingling. 2 Q. Okay. And during the course of your 3 training and experience, sir, have you 4 physically reviewed the code for the Microsoft 5 operating system? 6 A. I have reviewed at various times the 7 code for the Microsoft operating systems, yes. 8 Q. Okay. Why don't you go ahead and take 9 your seat again, sir. 10 Is it technologically safe? 11 A. It's safe now. 12 Q. The next slide that you have refers to 13 the kernel, sir, and I think you've testified a 14 number of times about the kernel and 15 middleware. 16 You have there a bullet point, 17 cardinal rule, never put applications code in 18 the kernel. 19 Can you explain to the jury what you 20 mean by that? 21 A. Well, the cardinal rule in here that 22 -- in terms of software development what you 23 want to do, I think, and I described this last 24 week, is you want to make sure that the kernel 25 is the most resilient, most well-protected, 6927 1 preserved piece of software in the system so 2 that it can provide services continuously to 3 the other components in the system that need 4 it. 5 It has to be able to operate and to 6 function under the most difficult of conditions 7 and the -- so what you do when you work to 8 develop the kernel is to put only those things 9 that are essential to fulfill the basic 10 functions of the system in the kernel and build 11 on top of it. 12 So build outward from the kernel in a 13 series of concentric rings. 14 Indeed, the design of the hardware for 15 Intel's architecture chips talks in terms of 16 rings and rings of protection and insulation. 17 And at the center, the inner ring, 18 that's the most protected and important piece 19 of software. So that's the kernel. 20 Q. Mr. Alepin, in your professional 21 opinion, does Microsoft violate that cardinal 22 rule and put applications code in the kernel? 23 MR. HOLLEY: Objection, Your Honor. 24 THE COURT: Overruled. You may 25 answer. 6928 1 A. The -- yes. 2 Q. And you've -- you've testified over 3 the past couple days about creating 4 dependencies on the applications code. 5 Can you explain to the jury what you 6 mean by that? 7 A. Well, what happens is here, and what I 8 intend by this is that the operating system 9 unnecessarily makes a requirement or a 10 condition that the browser be present, the 11 Microsoft browser be present in order to 12 fulfill certain of its missions or functions. 13 Q. Okay. During what time period has 14 Microsoft been doing this? 15 A. From the nineteen -- in the case of 16 the browser, from the 1997 time frame going 17 forward. 18 Q. Going forward to today? 19 A. Yes. 20 Q. In your professional opinion, is there 21 any technological justification for this 22 commingling? 23 A. No. 24 MR. LAMB: Can we get the next slide, 25 please? 6929 1 Q. Here, you're referring to a modular 2 operating system, ideal. What does that mean, 3 sir? 4 A. Well, what we have found, I think, is 5 in the -- over the course of 40 odd years of 6 working with operating system software is that 7 the best software is modular software; that is, 8 software that's comprised of multiple building 9 blocks. 10 The notion that individual pieces of 11 software should do one thing and do it well, 12 and then you assemble them together in blocks 13 or modules, each of these modules adhering to 14 that notion of modularity, and you try and 15 reduce the dependencies of each of these 16 modules on assumptions or other conditions in 17 the rest of the system. 18 So modular, self-sufficient, 19 self-contained, those kinds of attributes are 20 what we look at as the modular ideal of the -- 21 of software development and in particular of 22 operating systems, which are very large pieces 23 of software sometimes. 24 Q. Sir, is this the opposite of 25 commingling? 6930 1 A. It is the opposite of commingling on 2 at least one dimension, certainly. 3 Q. With the Court's indulgence, could you 4 maybe diagram for the jury what you mean by a 5 modular operating system? 6 A. Sure. 7 Modular operating system is one in 8 which the fundamental building blocks of the 9 system are separate and independent. 10 So you've got memory management. You 11 have interrupt management. You have hardware 12 device management. And the hardware 13 abstraction layer or HAL. 14 If you think of 2001, the Space 15 Odyssey, this isn't the same HAL. 16 And as you go up, you have file 17 systems and graphical user interfaces. And 18 even those components become modularized and 19 componentized so that they're themselves 20 assembled from different modules of the system. 21 They have interfaces between the 22 various components and they have -- and the 23 ideal here is to have the least amount of 24 interdependencies upon the individual details 25 of the components so that you can develop these 6931 1 components separately and that you can replace 2 these components with other components on 3 different schedules. 4 Q. Okay. You can take your seat again, 5 sir, please. 6 THE COURT: At this time we'll take a 7 recess for ten minutes. 8 Remember the admonition previously 9 given. You may leave your notebooks here. 10 All rise. 11 (A recess was taken from 9:59 a.m. 12 to 10:14 a.m.) 13 THE COURT: Everyone else may be 14 seated. Thank you. 15 Sir, you're still under oath. 16 Q. Mr. Alepin, we're going to turn to 17 Conclusion of Law 4.7, and Conclusion of Law 18 4.7 reads, Microsoft maintained the monopoly 19 power in the operating systems market by the 20 following, quote, anticompetitive conduct, end 21 quote: i.e., conduct which caused harm to the 22 competitive process and thereby harm to the 23 consumers. 24 Seven, agreeing to provide easy access 25 to IAPs services from the Windows desktop in 6932 1 return for the IAPs agreement to promote IE 2 exclusively and to keep shipments of Internet 3 access software using Navigator under a 4 specific percentage. 5 First, sir, what is an IAP? 6 A. An IAP is an Internet access provider. 7 Q. And how do they fit in technologically 8 in relation to the computer industry? What do 9 they do? What do they provide? 10 A. Could I use a diagram? 11 Q. With the Court's indulgence, 12 certainly. 13 A. An Internet access provider fits into 14 the -- into the Internet or to the connected 15 world by providing users with an on ramp to the 16 Internet. 17 So starting up here from -- with a 18 user, a PC user, and drawing the pieces here, 19 and I'll fill in the descriptions for them as 20 we've -- at the end here. 21 This is how we draw the Internet. 22 It's a big cloud, and over here we're going to 23 have websites, each of which has content on it. 24 And what Internet access providers do 25 is they allow a user to subscribe to the 6933 1 service which is going to provide the user with 2 the ability to get on the Internet. 3 So they're going to provide the dial 4 tone, if you will, or the telephone connection 5 that gets you onto the Internet. 6 They'll answer the phone and they'll 7 connect you to the Internet and allow you using 8 your browser to navigate to -- let's say to the 9 ebay website. 10 Internet access providers enroll you. 11 You call up -- you're provided with an initial 12 telephone number. You call up. You say I'd 13 like to subscribe, and then they give you the 14 telephone number, a user ID and a password, and 15 you give them a credit card or something else 16 that says that you're going to pay a monthly 17 fee for the Internet access services. 18 That's the function of an Internet 19 access provider in the Worldwide Web context. 20 Q. How does a user actually hook up with 21 an Internet access provider? 22 A. Well, a user can -- in the context of 23 PCs or Windows operating systems or generally? 24 Q. More generally. 25 A. More generally, the user can, as I 6934 1 indicated, get some software in the form of a 2 disk from a magazine or he can in the context 3 of Windows 95 and versions of Windows after 4 that use something called the Internet 5 Connection Wizard. 6 So there are two really -- two popular 7 ways of getting on. 8 Before the connection user you would 9 get a piece of software in a magazine or you 10 would download it if you had a means to 11 download it, to get the desktop software that 12 contained the information to dial up to the 13 Internet access provider to exchange the 14 information about registration and payment. 15 Q. Is the Internet Connection Wizard the 16 means that was provided the easy access to 17 IAPs? 18 A. That's correct. 19 Q. And we've heard IAPs. 20 We've also heard ISP. Is there a 21 difference, Internet service providers? 22 A. Not really, no. 23 And the -- here, there is a piece of 24 software that is called the Internet Connection 25 Wizard that contains the easy access software, 6935 1 the easy access to the Internet access 2 providers. 3 Q. And how does the Internet Connection 4 Wizard work? 5 A. Well, the Internet Connection Wizard 6 contains a list of IAPs. So on the Windows CD 7 or the Windows operating system installed on 8 your computer there is a list of Internet 9 access providers, and if you use the Internet 10 Connection Wizard, and say I would like to find 11 an Internet connection -- an Internet access 12 provider, the Internet Connection Wizard will 13 suggest to you an Internet access provider 14 and -- 15 Q. Can you give us an example? 16 A. Well, Internet access providers here 17 might be EarthLink or Speak Easy or Net Zero or 18 other companies like that. AT&T was an 19 Internet access provider. Netcom was an 20 Internet access provider. These companies have 21 changed over time. But those are examples of 22 Internet access providers. 23 And they could appear in the list here 24 that was part of the Internet Connection 25 Wizard, and the user would be directed towards 6936 1 one of these Internet access providers 2 whereupon the exchange of information would 3 take place. 4 Q. Okay. And then the Internet access 5 provider would suggest a web browser? 6 A. That's correct, yes. It would suggest 7 a web browser. 8 Q. And during what time period does this 9 pertain to, this Microsoft agreeing to provide 10 easy access to IAP services from the Windows 11 desktop in return for IAPs agreement to promote 12 IE exclusively? 13 A. From the 1995 through 1990 -- I 14 believe, 1998 time frame. 15 Q. Okay. And then basically there would 16 only be one option then for a browser? 17 A. Well, under the provisions that are 18 being discussed here, the -- 19 Q. Okay. 20 A. -- IAPs would agree to recommend -- to 21 use Internet Explorer, yes. 22 Q. Okay. Can you take your seat again 23 please, sir? 24 MR. LAMB: Can we go to the next slide 25 please, Darin? 6937 1 Q. On the next slide it says IE ubiquity. 2 What do you mean by that, sir? 3 A. I mean, Internet Explorer is 4 everywhere. 5 Q. What do you mean it's everywhere? 6 A. It's on every personal computer 7 virtually that is sold through OEMs. 8 Q. Can you remove it? 9 A. You cannot remove it. 10 Q. What if you want an alternative? So 11 let's use Mozilla that you talked about. 12 A. You can obtain it and install it. 13 Q. Okay. And then will it run? 14 A. It will run. 15 Q. But you still can't remove IE? 16 A. Still can't remove IE. You have two 17 browsers then. 18 Q. How about currently, are there any 19 issues in relation to Mozilla and IE currently 20 such as view this page in IE page in Mozilla? 21 MR. HOLLEY: Objection, Your Honor. 22 Leading. 23 THE COURT: Sustained. 24 MR. LAMB: I'll rephrase it. 25 Q. Are there any issues in relation to 6938 1 Mozilla and Internet Explorer as you understand 2 them today? 3 A. There are a couple of important 4 compatibility issues associated with Mozilla's 5 ability to run on Windows operating systems and 6 to use and display content from different 7 websites. 8 Q. Can you explain to the jury what those 9 are? 10 A. Well, the content one is the easiest 11 one. 12 Microsoft has since 1995 encouraged 13 content owners -- content owners being the 14 people who own the content that you go to 15 visit. So there are like a newspaper is 16 putting its headlines up. CNN is a content 17 owner, and they make their content available to 18 you. 19 Microsoft has encouraged these content 20 owners to use extensions to the standards that 21 are used for Internet browsing and to use these 22 extensions that are proprietary to Microsoft, 23 and as a result, Mozilla is forced to provide a 24 mechanism that allows the user to, when he 25 encounters a page that Mozilla is having 6939 1 trouble with when the Firefox browser can't 2 properly view it or when the user determines 3 that Mozilla hasn't properly rendered the page, 4 that is to say display the page on the screen, 5 there is a button that says view this page in 6 IE. 7 Kind of an escape hatch that would 8 allow you to get to the Internet Explorer if 9 you were having trouble with these proprietary 10 extensions or the like. 11 The second one, and this is something 12 that's happened recently, in fact over the -- 13 just before the holiday. 14 The Mozilla folks have reported 15 considerable difficulty in getting their 16 browser to work with the new Windows Vista 17 software, so -- new Windows Vista operating 18 system, so they're having difficulty getting 19 the -- their browser to work on Windows Vista. 20 MR. LAMB: Next slide, Darin. 21 Q. Sir, Conclusion of Law 4.8 reads, 22 Microsoft maintained a monopoly power in the 23 operating systems market by the following, 24 quote, anticompetitive conduct, end quote: 25 i.e., conduct which caused harm to the 6940 1 competitive process and thereby harm to the 2 consumers. 3 Eight, agreeing to give ISVs 4 preferential support in return for their 5 agreement to use Internet Explorer as the 6 default browsing software for any software they 7 develop with a hypertext-based user interface. 8 Sir, can you explain just briefly, I 9 think you've covered it, but default browsing 10 software, what is that? 11 A. Default browsing software is software 12 that is used for browsing -- browsing web 13 pages, whether those web pages are stored 14 locally on your computer or whether they're 15 stored on web servers at the other end of the 16 diagram. 17 Q. And what is a hypertext-based user 18 interface? 19 A. A hypertext-based user interface is 20 simply put, it's a web page. 21 Hypertext markup language is the 22 language that we use to create web pages. It's 23 the language that allows you to put the text of 24 your headline, for example, and then to say 25 make the headline bold and then put it in 14 6941 1 point font. And so do all of those things. 2 That's a hypertext markup. 3 And a user interface that is based on 4 the web -- a web page, where you've got buttons 5 and boxes in which you fill in information or 6 dropdown lists so when you type something in, 7 you get a list of choices when you get to a 8 particular input field. 9 Those elements are part of a hypertext 10 user-based interface, and that can be from a 11 page that's stored on your computer or a page 12 that's stored on a web server. 13 MR. LAMB: Can we get the next slide, 14 please? 15 Q. You have here as an example Intuit 16 Quicken or QuickBooks. 17 Can you explain that to the jury, 18 please? 19 A. Well, Quicken or Intuit, the company 20 that owns Quicken, thought that it would be a 21 good idea to enable its users to use the 22 Internet for a variety of purposes associated 23 with their use of the personal financial 24 management software, Quicken. Including, for 25 example, ordering checks. 6942 1 If you have Quicken, Quicken can work 2 with certain types of checks and formatted in a 3 certain way so that you can write the to -- the 4 to person and the amount in the correct way. 5 And in this -- so Quicken provided 6 this mechanism from within the application to 7 go out onto the Internet and perform E commerce 8 kinds of things; ordering checks and other 9 stuff, as well as obtaining software updates. 10 That's what Quicken -- how Quicken was 11 kind of extending its functionality and 12 reaching out to the Internet. 13 Q. Okay. And one of the bullet points is 14 Microsoft allows Intuit to ship IE with the 15 disk. 16 A. Yes. 17 Q. What are you referring to there? 18 A. Well, Quicken's software product when 19 you purchased it came on a CD. That was by 20 then the most common way of distributing 21 software, was on CD-ROMs, as opposed to 22 diskettes mercifully. 23 And what Microsoft allowed Quicken to 24 do was to include the Internet Explorer 25 software on the same CD as its applications 6943 1 software. It was, to use a term I've been 2 using before, it was bundled on the same disk. 3 MR. LAMB: Next slide, please. 4 Q. This notes differential treatment of 5 ISVs in relation to access to Windows and APIs. 6 What do you mean by that, sir? 7 A. Well, over time Microsoft has provided 8 different amounts of information, different 9 quality of information to independent software 10 vendors in advance of the shipment of 11 Microsoft's operating system software. 12 And so I referred last week to 13 something called beta software. 14 Beta software is software that is to 15 be made available in -- usually it's supposed 16 to be available within a reasonable amount of 17 time, reasonably soon, and so there is a -- but 18 there is a differential amount of information 19 that Microsoft provides to certain independent 20 software vendors when compared with other 21 independent software vendors. 22 Q. Okay. And why does early access 23 matter? 24 A. Early access matters because it is 25 important for independent software vendors to 6944 1 have their software work with the newest 2 versions of Microsoft software. 3 So what you don't want to have happen 4 first and foremost is that a user who installs 5 the newest version of Microsoft software to 6 cause your software already installed on the 7 user's computer to break or not work. 8 So you want to make sure that 9 installed software in the user's environment is 10 going to continue to work if the user chooses 11 to upgrade a piece of Microsoft software. 12 And the second piece that -- why early 13 access is critical in our business is, is that 14 you want to have your product ready that might 15 take advantage of certain of the new things in 16 the Microsoft operating system. 17 So if they have a -- have introduced a 18 new way of creating menus or tool bars or 19 whatever you want to have your product make use 20 of those pieces. 21 Q. You said that Microsoft had been doing 22 this over time. Over what period of time has 23 been Microsoft -- has Microsoft been engaging 24 in this differential treatment of ISVs in 25 relation to access to Windows and APIs? 6945 1 A. Since the late 1980s. 2 Q. Is it ongoing today? 3 A. It's ongoing today. 4 Q. In relation to beta access, you 5 testified, I believe Friday -- do you recall 6 you were talking about DR-DOS and you gave the 7 example of verified DOS and the example of 8 Bambi and the example of nested task. 9 And in there was this AARD code 10 example in relation to a beta access. Do you 11 recall that, sir? 12 A. I do. 13 Q. What was the impact of that beta 14 access distribution in relation to DR-DOS? 15 A. Well, the beta software in question 16 contained the AARD code, the code that detected 17 DR-DOS and issued the message, was distributed 18 to 15,000, approximately, beta testers. 19 These beta testers are influencers. 20 They were influential people, independent 21 software vendors, media, reviewers, and large 22 users. So large IT users. A large 23 corporation, the IT department within that 24 large corporation. 25 So these were important people in 6946 1 terms of establishing the reputation or the -- 2 for the common knowledge or the common sense of 3 a particular product or technology. 4 Q. And this differential treatment of 5 ISVs, how does this impact the industry 6 technologically? 7 A. Well, the companies that have access 8 -- earlier access to better quality information 9 are able to make better products in a more 10 timely manner than those who don't. 11 And given the ubiquity of Microsoft's 12 platform, given the ubiquity of Windows, having 13 access to the best possible information makes 14 an enormous difference in what you're able to 15 do and when you're able to do it. 16 MR. LAMB: Can we get the next slide, 17 Darin? 18 Q. Sir, Conclusion of Law 4.9 reads, 19 Microsoft maintained the monopoly power in the 20 operating systems market by the following, 21 quote, anticompetitive conduct, end quote: 22 i.e., conduct which caused harm to the 23 competitive process and thereby harm to the 24 consumers. 25 Nine, agreeing to release new versions 6947 1 of Office for the Apple Macintosh in return for 2 Apple's agreement to preinstall Internet 3 Explorer and make it the default web browser on 4 Apple's Macintosh operating system. 5 Sir, over what time period did this 6 happen? 7 A. I believe this was in the 1997 and '8 8 time frame, this particular -- 9 Q. And how long did it last? 10 A. I believe it was a five-year 11 arrangement, called for a five-year 12 arrangement. That would take it to 2002, I 13 believe. 14 Q. What does that mean to preinstall 15 Internet Explorer and make it the default web 16 browser? 17 A. Well, Apple makes personal computers, 18 Macintosh computers, and Apple also makes the 19 operating system, the Mac OS, and this 20 particular provision here is talking about 21 having Apple install or preinstall on every 22 computer that Apple makes, which is 100 percent 23 of the Macintoshes, the Microsoft Windows -- 24 I'm sorry, the Microsoft Internet Explorer for 25 the Mac and to make it the default browser for 6948 1 all Macintosh computers that Apple would sell. 2 Q. What is a cross-platform browser? 3 A. A cross-platform browser is a browser 4 that works on multiple different platforms. 5 For example, the Netscape Navigator 6 browser was a cross-platform browser. It could 7 run on UNIX computers, Macintosh computers, SGI 8 computers, and HP Apollo workstation computers. 9 It could run on a wide variety of 10 computer workstations, as well as Microsoft's 11 PC -- Windows PC software system. 12 Q. Okay. So Internet Explorer, is it a 13 cross-platform browser? 14 A. Internet Explorer ran on Windows, and 15 Microsoft made a version available on the 16 Macintosh and a version available on UNIX. 17 Q. So it was cross-platformed, then; 18 right? 19 A. It had, yes, three platforms. 20 Q. And when Internet Explorer first came 21 out, it was not tied to Windows; correct? 22 A. That's correct. 23 Q. And now it is tied to Windows; right? 24 A. It is tied to Windows. 25 Q. Now, in relation to the Mac OS, the 6949 1 Internet Explorer that is used on the Mac OS, 2 is it tied to the Mac OS operating system? 3 A. No, it is not. 4 Q. Okay. How is it configured then in 5 relation to the Mac OS operating system? 6 A. It's a separate application just like 7 Mozilla Firefox is or like Netscape Navigator 8 was. 9 Q. Okay. Are you familiar with the 10 phrase applications barrier to entry? 11 MR. HOLLEY: Objection, Your Honor. 12 THE COURT: Sustained. 13 MR. LAMB: Can we get Findings of Fact 14 340 to 356, please? 15 Q. There are several findings of fact 16 here, and I'm going read them to you. They're 17 going to take a little bit of time. And then 18 I'm going to ask you some specific questions. 19 Finding of Fact 340. By exchanging 20 its vital support for the agreement of leading 21 ISVs to make Internet Explorer the default 22 browsing software on which their products rely, 23 Microsoft has ensured that many of the most 24 popular web-centric applications will rely on 25 browsing technologies found only in Windows and 6950 1 has increased the likelihood that the millions 2 of consumers using these products will use 3 Internet Explorer rather than Navigator. 4 Microsoft's relations with the ISVs 5 thus represent another area in which it has 6 applied its monopoly power to the task of 7 protecting the applications barrier to entry. 8 Sir, from a technological perspective, 9 do you have an understanding as to what the 10 term applications barrier to entry means? 11 A. Yes. 12 Q. What is it? 13 A. It is a -- it refers to the number and 14 kind -- diversity of applications that a 15 particular platform needs to provide in order 16 to be viewed by the potential purchasers of 17 that platform as a viable alternative. 18 As a technical matter, does it have 19 enough applications of different kinds in order 20 to be able to do what I need the system to do. 21 And if you don't have that -- or I'm 22 sorry, the challenge of getting enough of those 23 applications from independent software vendors 24 is difficult, and it represents a barrier to 25 your being able to persuade people that your 6951 1 platform is a platform that can do the job for 2 them. 3 Q. What are web-centric applications? 4 A. Web-centric applications refer to 5 applications that make use of this new -- the 6 new Internet paradigm, the new way of thinking 7 of creating an application. 8 That includes a hypertext web 9 interface, for example, or obtains information 10 from websites and web servers throughout the 11 Internet. So these applications that have an 12 element of connectivity and based on these 13 standards that are prevalent in the Internet 14 age in the era of the Internet. 15 MR. LAMB: Could I get the next slide, 16 Darin? 17 Q. Finding of Fact 342. Just as 18 preinstallation and promotion by OEMs is one of 19 the most effective means of raising the usage 20 share of browsing software among users of 21 Intel-compatible PC systems, preinstallation 22 and promotion by Apple is one of the most 23 effective means of raising the usage share of 24 browsing software among the users of Apple PC 25 systems. 6952 1 Recognizing this, Bill Gates 2 consistently urged Microsoft executives to 3 persuade Apple to preinstall the Mac OS version 4 of Internet Explorer on its PC systems and to 5 feature it more prominently than the Mac OS 6 version of Navigator. 7 MR. LAMB: Next slide, please. 8 Q. Finding of Fact 343. By the summer of 9 1996, Apple was already shipping Internet 10 Explorer with the Mac OS, but it was 11 preinstalling Navigator as the default browsing 12 software. 13 After a meeting with Apple in June 14 1996, Gates wrote to some of his top 15 executives, I have two key goals in investing 16 in the Apple relationship. 17 One, maintain our applications share 18 on the platform; and, two, see if we can get 19 them to embrace Internet Explorer in some way. 20 Later in the same message, Gates 21 expressed his desire that Apple agree to 22 immediately ship IE on all their systems as the 23 standard browser. 24 Now, sir, applications share on the 25 platform, is it your understanding that the 6953 1 applications share refers to Microsoft's 2 applications? 3 MR. HOLLEY: Objection, Your Honor. 4 Concept of share is an economic one. 5 THE COURT: Sustained. 6 Q. Is it your understanding that 7 applications there refers to Microsoft's 8 applications? 9 A. Yes. 10 Q. Is it your understanding that the 11 platform refers to the Microsoft platform? 12 A. No. 13 Q. What platform does it refer to? 14 A. It refers to the Macintosh, the Apple 15 Mac OS platform. 16 Q. Okay. So Microsoft is referring to 17 its applications, Microsoft's applications on 18 the Mac OS operating system; correct? 19 A. That's correct. 20 Q. Finding of Fact 344. One point of 21 leverage that Microsoft enjoyed in its 22 relations with Apple was the fact that 90 23 percent of Mac OS users running a suite of 24 office productivity applications had adopted 25 Microsoft's Mac Office. 6954 1 In 1997 Apple's business was in steep 2 decline, and many doubted that the company 3 could survive -- would survive much longer. 4 Observing Apple's poor performance in 5 the marketplace and its dismal prospects for 6 the future, many ISVs questioned the wisdom of 7 continuing to spend time and money developing 8 applications for the Mac OS. 9 Had Microsoft announced in the midst 10 of this atmosphere that it was ceasing to 11 develop new versions of Mac Office, a great 12 number of ISVs, customers, developers, and 13 investors would have interpreted the 14 announcement as Apple's death notice. 15 MR. LAMB: Next slide, please. 16 Q. Finding of Fact 345. Recognizing the 17 importance of Mac Office to Apple's survival, 18 Microsoft threatened to cancel the product 19 unless Apple compromised on a number of 20 outstanding issues between the companies. 21 One of these issues was the extent to 22 which Apple distributed and promoted Internet 23 Explorer as opposed to Navigator, with the Mac 24 OS? 25 MR. LAMB: Next slide, please. 6955 1 Q. Finding of Fact 349. A few days after 2 the exchange with Waldman, Gates informed those 3 Microsoft executives most closely involved in 4 the negotiations with Apple that the 5 discussions have not been going well at all. 6 One of the several reasons for this, 7 Gates wrote, was that Apple let us down on the 8 browser by making Netscape the standard 9 install. 10 Gates then reported that he had 11 already called Apple's CEO, who at the time was 12 Gil Amelio, to ask how we should announce the 13 cancellation of Mac Office. 14 MR. LAMB: Next slide, please. 15 Q. Finding of Fact 350. Within a month 16 of Gates' call to Amelio, Steve Jobs was once 17 again Apple's CEO, and the two companies had 18 settled all outstanding issues between them in 19 three agreements, all of which were signed on 20 August 7, 1997. 21 Under the agreement titled technology 22 agreement, which remains in force today, 23 Microsoft's primary obligation is to continue 24 releasing up-to-date versions of Mac Office for 25 at least five years. 6956 1 Among the obligations that the 2 technology agreement places on Apple are 3 several relating to browsing software. 4 MR. LAMB: Next slide, please. 5 Q. Finding of Fact 351. First, Apple has 6 agreed for as long as Microsoft remains in 7 compliance with its obligations to support Mac 8 Office to bundle the most current version of 9 Microsoft's Internet Explorer for Macintosh 10 with all system software releases for Macintosh 11 computers, Mac OS, sold by Apple. 12 The technology agreement also 13 provides, while Apple may bundle browsers other 14 than Internet Explorer with such Mac OS system 15 software releases, Apple will make Internet 16 Explorer for Macintosh the default selection in 17 the choice of all included Internet browsers; 18 i.e., when the user invokes the browse the 19 Internet or equivalent icon, the Mac OS will 20 launch Internet Explorer for Macintosh. 21 In fulfillment of this requirement, 22 Apple did not include Navigator in the default 23 installation of the Mac OS 8.5 upgrade product. 24 In other words, Navigator is not 25 installed on the computer hard drive during the 6957 1 default installation, which is the type of 2 installation most users elect to employ. 3 Therefore, most users who upgraded 4 their Macintosh systems to Mac OS 8.5 were 5 unable to access Navigator without doing a 6 customized installation. 7 Having already installed an altogether 8 adequate browser, Internet Explorer, when the 9 Mac OS 8.5 upgrade completed its default 10 installation process, however, most users are 11 unlikely to trouble to install Navigator as 12 well. 13 There are a couple references here to 14 bundle. It says bundle the most current 15 version of Microsoft's Internet Explorer for 16 Macintosh, and it says Apple may bundle 17 browsers other than Internet Explorer with such 18 Mac OS system software releases. 19 From a technological term, sir, what 20 does the term mean? 21 MR. HOLLEY: Objection, Your Honor. 22 He's interpreting legal documents. 23 THE COURT: You may state what it 24 means in a technical sense. 25 A. As a technical matter, what this meant 6958 1 was that the Internet Explorer for the 2 Macintosh would be available on the same disk 3 as the Apple Macintosh OS. 4 MR. LAMB: Next slide, please. 5 Q. Finding of Fact 352. 6 The technology agreement further 7 provides that any other Internet browsers 8 bundled in the Mac OS system software sold by 9 Apple shall be placed in folders in the 10 software as released. 11 In other words, Apple may not position 12 icons for non-Microsoft browsing software on 13 the desktop of new Macintosh PC systems or Mac 14 OS upgrades. 15 Moreover, the agreement states that 16 Apple will not be proactive or initiate actions 17 to encourage users to swap out Internet 18 Explorer for Macintosh. 19 Both Apple and Microsoft read this 20 term to prohibit Apple from promoting 21 non-Microsoft browsing software. The agreement 22 even states that Apple will encourage its 23 employees to use Microsoft Internet Explorer 24 for Macintosh for all Apple-sponsored events 25 and will not promote another browser to its 6959 1 employees. 2 Pursuant to this provision, Apple's 3 management has instructed the firm's employees 4 to not use Navigator in demonstrations at trade 5 shows and other public events. 6 Also with regard to the promotion of 7 browser technology, the agreement requires 8 Apple to display the Internet Explorer logo on 9 all Apple-controlled web pages where any 10 browser logo is displayed. 11 Finally, the agreement grants 12 Microsoft the right of first refusal to supply 13 the default browsing software for any new 14 operating system product that Apple develops 15 during the term of the agreement. 16 MR. LAMB: Next slide, Darin. 17 Q. Finding of Fact 355. Apple increased 18 its distribution and promotion of Internet 19 Explorer not because of a conviction that the 20 quality of Microsoft's product was superior to 21 Navigator's or that consumer demand for it was 22 greater, but rather because of the in terrorem 23 effect of the prospect of the loss of Mac 24 Office. 25 To be blunt, Microsoft threatened to 6960 1 refuse to sell a profitable product in whose 2 development the company had already invested 3 substantial resources, and which was virtually 4 ready for shipment. 5 Not only would this ploy have wasted 6 sunk costs and sacrificed substantial profit, 7 it also would have damaged Microsoft's good 8 will among Apple's customers, whom Microsoft 9 had led to expect a new version of Mac Office. 10 The predominant reason Microsoft was 11 prepared to make this sacrifice and the sole 12 reason that it required Apple to make Internet 13 Explorer its default browser and restricted 14 Apple's freedom to feature and promote 15 non-Microsoft browsing software was to protect 16 the applications barrier to entry. 17 More specifically, the requirements 18 and restrictions relating to browsing software 19 were intended to raise Internet Explorer's 20 usage share, to lower Navigator's share, and 21 more broadly to demonstrate to important 22 observers, including consumer developers, 23 industry participants, and investors, that 24 Navigator's success had crested. 25 Had Microsoft's only interest in 6961 1 developing the Mac OS version of Internet 2 Explorer been to enable organizational 3 customers using multiple PC operating system 4 products to standardize on one user interface 5 for web browsing, Microsoft would not have 6 extracted from Apple the commitment to make 7 Internet Explorer the default browser or 8 imposed restrictions on its use and promotion 9 of Navigator. 10 MR. LAMB: Could I get the next slide, 11 Darin? 12 Q. Finding of Fact 356. Microsoft 13 understands that PC users tend to use the 14 browsing software that comes preinstalled on 15 their machines, particularly when conspicuous 16 means of easy access appear on the PC desktop. 17 By guaranteeing that Internet Explorer 18 is the default browsing software on the Mac OS, 19 by relegating Navigator to less favorable 20 placement, by requiring Navigator's exclusion 21 from the default installation for the Mac OS 22 8.5 upgrade, and by otherwise limiting Apple's 23 promotion of Navigator, Microsoft has ensured 24 that most users of the Mac OS will use Internet 25 Explorer and not Navigator? 6962 1 Although the number of Mac OS users is 2 very small compared to the Windows installed 3 base, the Mac OS is, nevertheless, the most 4 important consumer-oriented operating system 5 product next to Windows. 6 Navigator needed high usage share 7 among Mac OS users if it was ever to enable the 8 development a substantial body of 9 cross-platform software not dependent on 10 Windows. 11 By extracting from Apple terms that 12 significantly diminished the usage of Navigator 13 on the Mac OS, Microsoft severely sabotaged 14 Navigator's potential to weaken the 15 applications barrier to entry. 16 MR. LAMB: Could you put up the 17 software time line, Darin? 18 Q. Sir, today, does Microsoft make an 19 Internet Explorer for Macintosh? 20 A. No, sir. 21 Q. When did that stop? 22 A. I believe the last release of that 23 software was somewhere in the early 2001 time 24 frame. 25 Q. If you could, with the Court's 6963 1 indulgence, if you could get up and explain 2 this web browser time line and how it relates 3 to what happened in the industry. 4 MR. LAMB: Are we supposed to take -- 5 I just looked at the time. 6 THE COURT: Since you're starting a 7 new area, why don't we take a break now. It's 8 close to 11. 9 Members of the jury, remember the 10 admonition previously given. We'll be in 11 recess until 12 noon. Please leave your 12 notebooks there. Thank you. 13 (A recess was taken from 10:57 a.m. 14 to 12:04 p.m.) 15 (The following record was made in 16 the presence of the jury.) 17 THE COURT: Everyone else may be 18 seated. 19 Witness may resume the stand. You 20 wanted him over here on the time line? 21 MR. LAMB: Yes, sir. 22 Q. Good afternoon, Mr. Alepin. 23 A. Good afternoon. 24 Q. When we took a break, what I'd asked 25 you to do is go up and explain to the jury this 6964 1 time line that you created that relates to 2 browsers and explain the timing issues, too, if 3 you could, sir. 4 A. The time line here depicts the key 5 events in product releases for various browsers 6 from the -- in particular Netscape and its 7 Navigator product, as well as Microsoft's 8 Internet Explorer, and it includes the date of 9 availability of, for example, Internet Explorer 10 4.0 for the Macintosh. 11 So starting over here, Netscape's 12 product releases, as well as beta releases, are 13 just -- are coded in blue here and Microsoft's 14 are coded in red. 15 And as you can see at the beginning, 16 we have the original NCSA Spyglass browser, 17 which I talked about, Microsoft licenses it, 18 from the NCSA, Mosaic folks. 19 And here are Netscape early product 20 releases, including where Netscape begins to 21 introduce a scripting language that provides 22 the capability to create these web applications 23 or web-centric applications that will -- where 24 you can program activities on the web page that 25 you would have execute on your computer. 6965 1 Netscape Navigator also included Sun's 2 Java Virtual Machine, and we come up to 1996 3 and '97 where Microsoft begins bundling and 4 tying the operating system and the Internet 5 Explorer in IE 4.0, including any versions that 6 come out with Windows 98. 7 Q. Sir, just so we're clear, though, 8 before we move to the next screen. 9 Up on top where it's got the shaded 10 yellow and then it goes up to the top, it shows 11 various sections of, that's the complete time 12 line from left to right? 13 A. That is, yes. 14 Q. And then the area encapsulated in 15 yellow is the area that's in large print on the 16 screen now; right? 17 A. That's correct. There's slices of the 18 time moving across from 1994 all the way out to 19 2007, to this month actually. 20 So if we move forward here, we have, 21 as you can see, many events and many releases 22 of the products and technologies through '97 23 and '98 with IE 4 for the Mac we talked about 24 before lunch. And this is, I mentioned, 25 Internet Explorer for UNIX, which is this event 6966 1 up here in 1998. 2 However, the number of product 3 releases and indeed the number of products 4 being released rise up dramatically, as you can 5 see when looking at the top of the screen, from 6 many, many product releases and new features to 7 virtually nothing taking place in the period 8 between 1999 and 2000 and to the present day. 9 MR. LAMB: Why don't you scroll the 10 screen, Darin, so he can explain that. Then go 11 to the next screen. 12 A. The events here in blue, what happened 13 to the Netscape Navigator product was that it 14 became part of the open source. 15 There was no longer -- it was no 16 longer part of Netscape the company. 17 Netscape had been acquired in part by 18 AOL and in part by Sun, but the development of 19 the open source -- of the browser for Netscape 20 was now in the hands of the open source 21 community and not directed by a specific 22 company like Internet Explorer was directed by 23 Microsoft. 24 Q. There's a reference to Vista down 25 there in May 2001. 6967 1 Can you explain that to the jury, sir? 2 A. There's a reference to Vista here 3 where Microsoft begins to disclose the details 4 of the -- of its future product technologies at 5 the time called Longhorn. 6 MR. LAMB: Next screen. 7 A. And this is just a continuation, I 8 believe. 9 The last new version of Internet 10 Explorer shipped with Microsoft's Windows XP in 11 October of 2001. 12 The reviews in the trade press and 13 technical reviews is that the product did not 14 find much in the way of change or technological 15 improvements over the previous versions, 16 Internet Explorer 5.5 and 5.0. 17 Q. What is the opera reference? 18 A. Opera browser is a browser made by a 19 Scandinavian company. 20 Opera browser is an alternative 21 cross-platform browser to Internet Explorer and 22 to Netscape's Navigator, although Netscape's 23 Navigator is no longer there. 24 But to the successor, which is 25 Firefox, opera has a very small presence in the 6968 1 minds of the community. 2 MR. LAMB: The next slide, Darin. 3 A. Here we see additional products being 4 released by Firefox, the successor to Netscape 5 Navigator developed by the open source 6 community. 7 It goes from being Mozilla or 8 Navigator to being called Firefox. Its newly 9 christened name is Firefox. 10 Q. And there's no activity during this 11 time period as it relates to Microsoft 12 releases? 13 A. No releases of Microsoft software with 14 the browser here. 15 MR. LAMB: Last slide, Darin. 16 A. Finally, in October of nineteen -- 17 October of last year, Microsoft ships Internet 18 Explorer 7.0 for Windows XP. 19 So you can download a copy of Internet 20 Explorer 7.0 for Windows XP the current 21 operating system. And when Windows Vista is 22 ultimately available in retail stores, you will 23 be able to purchase a computer with Internet 24 Explorer 7.0 bundled and integrated, tied into 25 the -- into the operating system. 6969 1 You might get Internet Explorer 7.0 2 even if you're not an Internet Explorer user 3 because Microsoft made the update to Internet 4 7.0 an update that you should download as part 5 of the update program and process. 6 Even though you're not using Internet 7 Explorer, Microsoft's update software would 8 tell you to download it and install it anyway. 9 Not as an optional feature, but as a 10 requirement, something that Microsoft is 11 telling you you should do. You should install 12 Internet Explorer 7.0 on your Windows Vista -- 13 on your Windows XP system even if you're not 14 using it. 15 Q. And, sir, how long was the release 16 between Internet Explorer 6.0 and Internet 17 Explorer 7.0? 18 A. Very close to -- very close to five 19 years. 20 Q. Okay. Did you convey everything you 21 wanted to convey with that time line, sir? 22 A. I believe so, yes. 23 Q. Okay. You can take your seat again, 24 please, sir. 25 A. Thank you. 6970 1 MR. LAMB: Next slide, Darin. 2 Q. Conclusion of Law 4.10 reads as 3 follows: Microsoft maintained the monopoly 4 power in the operating systems market by the 5 following, quote, anticompetitive conduct, end 6 quote: i.e., conduct which caused harm to the 7 competitive process and thereby harm to the 8 consumers. 9 Ten, agreeing to give certain ISVs 10 access to Windows technical information in 11 return for their agreement to use Microsoft's 12 Java Virtual Machine as the default Java 13 Virtual Machine for their software. 14 Sir, what is Windows technical 15 information? 16 A. That would be specifications 17 concerning the interfaces and other 18 specifications concerning Microsoft products. 19 Q. And do ISVs need access to that 20 Windows technical information to write their 21 applications? 22 A. It's mandatory. 23 MR. LAMB: Can I get the next slide, 24 please? 25 Q. The next slide references Java 6971 1 preferential access to Windows technical 2 information to ISVs that agree to use MS Java 3 Virtual Machine. 4 What do you mean by that, sir? 5 A. Well, basically Microsoft agreed to 6 provide to independent software vendors who 7 fulfilled certain conditions special access to 8 Microsoft's specifications to enable them to 9 develop software. 10 Q. And what was the impact of that in the 11 industry to those who weren't doing that? 12 A. Well, that put them at a considerable 13 disadvantage when trying to develop that 14 software -- their software. 15 Q. Okay. The next point that you have 16 there is first wave agreements. What's the 17 issue with first wave agreements, sir? 18 A. Well, first wave agreements were 19 agreements that called for these conditions 20 that independent software vendors would have to 21 develop software that made use of 22 specifications that were linked or tied to the 23 Microsoft platform and Microsoft Java Virtual 24 Machine. 25 Q. So this was a requirement that 6972 1 Microsoft imposed on ISVs? 2 MR. HOLLEY: Objection, Your Honor. 3 Calls for a legal conclusion. 4 THE COURT: Overruled. You may 5 answer. 6 A. It was a condition of the agreement, 7 yes. 8 Q. Why does it matter? Why can't the 9 ISVs just use Microsoft's Java instead of Sun 10 Java? What's the problem? 11 A. Well, the big ideas in Java included 12 the fact that applications that were developed 13 for Java would be portable. I think I used the 14 phrase earlier run -- write once run 15 everywhere. 16 So that you would take an application 17 and you would be able to, after writing it 18 using Java, to run it on a Macintosh computer 19 or a UNIX computer or a Linux or on a Windows 20 computer, and you would not have to change it. 21 And users would not have to acquire a 22 different version of that software. They would 23 be able to get the same software. 24 Remember I discussed before you have 25 to buy a Mac version of Intuit or you have to 6973 1 buy -- of Quicken or you have to buy a Windows 2 version of Quicken. 3 With Java applets, you -- in Java 4 applications, one application runs across 5 multiple platforms, and it's the very same 6 application with -- 7 Q. Sir -- I think I cut you off. What 8 were you going to say? 9 A. Well, the issue here with Microsoft's 10 virtual machine was that the applications that 11 Microsoft was encouraging developers to build 12 would be tied to the Windows platform, would 13 reach through the Java Virtual Machine that 14 Microsoft would provide and access the 15 application programming interfaces of the 16 Windows operating system. 17 Q. Okay. Now, during what period of time 18 did Microsoft agree to give certain ISVs access 19 to Windows technical information in return for 20 those ISVs agreeing to use Microsoft's Java 21 Virtual Machine? 22 A. From 1996 until, I believe, 1998. 23 Q. And then the last bullet point you 24 have there is Java dead for desktop by 1998, 25 '99. What do you mean by that, sir? 6974 1 A. Well, Java was -- as I said, it was a 2 big idea and it was aiming at providing 3 cross-platform applications. 4 There are applications that are or 5 would be intended to be used by personal 6 computer users. And there are applications 7 using Java and the Java ideas that would run on 8 server computers. So you could have server 9 applications and desktop applications. 10 By this 1998, '99 time frame that I'm 11 referring to, the possibility or the -- and the 12 popularity of Java applications for desktops 13 had diminished substantially to the point where 14 it was really not perceived as the platform for 15 development of these applications on the 16 desktop. 17 MR. LAMB: If you could go to the next 18 slide, please. 19 Q. Conclusion of Law 4.11 reads as 20 follows: Microsoft maintained the monopoly 21 power in the operating systems market by the 22 following, quote, anticompetitive conduct, end 23 quote: i.e., conduct which caused harm to the 24 competitive process and thereby harm to the 25 consumers. 6975 1 11, deceiving Java developers about 2 the Windows specific nature of Microsoft's Java 3 developer tools. 4 MR. LAMB: Can I get the next slide, 5 please? 6 Now, could you put up Exhibit 2403, 7 Darin? 8 Q. Now, this is an exhibit we looked at 9 Friday, sir. Do you recall that, sir? 10 MR. LAMB: Why don't you show the to 11 and from line. 12 A. Yes. 13 MR. LAMB: And then if you'll go to 14 the next page, Darin, paragraph three, and 15 highlight it or expand it. There you go. 16 Q. Okay. And this says we should 17 consider support for Java as a platform. As a 18 company, we have two options for embracing and 19 extending Java. 20 One, we take control of it and add 21 Windows specific classes; or, two, we, quote, 22 sandbox, end quote, it, slow it down, and 23 restrict it to a particular domain, betting 24 that we can bring our technology to bear 25 quickly enough to minimize the impact. 6976 1 While I would like to pick two, my 2 personal feeling is that we should strongly 3 consider one. Namely, fully supporting Java 4 and extending it in a Microsoft -- in a 5 Windows/Microsoft way. 6 MR. LAMB: Can you go back to the 7 screen, 4.11, Darin? 8 Q. This is again the embracing and 9 extending Java concept. 10 A. Yes. 11 Q. Okay. Then we saw another exhibit 12 that was used Friday that was Exhibit 5803. 13 MR. LAMB: If you could pull that up, 14 please, Darin. 15 Q. And this is from Bill Gates. It's 16 September 30th, 1996, to Nathan Myhrvold. 17 Do you recall that yesterday, sir? 18 A. I do. 19 MR. LAMB: And if you'll flip to the 20 second page, Darin, and highlight the continue 21 to embrace and extend part. 22 Q. And that reads, continue to embrace 23 and extend both at the level of new Java tools 24 like J++ and our broader browser strategy. 25 Can you describe for the jury what 6977 1 Microsoft is doing during this time period, 2 this time period being 1995 and 1996, at least 3 through October of 1996, in relation to Sun 4 Java? 5 A. Well, at the outset when Java was 6 first -- when they first burst onto the scenes, 7 Microsoft was quite dismissive of the concept 8 and the technology in its public statements and 9 it, in fact, did not provide support for it. 10 Subsequently, as the Internet became 11 more and more of a popular idea and there was 12 more and more development, Microsoft entered 13 into an agreement with Sun Microsystems to 14 license the Java technology for its -- for use 15 with Windows and its Windows platform. 16 MR. LAMB: Could I have the next 17 slide, please? 18 Q. Okay. You reference inserting hooks 19 that it baited for developers to tie Java 20 applets to Windows. What does that mean, sir? 21 A. Well, on the previous E-mail 22 correspondence, there was something that said 23 J++. 24 Q. Yes, sir. 25 A. J++ is a developer tool. It's the -- 6978 1 it was Microsoft's Java compiling -- I'm sorry, 2 Java's interpreter and compiler tool set that 3 enabled developers to write programs in Java. 4 As part of the J++ developer tool, 5 there was support for special nonstandard Java 6 functions that -- or functions in Java that 7 were tied exclusively to the Windows platform. 8 So using the Microsoft developer tools 9 like J++ and the like, a developer would build 10 an application that would run exclusively or 11 only run on the Windows platform and Microsoft 12 encouraged independent software developers to 13 make use of these interfaces. 14 Q. So if an ISV writes to Microsoft Java, 15 then it is no longer portable to another 16 operating system? 17 A. That's accurate and that was the 18 point. 19 Q. If you could -- with the Court's 20 indulgence, if you could diagram how that works 21 for the jury, please. 22 A. The easiest way to think of Java 23 Virtual Machines and Java technology generally 24 is to imagine an application and imagine the 25 Java Virtual Machine as a set of interfaces 6979 1 between the application and the -- in the Java 2 Virtual Machine, the operating system on which 3 the Java Virtual Machine is running, those 4 interfaces are the same for any application on 5 any operating system. 6 So if this is Windows and this was, 7 let's say, OS/2 or the Macintosh OS, these 8 interfaces here, the interfaces that the 9 programmer had spent all of the time and 10 efforts to develop and test his software using 11 would be the same. This application would be 12 unchanged. 13 Now, with the J Direct interfaces, 14 which were part of Microsoft's Java Virtual 15 Machine and its Java developer tools, it would 16 create -- you know, it offered to these 17 developers interfaces which cut through, 18 created essentially a tunnel, if you will, 19 between the application and the operating 20 system. And this tunnel here would make the 21 application dependent on running on the Windows 22 operating system. 23 Java had a specific -- or it offered 24 applications specific ways to deal with 25 different kinds of capabilities on the 6980 1 operating system, but Microsoft did not use 2 that and did not encourage independent software 3 vendors to use the Java standard way of dealing 4 with differences that might occur in systems. 5 Rather, they created this special 6 tunnel that allowed an application to tie 7 itself essentially to the Windows operating 8 system and to lose the benefits of 9 cross-platform portability. 10 Q. Is this the extend part? 11 A. This is the extend part, exactly. 12 Q. You can take your seat again, sir, 13 please. 14 A. Thank you. 15 Q. Once Microsoft had extended through 16 J Direct and had, as you say, locked in the 17 applications into Windows, how did they react 18 to Java? And by that I mean Sun Java. 19 A. Basically they determined to stop 20 supporting the Java platform from Sun and from 21 the community and to go off on their own in 22 their own direction, so to take Java and 23 essentially split the community. 24 MR. LAMB: Could you put up Exhibit 25 2708, please? Could you highlight the to/from, 6981 1 Darin? 2 Q. This is an E-mail from Ben Slivka 3 dated Wednesday, May 14, 1997, to Bill Gates 4 and others regarding M Media. Do you see that, 5 sir? 6 A. I do. 7 Q. And again, who was Ben Slivka? 8 A. Ben Slivka was a developer inside the 9 Microsoft desktop operating systems group. 10 Q. And the subject is DirectX and 11 Talisman update, Java JDK 1.2 support. Do you 12 see that sir? 13 A. I do. 14 Q. What does that mean? 15 A. Java was distributed by Sun to the 16 licensees, including Microsoft, through what 17 was called a Java development kit or a JDK, and 18 these JDK's had versions associated with them, 19 incremental versions starting from JDK 1 and 20 1.0 and 1.1, sometimes even as much as 1.1.1, 21 and JDK 1.2 speaks to a particular new version 22 of the Java development kit that was -- that 23 Sun was releasing. 24 Talisman -- I'm sorry, I didn't give 25 you -- DirectX is a set of graphical 6982 1 application programming interfaces. 2 Talisman was, I believe, a set of 3-D 3 programming interfaces for use with Windows. 4 Q. Is this another one of these code name 5 things like Chicago and Vista? 6 A. Well, Talisman, I believe, is an 7 internal code name. DirectX is the name of 8 technology that you and I can see. 9 Q. Okay. 10 MR. LAMB: Darin, if you could 11 highlight the to/from that's from Bill Gates. 12 Okay. And then move that up, please, 13 sir. And go to the third paragraph down in the 14 Bill Gates exchange that starts the E-mail 15 exchange this morning. 16 There you go. Thanks. 17 Q. This is from Bill Gates, which is the 18 precursor to the Ben Slivka E-mail, and in it 19 Mr. Gates says, starting on the second 20 sentence, I think supporting JDK 1.1 is fine 21 and I am hard core about, all caps, not 22 supporting JDK 1.2. 23 Do you see that, sir? 24 A. I do. 25 Q. Okay. As you read that, what is your 6983 1 understanding of what Mr. Gates is saying about 2 Microsoft's intent to support Sun's Java or not 3 support Sun's Java? 4 MR. HOLLEY: Objection, Your Honor. 5 THE COURT: Sustained. 6 Q. What is JDK 1.1? 7 A. JDK 1.1 was the predecessor version of 8 the Java development kit, to the JDK 1.2 which 9 I just described. 10 Q. Okay. And from a technological 11 perspective, is it your understanding that Mr. 12 Gates is suggesting that there should be 13 support for JDK 1.1? 14 A. That's correct. 15 Q. And JDK 1.2 is what? 16 A. The successor and not to be supported 17 -- the successor to JDK 1.1 and not to be 18 supported by Microsoft. 19 Q. Okay. So the next iteration of Java? 20 A. Yes. 21 Q. Okay. 22 MR. LAMB: Could you go back to the 23 first part of the E-mail and the first two 24 paragraphs? 25 And I apologize to the Court and I 6984 1 apologize to the jury, but in order to be 2 accurate, I need to read this. 3 Q. Mr. Slivka is telling Mr. Gates to, 4 quote, Charles on JDK 1.2 support, quote, no 5 fucking way, exclamation point, end quote. 6 Do you see that, sir? 7 A. I do. 8 Q. Now, from a technological perspective, 9 did Microsoft support JDK 1.2? 10 A. No. 11 Q. The E-mail goes on to say the Java 12 community is having a hard time digesting JDK 13 1.1 and while it has important new features, 14 like beans, it still has that crappy AWT stuff, 15 shitty printing, the list goes on and on. JDK 16 has JFC, which we're going to be pissing on at 17 every opportunity. 18 First, sir, what are beans? 19 A. Beans are Java beans. People can get 20 carried away with names, but like the idea was 21 to think of Java beans like coffee beans. 22 They were little application -- they 23 were a way of developing little application 24 pieces that might correspond to transactions. 25 Such as looking up a reservation on an 6985 1 airline system, you might write the application 2 software that gets the information and presents 3 it to the user, and that would be in the form 4 of a bean. 5 So it's a way of representing a 6 particular kind of software. 7 Q. Okay. Mr. Slivka goes on to say, JDK 8 1.2 has JFC. What's JFC, sir? 9 A. Java foundation classes. 10 Q. What are they? What are Java 11 foundation classes? 12 A. Well, in the software industry, as 13 you're building software using these modular 14 development techniques and using something 15 called object oriented programming, you use 16 classes. 17 Classes are kind of -- are collections 18 of functions and data together, and they are 19 used by programmers to assist them in making 20 them reusing software. 21 Foundation classes in Java or 22 foundation classes in other -- on other 23 platforms are sets of these frequently used 24 software objects. 25 Like, for example, in Windows, if 6986 1 you've opened -- if you want to open a file, 2 you get a dialogue box, and that dialogue box 3 asks you where the file is and if you want to 4 move backwards and forwards to try and find the 5 file. 6 That can be made available to the 7 programmer through a foundation class, and he 8 can make use of it in his program and call that 9 dialogue box up in the middle of his program to 10 get the information from the user. 11 Q. And are those foundation classes 12 necessary to an understanding of JDK 1.2 and 13 then ultimately Sun's Java? 14 A. Well, they're necessary to -- so that 15 they're part of the Java platform, and they 16 provide application programming, interfaces 17 that would in this particular case be portable 18 across all of the platforms that your 19 application ran on. 20 Q. From a technological perspective what 21 do you understand Mr. Slivka is suggesting when 22 he says JDK 1.2 has JFC which we're going to be 23 pissing on at every opportunity? 24 A. Well, I believe this is the FUD 25 portion of what Microsoft did with respect to 6987 1 Java. That is to say, to disparage Java and 2 the capabilities of Java, to question its 3 capabilities and to -- generally to denigrate 4 the capabilities of the Java platform and in 5 particular here the JFC, the Java foundation 6 classes. 7 Q. Didn't Microsoft just recently before 8 this announce that it was going to support 9 Java? 10 A. It had, yes, it had entered into an 11 agreement to support to Java. 12 Q. Okay. And, in fact, in your 13 professional opinion, did Microsoft engage in 14 this FUD against Java? 15 A. Yes. 16 Q. Sir, did you -- have you seen any 17 evidence that leads you to believe that 18 Microsoft and Bill Gates adopted the 19 recommendations of Ben Slivka in this E-mail? 20 A. Yes, I have. 21 Q. What is that? 22 A. Well, as a -- there are a couple of 23 indicators, the first of which is that 24 Microsoft stopped its support of the Java 25 platform that Microsoft introduced products and 6988 1 technologies that were derived from or used the 2 specific extensions that Microsoft had included 3 into Java polluting the Java standard and 4 creating at least two different variants of 5 Java in the marketplace. 6 The third piece was I believe there's 7 an inquiry in the proceedings, in an earlier 8 proceedings where Mr. Gates is asked questions 9 about whether or not this particular element of 10 the campaign against Java would be undertaken. 11 MR. LAMB: With the Court's 12 permission, I'd like to run that brief 13 videotape -- it's about five or six minutes 14 long -- from Mr. Gates' deposition. 15 THE COURT: Very well. 16 (Whereupon, the following video was 17 played to the jury.) 18 Question: There is a message dated 19 May 14, 1997, from Ben Slivka to you and 20 others. 21 Did you receive this E-mail on or 22 about May 14, 1997? 23 Answer: I'm not sure, but I have no 24 reason to doubt that I did. 25 Question: When Mr. Slivka writes, as 6989 1 he does in the second paragraph, this summer 2 we're going to totally divorce Sun, do you know 3 what he's referring to? 4 Answer: I'm not sure. 5 Question: Did you ever ask him what 6 he was referring to? 7 Answer: No. 8 Question: In the next to last -- in 9 the last sentence, actually, in the last 10 sentence of the second paragraph, Mr. Slivka 11 writes that JDK 1.2 has JFC, and is the JFC 12 there the Java foundation classes that you 13 referred to earlier? 14 Answer: It's one of the many JFCs. 15 Question: What is one of the many 16 JFCs? 17 Answer: The one in JDK 1.2. 18 Question: Is the JFC in JDK 1.2 a 19 part of what was described as a major threat to 20 Microsoft? 21 Answer: I have no idea which JFC that 22 sentence written by somebody other than me 23 refers to. 24 Question: Well, the sentence written 25 by somebody other than you was written to you; 6990 1 right, sir? 2 Answer: It was sent to me. 3 Question: Yeah. And it was sent to 4 you by one of your chief executives -- one of 5 your top executives; correct, sir? 6 Answer: In an E-mail. 7 Question: Yes. And that's a frequent 8 way that your top executives communicated with 9 you; correct, sir? 10 Answer: Yes. 11 Question: Now, Mr. Slivka here says 12 that Microsoft is going to be saying 13 uncomplimentary things about JDK 1.2 at every 14 opportunity. Do you see that? 15 Answer: Where is that? 16 Question: That is JDK 1.2 has JFC 17 which we're going to be pissing on at every 18 opportunity. 19 Answer: I don't know if he's 20 referring to pissing on JFC or pissing on JDK 21 1.2, nor do I know what he specifically means 22 by pissing on. 23 Question: Well, do you know that 24 generally he means by pissing on, he's going to 25 be saying -- Microsoft's going to be saying 6991 1 uncomplimentary things? 2 Answer: He might mean that we're 3 going to be clear that we're not involved with 4 it; that we think there's a better approach. 5 Question: Well, you understand that 6 when Mr. Slivka says he's going to be pissing 7 on JDK 1.2 as you seem to interpret it at every 8 opportunity, do you interpret that as meaning 9 that Microsoft is going to be saying 10 uncomplimentary things about JDK 1.2? 11 Answer: I told you I don't know 12 whether pissing applies to JFC or JDK. 13 Question: He's going to be pissing 14 on -- Microsoft's going to be pissing on either 15 JDK 1.2 or JFC or both, according to Mr. 16 Slivka. Is that at least fair? 17 Answer: That's -- it appears to be 18 what the sentence says. 19 Question: Yeah, okay. 20 And as the chief executive officer of 21 Microsoft, when you get these kind of E-mails, 22 would it be fair for me to assume that pissing 23 on is not some kind of code word that means 24 saying nice things about? It has the usual 25 meaning of the word in the vernacular? 6992 1 Answer: I don't know what you mean 2 this kind of E-mail. 3 Question: The kind of E-mail that's 4 sent to you in the course of business of 5 executive. 6 Answer: So all E-mails I get? Ben 7 Slivka is not an executive. 8 Question: All the E-mails you get by 9 people telling you that they're going to piss 10 on competitive products. That's what I'm 11 talking about. 12 Answer: I don't remember mail like 13 that. It looks like I got one, but believe me, 14 it's not a term that's commonly used. 15 Question: But you have no reason to 16 think that he means it in any way other than 17 the normal meaning of that term, do you, sir? 18 Answer: I think it's a term of 19 multiple meanings. In this case I think it 20 means what you've suggested it means. 21 Question: Okay. 22 MR. LAMB: Thank you, Darin. Can we 23 go to the next slide? 24 Can we go to the next slide, please? 25 Before. One back. There you go. 6993 1 MR. HOLLEY: Your Honor, may we 2 approach the bench? 3 (The following record was made out of 4 the presence of the jury at 12:48 p.m.) 5 THE COURT: Mr. Holley. 6 MR. HOLLEY: Because the court 7 reporter had to leave the bench right before 8 lunch and because the jury was already in the 9 room before we started in the afternoon, I 10 didn't have an opportunity to say that I object 11 humanly to this notion of reading multiple 12 findings of fact into the record and asking no 13 questions about them. 14 Now we have a new reiteration of this, 15 which is to play some evidence that has already 16 been played to the jury and not ask any 17 question about it. 18 The examination of this expert is not 19 an opportunity to play other evidence. I would 20 object to asking him his opinion about it, but 21 I don't understand what we're doing here. Why 22 are they playing Mr. Gates' testimony? Why are 23 they reading multiple findings of fact into the 24 record and then just moving on. 25 As you'll recall, Your Honor, there 6994 1 were numerous findings of fact read about 2 Apple, and I was waiting for the question so I 3 could object. And then, instead, Mr. Lamb said 4 go to the time line, and then we broke for 5 lunch. There was never any question about the 6 finding of fact, and now we moved to a slide, 7 not asking a question about what Mr. Gates said 8 but on some other topic. 9 This isn't proper, Your Honor. That 10 is not a question in either case. 11 MR. LAMB: Well, first of all, what 12 happened just now was Mr. Alepin said that he 13 reviewed and relied on -- he saw some 14 deposition testimony of Mr. Gates. That's what 15 we just played, the testimony that he saw that 16 referred to that, and I'm going to ask him some 17 follow-up questions about that. 18 In relation to what happened 19 previously, I went through findings of fact. 20 I'm entitled to read those at any time to the 21 jury, and I asked him questions about certain 22 terms in those findings of fact. I'm entitled 23 to do -- 24 MR. HOLLEY: Your Honor, I -- 25 MR. LAMB: -- that. 6995 1 MR. HOLLEY: I'm sorry. I didn't mean 2 to interrupt. It may well be, and I wasn't 3 here the morning that this last came up, but it 4 may well be that the plaintiffs can read 5 whenever they feel like it the findings of fact 6 in the context of just standing up and saying 7 to the jury: Now we would like to read some 8 findings of fact. But in the course of an 9 examination of an expert, if he's not ask asked 10 any questions about them, it's improper to 11 stand there and read a bunch of findings of 12 fact. That isn't a proper question. 13 And as to the tape, it just -- I've 14 never seen a trial proceed where someone says, 15 Have you ever looked at something, and then all 16 of a sudden we get to watch it and then there's 17 no follow-up question about it. That's just 18 repeating evidence in the context of counsel's 19 questioning. It ends up looking like some sort 20 of interim argument, which isn't proper. 21 THE COURT: Anything else? 22 MR. TULCHIN: I just want to add one 23 thing, Your Honor, to supplement what 24 Mr. Holley just said. 25 It does seem to me, again, that using 6996 1 collateral estoppel -- I mean, it's one thing 2 to get the benefit of collateral estoppel and 3 have the jury instructed that these facts have 4 been determined, and it's another thing to use 5 that as sort of, let's say, a daily weapon. 6 Even in situations where the 7 particular findings or conclusions are -- which 8 the jury has already got in their notebooks and 9 heard about are really divorced from what this 10 expert is supposed to be doing. He's looking 11 at legal conclusions. And it's one thing to 12 say, What does this term mean technologically? 13 And it's another thing for this technical 14 expert to then be supplementing these findings 15 and conclusions with more opinions about what 16 the impact of this conduct was. It's just -- 17 it seems to me to be completely off base. 18 MR. LAMB: Your Honor, for what it's 19 worth, just to hopefully maybe shortchange 20 this, I don't have any further findings of fact 21 that I'm reading, if that helps, in this direct 22 examination. I'm at Conclusion of Law 4.11. 23 They only go to 4.12. There are no findings of 24 fact after that. 25 I think basically what I said before 6997 1 applies, but we've probably got another brief 2 amount of time for this examination, none of 3 which these objections apply to. 4 THE COURT: Well, anything else on 5 this one, on the objection Mr. Holley has 6 raised? 7 MR. LAMB: No, sir. 8 THE COURT: I agree with Mr. Holley. 9 If you're going to play something like that, 10 you better follow up with a question. 11 MR. LAMB: I'm trying to. I haven't 12 had an opportunity to. 13 THE COURT: Okay. Make sure you do. 14 MR. HOLLEY: Thank you, Your Honor. 15 (The following record was made in 16 the presence of the jury at 12:54 p.m.) 17 THE COURT: Proceed. 18 MR. LAMB: Thank you, sir. 19 Q. Mr. Alepin, is the Gates testimony 20 that you just referred to, is that something 21 that you reviewed and relied upon in forming 22 your opinions? 23 A. Yes. 24 Q. Okay. 25 A. Excuse me. Yes. 6998 1 Q. And can you -- you know, you referred 2 to embrace, extend, and extinguish, okay. Did 3 you see evidence of extinguish in this regard 4 in relation to Sun Java? 5 A. Yes. I think I indicated on the 6 earlier slide that evidence was in the form of 7 a fragmented Java platform for the personal 8 computer users and in the form of Java being 9 essentially pushed off the desktop and not 10 viable for the software development community 11 on the desktop platform. 12 Q. Okay. And, Mr. Alepin, in relation to 13 your training and experience, have you 14 personally had experience with Java? 15 A. Yes, I have. 16 Q. Can you explain to the jury what that 17 experience is? 18 A. Well, in the mid 1990s when Java first 19 came out, there were lots of opportunities to 20 work on the Java technology to improve it while 21 maintaining the promise of cross-platform 22 compatibility; that is, write once, run 23 everywhere. 24 One of those opportunities was to 25 develop -- and this is -- has the risk of 6999 1 getting pretty technical, but to create 2 just-in-time compilers, otherwise known as 3 JITs, which would take the Java code that came 4 from the Internet and compile it on the fly as 5 it was being used on the user's PC and optimize 6 its performance for that period while the user 7 was using that application. 8 And that technology, just-in-time 9 compilers, was something that I was working on 10 in the mid 1990s to try and improve the 11 performance of Java applets so that they could 12 run even larger, more complex programs on these 13 multiple different platforms. 14 Q. And how long did you work in that 15 regard? 16 A. I worked on it for a couple of years. 17 Q. In relation to this slide, you asked 18 the question, necessary to lock applications 19 into the platform. What are you referring to 20 there, sir? 21 A. I mentioned earlier that there was 22 this function in the developer tools that 23 Microsoft was providing that created a tunnel 24 -- I think it's still up on the board -- a 25 tunnel where the applications would be locked 7000 1 into the Windows platform, this J Direct set of 2 interfaces that Microsoft encourages -- 3 encouraged Java developers to use. 4 And that is what I mean by locking 5 them in, getting the developers to write those 6 applications that include references to this 7 tunnel and make use of this tunnel on the 8 Windows operating system. 9 MR. LAMB: Your Honor, at this time 10 Plaintiffs move to admit Plaintiffs' Exhibits 11 2403, 5803, and 2708. 12 THE COURT: Any objection? 13 MR. HOLLEY: Just to be clear, 2403, 14 5803, and, I'm sorry, I missed the last one. 15 THE COURT: 2708. 16 MR. HOLLEY: No objection, Your Honor. 17 THE COURT: They are hereby admitted. 18 MR. LAMB: We'd also like to move to 19 admit exhibits previously reviewed and relied 20 upon by Mr. Alepin, Plaintiffs' Exhibits 5735, 21 5906, 0411 underscore A as in Alpha, 0052, 22 7264, 5401, 3228, 5026, 3506, 981, 3516, 2456, 23 1031, and 2151. 24 MR. HOLLEY: One objection, Your 25 Honor. 7001 1 The Exhibit 411A appears to be 2 incomplete. It looks as if it was copied every 3 other side and so two pages are missing. And I 4 don't think that was the intention. 5 We have no substantive objection to 6 the exhibit, but I do think for the record that 7 the full document should be in evidence. 8 MR. LAMB: Which exhibit was that? 9 MR. HOLLEY: That is Plaintiffs' 10 Exhibit 411A. 11 THE COURT: Underscore A. 12 Did he just hand you a corrected one? 13 MR. HOLLEY: The one that was used 14 with the witness was missing pages 2 and 4, but 15 if this is the version that's going to be in 16 evidence, then Microsoft has no objection, Your 17 Honor. 18 MR. LAMB: I think what happened, Your 19 Honor, was we only showed those screens. I'm 20 not intending to not introduce the entire 21 exhibits. 22 THE COURT: Very well. 23 MR. LAMB: I apologize if there's 24 confusion. 25 THE COURT: Very well. You'll 7002 1 introduce all of 0411 underscore A. 2 MR. LAMB: And all of the exhibits. 3 THE COURT: True. 4 Hearing no objection to the remainder, 5 they are all admitted, including 0411 6 underscore A, as complete. 7 MR. LAMB: I apologize. There was one 8 other, Your Honor. 9 1425. 10 THE COURT: Okay. 11 MR. HOLLEY: No objection, Your Honor. 12 THE COURT: 1425 is admitted. 13 MR. LAMB: Thank you, Your Honor. 14 Q. Mr. Alepin, in relation to Microsoft's 15 Java, was there any special advantages related 16 to the incompatibilities in Microsoft's Java 17 that locked it into the other applications? 18 A. I'm sorry, could you ask the question 19 again, please? 20 Q. Let me ask it another way. 21 Was Microsoft's Java machine -- Java 22 Virtual Machine faster than Sun's Java Virtual 23 Machine? 24 A. Yes. 25 Q. How much faster? 7003 1 A. Depending on what you were doing, it 2 could be several times faster. 3 Q. And was that an advantage? 4 A. Yes indeed. 5 Q. But was there any need to lock in 6 other applications? 7 A. No, there was no need to lock in 8 applications in order to achieve the 9 performance advantages. In fact, none at all. 10 Q. Okay. So by locking in the 11 applications that didn't make it faster -- 12 A. No. The project I worked on that I 13 was discussing approached the problem of 14 optimizing application performance in many of 15 the same ways that Microsoft did, and we could 16 achieve similar gains in performance for 17 applications by applying good compiler 18 technology, special stuff, good garbage 19 collection and just-in-time compilation and 20 optimization of subroutines and other functions 21 in the application. 22 Q. Mr. Alepin, in your professional 23 opinion, why was Microsoft's Java Virtual 24 Machine faster than Sun's Java Virtual Machine? 25 A. To make Java applications run faster. 7004 1 Q. I know, but what was it about it that 2 made it faster? 3 A. It was the optimizations that I 4 described, the just-in-time compilation and 5 other improvements. 6 Q. The stuff that you were working on at 7 Fujitsu too? 8 A. I'm sorry if I didn't make that clear. 9 That's what I intended. 10 Yes, it was similar -- other companies 11 besides the company I was working on on behalf 12 of approached the task of optimization using 13 similar techniques. 14 Q. Okay. 15 MR. LAMB: Darin, could we see the 16 next slide, please? 17 Q. Conclusion of Law 4.12 reads, 18 Microsoft maintained the monopoly power in the 19 operating systems market by the following, 20 quote, anticompetitive conduct, end quote: 21 i.e., conduct which caused harm to the 22 competitive process and thereby harm to the 23 consumers. 24 12, coercing Intel to stop aiding Sun 25 in improving the Java technologies. 7005 1 Sir, what were the Java technologies? 2 A. The Java technologies were the virtual 3 machine in particular and the developer tools 4 that worked with the virtual machine and the 5 developer community. 6 Q. And at this time was Sun employing a 7 net computer -- a network computer? 8 A. Well, part of the work in expanding 9 the opportunities for Java and the ways in 10 which Java could be used to help users was to 11 create network computers, to take the idea of a 12 computer that was not much more than a network 13 connection and a brain and some memory and 14 allow that -- the user of that kind of network 15 computer to navigate through the Internet with 16 a browser to get a lot of the information they 17 needed as well as when they needed to, to 18 download an application written in Java and 19 have that application do the business 20 application that the users -- that the user of 21 that network computer would need. 22 Q. With the Court's permission, perhaps 23 you could get down and diagram personal 24 computer versus a network computer. 25 A. Sure. I think I figured out where the 7006 1 mute switch is. 2 So a personal computer is -- I talked 3 about before, is most familiar with a keyboard, 4 possibly with -- and now almost always with a 5 mouse or some sort of pointing device inside 6 this computer, you have now a network 7 connection. 8 Before it used to be sometimes a modem 9 or a telephone jack that you used, but nowadays 10 almost all computers are equipped with a 11 network connection that's much faster, and 12 always on network connection. 13 So you've got -- we refer to these 14 things as NIC or network interface cards. 15 You've got memory. You've got CPU. 16 You've got graphics card that puts the 17 information up on the display. And you've got 18 -- importantly you've got a disk drive or 19 multiple disk drives that have the operating 20 system and the applications software installed 21 on. 22 A network computer has many of these 23 same components, except the idea was to 24 eliminate the disk drive to make the disk drive 25 really be at the end of this network 7007 1 connection. 2 For all intents and purposes, that's 3 the way you would think about it. Because you 4 would not have to install any applications on 5 your local computer. 6 You would not have to maintain any 7 applications on the local computer -- on your 8 personal computer. You would not have to 9 update the operating system or configure the 10 operating system. Everything would be done for 11 you over the network. Hence, the term a 12 network computer. 13 These kinds of computers in comparison 14 to the personal computer of that day, and even 15 today, the network computer cost a lot less to 16 manufacture because it didn't have as many 17 moving parts, the disk drive being the moving 18 part. 19 It did not require as powerful a 20 processing unit because it ran a simpler -- it 21 ran a simpler, less complex operating system. 22 It didn't require maintenance. It 23 didn't require somebody going to the computer, 24 particularly in businesses, and maintaining and 25 updating the software and locking it down and 7008 1 doing all these other things. 2 So the network computer when compared 3 with the personal computer presented then, and 4 presents today, a substantial improvement in 5 something that we care a lot about, and that's 6 called TCO, total cost of ownership. That's an 7 expression that really matters to people in 8 businesses, but it also affects others. 9 Total cost of ownership of a network 10 computer versus a personal computer was 11 computed to be substantially less. 12 So network computers had the potential 13 to be substantially cheaper to own for 14 businesses and to manage and maintain over the 15 life span of the product. 16 Q. Okay. In your professional opinion, 17 were network computers viable? 18 MR. HOLLEY: Objection, Your Honor. 19 Viability is an economic concept. 20 THE COURT: Sustained. 21 Q. In your opinion, could network 22 computers be made to work? 23 A. In fact, in the 1997, '98 time frame, 24 I was actively involved in the review of the 25 design specifications for network computers, 7009 1 including the reference design that Intel 2 provided to participants in the industry or 3 potential participants in the industry. 4 A reference design is a design that 5 says here is what we think we can build and 6 here is what we think it will cost. 7 And Intel -- Intel's the largest 8 manufacturer of semiconductors in the world, 9 and its semiconductors are in it. 10 What Intel did was, it went out and 11 said we can, looking at the specifications that 12 we've talked to Sun and IBM and Oracle and 13 other participants, this is what we think we 14 can build and this is how much we think it will 15 cost and here -- here are the specifications 16 for it. 17 You can go out and try and build it 18 yourself. IBM can build computers, obviously. 19 Other companies can build computers. You can 20 build it up and try it out. 21 So technologically there's simply no 22 doubt in my mind that we could build them. In 23 fact, we built them, and we tried them out, and 24 we used them. 25 Q. Do they run on Windows? 7010 1 A. No, they don't run on Windows, no. 2 Q. Can they run on Windows? 3 A. No. They were designed as an 4 alternative. 5 Q. You have one of your bullet points 6 Kona suite of applications that do not need 7 Windows to run. What was that? 8 A. Well, I mentioned the reference design 9 for the network computer. That was the 10 hardware for the computer. 11 Sun had taken the functionality 12 necessary to build an operating system and 13 provided it as part of -- as a substructure 14 underneath the Java Virtual Machine and called 15 it the Java OS. 16 So so far you've got the hardware. 17 You've got the operating system that is really 18 a thin layer of software. But you need 19 applications. You need to be able to do stuff, 20 not just navigate to run -- to visit websites 21 and to interact with web-based applications. 22 You need to actually have business productivity 23 applications, word processors and that stuff. 24 Kona was a suite of personal 25 productivity applications that IBM had put 7011 1 together that would run on the Java Virtual 2 Machine and Java OS on the network computer. 3 Q. And was network computing from a 4 technological perspective a threat to the 5 Microsoft operating system platform? 6 A. Well, it didn't include any of 7 Microsoft's software in it, and it was an 8 alternative. It could substitute for a Windows 9 computer. So, yes, it was a threat. 10 Q. Okay. Sir, during what period of time 11 did Microsoft coerce Intel to stop aiding Sun 12 in improving the Java technologies? 13 A. This would be in the 1997, '98 time 14 frame, I believe. 15 Q. Are network computers commercially 16 generally available in the industry today? 17 A. You can buy network computers today, 18 yes. 19 Q. Okay. Are they -- you know, are they 20 in use in general terms very frequently or not 21 frequently at all? 22 A. They are a niche product. 23 Q. What does that mean, a niche product? 24 A. Well, rather than being a general 25 purpose alternative to what is sometimes 7012 1 referred to as -- you know, the thick client 2 computers or the PC computer, so rather than 3 being widely available as an alternative, 4 they're not. They're much less available to 5 businesses and much, much less widely used, I 6 should say -- rather much less widely 7 available. 8 Q. Technologically, what was the impact 9 of Microsoft coercing Intel to stop aiding Sun 10 in improving Java technologies? In terms of 11 the technology, what happened to the 12 technology? 13 A. What that did was it took away the 14 biggest, most capable company from a hardware 15 perspective that could have brought the 16 technology to market and kept the prices down 17 and promoted the economies -- I don't mean to 18 -- to produce stuff in high volume. 19 So Intel as a semiconductor 20 manufacturer was capable of producing lots of 21 product. Would have been capable of producing 22 lots of network computers, for example. 23 MR. LAMB: Could I get the next slide, 24 Darin? 25 Q. Okay. Again, when we started out, 7013 1 this was your assignment; right, sir? 2 A. Yes. 3 Q. And the opinions that you've provided 4 over the last few days, do you hold all of your 5 opinions with a reasonable degree of 6 professional certainty? 7 A. Yes, I do. 8 Q. And you understand, Mr. Alepin, that 9 you may be called back to trial here at a later 10 date to provide some testimony regarding a 11 different subject matter; correct? 12 A. That is my understanding, yes. 13 MR. LAMB: Can we get the next slide, 14 please? 15 MR. HOLLEY: Your Honor, I object to 16 this slide because I believe that the last 17 three bullet points are outside the scope of 18 his testimony. 19 THE COURT: Overruled. I'll wait till 20 a question. Go ahead. 21 Q. Mr. Alepin, this is kind of a broad 22 overview conclusion slide you've done; right? 23 A. Very broad, yes, sir. 24 Q. Very broad, okay. 25 And I don't mean to restrict the last 7014 1 two and a half days, but you've got one big 2 heading, Microsoft tactics, and then you've got 3 bundling, vaporware, and FUD. 4 What was your purpose in doing that 5 for the jury? 6 A. Well, I think it was to highlight the 7 tactics that I believe Microsoft employed as 8 part of a concerted strategic decision when 9 confronting technological threats and 10 challenges to its products and technologies in 11 the business. 12 Q. Okay. And then in terms of the 13 technological effects and results, why do you 14 list result less variety, less innovation, and 15 less choice? 16 MR. HOLLEY: Objection, Your Honor. 17 THE COURT: Overruled as stated. Go 18 ahead. 19 A. Well, the tactics have been remarkably 20 successful, and as a result, I believe that 21 technology that we could have made, that we 22 could have introduced didn't get into the 23 market, didn't get into our business. And we 24 didn't introduce changes in this kind of cycle 25 of improvement. 7015 1 In going back to the browser, the 2 browser time line, for example. 3 We didn't see the kind of rapid fire 4 innovations in -- and new releases. New 5 releases correspond to innovations generally 6 that we like to bring to market. 7 And we didn't see those, in my view as 8 much of them as we were able to produce. 9 And when that happens, there are less 10 products out there and less things from among 11 which to choose, less alternatives. 12 MR. HOLLEY: Your Honor, I move to 13 strike that answer as violating prior orders of 14 this Court. 15 THE COURT: Sustained. Stricken. 16 Jury will disregard. 17 Q. Mr. Alepin, from a less variety point 18 of view, and I'm just talking about 19 technological, how has there been less variety? 20 A. Well, there have been fewer operating 21 systems. There are fewer browsers, fewer 22 desktop productivity application suites than 23 there were before Microsoft became the dominant 24 -- the predominant vendor in the market. 25 MR. HOLLEY: Your Honor, same motion 7016 1 to strike the testimony for the same reason. 2 THE COURT: Overruled. I'll allow it 3 as answered. It's different. 4 Q. In relation solely to the 5 technological effect, sir, how has there been 6 less innovation? 7 MR. HOLLEY: Objection, Your Honor. 8 THE COURT: Overruled. 9 You may answer. 10 A. Well, there are fewer companies, fewer 11 people trying to improve on fewer products 12 available. That's really the bottom line. 13 There's one browser -- as a practical 14 matter, there's been one browser since 1998, 15 and people who want to improve on browsing have 16 only one alternative to try and work with. 17 That means less improvement. 18 Q. Okay. Again, solely from a 19 technological viewpoint, how in your opinion 20 has there been less choice? 21 MR. HOLLEY: Objection, Your Honor. 22 THE COURT: Sustained. 23 Q. In relation to ISVs, because of the 24 impact of what Microsoft has done as you've 25 described it, has there been less choice by 7017 1 ISVs in relation to applications that they can 2 work on? 3 MR. HOLLEY: Same objection, Your 4 Honor. 5 THE COURT: Overruled. I'll allow it. 6 A. There are -- applications developers 7 have been -- have fewer platforms to target as 8 a technical matter. 9 So if I want to build word processing 10 software, I need a platform to work on, and the 11 dominant platform -- the one that's on -- that 12 computer manufacturers are building computers 13 preinstalled is Windows. 14 So I'm driven to or forced into 15 developing the word processing software for 16 Windows or for some very tiny segment of users 17 who might be using a different platform. 18 Q. Mr. Alepin, in relation to your bullet 19 points above under Microsoft tactics, bundling, 20 vaporware and FUD, is there a graphical 21 representation you could give to the jury to 22 show what you're talking about? 23 A. I've been -- yes, I think I have a 24 graphical representation, but it probably would 25 take a little bit of time to go through and I 7018 1 would need -- it's large enough that I'm going 2 to need a bigger -- maybe that white board if I 3 could use that. 4 MR. LAMB: Your Honor, would it be 5 okay if we take a break now and set up the 6 white board and we'll leave the white board the 7 way it is? 8 THE COURT: Very well. Take a 9 ten-minute recess. 10 Remember the admonition previously 11 given. Please keep your notebooks here. 12 (A recess was taken.) 13 (The following record was made out of 14 the presence of the jury at 1:23 p.m.) 15 MR. HOLLEY: Your Honor, if they have 16 a demonstrative that they had prepared in 17 advance that he is now going to put up on the 18 white board, we were entitled to see it, not 19 now, and it isn't -- you can't evade that rule 20 by simply failing to write it down on a piece 21 of paper in advance. 22 It's one thing to ask a witness to get 23 out of the witness box and come do a minor 24 diagram, but if we're going to have some magnum 25 opus on the white board that they've had 7019 1 prepared, which is clearly the case, then we 2 were entitled to see it in advance. 3 So I object to this, Your Honor. 4 THE COURT: Is this something you 5 planned all along? 6 MR. LAMB: No, Your Honor, it's not. 7 We had it before and they can 8 cross-examine about it. In fact, if my memory 9 serves me from what he showed me, it's on a 10 napkin, and if they want to look at that time 11 and cross-examine him about the napkin, I don't 12 have any problem with it. 13 MR. HOLLEY: My point, Your Honor, is 14 if it's been on the napkin for longer than the 15 man has been on the witness stand, which is 16 from noon to 1:30 then it should have been 17 disclosed to us. It should have been disclosed 18 to us at 8:30 a.m. yesterday, or Friday 19 morning. But you can't ambush people like 20 this. There are rules about when 21 demonstratives are supposed to be disclosed. 22 THE COURT: When was it prepared? 23 When did your witness prepare it. 24 MR. LAMB: My understanding was it was 25 prepared yesterday on a napkin. 7020 1 THE COURT: Draw it out and then we'll 2 make a record of it. 3 MS. CONLIN: Well, Your Honor, before 4 we close down, the only rules that apply with 5 respect to demonstrative evidence in this case 6 are the rules to which the parties agreed. 7 And by its terms, that agreement 8 applies only to demonstrative evidence. It 9 doesn't apply to sketches, it doesn't apply to 10 diagrams that the witness prepares whenever he 11 thought it up. 12 They can certainly cross-examine him 13 on it, but he gets to -- you know, unless 14 Microsoft wants not to have its people be 15 drawing anything, this is -- you know, this is 16 a perfectly appropriate thing to do. 17 The only rules are those that we 18 agreed to, and we have complied with fully. 19 Microsoft has not, but we have. 20 MR. HOLLEY: Well, Your Honor, it just 21 elevates form over substance to an unbelievable 22 degree to say that a witness can prepare a 23 demonstrative exhibit yesterday and then wait 24 to provide it to the other side because there's 25 some strategic advantage to drawing it on the 7021 1 board rather than putting it on a slide. 2 You know, as we all know, someone 3 skilled in PowerPoint can create a slide in a 4 matter of moments that contains particular 5 content. 6 So, Your Honor, I guess I would 7 propose that we do what the Court suggested, 8 which is they draw it up and then we'll have a 9 record. 10 THE COURT: Draw it up. 11 MR. HOLLEY: Thank you, Your Honor. 12 THE COURT: Take a look at it before 13 the jury comes back. 14 (A recess was taken.) 15 (The following record was made out of 16 the presence of the jury at 1:45 p.m.) 17 THE COURT: Mr. Holley, you wish to 18 make a record outside the presence of the jury 19 on this chart? 20 MR. HOLLEY: Yes, Your Honor, I do. 21 As I said before the break, there is 22 an agreement between the parties which it is 23 within the inherent power of this Court to 24 enforce. 25 The agreement requires that 7022 1 demonstrative exhibits should be provided to 2 the other side within a preset amount of time 3 before their use in Court. 4 This document, based on my 5 understanding, has been in existence in some 6 form since yesterday. 7 It is not a sketch or something on the 8 fly but a quite premeditated chart which seems 9 to encapsulate basically everything that 10 Mr. Alepin has said over the last three days. 11 And in those circumstances, it is 12 Microsoft's position that it should have been 13 disclosed pursuant to the agreement, and the 14 fact that it wasn't should preclude the 15 Plaintiffs from using it now, Your Honor. 16 THE COURT: Mr. Lamb? 17 MR. LAMB: Your Honor, this is nothing 18 short of outrageous. 19 When we started on Thursday morning, 20 they conceded that they had a whole host of 21 demonstrative exhibits that they had had for 22 certainly the time period, but they continued 23 to object, even though they did not do what the 24 stipulation requires, which is objections in 25 writing. They failed to do that. 7023 1 And, in fact, Mr. Holley just this 2 morning objected to a slide that he had for 3 several days, that he's had probably for five 4 or six days, okay. 5 And it doesn't apply to drawings. 6 We're entitled to have him get up and display 7 something. 8 We were going to have him do it. He 9 has it in mind. They want him to do it, that's 10 fine. We'll do it in advance. 11 It's not prejudicial in any way. They 12 can cross-examine him on it. 13 You know, they're trying to flip this 14 and get it always to their advantage, but they 15 never comply with it. 16 THE COURT: Anything else? 17 MR. HOLLEY: Only, Your Honor, that my 18 objection based on the slides was based on a 19 ruling that didn't come into being until after 20 the time provided by the agreement to object, 21 and it can't possibly be the Plaintiffs' 22 proposition that if a ruling is made in the 23 intervening time, that that doesn't give you an 24 opportunity to object. But I have nothing 25 further to say on this. 7024 1 THE COURT: Tell me how many times 2 he'll use the chart, your witness. 3 MR. LAMB: He is simply going to 4 describe the columns, and he is going to 5 describe how they apply, and either check or 6 not check where applicable. 7 THE COURT: And I have trouble reading 8 all the columns. What's the second one going 9 horizontal? 10 MR. LAMB: The second horizontal is 11 OS/2. 12 THE COURT: That's vertical. 13 MR. HOLLEY: It says preannounced 14 vaporware, Your Honor. 15 MR. LAMB: No. I think that's 16 vertical, but okay. Sorry. 17 THE COURT: Horizontal is this way. 18 MR. LAMB: That's a heading on a 19 vertical column. 20 THE COURT: Let's do the headings 21 horizontally. 22 MR. LAMB: We'll do whatever you want, 23 sir. 24 THE COURT: What's the second one 25 again? 7025 1 MR. LAMB: It is preannounced 2 vaporware. 3 THE COURT: What's the third one? I 4 can't read it. 5 MR. LAMB: I believe that's 6 information access/disclosure. 7 The fourth one is incompatibility. 8 The fifth one is bundling and ties. 9 The sixth one is other. 10 THE COURT: Anything else? 11 MR. TULCHIN: Yes, Your Honor, if I 12 could. 13 All of this appears to be in the 14 nature of testimony that essentially is 15 economic or legal in nature about how, if at 16 all, some alleged conduct impacted the market. 17 That's what all of this is for. 18 That's why we have DR-DOS, OS/2, 19 browser, Netscape, Java. 20 This man is supposed to be a 21 technology expert. We'll see on cross if he 22 is. But he certainly shouldn't be drawing 23 conclusions or offering opinions about what 24 happened in the marketplace, and I thought the 25 Court had already instructed Plaintiffs not to 7026 1 permit him to do that. 2 THE COURT: What's he going say about 3 these? 4 MR. LAMB: I don't see market anywhere 5 here. 6 I mean, all he's going to say is 7 DR-DOS was FUD employed. Yes or no. OS/2 was 8 FUD employed. And he's testified about this. 9 MR. HOLLEY: But, Your Honor, 10 employing FUD violates the Court's order which 11 says that Mr. Alepin is not supposed to testify 12 about whether -- I'll just find it. 13 It's at page 6487 of the trial 14 transcript. 15 And it says, this witness may not 16 offer opinions on the following: Legal 17 opinions, including whether conduct is or is 18 not anticompetitive. 19 Now, it's one thing to ask him about 20 technical terms as they relate to the software 21 business, but this is, in fact, Plaintiffs' 22 case in a nutshell on what it is they say 23 Microsoft did that's anticompetitive. 24 Why is Mr. Alepin being permitted to 25 testify on this subject? He's already offered 7027 1 his opinions about what the technical issues 2 are in this case. 3 This is a different question. And if 4 you listen to what Mr. Lamb says, he didn't say 5 he's going to say something about what FUD 6 means or what vaporware means. He's going to 7 say whether Microsoft engaged in FUD with 8 regard to DR-DOS. 9 That's well beyond the purview of his 10 expertise, Your Honor. 11 MR. LAMB: Your Honor, for the last 12 two and a half days he's talked about FUD, 13 vaporware information access and disclosure, 14 incompatibility, bundling and ties. 15 I certainly believe he's entitled to 16 say does that apply to DR-DOS, does that apply 17 to OS/2, does that apply to browsers Netscape, 18 does that apply to Java, does that apply to 19 media players. 20 He's not going say that there's an 21 impact on the market. 22 We're just trying to, you know, within 23 a reasonable period of time graphically 24 summarize what his opinions have been. 25 THE COURT: Mr. Tulchin, you wanted to 7028 1 say something? 2 MR. TULCHIN: I'm sorry, Your Honor. 3 Yes. 4 I was just muttering to myself, but I 5 did want to say, these categories are what the 6 market is. 7 I mean, these are the competing 8 products in various markets. 9 DR-DOS was an operating system. OS/2 10 was an operating system. 11 There's no allegation in this case 12 about a market for browsers. 13 And in the government case, on appeal, 14 the Court of Appeals said the market had not 15 properly been defined. 16 So here we are, we're getting off 17 exactly into economics and legal conclusions, 18 FUD, vaporware. 19 These are legal conclusions applied to 20 the marketplace. And the fact that the word 21 market doesn't appear on this board, I mean, 22 you know, as they used to say in New York, that 23 and two bucks will get you on the subway. It's 24 irrelevant. This is what the market is. 25 MR. LAMB: Well, as they say, we ain't 7029 1 in New York, Your Honor, and this relates to 2 conduct, not legal conclusions. 3 THE COURT: I want to hear what he's 4 going to say. Make an offer. 5 You're still under oath. 6 THE WITNESS: Yes, sir. 7 THE COURT: Proceed. 8 EXAMINATION 9 BY MR. LAMB: 10 Q. Mr. Alepin, if you could explain how 11 this helps assist you to summarize the opinions 12 that you've given in the last two and a half 13 days. 14 A. All right. Well, the -- 15 THE COURT: You can go to the board. 16 A. In the -- arranged along each row is a 17 particular product or a particular technology 18 that had the technological potential to offer 19 alternatives as platforms for the development 20 of software -- applications software and other 21 services related to computers, personal 22 computers in particular. 23 Each one of these columns talks about 24 a particular conduct or act that -- such as, 25 for example, in the incompatibilities, I 7030 1 discussed the verify DOS and I discuss the AARD 2 compatibility detection software. 3 It's my intention here to discuss -- 4 maybe I'm not answering the question, but 5 answering your line of inquiry. 6 THE COURT: Just answer the question. 7 THE WITNESS: Okay. 8 A. So FUD, Microsoft in response to the 9 potential threat that DR-DOS presented engaged 10 in a campaign that its executives described as 11 FUD; that is to say, to disclose information 12 that would make the media influencers as well 13 as other potential people in the marketplace 14 worry about whether the product would be 15 compatible with other Microsoft products, as 16 well as with Microsoft's Windows product on a 17 going forward basis. 18 With respect to vaporware, my 19 examination of the record in this case 20 persuades me that Microsoft announced 21 preannounced products and that in response to 22 potential threats, beginning with VisiOn, which 23 I talked about in 1983, with the purpose of 24 getting people, the developer community and 25 others, potential purchasers to focus on 7031 1 Microsoft's products which were a long way away 2 rather than to take up the opportunities 3 presented by the alternative technology at the 4 time. 5 Information disclosure, in the case of 6 DR-DOS, Microsoft decided not to provide DR-DOS 7 an operating system product with interface 8 information necessary to permit it to work with 9 Microsoft's Windows desktop environment, not an 10 operating system. 11 So Microsoft withheld access to 12 information that would have been critical to 13 enable DR-DOS to eliminate compatibility and 14 interoperability products with other Microsoft 15 products, and as a result, DR-DOS did not work 16 with Windows 3.1 when Windows 3.1 came out. 17 That created an incompatibility that was widely 18 reported. 19 So incompatibilities, whether these 20 incompatibilities were the result of 21 information or specifications or errors or bugs 22 in Microsoft programs that could have been 23 fixed or whether they reflected, in fact, 24 problems in the third-party software, DR-DOS 25 for example, where we have the nested task 7032 1 flag. Was there a real incompatibility? 2 My review of the technical information 3 persuades me that the incompatibility was a 4 problem resulting from Microsoft's software and 5 not from DR-DOS. 6 With respect to bundling and tying, 7 and this is -- could be in two categories. 8 Microsoft began to tell the public 9 back in 1990 and '91 when DR-DOS emerged as an 10 operating system alternative that it was going 11 to bundle and tie the Windows product with the 12 DOS, with its MS-DOS operating system, thereby 13 eliminating the prospects for DR-DOS on a going 14 forward basis if users were interested in 15 choosing DR-DOS and thought it had a future in 16 the market. 17 By telling users that the DOS would be 18 tied to Windows, it eliminated the prospects or 19 reduced substantially the attractiveness of the 20 users investing in the DR-DOS platform. 21 In the case of OS/2, Microsoft and its 22 executives engaged in FUD creating the concerns 23 that Microsoft's OS/2 would not run with 24 Windows -- with applications that Microsoft had 25 developed to run on Windows. 7033 1 So that OS/2, while it might be able 2 to run third-party applications, it wasn't 3 going to be able to run Windows -- Microsoft 4 Windows applications. Not the Windows piece of 5 software, but the Windows -- but applications 6 that Microsoft itself had developed to run with 7 or on Windows. 8 MR. LAMB: Your Honor, if I may. 9 I mean, he can go through the whole 10 thing, but it's all pretty much the same, and 11 it's testimony that he's provided. He's just 12 putting it in the boxes. 13 THE COURT: Continue. 14 A. With respect to vaporware, there's not 15 really -- it wasn't an applicable category. 16 Similarly, with bundle and tying, it's 17 not a particularly important tactic here with 18 respect to Microsoft's conduct as a technical 19 matter against OS/2. 20 Microsoft withheld information that -- 21 from IBM's developers that would have permitted 22 it to more quickly maintain or address the 23 incompatibility and interoperability issues 24 with Windows, both in the form of the DPMI 25 extensions, as well as in other categories of 7034 1 information. 2 Accordingly, the perception and the 3 intended perception was that OS/2 was 4 incompatible with applications as a technical 5 matter that were developed for Windows and the 6 Windows environment. 7 With respect to browsers and Netscape, 8 Microsoft began by -- Microsoft engaged in FUD 9 by suggesting that the browser was going to be 10 part of the operating system and needed to be 11 as a technical matter part of the operating 12 system. Something that is still not a true 13 statement from a technical viewpoint. 14 Similarly, Microsoft did not provide 15 in response to Netscape's requests sufficient 16 information to enable Netscape to develop a 17 competing browser that would run as well on the 18 Windows platform as Microsoft's own browser 19 software. 20 So there were specific sets of 21 interfaces which Netscape requested of 22 Microsoft to be disclosed, which Microsoft 23 declined to disclose until only Netscape -- 24 until only after Windows 95 was released in the 25 product and Netscape had missed the opportunity 7035 1 to catch the first wave of users for Windows 2 95. 3 And Microsoft created 4 incompatibilities with Netscape's 5 specifications and international standards 6 specifications for the creation of content that 7 was to be available on the Internet creating an 8 alternative that said that best when viewed 9 with Internet Explorer and on -- when users 10 would navigate to certain of Microsoft's own 11 websites, users were invited to upgrade their 12 browser to Internet Explorer in order to view 13 content that was being posted on Microsoft's 14 sites. 15 Of course, as I discussed at length, 16 Microsoft first bundled as a technical matter 17 and then tied as a technological matter the 18 browser application to the Windows operating 19 system and did not provide the means for them 20 to be separated, nor did it provide -- nor did 21 it provide the means for users to disable 22 access, meaning that users always had at least 23 two browsers and that on certain occasions the 24 browser would, in fact, appear contrary to the 25 users' expression and express -- expression of 7036 1 preference or the users' policies that were to 2 be in effect on its desktops. 3 With respect to Java, Microsoft first 4 tried to disparage Java, then to adopt Java, 5 then to disparage Java in the most -- in the 6 strongest possible terms, as well as creating 7 this fracture in the marketplace that said that 8 the promise of write once, run everywhere 9 wasn't true; that there were going to be some 10 applications that will not run on Java so don't 11 develop for Java. 12 The information access and disclosure 13 as part of the first wave agreements, which I 14 discussed as part of the -- in response to 15 questions concerning the conclusions of law, 16 the first wave agreements set in motion an 17 obligation on the part of developers in 18 exchange for information access for them to be 19 able to -- for them to be required to develop 20 applications that made use of Microsoft's own 21 proprietary specifications, creating both an 22 incentive to create these applications 23 dependent on Windows in exchange for access to 24 this information. 25 The bundling and tying here is 7037 1 important in the sense that Java -- the means 2 for acquiring Java by most customers at the 3 time was through Netscape Navigator. If you 4 obtained a copy of Netscape Navigator, Java was 5 shipped with it. 6 When Microsoft entered into the 7 license, Microsoft became the principal way by 8 which users acquired a browser as a technical 9 matter. 10 Once Netscape's position had been 11 boxed in and it was no longer the principal 12 browser, users were unable to easily find a 13 different means for obtaining a copy of the 14 Java browser. 15 So there's a bundling and tying 16 element to this particular technology. 17 Media player, again, looking through 18 this, Microsoft said that media players will be 19 part of the operating system, and they're not a 20 separate product category, making it difficult 21 to persuade independent software vendors that 22 there was a viable alternative in the long-term 23 that in fact media player from RealNetworks, 24 Real player will be able to succeed as a 25 technical matter in the business. 7038 1 Vaporware not so much of an issue 2 here. 3 But information access, Microsoft 4 withheld information necessary to permit Real 5 Player to be as good a media player as 6 Microsoft's Windows media player. 7 During the period from 1998 until 2003 8 Microsoft -- Microsoft's disclosure response in 9 -- to requests from Real Player for media 10 disclosure were met with no, you can't have 11 this particular piece of information, and what 12 that -- Windows media -- I'm sorry, Real Player 13 sought to license the Codex, the information 14 necessary to interpret media formats and 15 content from Windows -- from Microsoft in order 16 to be able to take on the job of playing 17 content encoded for Windows media player, and 18 Microsoft declined to provide that information. 19 Bundling and tying. Of course, 20 Microsoft bundled, as I explained, and tied its 21 media player to the operating system and 22 removed the visible means by which users could 23 remove the media player from the system. 24 And with respect to others, the 25 various kinds of conduct, the various types of 7039 1 mechanisms that Microsoft used was some 2 combination of these techniques, depending on 3 the specific facts. 4 I've talked about BeOS. It's another 5 example where there were, in fact, restrictions 6 on what OEMs could do and how they could offer 7 Be as an alternative to the Windows operating 8 system. 9 So there -- 10 So the conclusion here from this is 11 that there are all of these specific categories 12 of conduct which Microsoft has used at various 13 points in time and adjusted to the specific 14 facts and technologies aimed at eliminating the 15 threat of an alternative platform to 16 Microsoft's software. 17 That's the -- 18 THE COURT: Anything else in the offer 19 of proof? 20 MR. HOLLEY: Yes, Your Honor, I think 21 it's now clear from this offer of proof that 22 what Mr. Alepin intends to discuss are legal 23 and economic judgments that he is not qualified 24 to make. 25 He said, as I heard him, that he 7040 1 intends to talk about conduct or acts engaged 2 in by Microsoft that he referred to as tactics, 3 mechanisms, and techniques. 4 He said those were in response to 5 competitive threats posed by Microsoft. 6 He said he intends to testify about 7 the impact on the market of Microsoft's 8 response to these competitive threats, as well 9 as the purpose of Microsoft's conduct. 10 And in this context, he intends to 11 testify about what was critical to the 12 commercial success of competing products. That 13 word was his word, Your Honor. 14 And in doing so, just a few examples 15 of what it is he says he intends to tell this 16 jury, is that Microsoft fractured the 17 marketplace in relation to Java. 18 He intends to interpret because -- and 19 he's not a lawyer -- what the requirements are 20 of the first wave agreements. 21 He intends to opine that Netscape's 22 position was boxed in by Microsoft's conduct in 23 the marketplace. 24 And he intends to talk about the 25 long-term viability in the marketplace of 7041 1 non-Microsoft media players and the ability of 2 competitors to create products that are as good 3 as Microsoft's. 4 All of this leads up to his 5 conclusion, which is not a technical 6 conclusion, but sounds like something that an 7 expert in antitrust economics might offer, 8 which is that Microsoft engaged in categories 9 of conduct that were aimed at eliminating 10 competitive threats faced by Microsoft. 11 Nothing could be a more blatant 12 violation of this Court's order, Your Honor. 13 MR. LAMB: Your Honor, the order that 14 you issued is he may also testify as to 15 applications systems, how in general they are 16 designed and developed, and may testify as to 17 what impact the conduct or acts of the 18 Defendant has had on competitors or developers 19 and the computer industry from the standpoint 20 of a person who has expertise in the computer 21 industry. 22 He's had quite a bit of service in 23 many aspects of it. I think he's qualified to 24 testify as to the impact of companies' 25 developments and activities and conduct in 7042 1 regard to the technological aspect of the 2 industry itself, but not economic and legal 3 opinions. 4 What he's testifying to is what he 5 believes would have happened but for this 6 conduct, and he's entitled to go through and 7 list all this conduct. 8 MR. HOLLEY: Your Honor, the -- 9 MR. LAMB: You know, if I could 10 finish. 11 MR. HOLLEY: Oh, I'm sorry, Mr. Lamb. 12 I'm sorry, I thought you were. I apologize. 13 MR. LAMB: You know, we realize 14 there's been a lot of bad evidence against 15 Microsoft over the last two and a half days. 16 That's the way trials go. 17 And there's a process that's called 18 cross-examination, and both Mr. Holley and 19 Mr. Tulchin have assured this Court that 20 they're going to get up there and do their best 21 to show that Mr. Alepin absolutely knows 22 nothing about technology. 23 And if they can do that, Your Honor, 24 then the jury, I'm sure, will be convinced that 25 Microsoft has done appropriate conduct. 7043 1 But there's no way that we can present 2 a case if we can't present technologically what 3 the conduct was and what the impact of that 4 conduct was, and that is completely in 5 compliance with your order. 6 MR. HOLLEY: Your Honor, just very 7 briefly. 8 The creation of but-for worlds from an 9 industrial organization standpoint is a 10 specialty in microeconomic theory that 11 Mr. Alepin has no expertise in and should be 12 not -- and should not be allowed to offer 13 opinions about, Your Honor. 14 MR. LAMB: Your Honor, we argued this. 15 Your order says, and I quote, he may 16 state but for the alleged conduct or acts of 17 the Defendant that there may have been or not 18 have been advances in specific computer 19 technologies that he is an expert in or knows 20 of or has qualifications in or the industry in 21 general. 22 Because I think he has expertise in 23 the industry in general to say whether or not 24 but for certain conduct, acts of the Defendant, 25 there may have been advances in technology. 7044 1 That's all he's doing. 2 MR. TULCHIN: Your Honor, if I may. 3 Advances in technology are one thing. 4 Mr. Alepin himself summed up his entire 5 presentation by saying that these are specific 6 categories of conduct that Microsoft he 7 believes engaged in that were aimed at 8 eliminating threats of competing products. 9 I tried to write it down as quickly as 10 I could. I think that's pretty much word for 11 word what he said. 12 Categories of conduct aimed at 13 eliminating the threat of competing products. 14 I mean, this is square in the category of 15 economic testimony. 16 THE COURT: Anything else? 17 MR. LAMB: Your Honor, he's trying to 18 eliminate the whole chart. We're going to take 19 him Q and A through this. They'll have an 20 opportunity to object if there's some type of 21 term that they don't like. 22 I would note, though, I find it 23 interesting that Microsoft finds it necessary 24 to have two counsel argue. I'm not sure what 25 the protocol is in this Court, but I find that 7045 1 to be a little unusual. 2 Usually one counsel argues unless 3 there's a request for and an agreement by the 4 Court to allow two to argue. 5 THE COURT: You are correct. 6 All right. I'm going to allow him to 7 testify, but he's going to stay within my 8 previous order regarding the technologies and 9 stay away from such areas and terms as 10 competition and what the effect is in the 11 marketplace. 12 The effect should be the technologies 13 and -- that he's already been found qualified 14 to talk about. What the advances in specific 15 computer technologies may have been or not have 16 been because of acts or conduct as far as 17 competition. Stay away from that, markets. 18 MR. LAMB: Understood, Your Honor. 19 THE COURT: Generally the rest of it 20 should be -- I recall most of it is just 21 summary of his prior testimony. 22 MR. LAMB: Yes, sir. 23 THE COURT: Stay to that, you'll be 24 all right. But some of the stuff was talking 25 about competition and economic, and I don't 7046 1 want him talking about that, or you'll get an 2 instruction from me to strike it. 3 Anything else? 4 MR. LAMB: No, sir. 5 MR. HOLLEY: No, Your Honor. Thank 6 you. 7 THE COURT: You're welcome. 8 (The following record was made in 9 the presence of the jury at 2:16 p.m.) 10 THE COURT: Everyone else may be 11 seated. 12 Ladies and Gentlemen of the jury, I 13 apologize for the lengthy delay. 14 As I told you in preliminary 15 instructions, sometimes issues of laws come up 16 and need to be discussed only by the attorneys' 17 parties and the Court. 18 Such situation did arise, and now 19 we're ready to proceed. 20 You may continue. 21 MR. LAMB: Thank you, Your Honor. 22 DIRECT EXAMINATION (CONT'D) 23 BY MR. LAMB: 24 Q. Good afternoon, Mr. Alepin. 25 A. Good afternoon. 7047 1 Q. When we took our break, you had 2 described a chart that you had now at the break 3 drawn for us that you believe would help assist 4 you to summarize your opinions in this case; 5 correct? 6 A. I have, yes. 7 Q. If you could, sir, and with the 8 Court's permission, if you could get up and 9 just, first of all, explain the chart in 10 relation to the horizontal and vertical axis, 11 that would be helpful. 12 A. What I've done here is I've created a 13 grid, a chart with columns and rows. 14 Each one of the columns is intended to 15 capture a particular conduct or a tactic that I 16 talked about earlier and in connection with 17 something that Microsoft had done. 18 The first one is FUD or fear, 19 uncertainty, and doubt, the process or the 20 strategy -- the strategy of creating in the 21 minds of potential users or in the media the 22 prospect that a third-party software product or 23 hardware product will not work with one of 24 Microsoft's products. 25 The second column -- I apologize for 7048 1 the poor writing, but it's parentheses 2 preannounce, and underneath it's vaporware. 3 And what this refers to, again in 4 going back to the definition that I provided in 5 the -- on one of the slides, vaporware was the 6 announcement in advance of products or 7 technologies that may exist more in the minds 8 of the marketing department than in reality or 9 in the computers or the developers working on 10 it. 11 This tactic of vaporware making those 12 kinds of disclosure is something that I talked 13 about in connection with Microsoft's conduct. 14 The third column is information 15 access/disclosure. 16 I have over the past two and a half 17 days talked about the importance of interface 18 information, specifications that are necessary 19 for software vendors and hardware vendors to be 20 able to build products that interoperate with 21 OEM and in some cases substitute for Microsoft 22 products. 23 What I will talk about with respect to 24 the -- to the horizontal rows is the 25 Microsoft's practice and tactics with respect 7049 1 to interface information disclosure. 2 The fourth column, incompatibility. 3 And I talked about how significant or important 4 incompatibility was or the appearance of 5 incompatibility to software products that wish 6 to interoperate. 7 So compatibility or incompatibility is 8 a -- an attribute of a product that's very 9 important to software developers as they seek 10 to develop software that will work with 11 Microsoft's platform software in particular. 12 And what I intend by this column is to 13 discuss Microsoft's tactics with respect to 14 interface -- with respect to the compatibility 15 or incompatibility of its products with other 16 companies' software products. 17 This fifth category or fifth column is 18 really bundling and tying where Microsoft has 19 included in the box of one product the software 20 of a second product. 21 For example, where Microsoft has 22 included in its Windows 95 product the Internet 23 Explorer software package and where it has made 24 it impossible as a technical matter to separate 25 the two products or technologies. 7050 1 This is -- I shall discuss this with 2 respect to these various horizontal rows here. 3 And finally, I'll talk about some 4 other kinds of conduct, not in any specific 5 detail, but just to indicate whether or not -- 6 for example, as I talked about earlier, whether 7 or not there were additional licensing 8 restrictions, for example, that included the 9 boot-up sequence licensing restrictions. 10 So that's really the intention behind 11 the columns here. 12 Now, if I can -- I'll introduce each 13 one of these products or technologies first and 14 then I intend to discuss just briefly what I 15 believe it is the record in this case 16 demonstrates. 17 First of all, DR-DOS. DR-DOS 18 operating system software, it was a product 19 that could substitute as a technical matter for 20 Microsoft's DOS operating system. It was in 21 play. It was available in the PC world in the 22 nineteen -- late 1980s and early 1990s. 23 OS/2, another operating system 24 product. It was able to replace Microsoft's 25 DOS operating system. It could run 7051 1 applications intended to run on Windows. 2 Netscape's Navigator and browsers, 3 Internet browsers more generally, these -- this 4 is -- refers to a product for -- insofar as 5 Netscape is concerned, and it refers to a 6 technology that had the capability to provide a 7 platform on which application developers and 8 content providers as a technical matter would 9 develop software to use. 10 Java. Java was and still is a 11 technology that permitted software developers 12 to create the applications that would run 13 across multiple different computer systems like 14 Netscape's Navigator. 15 Java was introduced in the mid 1990s. 16 I should have mentioned OS/2 was in the PC 17 world in the late 1990s and up through the mid 18 1990s. 19 The media player is a technology and 20 as a platform for the development of content. 21 People, content owners encoding video 22 clips like baseball games, live feed baseball 23 games, available to you using the software that 24 is the part of the platform for media players, 25 as well as the RealNetworks Real Player media 7052 1 player, which was a product that delivered onto 2 your desktop all of those capabilities. 3 This product in this particular 4 technology began in the mid 1990s and continues 5 through to today. In fact, it's a very 6 important component of what makes the web so 7 interesting and so lively. 8 And then just to complete the dots, if 9 you will, I have talked about the Be operating 10 system and a few other pieces of software or 11 technology, and I will discuss them in relation 12 to what Microsoft did during the time frame. 13 So these all share as a technical 14 matter several important common attributes or 15 characteristics. 16 They all represent platforms on which 17 other software can be built, other content can 18 be built and that independent software vendors 19 or personal computer makers can work together 20 to bring products and technologies to the world 21 so that they're available to businesses and to 22 regular users like us here as users. 23 Q. Okay. Mr. Alepin, let's see if we can 24 walk through this for the jury one at a time in 25 relation to DR-DOS. 7053 1 In your professional opinion, in 2 relation to DR-DOS, did Microsoft engage in 3 FUD? 4 A. Yes. 5 Q. Okay. Go ahead and put a check in 6 that box. 7 A. (Witness complied.) 8 Q. Now, I know you've done a lot of 9 testimony, but just as a refresher, if you 10 could just maybe give an example for the jury 11 briefly. 12 A. Well, Microsoft wanted the users to be 13 concerned about whether or not Microsoft 14 software would be supported on a different 15 operating system platform like DR-DOS. 16 So the idea was to raise in the minds 17 of the media, to raise in the minds of business 18 users, as well as regular users, the prospect 19 that Microsoft might not provide the same 20 quality of support, the same kind of access to 21 information that would enable the software 22 products from DR-DOS and Microsoft to work 23 together. 24 Q. How about vaporware? 25 A. I'll put a check there as well, yes. 7054 1 Microsoft -- 2 Q. Brief example. 3 A. Sure. 4 Microsoft had taken the position in 5 the marketplace -- had taken the position 6 publicly that DOS was dead. This happened 7 around 1985, '86 where in order to promote the 8 imminent arrival of OS/2, Microsoft executives 9 informed users that there weren't going to be 10 any more DOS programs. 11 Q. Okay. How about information access 12 and disclosure? 13 A. Information access and disclosure, 14 I'll put a check here. 15 Digital Research required information 16 about Windows in order to make its -- the 17 forthcoming version of Windows, in order to 18 make its DR-DOS operating system work with 19 Windows. 20 We're going back to the diagram 21 before. We have -- we have Windows, and this 22 is the beta version of Windows, the newest 23 version of Windows. Then we have DOS, the 24 operating system, and this could be Microsoft 25 DOS or it could be DR-DOS. 7055 1 Microsoft refused to disclose 2 information to Digital Research about Windows 3 and the Windows future version that would have 4 permitted it to work with Windows, the next 5 release. 6 Q. How about incompatibility, sir? 7 A. Incompatibilities, well, put a check 8 here. 9 And I discussed this in the nature of 10 the nested task flag and the Bambi software, 11 where Microsoft's software contained bugs and 12 incompatibilities that would prevent it from 13 working with DR-DOS. 14 And in conjunction with these other 15 tactics, Microsoft made these problems visible 16 and discussed them through the media about 17 incompatibilities that existed with DR-DOS 18 informing users, in fact, that they should 19 upgrade to Microsoft DOS when they reported 20 problems for example. 21 Q. How about bundling and tying, sir? 22 A. Well, this one gets a check, too, and 23 it gets a check for the reason that as DR-DOS 24 became more popular and it appeared that what 25 was going to take place was there was going to 7056 1 be this continuing cycle of product improvement 2 that people -- that DR-DOS was on this schedule 3 to introduce a new version of its DOS product 4 approximately every 19 or 18 months, maybe 20 5 months. So it was going to be a rapid sequence 6 of improvements in the product. 7 Microsoft said in I believe 1991, four 8 years before it actually happened, that DOS and 9 Windows are going to be tied together. We're 10 going to tie Windows technically to DOS. 11 And so the net effect is, of course, 12 if you buy DR-DOS, it's going nowhere. 13 Q. How about OS/2 in relation to FUD? 14 A. OS/2's relation to FUD? 15 Q. Yes. 16 A. Microsoft engaged in this kind of 17 tactic with respect to OS/2 trying to create 18 the impression that OS/2 would not run 19 Microsoft Windows applications; that is to say, 20 applications that Microsoft developed that were 21 designed to run on top of Windows in addition 22 to various other kinds of problems about 23 whether, in fact, OS/2 was a resilient or 24 reliable product. 25 Q. How about vaporware, sir? 7057 1 A. Vaporware is not really an issue here 2 in the context of OS/2 so I'll put a circle -- 3 maybe I should put a dash line instead as a 4 better -- 5 Q. Okay. How about information access 6 and disclosure? 7 A. Well, this gets a checkmark. 8 As I indicated, I believe, that the 9 tactics are adjusted somewhat for the different 10 circumstances that are represented by the 11 technology or by the product. 12 In the case of OS/2, Microsoft 13 withheld from IBMs developers, for example, 14 information that would have been necessary to 15 enable them to support Windows and Windows 16 applications on OS/2 in the time frame that had 17 originally been imagined for this release. 18 Q. And the category incompatibilities, 19 sir, does that apply? 20 A. Well, it certainly applies in the same 21 way that the FUD applies. That Microsoft and 22 Microsoft's executives in the course of their 23 correspondence sought to make sure that Windows 24 applications from Microsoft included features 25 and functions that were not present in the OS/2 7058 1 product operating system. 2 Q. How about bundling and tying, sir? 3 Did that apply in the OS/2 example? 4 A. In the OS/2 example, no, not 5 especially, no. 6 Q. Okay. Moving on to the browser 7 Netscape in relation to FUD. Did that apply? 8 A. That applied in the particular sense, 9 again looking at the specifics of the 10 technology and the mechanisms involved. 11 The question is, will the browser be a 12 part of the operating system? Does it need to 13 be a part of the operating system? Is there -- 14 are there features or functions that as a 15 technical matter you're going to need that can 16 only be delivered from your operating system 17 vendor? 18 And that proposition in the form of 19 uncertainty and doubt about Netscape as a 20 browser, so as a browser software developer was 21 called into question by Microsoft's tactics 22 here. 23 Q. And vaporware, the category vaporware, 24 does it apply? 25 A. Well, there were certainly schedules 7059 1 that were slipped substantially during the 2 development, but as a -- in this particular 3 case here, I would say that vaporware is not 4 really an issue. 5 Certainly Microsoft announced shortly 6 after Netscape would announce a product its 7 plans for similar technology, but I don't think 8 that in this particular context here we need to 9 put a check there. 10 Q. Okay. How about information access 11 and disclosure? 12 A. This is certainly a checkmark. 13 Certainly conduct, which I believe -- 14 which I believe had -- was applied to 15 Netscape's browser. 16 Q. Can you give the jury an example? 17 A. Certainly. 18 In the runup to the release of Windows 19 95, so this would be late spring, early summer 20 of 1995, Netscape asked for specifications that 21 would permit its browser to use a -- the 22 equivalent of dialer services within the 23 operating system. 24 These services were being used by 25 Microsoft's MSN network software and by the 7060 1 Internet Explorer. 2 Microsoft declined to provide that 3 information until actually it was too late. 4 Netscape was unable to incorporate the 5 changes necessary to support this feature into 6 its software and, in fact, missed the window 7 that OEMs had open -- that the personal 8 computer manufacturers had opened that would 9 have allowed them to accept software to be 10 bundled onto their PCs. So they just simply 11 missed that first wave in '95. 12 Q. How about incompatibility, sir? 13 A. Well, incompatibilities, here, would 14 get a checkmark in that for two reasons, the 15 first of which is that Microsoft sought to 16 create these extensions that I talked about as 17 part of the embrace and extend. 18 In fact, after cloning Netscape, 19 Microsoft introduced extensions which were -- 20 with which Netscape would be incompatible or 21 would face this very difficult choice because 22 you could not make the functionality available 23 on another platform. 24 So to fulfill the job of being a 25 cross-platform browser, if you embraced 7061 1 Microsoft's extensions, you would end up 2 incompatible on other platforms. 3 Q. How about bundling and tying, sir? 4 A. This one gets also a check. 5 Microsoft, as I described, began 6 bundling Internet Explorer as a -- in the box 7 with the Windows operating system. 8 And looking at the record, this 9 bundling was not sufficient. It did not have 10 the effect of getting more independent software 11 vendors and users to use the browser from 12 Microsoft, at which point Microsoft began to 13 tie the operating system and the browser 14 together using the commingling of files which 15 would prevent you from removing it and by 16 always, always making the browser available 17 regardless of what I chose or what I preferred. 18 Q. Okay. Let's move on to Java and FUD. 19 A. Well, I think we heard earlier the 20 disparagement strategy that Microsoft adopted 21 against the Java foundation classes as a 22 platform that developers should spend time 23 developing applications for, so I would have to 24 put a checkmark there. 25 That's only one element. Of course, 7062 1 there are many other instances, but certainly 2 the Java foundation class was one of them. 3 Q. How about vaporware, sir? 4 A. Vaporware, I think we would simply 5 indicate that it's not a tactic that really had 6 great applicability to the kinds of problems or 7 the kinds of alternatives that the Java 8 platform offered. 9 Q. How about information access and 10 disclosure? 11 A. Microsoft used access to information 12 for third parties conditioning their access on 13 this information in exchange for their use of 14 the specifications that tied their applications 15 to the operating system, the Windows operating 16 system. 17 Q. I'm sorry. Incompatibility? 18 A. Incompatibilities, Microsoft created 19 the version of the -- of its Java, which was 20 not the standard. 21 It fractured or fragmented the Java 22 standard making use of interfaces and providing 23 interfaces that were not the standards that the 24 rest of the Java community and all the other 25 platform vendors were to use. 7063 1 Q. Okay. Bundling and tying? 2 A. Bundling and tying has a particular 3 sense here, and that is that prior to 4 Microsoft's agreement with Sun to adopt Java 5 technologies, the most popular way of obtaining 6 a Java Virtual Machine is if you got a copy of 7 Netscape's Navigator and installed it on your 8 computer. 9 So in addition to being a browser, 10 Netscape's Navigator was also a means by which 11 users got Java. And so you would have a Java 12 and -- a browser from Navigator and you would 13 have Sun's JVM on it. 14 When Microsoft entered into this 15 agreement with Sun, it said we will bundle 16 Java, our Java on Windows, and as a result, the 17 personal computers that were sold with this 18 Java on it, contained the Java that was 19 different from the other companies' Java. 20 Q. Okay. Let's move on to media players 21 and RealNetworks. 22 Was FUD employed? 23 A. Well, again, FUD would be employed in 24 the same sense that we talked about earlier as 25 a tactic. 7064 1 Media players are part of the 2 operating system. You don't need to use a 3 different media player. Only media players 4 that are integrated into the operating system 5 will provide the kinds of functionality that 6 you want. 7 And accordingly, that creates an 8 uncertainty about whether you should use a 9 media player from a third party. 10 Similarly, people who owned content 11 and wanted to encode the content, the process 12 for media players is you as a content author, 13 you have to choose some authoring software for 14 the -- for the multimedia. 15 I talked about multi -- authoring 16 software for web pages. 17 You also need authoring software for 18 the video stream or for the audio stream, and 19 these are linked to the media player. 20 And the concern or the FUD was that 21 media players and media servers will be linked 22 together and that will -- our media player will 23 be everywhere and Real Players will not. 24 Q. How about vaporware, sir? 25 A. Vaporware again, not so much of a -- 7065 1 an issue in the media -- in the media player 2 technology. 3 Q. How about information access and 4 disclosure, Mr. Alepin? 5 A. This has two important elements to it, 6 both of which Microsoft used, the first of 7 which was did the media player from 8 RealNetworks get all of the interface 9 information that would permit it to offer a 10 media player that was the -- the same quality 11 as a media player -- as Microsoft's media 12 player. 13 When RealNetworks requested this 14 interface information, these application 15 programming interfaces, they did not get it and 16 did not get it in a timely manner. 17 The second one here -- actually, I'll 18 save it to put it in -- 19 Q. Relates to -- 20 A. It's kind of in both categories, 21 but -- 22 Q. How does it relate to incompatibility, 23 Mr. Alepin? 24 A. Well, the media player can appear -- 25 under certain circumstances when the user is 7066 1 using, let's say, a browser, and so you go to a 2 website and the website has content that is 3 being streamed through that web page, 4 Microsoft's media player was able to be 5 compatible with the Internet Explorer and to 6 stream that media seamlessly for the user, 7 whereas RealNetworks was not able to stream 8 that media. 9 Q. Okay. How about bundling and tying, 10 sir? 11 A. Bundling and tying. Of course, this 12 gets a check. 13 Microsoft media player was initially 14 bundled and then technologically tied to the 15 Windows operating system, and users and third 16 parties could not as a technical matter remove 17 it, and as a licensing matter were prevented 18 from authoring it, as well; removing it. 19 Q. I kept you out of the other column 20 there in relation to all those categories. 21 Do you need some water, sir? 22 A. Excuse me. 23 Q. Is there something else or anything 24 else that you wanted to relate to the jury that 25 would fall in other categories for any of those 7067 1 general topics, DR-DOS, OS/2, browser Netscape, 2 Java, or media players? 3 A. Yes. Just to say that there were 4 provisions here that -- license provisions that 5 worked to prevent DR-DOS from being able to be 6 installed on personal computers. 7 From computer manufacturers similarly, 8 and I've discussed this earlier, the provisions 9 about boot-up sequence and about altering the 10 size of icons and things like that, all of 11 those worked to reduce the opportunities for 12 third-party software like Netscape Navigator or 13 Real Player's media player to connect and 14 contact the user and draw attention to them 15 themselves. 16 So these contract provisions had a 17 role or were part of the series of steps that 18 Microsoft took to -- towards these various 19 products and technologies. 20 Q. Okay. Sir, are you finished with that 21 chart? 22 A. I am, yes, finished with that. 23 Q. You also had drawn at the break 24 another diagram to help you -- 25 MR. HOLLEY: Your Honor, please, don't 7068 1 let this man erase this. Okay? 2 THE WITNESS: I'm sorry I'm erasing. 3 MR. HOLLEY: Your Honor, I'd like to 4 move to strike all of this testimony and ask 5 that this photograph -- a photograph of this 6 chart be taken and be available as an exhibit 7 for identification. 8 THE COURT: How do you propose to 9 photograph it? 10 MR. HOLLEY: I think I can do it on my 11 telephone, Your Honor, but I just -- I don't 12 want them to erase right now. 13 THE COURT: Do not erase it. 14 Q. Do not erase anything. 15 There was another diagram that you did 16 at the break to help describe your opinions; 17 right? 18 A. I did, yes. 19 Q. Without erasing anything, if we could 20 just move that chart back or either -- maybe we 21 can just move the other chart forward. 22 (An off-the-record discussion was 23 held.) 24 THE COURT: Mr. Holley, I forgot to 25 rule on the other part of your motion to 7069 1 strike. It's denied. 2 Q. Mr. Alepin, please describe for the 3 jury what this represents. 4 A. This is a -- sort of the second 5 element of my conclusions here, and that is -- 6 that has to do with information disclosure and 7 information access and the differences in how 8 Microsoft's disclosure practices affect 9 companies who are trying to develop software. 10 So we start here with information 11 about Microsoft -- the Windows platform, and 12 the Windows platform includes additional pieces 13 that Microsoft has tried to attach over time, 14 including, for example, the Internet Explorer, 15 middleware. 16 And if you look at Microsoft 17 applications generally, and the office 18 productivity applications in particular, by 19 those I mean Microsoft Word and Microsoft Excel 20 and Microsoft PowerPoint, Outlook, Microsoft 21 has provided over time significantly better 22 access to the information that they need to 23 develop applications that will be more 24 technically capable in the market, in the -- 25 for sale when compared with other parties' 7070 1 products. 2 Q. Are the arrows interfaces? 3 A. The arrows are interfaces and they -- 4 what I've tried to do here graphically, and 5 this is rather primitive, but I've tried to 6 make it that there are -- there is more 7 information and that information is better in 8 quality. 9 It is better in timeliness and it is 10 better in completeness than the information 11 that's available to third-party application 12 software developers or independent software 13 developers. 14 Q. And the applications in the Microsoft 15 applications include Word, Excel, PowerPoint? 16 A. That's correct, and et cetera. 17 Q. All part of Office? 18 A. Those are part of Office, but 19 Microsoft also provides other software in the 20 -- that runs on the Windows platform for 21 personal computers, including software such as 22 -- excuse me -- Share Point and in the context 23 of businesses and so there's -- there are other 24 applications software for personal computers 25 that Microsoft makes. 7071 1 Q. And then the other category next to 2 Microsoft applications is what? 3 A. This is noncompeting applications. 4 Q. What does that mean? 5 A. Well, this was simply shorthand for 6 saying their word processor software, other 7 spreadsheet software, other PowerPoint 8 software. 9 If -- it was intended to identify 10 software from companies -- independent software 11 vendors that did not have a -- an analog in the 12 Microsoft product portfolio. 13 So word processors obviously have an 14 analog. Microsoft Word spreadsheets have an 15 analog. So I was trying to get all -- none of 16 those products from third parties into this 17 category. 18 Q. Okay. And they have two arrows. What 19 are you attempting to show with the two arrows, 20 sir? 21 A. Well, this is intended to indicate 22 that the amount of information, the quality, 23 timeliness and completeness of the information 24 is less than the information that is provided 25 to Microsoft's own application developers. 7072 1 Q. And then to the right of that you have 2 another category, sir. What is that? 3 A. That is actually comprised of two 4 pieces. One is competing application software. 5 Q. Such as? 6 A. Such as Lotus 1-2-3, which is a 7 competing applications software package or 8 WordPerfect, which is a competing software 9 application packet -- 10 Q. And there's one arrow there. What's 11 that supposed to designate? 12 A. That's supposed to designate that the 13 information that Microsoft provides to those 14 developers has been less complete, less timely, 15 and of a lesser quality than that provided to 16 noncompeting applications vendors and to its 17 own -- and even -- and less than what it 18 provides to its own vendors. 19 Q. And then below that you have another 20 category. What is that, sir? 21 A. And that's the competing middleware 22 and operating system software, which similarly 23 receive less quality, less complete and less 24 timely information. 25 Q. Okay. Can you give an example of that 7073 1 middleware? 2 A. That middleware would include, for 3 example, the Netscape Navigator or the Real 4 Player media player. 5 Q. Okay. And what about operating 6 systems? 7 A. Well, it would -- there are not a lot 8 of operating systems out there. 9 Q. Okay. Are there any left? 10 A. There is Linux, the Linux operating 11 system. 12 Q. And if I understand you, the third 13 category, competing applications, would include 14 like WordPerfect; right? 15 A. That's correct. 16 Q. Okay. 17 MR. LAMB: I don't have any further 18 questions. Thank you, sir. You can resume 19 your seat. 20 I'm sure you'll be subject to 21 cross-examination at this time. 22 THE COURT: Not today. Tomorrow, 23 though. It's 3 o'clock. 24 Remember the admonition previously 25 given. See you at 8:30. 7074 1 Please leave your notebooks here. 2 Drive safely. 3 (The following record was made out of 4 the presence of the jury at 2:58 p.m.) 5 THE COURT: Ten-minute break. Then I 6 think we have some things, according to 7 Mr. Tulchin's letter, that we're going to take 8 up. 9 MR. TULCHIN: Your Honor, yes. I 10 think Mr. Tuggy and Mr. Cashman have items to 11 discuss with the Court, if it's convenient for 12 the Court today. 13 THE COURT: Sure. 14 Let's take a ten-minute break if 15 that's all right. 16 (A recess was taken.) 17 (The following record was made out of 18 the presence of the jury at 3:10 p.m.) 19 THE COURT: Hello again. 20 MR. CASHMAN: Good afternoon, Your 21 Honor. 22 THE COURT: And we're discussing 23 Ms. Harlan? 24 MR. CASHMAN: That is correct, Your 25 Honor. Mr. Gralewski is going to handle Ms. 7075 1 Harlan. 2 MR. GRALEWSKI: Good afternoon, Your 3 Honor. 4 THE COURT: Good afternoon, sir. 5 MR. GRALEWSKI: Your Honor, we've 6 handed up a rulings chart for Ms. Harlan that 7 the parties have agreed to. 8 As a result of continued meet and 9 confer, we again, I think, did a good job in 10 limiting the amount of appeals to Your Honor. 11 There are approximately about ten 12 different blocks of testimony to discuss with 13 you this afternoon. 14 THE COURT: Okay. 15 MR. GRALEWSKI: We've also provided 16 you with a copy of the highlighted transcript, 17 and I believe Ms. Bradley has provided you with 18 a hearing memo that Microsoft filed several 19 weeks ago. 20 MS. BRADLEY: I actually haven't 21 handed that up yet. I can do so now if you'd 22 like. 23 THE COURT: Thank you. 24 MR. GRALEWSKI: Just briefly, Your 25 Honor, some background that I believe will help 7076 1 in the discussion today. 2 I'd like to tell you who Ms. Harlan 3 was and what her responsibilities were and what 4 the context of her deposition was that we're 5 here discussing today. 6 THE COURT: Is she deceased? 7 MR. GRALEWSKI: No. 8 THE COURT: You said who she was. I 9 thought a tragedy happened. 10 MR. GRALEWSKI: Well, she was because 11 she's no longer -- she was counsel -- 12 THE COURT: Oh, okay. 13 MR. GRALEWSKI: -- for DRI back in the 14 early '90s. She reported to Dick Williams, who 15 Your Honor will recall testified via videotaped 16 deposition right before the holiday break, and 17 then after the merger with Novell, she 18 continued on until, I believe, 1993, and at 19 that time she reported to David Bradford, who 20 will testify here sometime, I believe, in 21 January, later January, maybe early February, 22 I'm not exactly sure. 23 While she was at DRI, she was on what 24 DRI called the executive committee and the 25 pricing committee, and there may have been 7077 1 other committees that she was on. 2 On the pricing committee she was 3 responsible for dealing with launching DRI's 4 products into the marketplace. She was 5 knowledgeable about those aspects of DRI's 6 business. 7 Like many in-house counsel, Ms. Harlan 8 was not solely responsible for legal matters, 9 but she was responsible for a mixed bag of 10 legal and business issues. 11 She was deposed in the Caldera case by 12 Microsoft. Certainly Caldera's lawyers asked 13 her questions after Microsoft asked her 14 questions, but the deposition starts with 15 Microsoft asking her questions. 16 A couple overarching issues before we 17 go one by one through the designations. 18 A number of objections that repeatedly 19 occur in this deposition are Microsoft's 20 nonresponsive objections, and what I wanted to 21 do before we go one by one is to articulate 22 what we believe the right legal approach is 23 with respect to this objection, Your Honor. 24 There isn't a lot of case law, at 25 least we didn't find a lot of case law in Iowa. 7078 1 We found some cases in other jurisdictions, 2 certainly some state court cases and a few 3 federal cases. 4 But there is, I believe, a very 5 applicable reference in Wigmore On Evidence. 6 This is from the third edition, which I believe 7 is from the early '70s, but it didn't change 8 when it was updated the last time. 9 And what Wigmore says about this 10 nonresponsive beyond the scope objection is the 11 following: Where the witness either in a 12 deposition or on the stand goes beyond the 13 scope of the question and makes an answer not 14 responsive, there is nothing per se wrong. 15 If the answer includes irrelevant 16 facts, they may be struck and the jury directed 17 to ignore them. 18 If it furnishes relevant facts, then 19 they are, nonetheless, admissible merely 20 because they were not specifically asked for. 21 So what I believe that means, Your 22 Honor, is we'll get into this, but there are 23 five or six different examples in these 24 designations where the parties disagree on 25 whether Ms. Harlan is attempting to answer the 7079 1 question or whether she's simply endeavoring to 2 make a speech. 3 We believe that in these instances she 4 is trying to answer the question fully, and 5 we'll explain that. 6 However, and I think this is the 7 critical point, Your Honor is able to simply 8 allow the testimony if the testimony that she 9 gives is otherwise relevant to the case, and I 10 believe you'll see that the testimony is 11 absolutely relevant to the case as we go on. 12 The other overarching issue that we'll 13 see a number of times, Your Honor, is something 14 that we spoke a lot about with Mr. Speakman 15 again before the break, and that was the issue 16 of what happens when your information or 17 knowledge is gained from interactions you have 18 with people. 19 In that argument, Your Honor may 20 recall that we discussed three cases. One was 21 the Mattingly case, one was the Grayson case 22 and one was the Kehoe case. I know that the 23 Court has entertained a lot of argument. 24 Basically what those cases said, Your 25 Honor, is testimony that reflects what the 7080 1 witness herself observed, thought, or stated is 2 not hearsay, and if you make summaries of your 3 own opinions based on interactions with people, 4 that's not hearsay. 5 Subsequent to the Speakman argument, 6 we did some additional research and we found 7 another case on point. 8 This was a case which has one of my 9 favorite quotes from the entire trial so far by 10 Judge Posner, who I don't often quote in 11 argument, but this is what he has to say on 12 this topic that will again reoccur throughout 13 this argument. 14 All perception is inferential and most 15 knowledge social. 16 Since Kant, we have known that there 17 is no unmediated contact between nature and 18 thought. 19 Knowledge acquired through others may 20 still be personal knowledge within the meaning 21 of Federal Rule of Evidence 602 rather than 22 hearsay, which is repetition of a statement 23 made by someone else, a statement offered on 24 the authority of the out-of-court declarant and 25 not vouched for as the truth by the actual 7081 1 witness. 2 And again, we'll see this played out 3 as we get into the testimony. 4 With those two issues discussed, I 5 believe that will make my argument more 6 efficient as we go through. 7 The first designation is 6419 through 8 6517, and this is a designation that Microsoft 9 has objected to on nonresponsiveness grounds. 10 What is occurring in this block of 11 testimony, Your Honor, is -- we need to back up 12 first a little bit, a page or two beforehand. 13 After being asked if Ms. Harlan would 14 have objected to DRI's using proprietary 15 Microsoft information if DRI came to possess 16 it, Ms. Harlan answers the question by 17 explaining that a significant amount of 18 information about Microsoft's products was 19 already available in the marketplace. 20 Plaintiffs believe, Your Honor, that 21 this testimony is absolutely relevant to the 22 case. So under the Wigmore analysis, it would 23 be admissible. 24 But to address the unresponsiveness 25 objection specifically and to demonstrate that 7082 1 it is directly responsive to the question, the 2 answer that she gives is ultimately in the 3 final sentence or two of her answer where she 4 says, so it would surprise me not at all if DRI 5 had information from a source other than 6 Microsoft that did not have any obligation of 7 confidentiality, et cetera. 8 And to take that portion of the answer 9 out of context and cut the other portion out 10 and to cut up the answer would be, I would 11 submit, misleading and unfair to the Plaintiffs 12 because to answer the examining lawyer's 13 question fully, she has to communicate that 14 information that might appear to be 15 proprietary. 16 In other words, the premise that the 17 examining attorney is trying to set up is that 18 well, what happens if you get an internal 19 Microsoft memorandum? You know, would it be 20 appropriate to act on information contained in 21 that memorandum? 22 Basically through her answer, Ms. 23 Harlan says it was Microsoft's practice to 24 disseminate and leak, if you will, a bunch of 25 information about its products to the 7083 1 marketplace. 2 So what she's trying to do in her 3 answer is explain that you have to look at the 4 context of what the information is and how it's 5 available and whether it's available to the 6 marketplace or not. 7 And so, Your Honor, in sum, this 8 answer explains why DRI might have certain 9 information and use it without objection, which 10 is what the question is getting at. 11 THE COURT: And the Special Master 12 overruled the objection; correct? 13 MR. GRALEWSKI: Special Master 14 sustained the objection. 15 THE COURT: It says overruled here. 16 MS. BRADLEY: I believe this is 17 Microsoft's only appeal, Your Honor, and it was 18 overruled by the Special Master. 19 MR. GRALEWSKI: Correct. I stand 20 corrected, Your Honor. That's right. I 21 usually am on the defensive in these. 22 MS. BRADLEY: Not this time. 23 THE COURT: Your objection was 24 overruled? 25 MS. BRADLEY: Yes, Your Honor. 7084 1 THE COURT: You're going to tell me 2 why it shouldn't have been? 3 MS. BRADLEY: I'd like to. 4 THE COURT: Go ahead. 5 MS. BRADLEY: Your Honor, if I may, 6 I'd like to start with a little bit of 7 background about Ms. Harlan. Mr. Gralewski 8 provided most of it. 9 It's important to remember, 10 particularly when looking at the numerous 11 instances of Ms. Harlan's nonresponsive answers 12 throughout the deposition, to recall that this 13 was -- this is counsel for DRI. 14 A major portion of her job and 15 something that she repeats again and again 16 throughout the deposition testimony was 17 gathering information against Microsoft in an 18 effort to build a legal case against Microsoft. 19 She did that not only during her work 20 for the company, but also during this year that 21 her deposition was taken in 1998. 22 Years after she'd left the company, 23 Ms. Harlan was retained as a legal consultant 24 in the Caldera case. 25 And so, you know, to indicate that 7085 1 somehow really Ms. Harlan was just involved in 2 business matters and that her legal expertise 3 sort of overlapped with that is not the whole 4 story. 5 A large part of Ms. Harlan's job, both 6 during her work for DRI and then later her 7 engagement as an independent consultant in the 8 Caldera case, was making a case against 9 Microsoft. 10 And we see that she attempts to do 11 that again and again throughout this testimony. 12 And the first example being here at page 64. 13 The thing that Microsoft has 14 really endeavored to do because so many of 15 Ms. Harlan's answers were nonresponsive, at 16 least in part, was to narrowly tailor its 17 objections, to object only to the portions of 18 the testimony where Ms. Harlan has gone far 19 beyond what the questioner was eliciting and 20 where it really is apparent that she has an 21 agenda and she is determined to get that out, 22 regardless of the pending question. 23 And here's an example of that. 24 Microsoft has not objected to the 25 attorney's question. Nor has it objected to 7086 1 the first couple lines of the answer where it 2 appears that Ms. Harlan makes an attempt to 3 answer the question. 4 Where she goes on to make statements 5 that are really impossible to tie to the 6 question that's pending, that's where Microsoft 7 needs to object. 8 For Plaintiffs to argue that if the 9 information is somehow relevant that it's not 10 objectionable is one that, frankly, is without 11 support in Iowa law, and I think Plaintiffs 12 admitted as much, but it also just doesn't make 13 any sense. 14 It would make every witnesses' 15 testimony completely unmanageable. A witness 16 would be able to essentially make a monolog of 17 arguably relevant testimony, and there would be 18 no way to control or keep out that testimony, 19 and that can't be the standard. 20 MR. GRALEWSKI: Just briefly, may I, 21 Your Honor, respond? 22 THE COURT: Go ahead. 23 MR. GRALEWSKI: Just on the legal 24 points, I will note that in the hearing 25 memorandum that Microsoft handed up, they 7087 1 address this nonresponsive issue on pages 9 2 through 12 of their brief, and in not one 3 instance do they cite any case law, treatise, 4 or otherwise. 5 So it is simply Microsoft's naked 6 assertion that the testimony if not responsive 7 should be struck. 8 What we've done, Your Honor, is have 9 provided citation to the Wigmore treatise. 10 I would note, Your Honor, that in the 11 Wigmore treatise, on this point an Eighth 12 Circuit case is cited from 1936. 13 But, nonetheless, the Parente, 14 P-a-r-e-n-t-e, versus United States case, 82 15 F. 2d 722, Eighth Circuit 1936, would certainly 16 be a case that Your Honor could look to in an 17 absence of Iowa State Court law to find that 18 relevant testimony is appropriate to address 19 Ms. Bradley's sky is falling argument. 20 The recourse that the parties and the 21 Court has is to strike and not permit speeches 22 or testimony that is entirely irrelevant to the 23 case, but so long as that is relevant to the 24 case, Wigmore, this Eighth Circuit case and a 25 number of other cases say it should be 7088 1 permitted. 2 THE COURT: Anything else on this one? 3 MS. BRADLEY: No, Your Honor. 4 THE COURT: Let's move to the next 5 one. 6 MR. GRALEWSKI: The next one, Your 7 Honor, is on your rulings chart the second and 8 third boxes, or I should say the second and 9 third rows we should look at together. 10 Just for the record, I'll note that 11 this next appeal concerns 110, 5 to 10; 110, 12 21; to 111, 9; and 111, 18 through 113, 2. 13 And let me explain that you'll see 14 that 111, 18 through 113, 2, Your Honor, is 15 identified in both rows. 16 The other citations in the second row, 17 basically what's going on is a document is 18 introduced into evidence and then questions 19 follow that introduction of the document. 20 The hearsay objection to the testimony 21 at 111, 18 through 113, 2 was submitted to the 22 Special Master, and that objection was 23 sustained. 24 I'm going to argue that it should be 25 overruled and that our appeal should be 7089 1 granted. 2 The other designations on 110 and 3 through 111 at line 9, those are objections 4 that Microsoft has asserted subsequent to the 5 Special Master process. They haven't been 6 submitted to the Special Master. Those are for 7 Your Honor's consideration in the first 8 instance. 9 Let me briefly explain what is going 10 on here with respect to this block of 11 testimony. 12 This block of testimony concerns 13 testimony similar to what Your Honor may recall 14 from the Dick Williams testimony about a 15 back-order program that Microsoft initiated to 16 presell MS-DOS 5.0, and the testimony here also 17 concerns the effect that this back-order 18 program had on DR-DOS and their ability to 19 compete in the marketplace. 20 Also, at the end of the designation, 21 Ms. Harlan testifies about how a retail store 22 called Egghead that we've talked about in the 23 past was not selling DR-DOS. 24 Now, let me address each of the 25 objections in turn. 7090 1 110, 5 to 10, Your Honor, we believe 2 stands on its own and is not dependent on the 3 document. 4 Now, I will say that while Plaintiffs 5 don't necessarily agree that in all instances 6 it's improper to ask the witness about a 7 document that is otherwise inadmissible, we 8 don't believe that is happening here. 9 For example, I know it's only two 10 lines of testimony, but we're not pursuing 109, 11 25 through 110, 2, where the document gets 12 introduced into evidence. We believe the 13 testimony at 110, 5 to 10 stands on its own and 14 doesn't implicate the document. 15 All that's asked here is -- and it 16 could be asked without the document at all -- 17 do you recall working with Mr. Sobin to prepare 18 certain answers to FTC questions about the 19 subject matter of what happened in the retail 20 channel when MS-DOS 5.0 was launched, and she 21 answers that question without referring to the 22 document. 23 Now, the next question at 110, 21 24 through 111, 9 certainly does reference the 25 document. 7091 1 That question, Your Honor, is not 2 offered for the truth, but to understand and to 3 provide foundation and context for the next 4 question that's at issue, which is at 111, 18 5 through 21, and then the answer. 6 What the examining lawyer does at the 7 bottom of 110 and the top of 111 is quotes from 8 the document at issue, and then there's a 9 subsequent answer, and then the question says, 10 assuming that you saw these answers, do you 11 recall what you had reference to when you 12 referred to, quote, Microsoft's back-order 13 scheme or, quote, back-order program? 14 So those quotations there are the 15 quotations from the document, and to understand 16 the question, we believe it's important to have 17 the testimony at 110 and 111. 18 What follows, though, Your Honor, the 19 answer, which is the most important part of 20 this designation, which is from 111, 22 through 21 113, 2 is Ms. Harlan's own opinion. 22 It's not an answer where she's reading 23 from the document or quoting from the document. 24 The examining lawyer, Microsoft's 25 lawyer, certainly uses words from an otherwise 7092 1 hearsay document, but you can imagine the 2 mischief that would be created if every time an 3 examining lawyer asked a question if they 4 simply used portions of an inadmissible 5 document. You could otherwise cause responsive 6 answers to be struck or inadmissible, and that 7 shouldn't be the law. 8 What happens here with respect to the 9 hearsay objections -- so now we're at 111, 22 10 through 113, 2. The first two paragraphs 11 concern the back-order program. 12 And they simply recount facts. 13 For example, Ms. Harlan, based on her 14 experience in the industry, states that usually 15 software distributors will not accept orders 16 that they can't fill that day. 17 And the testimony also recounts 18 Ms. Harlan's personal knowledge about the 19 computer industry generally and the back-order 20 program specifically. 21 What's significant here, Your Honor, 22 is that she's not repeating any out-of-court 23 statements here in testimony like this that 24 only reflects what the witness herself 25 observed, thought, or stated is not hearsay 7093 1 based on the cases that we talked about at the 2 beginning of this hearing and back when we were 3 talking about Mr. Speakman's testimony. 4 Specifically in this instance the 5 Mattingly case, which is the Iowa case from 6 1974. 7 The final paragraph in this answer is 8 the paragraph where she talks about Egghead not 9 offering DR-DOS 5.0 for sale. And again this 10 paragraph should be admitted for all the same 11 reasons. 12 There are no -- there are absolutely 13 no statements here that Ms. Harlan repeats. 14 To the extent Microsoft attempts to 15 suggest or Your Honor is curious about a 16 foundation issue, there is no pending 17 foundation objection. 18 The only issue before the Court on 19 this paragraph other than the testimony based 20 on inadmissible document is the hearsay issue, 21 and as I've stated, there are no statements 22 repeated. 23 Thank you. 24 THE COURT: Ms. Bradley. 25 MS. BRADLEY: Your Honor, if I may, 7094 1 I'd like to hand up a document about which 2 Ms. Harlan testifies here. 3 THE COURT: Thank you. 4 MS. BRADLEY: There's a sustained 5 hearsay foundation and improper opinion 6 objection to this document, which those were 7 all sustained by the Special Master. And 8 Plaintiffs haven't appealed those rulings to 9 the document. 10 Plaintiffs have conceded that the 11 document itself is inadmissible, as they 12 should, because the document consists of an 13 outline of answers to FTC questions. 14 And as Ms. Harlan testifies in her 15 deposition, she assisted in the preparation of 16 these answers to questions posed by the FTC. 17 The document is hearsay. Ms. Harlan's 18 testimony about the document is hearsay. 19 Reading the document into the record 20 does not make it any less hearsay. Testimony 21 about the document is inadmissible. 22 There are two grounds for exclusion of 23 the testimony. The first that it's about this 24 -- it all centers on this inadmissible 25 document, and the second, that the subject 7095 1 matter of the testimony itself is hearsay 2 because it consists of what Ms. Harlan has 3 learned during the course of business 4 negotiations. 5 I've addressed the inadmissibility of 6 the document and of the testimony about the 7 document. 8 Plaintiffs seek to essentially get the 9 document into the record by having the document 10 read into the record from the deposition. 11 That's plainly inappropriate, 12 particularly when the document itself consists 13 of such rank hearsay, not to mention improper 14 opinion. 15 THE COURT: What is -- are you saying 16 that from line 23 on page 111 to line 2 on page 17 113 she's actually quoting from a document? 18 MS. BRADLEY: There Ms. Harlan is 19 speaking in general terms about what appears in 20 the document. 21 There is an independent ground for 22 exclusion of that testimony in particular 23 because it's hearsay. 24 We object to the entire line of 25 questioning because it's about the document, 7096 1 but in particular, the lines that you asked 2 about are also inadmissible because they're 3 hearsay. 4 Had the questioning attorney asked 5 the question in some other way that was 6 independent of the document, it's conceivable 7 that Ms. Harlan could have given an answer that 8 didn't implicate the document itself. 9 Here, because of the way the question 10 is asked, there's really no way to sort of 11 extricate that testimony from the testimony 12 about the document itself. 13 THE COURT: Well, it appears to me, 14 and correct me if I'm wrong, but the question 15 seems to say that assuming -- I'll read the 16 question first. 17 Question: Assuming that you saw these 18 answers, do you recall what you had reference 19 to when you referred to, quote, MS's back-order 20 scheme or, quote, back-orders program? 21 Now, she doesn't say what she has -- 22 where she got the information she had reference 23 to. 24 It appears from the answer that she's 25 not quoting from the document itself, but 7097 1 merely giving a recitation of what she recalls 2 or remembers that she was referring to about 3 the back order scheme or back-order program 4 just in general. 5 How is that hearsay? 6 MS. BRADLEY: I would agree that her 7 answer doesn't necessarily implicate the 8 document itself. The answer, though, is based 9 entirely on information that she has learned 10 during hearsay conversations with distributors. 11 And if you'll look at the testimony 12 itself, she speaks about the reports from 13 distributors that Microsoft is, quote, 14 threatening distributors unless they committed 15 to certain business terms and that Microsoft 16 used intimidation tactics against distributors, 17 and this is classically the type of -- these 18 are the types of conversations that are purely 19 inadmissible hearsay because they are not 20 trustworthy, and this is the ground we've 21 covered many times previously with reference to 22 other witnesses, and that is that when 23 distributors are negotiating with DRI over 24 whether or not they plan to distribute DRI's 25 products, that those distributors have every 7098 1 motivation to not tell the whole truth. 2 The fact that the distributors may 3 have reported to Ms. Harlan that they were 4 suffering from threats or intimidation or were 5 nervous about such threats and intimidation 6 from Microsoft does not make that true. 7 There are just too many levels of 8 untrustworthy reporting here, both from the 9 distributors themselves to Ms. Harlan, if, in 10 fact, Ms. Harlan heard it directly from the 11 distributors, which is not something that's 12 established in the testimony, and then 13 Ms. Harlan's report in this FTC questionnaire, 14 or even independently of the FTC questionnaire, 15 is also untrustworthy because as we know, 16 Ms. Harlan had an agenda of her own here. 17 THE COURT: What if the question was 18 done differently, just saying something to the 19 effect of can you tell us what you know about 20 the -- any threats or inducements that 21 Microsoft did with distributors and she gave 22 the same answer? 23 MS. BRADLEY: Your Honor, if there 24 were any indication in her answer that her 25 knowledge of the -- of these -- the back-order 7099 1 scheme or the back-order program or any threats 2 or intimidation at all came from somewhere else 3 besides the distributors report to her, there 4 may be some way that similar information could 5 come into the record. 6 The way it's stated here, we have no 7 indication that this is a result of something 8 that Ms. Harlan simply observed, thought, or 9 stated. 10 We have every indication that these 11 are reports of what she's heard from 12 distributors who, as I've said, had every 13 reason to dissemble. 14 THE COURT: Looking at the answer from 15 line 23 and page 11 -- page 111 onward, I'm 16 having trouble finding out where she got 17 information from distributors or other people. 18 One could equally say that this is something 19 that she discovered on her own investigation. 20 Show me where you think it's coming 21 from someone else. 22 MS. BRADLEY: Well, Your Honor, a 23 couple places it seems particularly clear that 24 these -- this would most likely have come from 25 reports straight from distributors, one of 7100 1 which was that Microsoft, quote, induced 2 Egghead to make DR-DOS 5.0 unavailable in 3 Egghead's stores. 4 The only thing that Ms. Harlan would 5 have independent access to would be the fact of 6 Egghead's no longer distributing DR-DOS. 7 The only way for Ms. Harlan to learn 8 about the reasons for that happening or the 9 motivation for Egghead's no longer distributing 10 DR-DOS would be representations made to her by 11 Egghead software. 12 And above that, you'll see that 13 Ms. Harlan states, quote, they were also 14 threatening distributors that unless they 15 committed to certain quantities of MS-DOS or 16 unless they ordered certain quantities, then, 17 gee, they just might not get any at all which 18 intimidated distributors. 19 It's hard to imagine that any 20 observation, thought, or statement by 21 Ms. Harlan could be the only source of such 22 information. 23 THE COURT: Okay. Anything else on 24 this? Ms. Bradley? 25 MS. BRADLEY: No, Your Honor. 7101 1 THE COURT: Any further response? 2 MR. GRALEWSKI: Very quickly, Your 3 Honor. 4 What's happening here, Your Honor, is 5 that the statements by the out-of-court 6 declarants, if there are any, are not what's 7 being offered. 8 This is really a situation of 9 knowledge, and she has that knowledge. It's 10 not about the out-of-court statements. As 11 Judge Posner has said not -- let's assume for a 12 second that even if she did acquire it from 13 others, Judge Posner has said that knowledge 14 acquired through others may still be personal 15 knowledge within the meaning of Federal Rule of 16 Evidence 602 rather than hearsay. 17 Your Honor has grappled with this 18 issue with Mr. Speakman. This isn't the first 19 time this has come up. 20 And Your Honor affirmed -- I should 21 say granted the appeals to the Plaintiffs in a 22 remarkably similar situation. 23 Just I'll note for the record that 24 Plaintiffs in the Speakman argument appealed 25 65, 20, through 66, 3, and 66, 4, through 67, 7102 1 5. 2 Identical arguments were made there 3 with respect to reliability and that 4 Mr. Speakman was simply repeating what he 5 learned from others. 6 For example, the testimony there that 7 this Court permitted was -- and I won't quote 8 it all. Your Honor can look at it if Your 9 Honor wants to. 10 But, for example, starting at page 65, 11 line 20, this is Mr. Speakman talking, but the 12 difference was, I always got the distinct 13 impression dealing with the OEM customers that 14 it wasn't so much that, you know, it was 15 confidential, it was more they were absolutely, 16 you know, terrified of what would happen to 17 their business if they didn't go along exactly 18 with the way Microsoft wanted them to behave. 19 So there, Your Honor, we have a 20 crystal-clear example of the application of the 21 Mattingly case and the Grayson case and this 22 new case from Judge Posner that Ms. Harlan's 23 statements about what she knew are not hearsay. 24 I think that Ms. Bradley made two 25 important statements during her argument. 7103 1 One is that I believe, and she'll 2 correct me if I'm wrong, but I believe she 3 suggested that the main part of this 4 designation that we're talking about is not 5 directly tied to the document, and I don't 6 think it is. 7 I think that, as I said, the answer -- 8 the answer stands on its own. It's 9 Ms. Harlan's own statements independent of the 10 document. 11 The second issue is, Your Honor, that 12 Ms. Bradley said that it is not in the 13 testimony that she got this information from 14 distributors. 15 Now, as I've just argued with Speakman 16 and citing the Posner case, even if she did get 17 the information from distributors or customers, 18 that wouldn't necessarily exclude the 19 testimony. 20 But even going back a step, there's no 21 concrete facts supporting the argument, the 22 argument that they make that this is 23 information coming from some other source as 24 opposed to an independent investigation or 25 things of that nature. 7104 1 So with that we think that this is 2 admissible testimony. 3 THE COURT: Anything else on this 4 portion? 5 MS. BRADLEY: Two very quick points, 6 Your Honor. 7 First, I would suggest that the 8 Speakman testimony which you permitted is 9 distinguishable from the testimony here. 10 In the Speakman testimony, he 11 testified that he had the impression that they 12 were terrified. That's an observation that he 13 could have made independently of anything 14 stated. Here that's not the case. 15 And second, I would just like to note 16 for the record that in the Posner case, Judge 17 Posner had independent grounds for admitting 18 the testimony there, and that was that it was 19 based on the authority of the out-of-court 20 declarant. 21 Here there's no such suggestion that 22 the out-of-court declarant had some apparent 23 authority to make the statements here. 24 THE COURT: In the case where Judge 25 Posner ruled, did the witness at trial identify 7105 1 specifically the out-of-court declarant by name 2 or attempt to quote? 3 MR. TUGGY: Your Honor, if I may 4 respond because I've reviewed that case pretty 5 carefully. 6 In that case, which is an unpublished 7 opinion, I'm not sure that it's been cited, but 8 in that case Judge Posner dealt with evidence 9 offered in support of a motion for summary 10 judgment. 11 And there were -- there was a variety 12 of evidence, and some of the evidence was 13 evidence where the declarant observed 14 personally activity that occurred and drew 15 conclusions from it. 16 Where the declarant -- and that was 17 admitted. 18 Where the declarant stated on the 19 authority of a third person that something 20 occurred, then that was excluded. 21 So the case involves at least 20 or 30 22 judgment calls made by the Court, admitting 23 some testimony and excluding other testimony, 24 and the line that the Court was drawing in that 25 case was between situations where the declarant 7106 1 personally observed facts. 2 That case involved the laying of cable 3 and whether actions were taken to sabotage 4 cable that had been laid and where an executive 5 would say something to the effect that after we 6 laid the cable, it was sabotaged, where that 7 executive actually observed some cut wires and 8 received reports from those who worked for him 9 about the fact that the job had slowed down, 10 had observed what occurred on the jobsite. 11 Judge Posner said that kind of 12 evidence has foundation and it's not based on 13 hearsay. 14 Where, however, the declarant is 15 basing the statement on the authority of the 16 statement by a third party, whether it's a 17 direct quote by -- of a third-party statement 18 or a reference to what the third party says, 19 then Judge Posner excluded as hearsay. 20 So for example, if a witness says I 21 know this to be true because Mr. Smith told me, 22 that is not personal knowledge. That's a 23 statement of fact based upon what was said by 24 another, based on the authority of the other, 25 the perception and the statement of the other. 7107 1 So the argument here is that 2 Ms. Harlan's statements about what distributors 3 experienced were necessarily based on what the 4 distributors told her. They were not based -- 5 there's no evidence that they were based on her 6 being present and observing conduct by 7 Microsoft relating to those distributors. 8 And there is other testimony that's 9 been designated, for example, at page 115, line 10 7 to 10, where she says in an answer to another 11 question, we were specifically told by the 12 distributors that we should go quiet in terms 13 of advertising because they did not think that 14 we could compete given the resources that we 15 had. 16 Now, we haven't objected to that on 17 hearsay because there's not a statement of 18 fact, but it is evidence of the fact that her 19 information is based on conversations that she 20 did, in fact, have with distributors. 21 THE COURT: So -- 22 MR. CASHMAN: Your Honor, may I just 23 say something quickly because Mr. Tuggy, I 24 believe, has two cases confused? 25 The case that Mr. Gralewski cited 7108 1 provides the statement by Judge Posner which is 2 about when a witness has personal knowledge. 3 It's not -- not really a hearsay case. 4 Mr. Tuggy has that confused with 5 another case, which I'm sure will come up when 6 we argue about Mr. Dixon, in which a case -- 7 it's a Southern District of New York case in 8 which they rely in part on that statement by 9 Judge Posner, and it's a different case. 10 The circumstances that Mr. Tuggy was 11 talking about are in the Southern District of 12 New York case. 13 So I think there's a need for 14 clarification on that point, and I'm sure 15 Mr. Gralewski will take up the specific issues 16 here, but it's really a matter of how a person 17 can derive personal knowledge. 18 It's not a hearsay issue, as Mr. Tuggy 19 seeks to cast it. 20 THE COURT: I just have a question of 21 Mr. Tuggy. 22 So you see a difference, sir, if I 23 look at page 112, line 14, between the phrase 24 they were also threatening distributors and 25 goes on, you see a difference between that and 7109 1 -- I'm sorry, I misstated. 2 You do not see a difference between 3 that and Ms. Harlan saying I was told by 4 distributors that they were being threatened? 5 You see no difference? 6 MR. TUGGY: Where she says I am told 7 by distributors they were being threatened, 8 that is, from my perspective, an easy hearsay 9 call. 10 THE COURT: Okay. You see no 11 difference when she says they were also 12 threatening distributors? You see no 13 difference that's also hearsay? 14 MR. TUGGY: There is a difference in 15 that had she personally observed Microsoft 16 threatening distributors and this statement was 17 based on her observations of that occurring, it 18 would not be hearsay. 19 THE COURT: But there's no statement 20 in here whether she observed it or not. 21 MR. TUGGY: That's -- in this 22 particular set of testimony, that is correct. 23 And the question then becomes whose 24 burden is it to show that, in fact, this was 25 learned from statements by distributors or from 7110 1 her personal observation. 2 And if it's Microsoft's burden, our 3 position is that this deposition taken as a 4 whole, considering her position as in-house 5 counsel and her description in other parts of 6 the deposition like the one I gave you, the 7 fact that they did have conversations with 8 distributors, would lead to the inference that, 9 in fact, this was learned only from statements 10 by distributors, not from personal 11 observations. 12 THE COURT: So you're saying the Court 13 should look at it as a whole, the entire 14 testimony? 15 MR. TUGGY: Correct. 16 THE COURT: Anything else on this one? 17 MR. GRALEWSKI: Just on that 18 particular point, Your Honor. 19 I think the question really is not how 20 she learned the information. Instead, I think 21 the question is what she believed or what her 22 opinion was about the information that she 23 learned. 24 I mean, Ms. Harlan in answering this 25 question could have said the distributors were 7111 1 threatened or the OEMs were threatened, but 2 instead, she essentially owns the statement and 3 it's her opinion, knowledge, and belief that 4 what she's testifying -- what she's testifying 5 about here, they were, I believe that they 6 were. That's the fair reading of the answer. 7 It's similar to where Mr. Speakman 8 talks about his feeling was that the OEMs were 9 scared. 10 Here it's as if Ms. Harlan is saying 11 her feeling is that these distributors were 12 threatened. 13 THE COURT: Very well. 14 Anything else on this before we move 15 on to the next one? 16 MR. GRALEWSKI: No, Your Honor. 17 THE COURT: Page 161, then, line 24? 18 MR. GRALEWSKI: Yes. 19 Here, Your Honor, Ms. Harlan is asked 20 if she knew -- this is a nonresponsive issue. 21 Here, Your Honor, Ms. Harlan is asked 22 if she knew what, if anything, Microsoft said 23 to the press about DR-DOS other than what was 24 in the press that she had already read. 25 There was prior testimony about her 7112 1 reading certain press statements. 2 So specifically here the question is 3 do you have any knowledge about what Microsoft 4 said to the press other than what was in what 5 you read. And she recounts an instance where 6 Bill Gates made positive statements about 7 DR-DOS, and then what subsequently transpires, 8 Your Honor can read it, it's a short 9 designation. 10 The first issue, Your Honor, is that 11 the question specifically asks about what 12 Ms. Harlan knew separate and apart from the 13 press articles. 14 So this is certainly a situation that 15 Microsoft cannot complain that Ms. Harlan is 16 repeating statements she read about in the 17 press. 18 The statements by Mr. Gates are 19 admissions. The testimony about DRI using the 20 statement in advertising is simply a fact that 21 Ms. Harlan is recounting; it's not an 22 out-of-court statement. 23 In the final paragraph of the answer, 24 the witness explains what DRI did. 25 Because the court reporter puts quotes 7113 1 around the words in the final sentence doesn't 2 convert the fact of what they did into hearsay. 3 It doesn't convert its fundamental character. 4 To the extent the Court believes that 5 those statements there are hearsay, the 6 Plaintiffs can appropriately and fairly offer 7 that particular paragraph for the nonhearsay 8 purpose of explaining subsequent conduct, which 9 is that it explains what DRI did after 10 Microsoft complained to DRI. 11 Thank you, Your Honor. 12 THE COURT: Ms. Bradley? 13 MS. BRADLEY: Your Honor, again, there 14 are two independent grounds for excluding this 15 testimony. 16 The testimony is both hearsay and 17 Ms. Harlan's response is nonresponsive. 18 As for the hearsay, while Ms. Harlan 19 repeatedly attempts to evade the question, 20 which is what is the basis for her knowledge of 21 the statements that she's -- about which she's 22 testifying, she ultimately does admit that the 23 only basis of her knowledge of those statements 24 are articles that she's read. 25 If you look down to the bottom of 162, 7114 1 starting at 24, the questioner again asks about 2 the basis of her knowledge of Microsoft's 3 statements, and her response is telling in a 4 number of ways. 5 She answers I don't want to sound 6 flippant, but my knowledge of the continent of 7 Africa is based solely on what I've read and 8 seen on television, but that doesn't mean it 9 doesn't exist. 10 The questioner tries again. My 11 question is, for your statement that Microsoft 12 made statements to the press, do you have any 13 source of knowledge about those statements 14 other than the articles themselves? That is, 15 were you present when it was -- and she 16 answers. 17 Answer: Right now, that's all I 18 recall. 19 She admits that her knowledge of 20 Microsoft's statements come from press reports 21 of those statements. 22 Thus, the declarant here is not 23 Microsoft or Bill Gates, but it is the reporter 24 reporting on those statements. And that's 25 another ground that we've covered before, and 7115 1 you've sustained similar objections. 2 The Special Master sustained the 3 hearsay objection here, and we ask that you do 4 so again for the same reason. 5 Ms. Harlan's only basis of knowledge 6 and her reports come from statements made in 7 press articles. 8 Her answer is also nonresponsive 9 again, because it takes until two pages later 10 in the deposition transcript for Ms. Harlan to 11 actually give even the inkling of an answer 12 about the basis of her knowledge about those 13 statements. 14 THE COURT: Do you think the entire 15 answer -- I'm looking at page 162. What about 16 the portion lines 9 through 13? Why isn't that 17 admissible? 18 MS. BRADLEY: Your Honor, that's 19 inadmissible for the same reason that any 20 number of these posturing letters going back 21 and forth have been held to be inadmissible by 22 Your Honor, and that is that DRI's statement to 23 Microsoft is no business record, is not 24 admissible under any independent grounds. 25 It's simply posturing to Microsoft, 7116 1 and there's no basis for its admission either; 2 Ms. Harlan's report of something that DRI 3 reportedly wrote to Microsoft at some point. 4 THE COURT: Okay. Anything else on 5 this one? 6 MR. GRALEWSKI: I'm sorry, Your Honor, 7 if I may one quick moment. 8 THE COURT: Sure. 9 MR. GRALEWSKI: The portion of the 10 transcript that Ms. Bradley quotes from at page 11 163, which is the continent of Africa answer, 12 and then a few subsequent answers, is 13 addressing a portion of the testimony earlier 14 than the one that's presently at issue. 15 The question at issue at the bottom of 16 161 and the top of 162 is: 17 Question: Do you have any knowledge 18 of what Microsoft said to the press other than 19 what was in the articles you read? 20 And she answers that question about an 21 interview that she was aware of that Mr. Gates 22 gave. 23 So based on the question and based on 24 the answer, Mr. Gates' statements are 25 admissions. 7117 1 And as I said, the next statement 2 about the advertising is simply a fact, and 3 I've made my argument on the final paragraph. 4 THE COURT: The other problem I have 5 is her answer between lines 2 and 8 where she 6 talks about an interview that Mr. Gates gave. 7 There's no indication where she read 8 or saw this interview. She could have seen it 9 -- him talk live on television. She could have 10 been there in a press conference. How do we 11 know that's even hearsay? 12 MS. BRADLEY: Your Honor, if she's not 13 talking about something she read in an article, 14 then her answer is all the more nonresponsive 15 because the pending question was, do you have 16 any knowledge of what Microsoft said in the 17 press other than what was in the article you 18 read? 19 And she goes on to speak about a 20 statement that's -- that was allegedly made by 21 Mr. Gates as it was reported in the press. 22 And with all due respect to 23 Mr. Gralewski, I'm not sure what the following 24 questions would be referring to if not to that 25 testimony immediately prior. 7118 1 And she ultimately does end up at a 2 place where she admits that her only 3 recollection of the source of that -- of her 4 knowledge about those statements is articles 5 that she's read. 6 MR. GRALEWSKI: Not to belabor the 7 point, Your Honor, but I'd like to address that 8 last point. 9 I'll tell the Court what she is -- 10 what those questions, what those subsequent 11 questions refer to, if Your Honor can look at 12 page 159, lines 9 through 15, there Ms. Harlan 13 talks about press releases, things that she 14 read where Microsoft was using that information 15 to harm DRI in some way. 16 And then you go ahead to the bottom of 17 161 -- I guess this is the place where 18 Ms. Bradley and I disagree. 19 I think that the question makes the 20 answer entirely responsive; that last 21 propositional phrase where the examining 22 lawyer, Microsoft's lawyer, says other than 23 what was in the article you read. So he's by 24 the question itself carving that out. 25 And then after she gives the answer, 7119 1 the examining lawyer goes back what I believe 2 to the stuff at 159, 13 to 15 where there she 3 was talking about the press, and he says, do 4 you have any source of knowledge for what you 5 testified a minute ago? 6 So he's not referring to the 7 immediately prior question there. These 8 subsequent questions about Africa and whatnot 9 have to do with the testimony at 159, 9 to 15. 10 THE COURT: Anything else on this one 11 before we move on? 12 Page 198 that's next. 13 through 20. 13 MR. GRALEWSKI: Yes, Your Honor. 14 THE COURT: Okay. 15 MR. GRALEWSKI: Your Honor, this small 16 bit of testimony carries three different 17 objections, a nonresponsive, a foundation, 18 which is really an improper opinion objection, 19 and a prejudicial objection. 20 What's going on here is that 21 Ms. Harlan is asked if she recalls any 22 conversations with Mr. Speakman, who we've 23 talked about, or anyone else, and that's going 24 to be important in a moment. 25 So she's asked if she recalls any 7120 1 conversations with Mr. Speakman or anyone else 2 to determine if Viglen, an OEM, would cooperate 3 with DRI to develop a record of its 4 negotiations with Microsoft. 5 And then answering the question, 6 Ms. Harlan says she did everything she could to 7 get an OEM to cooperate, but it was very 8 difficult. 9 So again the -- under the Wigmore 10 analysis, there's no question that this 11 testimony is relevant to the case, so it should 12 be admissible. 13 But answering Microsoft's contention, 14 Ms. Harlan directly answers the question. The 15 question is, do you recall having any 16 conversations with anyone about creating a 17 record of what Viglen thought or was 18 complaining about, and she says she did her 19 best, she talked to as many people as she 20 could. 21 With respect to the foundation 22 improper opinion objection, Your Honor, that is 23 confined to the phrase illegal behavior, which 24 is at 198, line 16 of her answer. 25 And for purposes of this designation 7121 1 only, Plaintiffs will agree not to play that 2 phrase so long as the rest of the answer is 3 played. 4 And I will note that I made this 5 proposal during the meet and confer. Microsoft 6 certainly is free to argue for exclusion of the 7 entire designation. I just wanted Your Honor 8 to know that this is something that we've 9 attempted to resolve apart from Your Honor's 10 time. 11 Lastly, the prejudice objection is 12 confined to the three lines, 18 to 20, where in 13 answering the question Ms. Harlan says, 14 frankly, my experience at the time was that it 15 was probably easier to get somebody to testify 16 about the Mafia than against Microsoft. 17 Here, this prejudice objection is not 18 well-taken because while I think the parties 19 can admit that this is a harsh analogy, it 20 fairly and quite efficiently conveys the level 21 of fear of Microsoft that Ms. Harlan believed 22 persisted in the marketplace. 23 There's an independent reason why this 24 testimony is admissible. Of course, Your Honor 25 knows that you have to balance the probative 7122 1 value versus the prejudicial effect and the 2 other factors that go along with prejudicial 3 effect. 4 So one highly probative issue in this 5 case is going to be the heavy-handedness that 6 Microsoft exerted and the fear that was 7 perceived in the marketplace to get people to 8 go along with Microsoft's contracts or to get 9 OEMs to do what Microsoft wanted them to do. 10 The independent basis, Your Honor, is 11 that later on in the trial, Plaintiffs will 12 offer the testimony of Marc Andreessen -- he 13 was formerly with Netscape -- and in that 14 testimony, Mr. Andreessen compares a particular 15 meeting that Netscape officials, including 16 himself, had with Microsoft as being -- or as 17 if it was feeling like being a visit from 18 Corleone. 19 And this particular testimony at issue 20 where Ms. Harlan talks about it being difficult 21 to get somebody to offer testimony against 22 Microsoft supports Mr. Andreessen's testimony 23 and vice versa, and it will allow the jury to 24 draw the conclusion independently that it wants 25 to. 7123 1 Taking away one reference undermines 2 the other, and that would be improper to 3 preclude the jury from seeing that this is a 4 reoccurring theme. Independent people at 5 independent companies, probably six or eight 6 years apart, have this similar feeling. 7 So on balance, we believe this 8 particular testimony should be admitted because 9 it's highly probative and outweighs any danger 10 of confusion or misleading of the jury. 11 Certainly there's no undue delay. It 12 will take five seconds or so to read this into 13 the record. 14 Thank you, Your Honor. 15 THE COURT: Thank you. Ms. Bradley? 16 MS. BRADLEY: Your Honor, this is 17 another example of a line of testimony, a very 18 brief one at that, on which there are three 19 independent grounds for exclusion of the 20 testimony, two of which have been sustained by 21 the Special Master, and the third of which is 22 being presented to you for the first time here. 23 Also another example of a place where 24 Microsoft as well made its very best efforts to 25 resolve these objections with the Plaintiffs 7124 1 during our meet and confer and as a result have 2 dramatically narrowed our objection to only two 3 paragraphs of testimony that really are 4 inadmissible under any standard. First, the 5 nonresponsiveness. 6 Microsoft, because it's narrowed its 7 objection, has allowed the question from line 7 8 to 12, do you recall having any conversations 9 with Mr. Speakman or anyone else to see if 10 Viglen would cooperate with DRI to develop or 11 create a record of what Viglen thought or was 12 complaining about what was going on in its 13 negotiations with Microsoft. 14 Microsoft also is not objecting to 15 Ms. Harlan's actual attempt to answer the 16 question at lines 21 to 24 where she answers. 17 Answer: So I didn't remember -- don't 18 remember specific discussions with Tony 19 Speakman, and I don't recall specific 20 discussions with Viglen. 21 I'm sure that I had them if I thought 22 it would be effective. 23 The portions to which Microsoft 24 objects are utterly nonresponsive to the 25 question at hand, which while Mr. Gralewski 7125 1 points out that the questioner asks about 2 conversations with anyone else, the questioner 3 also clearly confines the question to 4 conversations about Viglen. 5 Ms. Harlan's response goes far beyond 6 that to talk about attempting to get anyone she 7 could find to testify about Microsoft's, quote, 8 illegal behavior and the difficulty that she 9 reports encountering in doing so and the manner 10 in which she characterizes that difficulty 11 really is unduly prejudicial. 12 Ms. Harlan makes a very strong and 13 clear point throughout her deposition and 14 throughout many of her responses that she 15 believed that Microsoft was heavy-handed, as 16 Mr. Gralewski characterized it, in working with 17 OEMs and others. 18 That point will be very clear to the 19 jury. 20 Ms. Harlan's perspective on that will 21 come across just fine without the prejudicial 22 statement that Ms. Harlan makes about it being 23 easier to get somebody to testify against the 24 Mafia than against Microsoft. 25 And I will also note that it's hard to 7126 1 imagine that Ms. Harlan ever tried to get 2 somebody to testify against the Mafia. 3 She probably lacks personal knowledge 4 of that matter. 5 THE COURT: There's no objection based 6 on that. 7 MS. BRADLEY: There is a foundation 8 objection, Your Honor, but that wouldn't be the 9 first grounds for objecting to it. 10 THE COURT: I'm teasing. Anything 11 else on this one? 12 MR. GRALEWSKI: Briefly, Your Honor. 13 I understand what Your Honor just 14 said, but just to be clear and to answer what 15 Ms. Bradley just said, the foundations 16 objection, as the rulings chart indicates, is 17 limited to, and in the Special Master process 18 it's clear from the rulings chart, was related 19 to the improper opinion at line 16 of illegal 20 behavior, and I've attempted to make a 21 good-faith proposal to deal with that issue. 22 In terms of the nonresponsiveness, 23 Ms. Bradley thinks that lines 13 to 16 or 17 go 24 too far. 25 What's going on here is that 7127 1 Ms. Harlan is asked if she's done anything to 2 get anybody to testify against Viglen, and she 3 says she's done everything she could to get 4 someone to testify about Microsoft's behavior. 5 It doesn't say that the behavior is 6 any different or it's directed to other OEMs. 7 First of all, the behavior that she's 8 seeking to get testimony about is the same 9 behavior that's directed towards Viglen as to 10 other OEMs, but I think a fair reading of this 11 paragraph, and I know we're looking at each 12 individual word, but there's nothing in there 13 to suggest that she was discounting Viglen and 14 only answering the question about somebody 15 else. To the contrary, it's if anything, 16 includes Viglen and others, which would make 17 the answer responsive. 18 The issue of heavy-handedness is a 19 real issue in this case, Your Honor. 20 Admissible testimony from Speakman as 21 an example is testimony that OEMs felt 22 terrified of what would happen to their 23 business if they didn't go along exactly with 24 the way Microsoft wanted them to behave. 25 Accordingly, as I said, although this 7128 1 is a harsh analogy, it is highly probative of a 2 very important and relevant issue in the case 3 and should be admitted. 4 THE COURT: Anything else on this one? 5 MR. GRALEWSKI: No, Your Honor. 6 THE COURT: Page 201, lines 11 to 202, 7 line 5. 8 MR. GRALEWSKI: Yes, Your Honor, and 9 if I may suggest that we go a little bit out of 10 order here and handle this particular 11 testimony, but also handle 222, 8 to 23, and 12 238, 14 through 239, 19, I believe all of 13 these -- 14 THE COURT: All together? 15 MR. GRALEWSKI: They're cut up a 16 little bit in the testimony, but I believe they 17 all relate to a similar point, and it's a point 18 that we've spent a lot of time talking about 19 today, and also with Mr. Speakman, and that's 20 really it's a hearsay issue, and the issue is 21 whether Harlan is repeating out-of-court 22 statements or whether she is offering her own 23 conclusions based on interactions in the 24 marketplace. 25 THE COURT: Any objection to preceding 7129 1 in that manner, Ms. Bradley? 2 MS. BRADLEY: No objection. 3 THE COURT: Very well. Proceed. 4 MR. GRALEWSKI: So with respect to 5 201, 11, to -- I think I said that right -- 6 THE COURT: 202, 5. 7 MR. GRALEWSKI: Right, 202, 5. 8 What's going on at this designation, 9 Your Honor, is the witness is asked whether she 10 gathered any evidence -- whether she gathered 11 any evidence about operating system licenses. 12 Ms. Harlan answers that she personally 13 spoke with two OEMs about this issue -- this is 14 on all fours with the analysis in Speakman. 15 She personally spoke with two OEMs about this 16 issue, and she then offers her own opinions 17 about what she thought the OEMs thought about 18 the per processor contracts. 19 So what's going on here is, as I said, 20 she's not repeating out-of-court statements. 21 To the contrary, she's offering her own 22 conclusions based on the interaction she had 23 with the two companies. 24 Specifically, Ms. Harlan's testimony 25 that she thought, she thought the OEMs were 7130 1 deeply offended and wanted to be able to offer 2 DR-DOS is admissible because it reflects what 3 Harlan herself observed. 4 Lastly, the out-of-court statement -- 5 and I shouldn't have painted it with such a 6 broad brush because I do believe there is an 7 out-of-court statement, and that's in the last 8 paragraph here. 9 202, lines 2 to 5, at the end of the 10 block of testimony, she says when I called them 11 back, or when the FTC called them back, they 12 said that they weren't being allowed to testify 13 by their companies because their companies were 14 afraid of retaliation. 15 There, Your Honor, we would offer that 16 for the nonhearsay purpose of explaining 17 subsequent conduct under McElroy and the other 18 cases that we've spent some time talking about. 19 Here, with respect to Gacke, as Your 20 Honor is aware, it makes no difference if 21 Microsoft would have retaliated or not. 22 As a matter of fact, Microsoft would 23 argue up and down that that's not something 24 that they did or not a practice that they had. 25 So it makes no difference if Microsoft 7131 1 would have retaliated or not. What mattered 2 was what the companies believed, which was 3 their state of mind at the time, and what they 4 didn't do, which is the conduct, what they 5 didn't do is they didn't testify. 6 Thank you, Your Honor. 7 I can do the others or we can have 8 response to this, however the Court and 9 Microsoft likes to -- would like to proceed. 10 THE COURT: What do you prefer, 11 Ms. Bradley? 12 MS. BRADLEY: Let's just take them one 13 at a time. 14 THE COURT: All right. Then you have 15 the floor. 16 MS. BRADLEY: Thank you, Your Honor. 17 Your Honor, this is testimony by 18 Ms. Harlan repeating and reporting on 19 conversations that she had with OEMs and 20 knowledge that she gained from those 21 conversations. 22 As we've discussed many times 23 previously, OEMs in conversations or 24 negotiations with DRI had every reason to 25 dissemble, and those statements are often 7132 1 untrustworthy. 2 They are attempting at least here to, 3 it looks like, gain the best deal they could 4 from DRI or to provide some explanation to DRI, 5 a company with which they hoped to deal in the 6 future about why they didn't wish to testify 7 against Microsoft before the Federal Trade 8 Commission. 9 The statement that OEMs were deeply 10 offended by Microsoft's behavior is -- it makes 11 it pretty clear that the OEMs themselves were 12 likely presenting themselves in the best light 13 possible to DRI and that those statements 14 aren't trustworthy as such. 15 And finally, Plaintiffs' statement 16 that these conversations are admissible for 17 some nonhearsay purpose of explaining 18 subsequent conduct is incorrect on the law, 19 first of all, because the conduct -- the 20 explanation of subsequent conduct, the conduct 21 that's relevant is the conduct of the hearer, 22 the listener, and in this case that would be 23 Ms. Harlan. 24 Ms. Harlan hearing from -- the 25 statement that the companies refused to testify 7133 1 against the FTC because they were afraid of 2 Microsoft's retaliation does nothing to explain 3 Ms. Harlan's conduct going into the future. 4 And so that's simply not a plausible 5 nonhearsay purpose for that portion of 6 testimony. 7 THE COURT: Thank you. Anything else 8 on this? 9 MR. GRALEWSKI: Just to highlight, 10 Your Honor, I think the two -- in response to 11 Ms. Bradley's argument, the two most important 12 phrases here are at 201, 15, I talked to, and 13 201, 20, I thought. 14 That's exactly what was happening in 15 Speakman, for example, where he testifies -- 16 and the Court admitted this testimony -- I know 17 I always got the feeling after these meetings. 18 So essentially what was going on in 19 Speakman is he met with the OEMs and that -- 20 and then he, based on -- certainly and 21 admittedly, based on the interactions and the 22 discussions with the OEMs, he met with the 23 OEMs, and then he got a feeling or he developed 24 a thought, and that's exactly what's going on 25 in this testimony. 7134 1 Ms. Harlan testifies at line 15 of 2 201, I talked to him, and then at line 20, I 3 thought. 4 And for those reasons, the testimony 5 should be admissible just like the Speakman 6 testimony was admissible. 7 THE COURT: When is Ms. Harlan's 8 deposition going to be offered, after cross of 9 Mr. Alepin? 10 MR. GRALEWSKI: Following -- you said 11 the cross of -- 12 THE COURT: Mr. Alepin. 13 MR. GRALEWSKI: Yes, following 14 Mr. Alepin, Mr. Constant will testify live. 15 THE COURT: Okay. 16 MR. GRALEWSKI: And again, Your Honor, 17 this is my understanding, I hope you 18 understand, and I'm not privy to everything in 19 what happens in the courtroom. 20 But after Mr. Constant, we will then 21 play several relatively short prior testimony 22 designations. So Ms. Harlan will probably be 23 the following week. 24 I will note that significant amount of 25 time is needed to go from where we are now to 7135 1 get Ms. Harlan up to the screen, but it will be 2 the following week. 3 THE COURT: Okay, good. 4 Very well. Well, due to the lateness 5 of the hour, is it okay if we take this up 6 again tomorrow? 7 MR. GRALEWSKI: Yes. May I -- 8 absolutely, and with Microsoft's acquiescence, 9 and if it's acceptable to the court reporters 10 and Your Honor, can we do it at 8 a.m. and try 11 to finish it between 8 and 8:30? 12 MR. TUGGY: Your Honor, I would prefer 13 not to have argument on witnesses that is not 14 urgent at 8:00 in the morning when so much 15 occurs right during that time and then we end 16 up pressing against the jurors being seated and 17 everyone ready at 8:30. 18 It seems to me that the time 8 to 8:30 19 ought to be reserved for matters more urgent 20 for the day. 21 And we can take this up tomorrow 22 afternoon and complete it. 23 I really don't see a risk here of the 24 Plaintiffs running out of prior testimony to 25 play with John Constant coming. Plus, all the 7136 1 testimony that we've cleared to date, I just 2 don't see the urgency, and in my experience in 3 doing these from 8:10 to 8:25 is we have a hard 4 time getting started. Then we press up against 5 the 8:30 time. 6 MR. CASHMAN: Your Honor, the 7 Plaintiffs don't agree that getting these prior 8 testimony designations isn't urgent. 9 We need to stay ahead so that we have 10 a sufficient amount of the prior testimony 11 designations completed so that we don't run 12 into problems. 13 And we would like to make use of the 14 time between 8 and 8:30 each day, unless there 15 is something specific that the parties have 16 agreed needs to be addressed with the Court on 17 some other matter. 18 But a half an hour is valuable, and 19 the Plaintiffs do definitely want to continue 20 each morning with prior testimony designations 21 unless there's something else specific that is 22 raised. 23 And if Microsoft has something that 24 they think needs to be raised on any given 25 morning, they can give us notice, and vice 7137 1 versa. But in the absence of that kind of 2 situation, we definitely would like to make use 3 of that time. 4 THE COURT: Tammy, what's your 5 position? 6 MR. CASHMAN: Your Honor, I have 7 another suggestion that since the court 8 reporter is here, I'm just going to throw this 9 out. I haven't raised this with Microsoft. 10 But given the amount of prior 11 testimony designations that I think are going 12 to be ready for decision shortly, Plaintiffs 13 were wondering if the Court would entertain 14 argument on next Monday, on Martin Luther King 15 Day on any of these prior testimony 16 designations? 17 THE COURT: Well, the only problem is, 18 is that you can't get in the courthouse. It's 19 closed. And the chief judge of the district 20 does not want people in the courthouse when 21 security is not present to screen people 22 through the metal detectors. 23 MR. CASHMAN: Okay. 24 THE COURT: So it's not possible. 25 Sheriff's deputies are out. 7138 1 MR. CASHMAN: That would just 2 highlight then our desire to continue in the 3 making use of that half an hour in the morning. 4 MR. TUGGY: Your Honor, it seems to me 5 that we over time are going to become more 6 efficient at these arguments. 7 Some of these issues are now repeating 8 themselves and the parties ought to resolve as 9 many disputes as possible in the 10 meet-and-confer process. 11 These are all appeals of previously 12 ruled upon testimony, and what occurs in the 13 morning is a lot of anxiety attempting to get 14 the jury seated on time, and if there's no 15 urgency, it seems inappropriate. 16 MR. CASHMAN: There's the rub. 17 Plaintiffs do view it as urgent in the sense of 18 getting as much done as we can. 19 MR. GRALEWSKI: Just to put some meat 20 on the bones. 21 For instance, Rick Apple I worked on 22 this weekend, Your Honor. It takes hours and 23 hours to finalize the play lists and highlight 24 the exhibits that go on the screen and do the 25 callouts and send it to Microsoft, and when we 7139 1 pile up the witnesses -- for example, if we 2 don't finish Harlan until tomorrow and then the 3 Dixon witness gets pushed back, Microsoft wants 4 to argue about eight or nine motions on 5 Wednesday and Thursday so we don't do any prior 6 testimony argument on Wednesday or Thursday. 7 Friday, I'm not sure what's going on, but we do 8 start to run into a problem next week. 9 MR. CASHMAN: And just to put a little 10 bit further point on that, Mr. Tuggy wants to 11 reserve that half an hour in the morning for 12 something -- for other things that may not come 13 up, and so it seems to me to make sense that we 14 should plan on making use of the time unless 15 they give us notice or we give them notice that 16 we have something we'd like to address that's 17 different than the prior testimony 18 designations. 19 THE COURT: The other problem I notice 20 is a lot of things that are not known by the 21 parties until you walk in at 8 o'clock and then 22 I'm told I've got to do something else. 23 So we'll do it at 3 o'clock tomorrow. 24 Anything else? 25 MR. CASHMAN: Nothing, Your Honor. 7140 1 MR. GRALEWSKI: Just for your own 2 preparation, we'll plan on arguing the Dixon 3 appeal immediately following the Harlan -- I 4 really do think that this one will take no more 5 than a half an hour. 6 THE COURT: Be ready to go on both. 7 You guys have a great evening. 8 (Proceedings adjourned at 4:35 a.m.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7141 1 CERTIFICATE TO TRANSCRIPT 2 The undersigned, Official Court 3 Reporters in and for the Fifth Judicial 4 District of Iowa, which embraces the County of 5 Polk, hereby certifies: 6 That she acted as such reporter in the 7 above-entitled cause in the District Court of 8 Iowa, for Polk County, before the Judge stated 9 in the title page attached to this transcript, 10 and took down in shorthand the proceedings had 11 at said time and place. 12 That the foregoing pages of typed 13 written matter is a full, true and complete 14 transcript of said shorthand notes so taken by 15 her in said cause, and that said transcript 16 contains all of the proceedings had at the 17 times therein shown. 18 Dated at Des Moines, Iowa, this 8th 19 day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25