7423 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 XXVIII 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 8:15 a.m., January 10, 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 7424 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 Attorneys 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 7425 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY JOSEPH E. NEUHAUS 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 BRENT B. GREEN 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 20 21 22 23 24 25 7426 1 RICHARD J. WALLIS STEVEN J. AESCHBACHER 2 Attorneys at Law Microsoft Corporation 3 One Microsoft Way Redmond, CA 98052 4 (425) 882-8080 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7427 1 (The following record was made out of 2 the presence of the jury at 8:19 a.m.) 3 THE COURT: Did you guys want to talk 4 about these letters? 5 MR. TULCHIN: Yes, Your Honor. I 6 don't know whether we should wait for 7 Ms. Conlin. But we corresponded by e-mail last 8 evening. 9 THE COURT: Right. 10 MR. TULCHIN: And I think we are 11 pretty much agreed. 12 There is one issue. There was one 13 motion that I think the parties agree can be 14 heard on Friday, subject, of course, to the 15 Court's convenience. 16 And as to all the others, both sides 17 agree that we can put those off until next 18 week. 19 THE COURT: That's fine. 20 MR. TULCHIN: That raises, though, 21 Your Honor, the question of whether we are 22 having so-called evidence day on Friday or 23 whether we're having a witness. 24 THE COURT: Yeah. 25 MR. TULCHIN: And I gather that the 7428 1 Plaintiffs have Mr. Constant, who's here from 2 England, and so, you know, I'm not sure whether 3 Ms. Conlin wants to be here for this 4 discussion. That's why I was -- 5 MR. GREEN: She's out in the hallway. 6 THE COURT: Oh, she is. 7 Well, just for your information, when 8 Mr. Tuggy and Ms. Bradley and Mr. Cashman and 9 Mr. Gralewski were here last night, he told me 10 that Roxanne told her -- him that -- so this is 11 a classic hearsay -- that that guy is coming to 12 testify and they probably want to use Friday 13 because they didn't know if Mr. Alepin would be 14 done. So they asked me about Friday. 15 That's fine if you guys want to 16 postpone on the exhibits. That's fine. I'll 17 just hear that one motion. 18 MR. TULCHIN: Yeah. We don't really 19 want to, Your Honor, but we're also sensitive 20 to the fact that there's a witness from out of 21 town. And we don't want to inconvenience that 22 witness. 23 I assume that we'll get the same 24 courtesy, you know, if a similar situation 25 arises during our case. 7429 1 THE COURT: Absolutely. 2 MR. TULCHIN: And there's a witness 3 that comes from some distance. 4 THE COURT: Mr. Constant is from 5 England, I guess? 6 MS. CONLIN: Yes, Your Honor. 7 MR. TULCHIN: Yeah. 8 THE COURT: That's fine with me. 9 MR. TULCHIN: If it's better for the 10 Court and for everyone else to proceed with 11 Mr. Constant and to sit with the Jury on 12 Friday, that's fine with us. 13 I assume we'll get the same courtesy. 14 And at some point on Friday, we'll hear 15 argument on that one motion. 16 THE COURT: Okay. 17 MR. TULCHIN: Whenever is best for the 18 Court. 19 THE COURT: I have no problem. 20 Mr. Hagstrom? 21 MR. HAGSTROM: When Mr. Tulchin 22 mentions the one motion, it's really kind of 23 three pleadings together, the last three in my 24 letter of yesterday. 25 THE COURT: Which motion is it? 7430 1 MR. HAGSTROM: Well, they have 2 Defendant's emergency motion for an order to 3 show cause, and I thought we already had a 4 hearing on that. Maybe that was just evidence. 5 Then the next one was Defendant's 6 renewed motion for sanctions. 7 And then Plaintiffs' motion to compel 8 Defendant to produce expert discovery. 9 So those are all three motions that 10 are related to the same -- 11 THE COURT: Same thing? 12 MR. HAGSTROM: Same issues. 13 THE COURT: Is that what you meant by 14 -- 15 MR. TULCHIN: Well, I thought the only 16 one we were going to hear Friday was our motion 17 for sanctions. It's the same issue, Your 18 Honor. 19 We think there's been more expert 20 discovery that hasn't been produced to us and 21 there are papers. It's been fully briefed. 22 If the Plaintiffs wanted the same time 23 to have their motion heard to compel expert 24 discovery, although we think we've given them 25 everything, you know, that's fine with us. 7431 1 THE COURT: Okay. All right. We'll 2 do that. That's fine. 3 So that will be on Thursday -- Friday? 4 MR. HAGSTROM: Friday. 5 THE COURT: Friday? 6 MR. TULCHIN: Friday is fine, Your 7 Honor. Thursday would be fine with us too. In 8 fact, Thursday would be better. If you want to 9 do it Thursday? 10 MR. HAGSTROM: Let me just let you 11 know later today. Is that all right? 12 MR. TULCHIN: If it's all right with 13 the Court. 14 THE COURT: Let me know too because 15 then we'll decide. If you want to do it 16 Thursday, that's fine. That way I can finish 17 this afternoon with the deposition stuff I was 18 going through with Mr. Tuggy and Cashman. 19 MR. HAGSTROM: Yeah. I just have to 20 check with some people back at the office. 21 MR. TULCHIN: There may also be some 22 advantage at doing it Thursday because Friday 23 at 3 o'clock everybody is tired from the week. 24 THE COURT: I'm just raring to go. 25 MR. TULCHIN: I've got to see you on 7432 1 Saturday then. 2 THE COURT: Saturday you don't want to 3 see me. 4 (The following record was made in the 5 presence of the jury at 8:37 a.m.) 6 THE COURT: For once, the delay is not 7 my fault. That's good. 8 Mr. Alepin, you are still under oath. 9 RONALD ALEPIN, 10 called as a witness, having been previously 11 duly sworn, testified as follows: 12 CROSS-EXAMINATION (CONT'D) 13 BY MR. HOLLEY: 14 Q. Good morning, Mr. Alepin. 15 A. Good morning. 16 Q. When we finished yesterday afternoon, 17 I believe that you had just testified that you 18 did review the testimony of Professor Elzinga 19 of the University of Virginia; is that correct, 20 on the subject of media players? 21 A. I believe I said I had reviewed 22 portions of it. 23 Q. Okay. I'd like to show you, sir, a 24 portion of that testimony. 25 MR. HOLLEY: May I approach the 7433 1 witness, Your Honor? 2 THE COURT: Yes. 3 Q. And I've given you the full testimony 4 behind it, but what I'd like to focus on is 5 paragraph 52 of Professor Elzinga's testimony. 6 In that paragraph -- and I'm sort of 7 midway down the paragraph, he says each media 8 player -- and he's referring to Real 1 player, 9 Music Match Jukebox and Win App -- and you're 10 familiar with all of those, are you not, sir? 11 A. Yes, I am. 12 Q. Each media player also launched its 13 own small program. Tinkerbell is the code name 14 for Real 1's program to check periodically to 15 see if its media player had the MP 3 default 16 association. If it did not, the program took 17 it back. 18 And that's consistent with your 19 technical understanding of the way that 20 Tinkerbell works; correct? 21 A. Yes, that's one portion of 22 Tinkerbell's function, yes. 23 Q. And then Professor Elzinga goes on to 24 say that Real 1, check every 10 minutes to see 25 if it had the default association for MP 3 and, 7434 1 if it didn't have it, it took it back; is that 2 correct? 3 A. He -- yes. I mean, you're not reading 4 the exact text, but, yes, Real 1 and Win App, 5 yes. 6 Q. And even if someone had gone to 7 Windows Media Player and explicitly chose to 8 have Windows Media Player be the default 9 handler for MP 3 playback, the next 10-minute 10 cycle that occurred, Tinkerbell would take it 11 back; correct? 12 A. At -- during some period of time, that 13 would have been true. 14 Q. Now, you testified yesterday, sir, 15 that there is media playback software in 16 Apple's Mac OS and various versions of Linux, 17 including Suse and RedHat and in Sun Solaris; 18 is that correct? 19 A. Those products ship with media player 20 functionality, yes. 21 Q. And that media player technology, in 22 your parlance, is bundled and tied with those 23 operating system products; correct? 24 A. I don't believe that it's tied, but 25 it's bundled. It's in the box. 7435 1 Q. Okay. Well, if I go to buy a copy of 2 RedHat desktop, I can't get it without media 3 player software, can I? 4 A. That's correct. 5 Q. And if I go to get a copy of Mac OS X 6 Tiger, I can't get it without QuickTime media 7 playback software; correct? 8 A. It's in the box, that's correct. 9 Q. And there's no option -- there is no 10 Mac OS Tiger that comes without QuickTime, is 11 there, sir? 12 A. I'm unaware of any such version. 13 Q. And the same is true of Suse Linux 14 from Novell. I can't go anywhere to a store 15 and get a copy of Suse Linux without getting 16 the media player software that Novell has 17 included; is that right, sir? 18 A. As a retail product, that's correct. 19 Q. Well, if I ask that Dell preinstall 20 Suse Linux on my new PC, can I get it without 21 the media playback software? 22 A. I don't believe Dell ships it without 23 the media player. 24 Q. Do you know one way or the other, sir? 25 A. I know it does not. 7436 1 Q. And if I go and get a copy of Sun 2 Solaris 10, can I get Solaris 10 without the 3 media player software that Sun includes in 4 Solaris 10? 5 A. I'm -- you're talking now about 6 Solaris for PCs as opposed to Solaris, the 7 server operating system? 8 Q. I appreciate the clarification. I'm 9 talking about the Intel version of Solaris. 10 Can I get that without the media player 11 software? 12 A. I don't believe so. 13 Q. Now, you testified on direct that 14 Microsoft's conduct had prevented the emergence 15 of niche devices that could be used with PCs to 16 provide media functionality. Did I understand 17 that testimony correctly? 18 A. I -- yes, I think that's correct as 19 far as it goes, yes. 20 Q. You're, I presume, aware of something 21 called an iPod, are you not, sir? 22 A. Yes, I am. 23 Q. Okay. And an iPod is a device that 24 can be used with iTunes on a PC to provide both 25 audio and video playback; correct? 7437 1 A. A little bit of clarification. 2 An iPod can operate independently of 3 the PC to provide playback. 4 Q. I appreciate that, but the only way 5 that you can get music on your iPod, legally, 6 is to use iTunes; correct? 7 A. I believe that's the case, yes. 8 Q. Now, an iPod, you would agree with me, 9 is far and away the most popular digital media 10 player in the world? 11 A. It's -- it is so at my home and it 12 probably is in -- certainly in the United 13 States. 14 Q. I may get in trouble with my client, 15 but it's very popular with me as well, sir. 16 And one of the things that is true of 17 the iPod is that the format of the songs on the 18 iPod is not compatible with Windows Media 19 Player, is it? 20 A. It's not the same -- the format is not 21 the same. Windows Media Player supports a 22 variety of formats, but it does not support the 23 iTunes -- the iTunes format and/or iPod format. 24 Q. And that's because that format is 25 proprietary to Apple; correct? 7438 1 A. That's -- I'm sorry. There's a 2 missing link there, I think. It's -- it's not 3 because it's proprietary, that it's not 4 supported. 5 Q. Well, is it available for license to 6 Microsoft, the fair play digital rights 7 management software on top of Apple's AAC 8 format, is that available for license to 9 anyone? 10 A. I don't -- 11 MR. LAMB: Objection to the extent it 12 calls for a legal conclusion. 13 THE COURT: Overruled. 14 He may answer if he knows. 15 A. I believe that Real Player provides 16 support for or has provided support for Apple 17 iPod formats. 18 Q. And was threatened with a lawsuit as a 19 result; correct? 20 MR. LAMB: Objection to the extent it 21 calls for a legal conclusion. 22 THE COURT: Overruled. 23 He can answer that. 24 A. I don't recall whether it was or not. 25 Q. Well, as we sit here today, does Apple 7439 1 let RealNetworks play digitally rights -- the 2 content in AAC format that is protected using 3 the fair play digital rights management 4 software that Apple created? 5 A. I didn't follow -- I haven't followed 6 it recently. Only -- I followed it up until 7 the time that Real Player implemented support 8 for the AAC format. 9 Q. Have you followed what's going on in 10 the French legislature about the proprietary 11 nature of Apple's iPod formats? 12 A. I have read -- I've read reports of 13 what's going on. 14 Q. And you're aware that the French 15 senate, for example, passed a law seeking to 16 force Apple to open up its proprietary formats 17 for the iPod, are you not, sir? 18 MR. LAMB: Objection to the extent it 19 calls for a legal conclusion. 20 THE COURT: Overruled. 21 You may answer. 22 A. It's quite murky. I believe -- my 23 understanding is it's quite murky. 24 There were a number of different 25 proposed legislations that variously dealt with 7440 1 Apple formats. 2 But I don't know whether it -- I'm 3 sorry, I don't recall whether it was the 4 senate, whether it was the National Assembly or 5 any of the -- or whether the executive, the 6 president, or the prime minister had a role in 7 proposing where that legislation ultimately 8 ended up. 9 Q. And just one last question on this 10 subject. 11 As far as you know, sitting here 12 today, Microsoft is not able to play content 13 encoded in Apple's AAC format and protected 14 with Apple's fair play digital rights 15 management on Windows Media Player? 16 A. It is not -- is not able is unclear to 17 me in your sentence. 18 Q. And what is unclear to you about that? 19 A. Well, as a technical -- excuse me. As 20 a technical matter, I don't know whether 21 Microsoft is or is not able to do that. 22 RealNetworks was able as a technical matter to 23 do that. 24 Q. And I'm not asking you for a lawyer's 25 opinion, but, as a matter of fact, do you know 7441 1 whether Apple licenses to anyone the ability to 2 play content encoded in its AAC format 3 protected by its fair play digital rights 4 management so that other people can implement 5 that technology on their digital music devices? 6 A. No, I don't. 7 MR. LAMB: Objection. Legal 8 conclusion. Relevance. Conflicts with motion 9 in limine rulings regarding other conduct. 10 THE COURT: Overruled. 11 You may answer. 12 A. I don't, no. 13 Q. I'd like to switch gears here now, 14 sir, and talk about web-browsing software. 15 We've been talking about media player 16 software and I'd like to now talk about 17 web-browsing software. 18 In forming your opinions in this case, 19 I presume that you looked at evidence in the 20 record about what Netscape knew and didn't know 21 at the time of its formation about the plans of 22 operating system vendors to include 23 web-browsing software in their products. Is 24 that right? Did you do that? 25 A. I did. 7442 1 Q. Okay. And among the things that you 2 looked at, I presume, was the private placement 3 memorandum that Netscape issued in January of 4 1995 in seeking to raise additional capital? 5 A. Well, I've heard reference to the 6 private placement memo. I'm not sure that I, 7 in fact, reviewed it. 8 Q. So you know about it, but you never 9 looked at it? 10 A. I didn't mean to convey that. 11 I know about it. Other documents 12 refer to it. I don't recall whether I read it 13 or not. 14 Q. Well, you testified in direct 15 examination, didn't you, sir, that one of the 16 things that Microsoft did in your view to 17 Netscape was to tell the world that 18 web-browsing software was going to be part of 19 the operating system; correct? 20 A. I did. 21 Q. Would it be relevant to your opinion 22 that Netscape knew that eight months before 23 Windows 95 was commercially released? 24 A. Not necessarily. 25 Q. What if Netscape itself was telling 7443 1 the market that it knew in January of 1995 that 2 IBM and Apple and Microsoft and all UNIX 3 vendors were likely to include web-browsing 4 software as a standard feature of their 5 operating system? 6 A. Well, I believe that in documents that 7 discuss the risks of investments -- and I'm not 8 a specialist in here, but it is standard 9 practice to include a list -- a parade of 10 horribles that condition potential investors to 11 the array of risks that might occur when an 12 investor, a potential investor is considering 13 whether or not to put money into a company. 14 MR. LAMB: Your Honor, may we 15 approach? 16 THE COURT: Go ahead. 17 (The following record was made out of 18 the presence of the jury at 8:53 a.m.) 19 THE COURT: Okay. 20 MR. LAMB: Your Honor, again, he's 21 going to go into a private place in reading 22 from that document that was published, 23 apparently, by Netscape in '95. Again, he's 24 asking for legal conclusions. 25 This isn't relevant. It basically 7444 1 conflicts with the findings of fact in that 2 he's trying to go through and try to show 3 through other's conduct that Microsoft's 4 conduct wasn't that bad. 5 This doesn't go to any of the 6 examination by Mr. Alepin. It doesn't impeach 7 any of the testimony of Mr. Alepin; and, 8 furthermore, it conflicts with and is trying to 9 undermine the findings of fact and the specific 10 findings that there was some illegal conduct 11 undertaken by Microsoft in this report. 12 MR. HOLLEY: Let me address those one 13 by one. 14 I just established the foundation that 15 he testified on direct that one of the things 16 that Microsoft did to Netscape, in his view, 17 was tell the market that it was going to 18 include Web browsing software Windows. 19 This document directly impeaches that 20 testimony because it shows that in January of 21 1995, eight months before the release of 22 Windows 95, Netscape itself was telling the 23 market that that was going to happen. 24 The second point is that there is no 25 collaterally estopped finding that Microsoft 7445 1 injured Netscape by telling the market that it 2 was going to include Web browsing software in 3 Windows. 4 There is also no collaterally estopped 5 finding or conclusion that the inclusion of Web 6 browsing software in Windows was itself 7 illegal. 8 There are conclusions of law that the 9 manner in which Microsoft included Web browsing 10 software in Windows by not putting it in the 11 add/remove utilities program and by commingling 12 the code, that manner of doing it was a 13 violation of Section 2. 14 But as I've said before, what the 15 Court of Appeals' decision says is that there 16 are procompetitive benefits of including IE in 17 platform software like Windows. That is why 18 they reversed and remanded the tying claim. 19 And the government dropped that claim on remand 20 because they knew, as they told Judge 21 Kollar-Kottely, that they could never prove 22 that the procompetitive benefit of including 23 Web browsing software in Windows were 24 overwhelmed by any anticompetitive benefit. 25 And there is a transcript of the 7446 1 government's lawyer saying exactly that, Your 2 Honor. We dropped the claim because we 3 couldn't prove it. 4 So, obviously, we are collaterally 5 estopped by things that we're collaterally 6 estopped on, but we're not estopped from things 7 that are not addressed in the government case. 8 So I think this is well within the 9 scope of direct. I've now established that, 10 and it is not collaterally estopped, Your 11 Honor. 12 MR. LAMB: Your Honor, that cannot be 13 the case that a technological expert can be 14 impeached with the determinations of a Court of 15 Appeal, number one. 16 Number two, number two, this witness 17 did not review this document, and this witness 18 did not rely on this document, so he cannot be 19 impeached by this document. 20 MR. HOLLEY: Your Honor, that is the 21 craziest thing, with respect, I have ever 22 heard. If it's the rule, then it will be the 23 rule going forward for everyone. But it is not 24 the case that in cross-examining an expert, in 25 particular, you are restricted to things that 7447 1 the expert reviewed and relied upon. 2 One of the points that needs to be 3 made on cross is that there are things in the 4 record that the expert should have reviewed and 5 didn't. And it can't be that you can shield 6 your expert from selective quotation or 7 reliance on some factors in the record and not 8 be able to cross-examine that expert on that 9 basis. 10 There are -- and I should have brought 11 it in with me, Your Honor -- there are two Iowa 12 cases on this subject which say that one of the 13 grounds for cross-examining an expert is to 14 test what it is that the expert did not do. 15 Well, how can you do that unless you 16 can show the expert things in the record of the 17 proceeding that the expert chose to ignore. So 18 it cannot be that unless the expert reviewed 19 and relied on a document, it can be used for 20 impeachment. 21 MR. LAMB: Your Honor, this is done 22 every day in America, and the way it's done is: 23 Are you aware of this private 24 placement memo? 25 He says no. 7448 1 Have you reviewed it? 2 No. 3 All right. Then if it's relevant and 4 they can lay a foundation for its relevance 5 with some other witness, they will bring that 6 in and that will impeach Mr. Alepin's 7 testimony. 8 What they're trying to do is read 9 documents in to the record as if they're facts 10 that are not rebuttable that this witness 11 hasn't reviewed and hasn't relied on, and that 12 is not proper impeachment. 13 MR. HOLLEY: Your Honor -- 14 MR. LAMB: There's no foundation for 15 it. 16 MR. HOLLEY: I was taught in lawsuit 17 school, and I don't think the law has changed 18 any since then, particularly with an expert -- 19 remember, experts can rely on hearsay in 20 forming their opinions. They don't have to 21 rely on things that are admissible in evidence. 22 So experts can rely on hearsay if it's 23 the sort of thing that people in their field 24 routinely rely on in forming their opinions. 25 And so in cross-examining an expert, you can 7449 1 impeach them. And this isn't some magazine 2 article. This is the private placement memo 3 from Netscape. 4 You can impeach them with things that 5 they ignored or failed to take into account. 6 We are severely prejudiced if we can't point 7 out that out of this huge mass of evidence 8 Mr. Alepin conveniently chose to ignore things 9 that were inconsistent with his opinions. 10 That is very important for the jury to 11 understand. Yes, the record is big, but he was 12 getting paid. He got all the time he needed to 13 go look at anything he wanted to look at. 14 And the point I'm trying to make on 15 cross, which I think I'm entitled to make, Your 16 Honor, is there are things in the record which 17 flatly contradict his stated opinions on 18 direct. And some of those things are relevant 19 precisely because he didn't rely on them. 20 MR. LAMB: Your Honor, this is not in 21 the record. This -- I mean, it's one thing to 22 talk about a known treatise that the witness 23 says, "Yeah, I know of that treatise." And, 24 "No, I didn't look at it." Now you impeach 25 him. 7450 1 But he hasn't said, "Oh, yeah, I'm 2 aware of that private placement memo. Yes, I 3 should have read that private placement memo. 4 Yes, it's customary for me as a technologist to 5 review that to form my opinions." This is not 6 proper. 7 MR. HOLLEY: Well, he testified -- I 8 mean, for good or ill, and they opened the door 9 to this -- he testified and he just repeated it 10 to me. He testified on direct that one of the 11 things that Microsoft did was tell the market 12 that it was going to include Web browsing 13 software in Windows. He just said that. 14 Now, whether that's a technological 15 opinion or not, he gave it and they elicited it 16 from him. 17 Now having done that, they opened the 18 door to showing him a document which flatly 19 contradicts what he just said. And if we're 20 not allowed on cross-examination to impeach 21 this man with those sorts of flat 22 contradictions of things which are in the 23 record of this case, they got this document in 24 discovery. It was Defendant's Exhibit 68 in 25 the United States against Microsoft. It's 7451 1 Defendant's Exhibit 3741 in this matter. I 2 didn't -- you know, this is no surprise. This 3 document has been produced. 4 THE COURT: How does it contradict his 5 testimony? 6 MR. HOLLEY: Because what he said, 7 Your Honor, was that Microsoft damaged Netscape 8 by telling the market that it was going to 9 include Web browsing software in Windows. 10 And what this document says in January 11 of 1995, two months after the formation of 12 Netscape and eight months before Windows 95 was 13 released is the following: 14 Quote, Microsoft Corporation is 15 already licensing browser software from 16 Spyglass and has announced its intentions to 17 add functionality to the browser software and 18 to bundle it with its Windows 95 operating 19 system. 20 The company believes that the other 21 primary PC operating system vendors -- Apple 22 Computer, Inc., and International Business 23 Machines Corporation, IBM -- will also 24 eventually incorporate some Web browser 25 functions into their operating systems as 7452 1 standard features. 2 This may also be true of UNIX 3 operating system vendors such as Sun 4 Microsystems, Inc., Hewlett-Packard Company, 5 IBM, Digital Equipment Corporation, the Santa 6 Cruz Operation, Inc., and Philippine Graphics, 7 Inc. 8 If these companies incorporate Web 9 browser functionality into their software 10 products, they could subsequently offer this 11 functionality at little or no additional costs 12 to customers. 13 The point being, Your Honor, that 14 Netscape knew full well, two months after Marc 15 Andreessen founded the company, that PC 16 operating systems vendors -- in particular, 17 Microsoft -- were going to add Web browsing 18 functionality to their products as standard 19 features. No surprise, and no way that what 20 Microsoft said it was doing injured Netscape. 21 They said it themselves to the market. 22 MR. LAMB: Your Honor, all that says 23 is that Microsoft said it. And now we're 24 telling in a private placement memo, which is 25 designed to be honest and truthful to 7453 1 investors, that we're aware that we were told. 2 That doesn't say we knew it all along or we 3 weren't surprised or anything. That doesn't 4 contradict or rebut anything. 5 And what he's trying to show is that 6 Microsoft said, "We're going to do X." 7 Everybody else says, "Okay. I guess we're 8 going to do X too." That is not proper 9 impeachment or rebuttal testimony. 10 THE COURT: Anything else? 11 MR. LAMB: No, sir. 12 MR. HOLLEY: No, Your Honor. 13 THE COURT: Can I see this? 14 MR. HOLLEY: Yes, Your Honor. 15 THE COURT: What's the question 16 pending right now? Do you recall? 17 MR. HOLLEY: The pending question, if 18 I recall properly -- 19 MS. CONLIN: Tammy has it. 20 THE COURT: Oh. Do you have it, 21 Tammy? 22 (Requested portion of the record was 23 read back.) 24 THE COURT: Did he answer? What did 25 he say? 7454 1 (Requested portion of the record was 2 read back.) 3 THE COURT: What's your next question 4 going to be? 5 MR. HOLLEY: I was going to show him 6 that document and ask him if, in fact, Netscape 7 made those statements. 8 And he's well aware, as he just said, 9 that in public documents like this used to 10 raise capital in the U.S. capital markets, 11 there is a section called "Risk Factors." 12 And, Your Honor, if I could just go 13 back to the prior page of this document 14 there -- or two pages back. That is exactly 15 what this is. It's the risk factor section. 16 So Mr. Alepin knows all about this. 17 And what he tried to do in that answer just now 18 is undermine the significance of it by 19 referring to as a "parade of horribles." 20 Having said that, I think it's now 21 important to show the jury that they weren't 22 saying that a meteor might strike the earth. 23 In the risk factor section of this 24 private placement memorandum, they're saying 25 that Microsoft is going to do this and everyone 7455 1 else is too. 2 THE COURT: How can he authenticate 3 something he didn't prepare? 4 MR. HOLLEY: He doesn't have to. I'm 5 not offering it into evidence. It impeaches 6 his testimony. It is evidence in the record 7 which is inconsistent with his testimony and 8 therefore impeaches him; but it doesn't have to 9 be admissible into evidence, Your Honor, in 10 order to impeach him. He doesn't have to have 11 ever seen it before. He doesn't have to have 12 relied on it. It does not have to be 13 admissible. It is impeachment. 14 MS. CONLIN: But it doesn't contradict 15 his testimony. 16 MR. HOLLEY: With respect, Your Honor, 17 it does. And it's for the jury to decide 18 whether it does or does not. It is our 19 submission that it is contradictory to his 20 testimony on direct. 21 They elicited that testimony in order 22 for the jury to make an assessment of this 23 man's credibility and his bias and his -- and 24 the validity of his testimony. 25 The jury is entitled to know what else 7456 1 is in the record that is inconsistent with what 2 he said on direct. 3 THE COURT: So what if someone gave 4 you a statement on the street that Netscape 5 knew about this? Can you bring that statement 6 in and show it to him? 7 MR. HOLLEY: If that statement was the 8 sort of thing that Mr. Alepin relied on -- I 9 asked him a foundational question. 10 THE COURT: He didn't rely on this. 11 MR. HOLLEY: But -- no, the sort of 12 statements -- see, I asked him a foundational 13 question. I said: "Did you look in the record 14 in forming your views for evidence relating to 15 what Netscape knew." 16 THE COURT: Record of what? 17 MR. HOLLEY: Of all -- he testified 18 that he looked at hundreds of thousands of 19 documents. He's tried to bolster his 20 credibility by saying that he looked at 21 hundreds of thousands of documents, even though 22 he relied on 500, but he says he looked at 23 hundreds of thousands. 24 I asked him a question: 25 "Did you look for evidence in the 7457 1 record relating to your testimony? 2 "Yes. 3 "Did you try to, you know, look at all 4 of that stuff? 5 "Yes." 6 Okay. Well, here's some stuff in the 7 record that he didn't look at. 8 THE COURT: What's your next step 9 after you ask him the next question that you 10 just told me you're going to ask? 11 MR. HOLLEY: I think I'm going to move 12 on, Your Honor, if I'm allowed to ask that 13 question. 14 THE COURT: Anything else? 15 MR. LAMB: No, sir. 16 THE COURT: Okay. I'll let you ask 17 that question. 18 MR. HOLLEY: Thank you, Your Honor. 19 MS. CONLIN: Your Honor, before we 20 leave here, I've become quite concerned about 21 the "me too" evidence that is being elicited. 22 And the Court will recall that you 23 precluded that, and there's been quite a bit of 24 testimony about that. I don't know if there's 25 more coming, of the "me too" variety: Other 7458 1 companies did it and, therefore, it wasn't 2 illegal. 3 And you specifically precluded that, 4 and we had a whole raft of testimony about what 5 other media player companies were doing. 6 And I don't -- you know, ordinarily, 7 Your Honor, if I were going to offer such 8 testimony and you had made a ruling on it, I 9 wouldn't be doing that without asking you 10 first. And we've had that happen again and 11 again here. It's very distressing. Mr. Lamb 12 is loathed to interrupt the examination on a 13 repeated basis for this kind of thing because 14 I'm sure it just irritates the heck out of the 15 jury, but I did just want to mention that, Your 16 Honor, while we're back in the back here. 17 MR. HOLLEY: Well, I just want to 18 mention, Your Honor, that that is a complete 19 misrepresentation of the state of the law of 20 this case. 21 Instruction No. 9 to the jury tells 22 the jury that it needs to determine whether 23 Microsoft engaged in ordinary business 24 practices, and it needs to determine whether 25 Microsoft's conduct was consistent with 7459 1 competition on the merits. 2 The Court issued a ruling that said 3 that you cannot talk about other companies' 4 illegal conduct. There is nothing vaguely 5 illegal or anticompetitive about Apple, IBM, 6 and all the UNIX vendors putting new features 7 in their operating systems. 8 Mr. Alepin told me ten times yesterday 9 that operating systems evolve over time, that 10 everybody puts more and more functionality into 11 their operating systems. 12 There is no finding from any court in 13 the world that including functionality in an 14 operating system is illegal or anticompetitive, 15 none. 16 And so we are entitled in order to 17 give the jury a context for determining whether 18 they have met the standard articulated in 19 Instruction No. 9 to tell them what is the 20 market in this business. Otherwise, they're 21 asked to make the determination that the 22 Court's Instruction No. 9 -- and I hope I have 23 the right number -- asks them to make in a 24 complete vacuum. 25 How can the jury decide whether it is 7460 1 consistent with competition on the merits on 2 the one hand or anticompetitive on the other to 3 add the same functionality that everybody else 4 is adding unless they know that everybody else 5 did it. 6 MS. CONLIN: Your Honor, I didn't seek 7 to argue it. I sought to bring forward an 8 issue of procedure, which is before you do 9 stuff like that that might possibly violate any 10 order of this Court, you're supposed to ask. 11 MR. HOLLEY: Your Honor, I really 12 cannot allow Ms. Conlin to say that I am 13 overtly violating the Court's order. I am not. 14 It is my understanding that that 15 motion in limine says that you are not allowed 16 to elicit testimony that someone else did 17 something illegal in order to justify your own 18 illegal conduct. 19 I am not suggesting, have not 20 suggested, and will never suggest that adding 21 Web browsing functionality to an operating 22 system is illegal or anticompetitive. 23 THE COURT: I think the point she's 24 making is if you're going to get into that 25 area, it's for the Court to decide what is 7461 1 legal and what is not legal. 2 So before you do something like that, 3 you should alert me first so I can decide if 4 it's illegal conduct. 5 MS. CONLIN: Absolutely, Your Honor. 6 That's exactly my point. 7 MR. HOLLEY: Okay. Well, just maybe 8 we should do this right now then because I 9 intend to elicit testimony from -- and we 10 intend to make it the center piece of our case, 11 that every vendor of operating system software 12 over time has added new functionality to its 13 product and that is a standard business 14 practice. It's ordinary course, A. That every 15 operating system vendor preannounces its 16 products for two purposes principally. 17 One is so that it can find out whether 18 there are bugs in the product by asking other 19 people to test it for that company. 20 And, B, to give sufficient lead time 21 for vendors of compatible products to create 22 those compatible products and have them in the 23 marketplace contemporaneously. 24 And, C, that all operating system 25 vendors engage in comparative advertising, some 7462 1 of which is quite rude. IBM does it. Apple 2 does it. Everybody does it. There's nothing 3 anticompetitive about that. 4 So on FUD, on Vaporware, on the 5 integration of new features into operating 6 systems, it is our case. It is our defense 7 that that is standard business conduct. There 8 is nothing anticompetitive about it. 9 Now, Your Honor, if it's your ruling 10 that every time we do that, we need to discuss 11 it first, then, obviously, we will honor that. 12 But I just want to make it clear it is the core 13 of our defense consistent with the Court's 14 instruction to the jury that what Microsoft did 15 is not anticompetitive. Obviously, we're 16 constrained by the collaterally estopped 17 findings, but outside that context, what 18 Microsoft did is not anticompetitive. It is 19 instead normal business conduct, which is 20 consistent with competition on the merits. 21 THE COURT: I understand what you're 22 going to, but I think we have to have a review 23 every time you do it. 24 MR. HOLLEY: Okay. Fair enough, Your 25 Honor. I understand. 7463 1 Thank you. 2 MS. CONLIN: That's my only point. He 3 (The following record was made in the 4 presence of the jury at 9:15 a.m.) 5 THE COURT: You may ask your next 6 question, please. 7 BY MR. HOLLEY: 8 Q. Mr. Alepin, are you aware, sir, that 9 in a 1995, January 16, 1995, private placement 10 memorandum issued by Netscape, it made the 11 following statement: Microsoft Corporation is 12 already licensing browser software from 13 Spyglass and has announced its intention to add 14 functionality to the browser software and to 15 bundle it with its Windows 95 operating system. 16 The company believes that the other 17 primary PC operating system vendors, Apple 18 Computer, Inc., and International Business 19 Machines Corporation, IBM, will also eventually 20 incorporate some web browser functionality into 21 their operating systems as standard features. 22 This may also be true of UNIX 23 operating system vendors as Sun Microsystems, 24 Inc., Hewlett company, IBM, Digital Equipment 25 Corporation, the Santa Cruz Operation, Inc., 7464 1 and Silicon Graphics, Inc. 2 If these companies incorporate web 3 browser functionality into their software 4 products, they could subsequently offer this 5 functionality at little or no additional cost 6 to consumers. 7 Now, in forming your view which you 8 expressed to the Jury on direct that Microsoft 9 did something bad to Netscape by telling the 10 market that it was going to include 11 web-browsing software in Windows, did you take 12 account of what I just read to you, sir? 13 A. I did. 14 Q. And did you disagree with Netscape 15 that as of January of 1995 it was likely that 16 all PC operating system vendors would include 17 web-browsing functionality in their products as 18 a standard feature? 19 A. I'm sorry. I lost the front part of 20 the question. I'm sorry. 21 Q. I'll ask it again. 22 A. Okay. 23 Q. Did you disagree with Netscape's 24 belief as expressed in this document that I 25 just read to you that as of January 1995, it 7465 1 was likely that all PC operating system vendors 2 would include web-browsing functionality as a 3 standard feature of their products? 4 A. I -- I don't disagree. 5 Q. And you don't disagree, do you, sir, 6 that as we sit here today, Apple has done that. 7 The Safari web browser is a feature of the 8 Macintosh operating system operating product, 9 is it not? 10 A. That's correct. 11 Q. And Sun Solaris already also has a web 12 browser as a feature of its product? 13 A. That's correct. 14 Q. And Suse Linux has a web browser as a 15 feature of its product? 16 A. It has several browsers available with 17 its product. 18 Q. And RedHat has as a feature of its 19 desktop OS a web browser; correct? 20 A. I think you used product before, and I 21 agreed with its products. If you meant in your 22 question, does RedHat as part of its operating 23 system product include several browsers, yes. 24 But as part of its operating system, no. 25 THE COURT: Sir, could you adjust your 7466 1 microphone? 2 THE WITNESS: Oh, I'm sorry. 3 Q. And using your terminology, those web 4 browsers are bundled and tied to those 5 operating systems; correct? 6 A. No. No, they're not. 7 Q. Okay. So let's take them one by one. 8 Safari and Mac OS X Tiger, is it 9 bundled or tied or both? 10 A. It's bundled. Excuse me. It's 11 bundled. 12 Q. And that is so, despite the fact as we 13 said yesterday, there are dependencies between 14 Safari and other parts of Mac OS X Tiger? 15 A. That's correct. 16 Q. Okay. And so what in your mind, sir, 17 distinguishes those two terms, bundling and 18 tying as they relate to Mac OS X Tiger? 19 A. Well, bundling is, as I described over 20 the past several days, it's where you put the 21 two separate products into the box and make 22 them available. 23 Tying is where you at least make it, 24 in the particular case here, the user unable to 25 remove it or where you create 7467 1 cross-dependencies as opposed to vertical 2 dependencies. 3 One, a top layer piece of software 4 relying on the services of a lower level piece 5 of software. 6 And in the third case where you would 7 commingle, where you would include portions of 8 the browser product inside the operating system 9 product. 10 So those three would constitute the 11 tying, different from where you would bundle 12 it, include it in the same box. 13 Q. Okay. Now, you recall yesterday, do 14 you not, sir, looking at the slide of the user 15 interface for the Be operating system? 16 A. Yes, I do. 17 Q. Okay. And if I'm fast enough here, 18 I'll get the number and we could look at it 19 again. 20 MR. HOLLEY: Could we see Slide Number 21 760, please? 22 Q. Now, as you said yesterday in your 23 testimony, this window in the lower left corner 24 called NetPositive, that's the web browser that 25 is part of the BeOS; correct? 7468 1 A. That is a web browser that is 2 available on the BeOS. 3 Q. Right. Is it bundled or tied, sir? 4 A. It's bundled. 5 Q. Isn't it also tied in this respect, 6 that Be has decided that they're going to make 7 the documentation, the welcome to DOS tutorial 8 and other information available to users in 9 HTML format through the NetPositive web 10 browser, and if you take it out, all of that 11 functionality disappears? 12 A. No. The -- no. 13 Q. Okay. Have you looked at the BeOS and 14 the warning messages that are displayed if you 15 seek to delete the NetPositive web browser? 16 A. I don't recall at this time here. 17 Q. Have you looked at the warning 18 messages that are displayed if you seek to 19 delete QuickTime from Mac OS X Tiger? 20 A. In the past I have looked at it. Not 21 recently. Not for Tiger, no. 22 Q. Apple tells consumers not to delete 23 QuickTime because it provides services to other 24 parts of the operating system; correct? 25 A. As to Tiger, as I told you, I don't -- 7469 1 I haven't looked at that. 2 Q. So in testifying just now that Safari 3 is bundled but not tied, you haven't looked to 4 see what Apple says to customers who try to 5 delete Safari; is that correct? 6 A. I have -- I don't use Safari on my Mac 7 OS Tiger. I have no reason to believe that my 8 system is any less stable for that. 9 Q. You don't use it because you use 10 Mozilla Firefox; correct? 11 A. That's correct. 12 Q. But you haven't deleted Safari, have 13 you, sir? 14 A. I put it in the trash can, recycle. 15 Q. But did you go into the system and 16 delete the code that comprises Safari from Mac 17 OS X Tiger? 18 A. No. 19 Q. Now, on direct examination you 20 testified, I believe, sir, that there was no 21 technological benefit whatsoever for 22 Microsoft's inclusion of web-browsing 23 functionality in Windows. Did I understand you 24 correctly? 25 A. I don't think I used those words. 7470 1 Q. In sum or substance, is that what you 2 said? You said that bundling or tying Internet 3 Explorer to Windows gave rise to no technical 4 benefit at all? 5 A. I don't think, again, I used that 6 language, but I'd be happy to look at that. 7 Q. Okay. Well, do you recall being asked 8 the question: Mr. Alepin, from a technological 9 standpoint, if someone were to claim to you 10 that it was necessary for Windows to bundle or 11 tie Internet Explorer in order to get 12 technological advancements, what would your 13 response to that statement be? 14 I would say no. I would disagree with 15 it. 16 And then Mr. Lamb asked you, can you 17 explain to the Jury why? 18 And your answer was, because it's not 19 necessary to include the browser as part of the 20 operating system in order to achieve any 21 important -- or any benefit at all. 22 So that was your testimony; right? 23 A. Thank you. 24 Q. Okay. So you agree, although maybe my 25 formulation of words is slightly different, 7471 1 that bundling or tying Internet Explorer to 2 Windows achieves no technical benefit at all in 3 your view? 4 A. I believe the answer was it was 5 unnecessary to achieve the technological -- 6 whatever the functionality was by doing the 7 tying and bundling. 8 Q. I'm going to show you a slide that we 9 created, Number 701, which lists the 10 components, the Internet Explorer components, 11 of Windows. 12 And you're familiar with these, are 13 you not, sir, these components? You've heard 14 of them? 15 A. Yes, I have. Yes. 16 Q. Okay. When you say that there was no 17 benefit technologically from bundling or tying 18 Internet Explorer to Windows, are you referring 19 to all of those components? 20 A. There is no -- there is no benefit 21 that could not have been achieved by other 22 means than tying and bundling. 23 Q. Well, didn't you tell me at your 24 deposition, sir, that it would be okay in your 25 view for Microsoft to include an HTML parsing 7472 1 and rendering engine in Windows? 2 A. Okay is different from technological 3 alternatives. 4 Q. Okay. I appreciate that, but I'm just 5 asking you a question. 6 You did say that at your deposition, 7 didn't you? 8 A. I -- again, I've had two lengthy 9 depositions in this case. I'd like to be able 10 to read the passage in particular. 11 Q. Well, let me ask you just right now to 12 save time, it is not your testimony, is it, 13 sir, that there was something wrong with 14 Microsoft's decision to include an HTML parsing 15 and rendering engine in Windows? 16 MR. LAMB: Objection. Calls for a 17 legal conclusion. 18 THE COURT: Sustained. 19 Q. There was a technical benefit to other 20 parts of Windows, to software developers, and 21 to users from the inclusion of an HTML parsing 22 and rendering engine in Windows; correct? 23 MR. LAMB: Objection. Irrelevant just 24 to time given the Findings of Fact between '95 25 and '99, Your Honor. 7473 1 THE COURT: Sustained. 2 Q. Since June 24th of 1999, there has 3 been a technical benefit to software 4 developers, to other parts of Windows, and to 5 users from the inclusion of an HTML rendering 6 engine in Windows; correct? 7 A. Well, now that there are dependencies 8 that have been created on Microsoft's HTML and 9 -- HTML rendering engine as part of the 10 operating system product, continuing that as 11 some benefit for those users and software 12 developers who relied on that -- on that way of 13 providing the software as part of the operating 14 system package bundled and tied in that way. 15 Q. And as we saw yesterday, one of those 16 software developers who benefits by being able 17 to call upon these components up on the screen 18 is Quicken, Intuit's Quicken; right? 19 MR. LAMB: Same objection as to time, 20 Your Honor. 21 THE COURT: Sustained. 22 Q. As we were looking yesterday at 23 Quicken 2007. 24 So Quicken 2007 benefits by relying on 25 the HTML parsing and rendering engine and the 7474 1 other Internet Explorer components of Windows? 2 You said that yesterday, didn't you, sir? 3 A. I did. And is your question -- 4 Q. I just wanted to make sure that we're 5 still on the same page. You haven't changed 6 your mind about that, have you? 7 A. No. I was just agreeing that I had, 8 in fact, testified yesterday. I didn't know 9 whether I -- whether the earlier question was 10 still up. 11 Q. Well, the Judge sustained an objection 12 to one question I asked. So I was asking you a 13 different question, which is: You testified 14 yesterday, sir, that Quicken 2007 benefits from 15 its reliance on these Internet Explorer 16 components in Windows? 17 A. I believe Quicken is now in the 18 position of having created dependencies on -- 19 in its program on those -- on the bundled and 20 tied components of Microsoft's Internet 21 Explorer. 22 I think that Quicken or Intuit and 23 Intuit's executives were rather ambivalent is 24 my recollection about what that would mean for 25 them, including how that might interfere with 7475 1 their relationships with Netscape at the time. 2 But now that they've included those 3 dependencies, I think the answer to your 4 question is yes. 5 Q. And the same is true of this NetGear 6 router that you were asked about by Mr. Lamb, 7 is that not also correct? The people who make 8 the NetGear router have decided, for their own 9 reasons, to call upon the Internet Explorer 10 components of Windows; is that right? 11 A. That's an interesting question because 12 NetGear supplies -- on this same disk as the 13 installation material, it supplies its 14 documentation and it supplies the documentation 15 in PDF format, which is a very popular format 16 for -- portable document format. It's a very 17 popular format for exchanging documents in the 18 way that the author of the document intended 19 them -- intended for them to be seen. 20 The NetGear folks redistribute their 21 documentation in the Acrobat PDF reader 22 software in case I don't have the PDF reader 23 software on the disk, but they don't distribute 24 the Internet Explorer software on that disk 25 relying now, I believe, on the fact that 7476 1 Internet Explorer is inevitably on the disk -- 2 on the user's computer system. 3 That is -- therefore, they have made 4 the decision to rely on the presence of that 5 bundle and tie on the computers for their 6 users. 7 Q. And, in fact, they like that, don't 8 they, sir? They like the fact -- NetGear likes 9 the fact that they know that this particular 10 feature of Windows that they have elected 11 themselves to call upon will be present in 12 every copy of Windows on which a consumer might 13 elect to install their product? 14 A. See, that -- well, to begin with, I'm 15 not sure I know whether the NetGear folks like 16 it or not, but it seems to me the fact that 17 they include the PDF reader software for their 18 documentation means that they'd be quite okay 19 with installing browser software if they needed 20 to install browser software on a user's 21 computer that didn't have it. 22 Q. That's purely your speculation, isn't 23 it, Mr. Alepin? 24 A. I began my answer by saying I don't 25 know what the NetGear people are thinking. 7477 1 MR. HOLLEY: Your Honor, can I go grab 2 a box over there? 3 Q. Now, when Mr. Hagstrom was having his 4 problem with the NetGear router, did you have 5 occasion to look at the box? 6 A. Yes. 7 Q. Okay. And I presume that you looked 8 on the bottom of the box at something called 9 system requirements? 10 A. Not this time. I own one of those. 11 In fact, I own one of most everything actually. 12 So this time I didn't need to or felt I didn't 13 need to read the requirements at the bottom. 14 Q. Okay. Would it surprise you, sir, 15 that the bottom of the box says system 16 requirements Internet Explorer 5.0 or Netscape 17 4.7 or higher? 18 A. It would not surprise me, but it would 19 -- actually, it would surprise me because it 20 turns out that it's inaccurate. 21 Q. So whatever this says, it doesn't work 22 with Netscape 4.7 or higher? 23 A. That's correct. 24 Q. Okay. Is this a common sort of thing, 25 this idea of having products have system 7478 1 requirements that consumers are told about? 2 A. It's a -- it's a common practice to 3 include system requirements in hardware and 4 software packages, yes. 5 Q. And that's done, is it not, 6 Mr. Alepin, because frequently products are 7 designed with certain dependencies on other 8 software or hardware just assumed? 9 A. Well, there are broader reasons, but 10 one of those reasons would be a design reason. 11 Q. A design reason in the sense that a 12 particular product, for example, the NetGear 13 router, was designed in order to depend on 14 particular functionality in Windows? 15 A. That's one of the reasons. That's 16 correct. 17 Q. Now, you've testified previously, have 18 you not, that users get a benefit in getting 19 Internet Explorer with Windows; is that right? 20 A. Do you have a particular context in 21 which I've said that? 22 Q. Sure. Among my massive paper here. 23 MR. HOLLEY: Your Honor, may I 24 approach the witness? 25 THE COURT: Yes. 7479 1 Q. I'm going to show you, Mr. Alepin, 2 your July 18, 2006 deposition in this case, 3 sir. 4 And if you would, please, can you turn 5 to page 161, line 16 through 23. 6 MR. LAMB: What page did you say, Mr. 7 Holley? 8 MR. HOLLEY: Mr. Lamb, it's 161. 9 Q. And could just -- I don't mean to get 10 ahead of you, but can you tell me when you are 11 there, please? 12 A. I'm at page 161. 13 Q. Okay. So what I'm interested in is, 14 do you remember being asked this question and 15 giving this answer. 16 I asked you, what benefits do you see 17 from having web-browsing functionality in 18 Windows or the Mac OS or OS/2 or every version 19 of Linux. 20 And you answered, well, I think there 21 is a benefit to having web-browsing 22 functionality with Windows, not in Windows. 23 And I asked you the question, and what 24 benefit is that? 25 And your answer was, that you can 7480 1 browse the web, which is a nice thing. 2 And you agree with that; right? 3 A. Browsing the web is a nice thing, I 4 do. 5 Q. In fact, that's one of the principal 6 reasons that people buy PCs now, isn't it, that 7 they want to browse the web and go do things on 8 the Internet? 9 A. I think I said that very thing in my 10 direct examination, yes. 11 Q. And you don't object to Microsoft 12 distributing IE with Windows, do you? 13 A. Object is a -- in a sense -- in what 14 particular sense? 15 Q. Well, let's go again to the 16 deposition. 17 Let's look at page 168. It starts on 18 the prior page. The transcript seems slightly 19 garbled, but what it says is, I asked you the 20 question, okay, and did you reach a judgment 21 that the statements that were made in 1993 and 22 1994 were while Marc Andreessen was still in 23 college. 24 And just so we are clear here, who is 25 Marc Andreessen? 7481 1 A. Marc Andreessen still is a founder, 2 one of the founders of Netscape Corporation. 3 He was active in the development at the 4 University of Illinois Champaign-Urbana and 5 came to California to be a part of the team 6 that created the first version of Netscape 7 Navigator. 8 He's now, I believe, at a company also 9 that he founded called Opsware. 10 Q. Okay. Sorry for that interruption. 11 Let's go back. 12 So the question was, okay. And did 13 you reach a judgment that the statements that 14 were made in 1993 and 1994 were while Marc 15 Andreessen were still in college were all 16 pretextual about the -- it says without, but I 17 think I said about -- about the benefits of 18 including web-browsing functionality in 19 Windows. 20 And your answer was -- there was an 21 objection, and then your answer was, the 22 benefits of including web-browsing as 23 functionality that would be available to users 24 is one thing. I'm not objecting to IE with 25 Windows. 7482 1 A. Uh-huh. 2 Q. And by that you meant, sir, that 3 you're not objecting to Microsoft's 4 distribution of an operating system product 5 that includes web-browsing functionality, are 6 you, sir? 7 A. In that context, no. 8 Q. Now, I have one last question about 9 web-browsing, and then we can move on. 10 You testified on direct examination 11 that the Mozilla Firefox developers were having 12 problems getting their product to work with 13 Windows Vista; is that right? 14 A. That's my understanding. 15 Q. And that is based on what, sir? 16 A. A review of the press, trade press 17 coverage, as well as looking at some of the 18 blogs that are -- blog is being interactive 19 postings that the developer community is using 20 to pass information back and forth. The 21 equivalent of diaries, shared diaries, if you 22 will. 23 Q. You personally don't have any 24 involvement in this at all, do you? I mean, 25 trying to get Mozilla Firefox to run on Vista? 7483 1 A. No, I don't. 2 Q. So your opinion is based on what 3 you've read in the press and what you've seen 4 on blogs; is that right? 5 A. That's correct. 6 Q. Okay. Have you had occasion, sir, to 7 review a blog called -- a Google blog called 8 Mozilla.deaf.planning? 9 A. Not in this particular -- not in this 10 particular time frame, no. 11 Q. Okay. Well, how did you go about 12 deciding which blogs to look at before you 13 decided to come in here and say that the 14 Mozilla Firefox people were having problems 15 getting their product to run on Vista? 16 A. I went to the -- I followed the 17 article and the references cited in the 18 articles that appeared in the trade press to 19 see if I could get an understanding as to 20 what's going on. 21 Q. Okay. 22 A. I had previously heard that Microsoft 23 had been in contact with the developers in -- I 24 think around the September time frame, and 25 accordingly it struck me as kind of odd that 7484 1 they were still having problems this late in 2 the game. 3 Q. Okay. Are you familiar with a 4 gentleman who works for Microsoft called Sam 5 Remja, R-e-m-j-a? 6 A. He may have been the person in the 7 September piece, but, no, I -- no, I'd have to 8 say. 9 Q. Are you familiar, sir, with something 10 called the open source software lab on the 11 Microsoft campus Redmond, Washington? 12 A. I have heard of it. 13 Q. Okay. And you are aware, are you not, 14 sir, that the Firefox Mozilla development team 15 was invited by Microsoft, by Mr. Remja, to come 16 to the Microsoft open source software lab in 17 Redmond for one-on-one support in order to get 18 Firefox to run on Vista? You know that, don't 19 you, sir? 20 A. I think that is what I was referring 21 to in the September time frame. 22 Q. Okay. And do you know whether the 23 Mozilla people took Microsoft up on its offer 24 and went to Redmond and got that one-on-one 25 support that they were offered? 7485 1 A. I don't. 2 Q. Now, I want to switch gears here now 3 and talk a little bit about OS/2 from IBM. And 4 you remember giving testimony on direct 5 examination -- 6 THE WITNESS: Can we take a break? 7 THE COURT: You want a break? 8 THE WITNESS: Yes. 9 THE COURT: Sure. It's time for 10 recess. We will take a 10-minute recess at 11 this time. 12 Remember the admonition given earlier, 13 and see you in about 10 minutes. 14 THE WITNESS: Thank you. 15 THE COURT: All rise. 16 (A recess was taken from 9:47 a.m. 17 to 10:05 a.m.) 18 THE COURT: Okay, Mr. Holley. 19 BY MR. HOLLEY: 20 Q. Mr. Alepin, just before the break, we 21 were switching topics to OS/2, and you 22 testified on direct, sir, that Microsoft 23 delayed giving Windows 3.1 source code to IBM 24 that would have disclosed to IBM that Windows 25 3.1 was no longer a DPMI client. 7486 1 Did I understand your testimony 2 correctly? 3 A. Excuse me -- no longer a full DPMI 4 client, that's correct. 5 Q. Now, in forming that view, did you 6 review the e-mail records of Microsoft about 7 what was sent to IBM and when? 8 A. I reviewed some e-mail records, yes. 9 Q. And you tried, did you not, sir, to 10 review the e-mail records that were relevant to 11 this question, did you not? 12 A. I tried, yes. 13 Q. Okay. Did you, sir, review 14 Defendant's Exhibit 898, which was an e-mail 15 exchange among various developers at Microsoft 16 concerning what code IBM got? 17 A. If I could remember that based on -- 18 based on that description, that would be pretty 19 good. 20 Q. Well, that's a lot to ask. 21 MR. HOLLEY: Your Honor, may I 22 approach? 23 THE COURT: Do you need some copies 24 made? 25 MR. HOLLEY: I think I'm fine, Your 7487 1 Honor. I've done Mr. Lamb the favor of giving 2 him -- 3 MR. LAMB: Mr. Holley, do you have any 4 tab of notes? 5 MR. HOLLEY: No, I don't have any 6 notes. 7 May I approach? 8 THE COURT: Sure. I was just going to 9 offer Carrie to make a copy. 10 MR. HOLLEY: No, Your Honor. I 11 probably should have another set, but I don't. 12 THE COURT: Okay. 13 Q. Now, among the documents that you 14 looked at in forming this view about this DPMI 15 issue, did you look at the e-mail on the second 16 page of this document, which is an e-mail from 17 Mr. Cole? 18 A. The second page. I see one from Andy 19 Hill and one from Tonya. 20 Q. Okay. 21 A. On the second page -- 22 Q. Second page. Now, I am sort of -- 23 Mr. Lamb is being nice to me. 24 Okay. So I'm looking at the e-mail 25 from Andy Hill, and he was, as you testified, a 7488 1 Microsoft developer; correct? 2 A. Yes. 3 Q. To Sherry V. and Janine H., and do you 4 see there in the third paragraph, sir, where it 5 says Janine H., double-check what we shipped 6 and the DPMI code is definitely in there? 7 A. I see that. 8 Q. Okay. And this e-mail is entitled IBM 9 questions about 3.1 code; correct, sir? 10 A. That's correct, yes. 11 Q. And your understanding is that's a 12 reference to Windows 3.1; right? 13 A. That's a reference to the Windows 3.1 14 product under development, I believe. 15 Q. My question is not meant to be tricky. 16 I just want to make sure that your 17 understanding is that the shorthand 3.1 is a 18 reference to Windows 3.1; right? 19 A. Oh, yes. 20 Q. Okay. And the date of this e-mail is 21 March 26, 1991; is that right? 22 A. Yes. 23 Q. And Windows 3.1 was commercially 24 released one year later; is that correct, in 25 March of 1992? 7489 1 A. That sounds correct. I think it was 2 late the first quarter of two thousand -- 1992. 3 That would be March, yeah. 4 Q. Yeah. So IBM had the DPMI code for a 5 year before Windows 3.1 was commercially 6 released; correct? 7 A. It had different versions of the DPMI 8 code over time. 9 Q. Correct. Every month they got a new 10 drop under the arrangements between Microsoft 11 and IBM of the Windows 3.1 source code? 12 A. That's my understanding of how things 13 worked. 14 Q. And you have testified in a prior 15 proceeding that once IBM had the DPMI code, it 16 could do the work necessary to provide DPMI 17 support in OS/2; correct? 18 A. That's a -- not my formulation, but 19 once it had the DPMI software, it understood 20 that Microsoft had changed the DPMI software in 21 Windows so that, contrary to what Microsoft had 22 said, it was no longer going to make Windows 23 DPMI client -- a full DPMI client. 24 Q. Well, is it your testimony that, in 25 fact, Microsoft made that change or just that 7490 1 they thought about it? 2 A. It's my understanding that they made 3 that change. 4 Q. And that is based on your review of 5 the record in this case; correct? 6 A. That's -- that's correct. 7 Q. Okay. Now, in reaching that opinion, 8 did you review an e-mail from Mr. Cole -- and 9 Mr. Cole was in charge of Windows 3.1 10 development on a day-to-day basis; correct? 11 That's your understanding of his job 12 at the time in 1991? 13 A. I'm not sure whether he was a program 14 manager, which is like a project manager, or 15 whether he was the development manager. I 16 thought he was the program manager, but I'll 17 accept that he had -- that he had 18 responsibility as an executive for Windows 19 development. 20 Q. Okay. And my question to you, sir, 21 is, did you review the e-mail that Mr. Cole 22 wrote to Mr. Silverberg, who was the vice 23 president in charge of Windows development in 24 1991, about the status of the DPMI support in 25 Windows? 7491 1 A. I reviewed several correspondence 2 between Mr. Cole and Mr. Silverberg in that 3 time frame. 4 Q. I want to show you what's been marked 5 as Defendant's Exhibit 901. 6 Now, there -- and I want to blow up 7 just so we can all see it a little better this 8 center e-mail. 9 This is an e-mail from David Cole from 10 Brad Si, and you testified on direct that 11 that's the e-mail alias for Brad Silverberg; 12 correct? 13 A. Brad Si, yes. 14 Q. Right. And what Mr. Cole says is -- 15 and this is in August, so we're now five months 16 after March; correct? 17 A. That's correct. 18 Q. Okay. What Mr. Cole says is, this is 19 confusing. Janine H. says Earl H -- and that's 20 Earl Horton; correct? 21 A. I'm not sure what his final last name 22 is, but he's a Microsoft employee active in 23 this area. 24 Q. So Janine H. says Earl H. never took 25 any DPMI client code out of the product, 7492 1 exclamation mark. Apparently he thought it was 2 a bad idea. So according to Janine H. and some 3 mail from Earl H., we are 99 percent a DPMI 4 client now as we originally were. 5 Now, that suggests, does it not, sir, 6 that whatever Mr. Ballmer may have said or 7 whatever Mr. Gates may have said or whatever 8 anyone else may have said, Mr. Horton took it 9 upon himself to leave all the code in the 10 system; correct? 11 A. Well, there's a difference, first of 12 all, between leaving the code in the system and 13 making it function in the retail product, much 14 like the AARD code remained in the Windows 15 product, although it was -- it didn't result in 16 an error message. 17 And the second point on that is, under 18 the whatever anyone else said, I believe it's 19 Doctor Koogan, who was the head of OS/2 20 development at IBM indicated that the Windows 21 DPMI client status changed in the retail 22 product. 23 Q. Well, okay. That's interesting, but 24 not what I asked. 25 I mean, IBM got, as you testified, 7493 1 every month the code, the source code for 2 Windows 3.1. We agree on that; right? 3 A. I believe -- that was the way the 4 contract was supposed to work, and that's the 5 way I understood it to work. 6 Q. And what this e-mail says is that even 7 though Mr. Ballmer apparently said at some time 8 to take the DPMI client code out, Mr. Horton 9 decided that that was a bad idea and he left it 10 in; correct? 11 MR. LAMB: Objection. Misstates the 12 document itself. There's no reference to 13 Ballmer. 14 THE COURT: Overruled. 15 He may answer if he can. 16 A. Mr. Horton apparently left the code in 17 the -- in the Windows software. 18 Q. Okay. Now, you testified just now 19 about what somebody from IBM thought about this 20 DPMI issue; correct? 21 A. That's correct. 22 Q. Did you happen in forming your views 23 on this subject to review the testimony of the 24 president of IBM's PC software company at the 25 time, Mr. Reisweig? 7494 1 A. Well, as I think I indicated 2 yesterday, there are -- I reviewed some of 3 Mr. Reisweig's testimony. I believe one of his 4 depositions went on for five days or something 5 like that. 6 Q. And you reviewed all the parts of 7 Mr. Reisweig's deposition, although lengthy, 8 that you thought you needed to review in order 9 to express the opinions that you've expressed 10 to the Jury; right? 11 A. In order to factor them into my 12 conclusions, yes. 13 Q. I'd like to play you a clip from 14 Mr. Reisweig's January 20, 2002 deposition, and 15 then I'm going to ask you a question about it, 16 sir. 17 (Whereupon, the following video was 18 played to the jury.) 19 Question: And you were asked some 20 questions by the other attorneys about DPMI. 21 Let me just ask you a couple of questions about 22 that. 23 Is it true that you don't recall any 24 important issues about DPMI arising during your 25 tenure as head of IBM's personal software 7495 1 products division during 1990 to 1995? 2 Answer: In thinking about this and 3 these questions, I do believe that I recall 4 Windows 3 used DPMI as a -- for access to high 5 memory above 640 kilobytes. 6 And since we had DPMI support planned 7 in OS/2, it meant that we would be able to 8 provide Windows application binary 9 compatibility if we could run Windows using 10 that support in OS/2's multiple virtual DOS 11 capability as one of the alternatives to get 12 WABCC. 13 Now, you asked me about were there 14 issues between IBM and Microsoft about DPMI. 15 And I honestly don't remember if there were 16 issues between us about it. 17 Question: So as you sit here today, 18 having run that group for five years, you can't 19 recall any problems that arose in connection 20 with DPMI? 21 Answer: There may have been some 22 problems. I don't remember the specifics of 23 it, and I believe we shipped Windows with DPMI 24 support and OS/2 with DPMI support. 25 Question: Do you have even a general 7496 1 recollection of there being any problems? 2 Answer: No. 3 (Whereupon, playing of the video 4 concluded.) 5 BY MR. HOLLEY: 6 Q. Now, this is the man who ran OS/2 at 7 IBM; correct? 8 A. I believe that's the case. I believe 9 he was the president of the IBM software group. 10 I think you gave me that title. 11 Q. Right. From 1990 through 1995, which 12 is what he said in the tape; right? 13 A. Yes. 14 Q. So he was the president in 1991 when 15 this allegedly occurred; correct? 16 A. Necessarily so. 17 Q. Okay. And you didn't think it was 18 important to tell the Jury when you testified 19 that this was a big problem for IBM, that 20 Mr. Reisweig, the executive in charge, didn't 21 think it was a problem at all? 22 A. The person who was directly involved 23 with it, the head of OS/2 development, was the 24 person who had, in my view, a better view of 25 what was going on. 7497 1 Q. A better view than the president of 2 IBM's PC software company? 3 A. That's correct. This is a technical 4 issue, and it involved development and 5 developers. 6 Q. Okay. Let's move on now to a slightly 7 different topic. 8 I want to talk about the initial boot 9 sequence of Windows. 10 And do you recall giving testimony on 11 direct about the initial boot sequence of 12 Windows? 13 A. I do. 14 Q. And just to be clear, when we talk 15 about the initial boot sequence of Windows, we 16 are only talking about the very first time that 17 you turn on a new PC out of the box that runs 18 Windows? 19 A. Well, there is -- if you want me to 20 limit our conversation going forward to that 21 specific type of initial boot sequence, then 22 I'd be happy to do that. 23 But each time you boot the computer, 24 of course, there's the initial booting -- the 25 initial boot sequence is as I described it, 7498 1 start the bios and then do all this other 2 checking and stuff. 3 But we can describe or refer to the 4 initial out-of-the-box experience of a customer 5 opening up the computer and turning it on for 6 the first time as the initial boot sequence. 7 Q. Okay. Well, I don't want to dictate 8 anything to you. 9 I just want to understand, when you 10 were testifying on direct, were you talking 11 about every time the computer turns on or were 12 you talking about what you've now described as 13 the out-of-box experience? 14 A. Well, I described -- in the course of 15 explaining how computers work, I described the 16 bootup sequence and how computers -- and what 17 components are involved in the bootup sequence. 18 I described a bootup sequence where 19 users would every time they turned on the 20 computer be presented with the ability to 21 choose which operating system they wanted to 22 run if they had a dual boot computer, and then 23 I talked about the bootup sequence that is the 24 out-of-box experience. 25 Q. Okay. So it's important in 7499 1 understanding your testimony on direct to 2 distinguish between these cases. 3 Some of your testimony related to only 4 the very first time that a computer is turned 5 on, and other parts of your testimony related 6 to every time a computer is turned on; correct? 7 A. That's fair, yes. 8 Q. Okay. Now, specifically with 9 reference to this slide that I think you 10 showed, or something very similar to this -- 11 I'd like to show you Slide Number 1008, excuse 12 me. 13 Now, this is this Packard Bell 14 Navigator shell that you described on direct 15 testimony; correct? 16 A. Yes. 17 Q. Okay. Now, you said that Microsoft 18 prevented Packard Bell from having this user 19 interface displayed in the initial bootup of 20 Windows. 21 And I just want to be clear whether 22 that was in the out-of-box experience, when 23 somebody goes to Target and buys a new PC and 24 brings it home and pulls it out of the box, or 25 whether you were talking about every day when 7500 1 you turn the PC on. 2 A. I believe I mentioned -- I described 3 the Navigator as part of the auto start 4 function. 5 So once the system was up, the -- once 6 Windows had booted, there was a provision in 7 the system start-up that said okay, Windows, 8 after you've got everything up and running, 9 then you can start this program. 10 Q. Okay. 11 A. And I was referring to the Navigator 12 with respect to the auto start. 13 Just to be clear, I had talked about 14 different kinds of restrictions, one of which 15 had to do with the out-of-the box, one of them 16 had to do with the dual boot, another one had 17 to do with auto start and larger icons. I 18 mean, these are the conclusions of law. 19 Q. Right. And you may not be happy to 20 hear this, but I intend to talk about all of 21 those things. 22 But what I'd like to talk about right 23 now is this. 24 Okay. And what you said on direct was 25 that what Microsoft didn't let Packard Bell do 7501 1 was the very first time I bought a 2 Windows-based PC and brought it home and turned 3 it on, Packard Bell couldn't boot the system so 4 that this was the first screen that somebody 5 saw. Is that your understanding? 6 A. After the operating system started, 7 that's correct. 8 Q. But, in fact -- yeah, and the 9 operating system would start, and you'd never 10 see the Windows screen. You'd go right to this 11 screen; correct? 12 A. That was what Packard Bell sought to 13 do. 14 Q. That is correct. 15 Now, you notice here, for example, 16 that they have completely obscured the start 17 button of Windows 95? 18 A. There's a Windows button on the upper 19 right-hand side, second from the right top. 20 Q. Okay. I see that. That means that if 21 I'm smart enough to figure it out, I can get to 22 the Windows desktop. 23 But my question to you, sir, was this 24 UI, this shell that Packard Bell created 25 completely obscures the Windows 95 start 7502 1 button, doesn't it? 2 A. Yes. 3 Q. Okay. And it obscures the system tray 4 and it obscures the task menu, doesn't it? 5 A. Well, the same way that any 6 application that is running on the full screen 7 obscures what's underneath it. 8 Q. Now, did you have occasion in forming 9 your views about these sorts of OEM shells to 10 review the written direct testimony of Joachim 11 Kempin from Microsoft in a prior proceeding? 12 A. Which proceeding would that be? 13 Q. I am referring to United States 14 against Microsoft, sir. 15 A. Which -- which one? 16 Q. This is the first one. 17 A. Forgive me. This is with respect to 18 the -- under the consent -- brought under the 19 -- 20 Q. Let's try to short-circuit this 21 because I don't want to get into a long 22 discussion of which one is which. 23 A. If you could give me the dates, it 24 would be a lot easier. 25 MR. HOLLEY: May I approach the 7503 1 witness, Your Honor? 2 THE COURT: Yes. 3 Q. Now, Mr. Alepin, this is the written 4 direct testimony of Joachim Kempin of 5 Microsoft. 6 And as you testified on direct, 7 Mr. Kempin was the vice president of Microsoft 8 in charge of its dealings with computer 9 manufacturers and they're also referred to 10 frequently as OEMS; is that right? 11 A. That's my understanding. 12 Q. Okay. Now, in forming your views, did 13 you look at page 8 to paragraph 37 of 14 Mr. Kempin's written direct testimony? 15 A. I'm just familiarizing myself with 16 that. 17 Q. I don't want to rush you. Take as 18 much time as you need. 19 A. Thank you. 20 I did, yes. 21 Q. Okay. And one of the things that 22 Mr. Kempin says in paragraph 37 is that these 23 OEM shells that we're talking about were 24 frequently of poor quality. 25 You see that, do you not, sir? 7504 1 A. I do. 2 Q. And he also says that they obscured 3 basic functionality of the operating system 4 like the start menu; correct? 5 A. That's what he's saying, yes. 6 Q. And he also notes that in particular 7 -- sorry, can you -- yeah. 8 That this Packard Bell Navigator had 9 the unfortunate consequence of disabling right 10 mouse clicking. 11 Do you see that, sir? 12 A. Yes, I do see it. 13 Q. Okay. What happened to Packard Bell? 14 They went bankrupt and they're no longer in 15 business, isn't that right, sir? 16 A. I think they were acquired by NEC, 17 which is perhaps different from -- 18 Q. Were they acquired out of bankruptcy, 19 sir? 20 A. I'm afraid I don't know whether they 21 were or not, but I can still -- I believe I can 22 still buy a Packard Bell computer in different 23 countries, so -- 24 Q. Now, you testified that one of the 25 things that Microsoft did was to inhibit the 7505 1 ability of OEMs to provide tutorials to users; 2 correct? 3 A. I think that that's not exactly the 4 way I phrased it. 5 Q. Well, okay, I don't want to put words 6 in your mouth. 7 But you did say, did you not, sir, 8 that these restrictions that you were talking 9 about prevented OEMs in the initial boot 10 sequence, the very out-of-box experience of 11 Windows, to put tutorials in that process; 12 correct? 13 A. Mr. Kempin and I are referring, I 14 believe, to the same thing here, which is the 15 auto start provisions, not the initial out of 16 -- the initial bootup sequence. 17 Q. Okay. 18 A. But, yes. But with that 19 clarification. 20 The part of the function that OEMs 21 intended to have performed by this software 22 shell that was there to greet their users 23 included the ability to run tutorial software 24 that would introduce them to the functions and 25 features of their computer, much like Microsoft 7506 1 has a tutorial that comes with some of its 2 software. 3 Q. Now, I just -- I don't mean to go 4 backwards, but I want to make one point before 5 we move on from the shells to tutorials. 6 There was nothing ever, right, that 7 prohibited an OEM from putting an icon on the 8 desktop of Windows that, if the user chose, it 9 would launch into an alternate shell like 10 Packard Bell Navigator; correct? 11 A. There is -- those software developers 12 would find themselves perhaps denied 13 information, but the OEMs could bundle that 14 software and put it on the desktop as an icon. 15 Q. Okay. Well, let's -- you're 16 speculating about whether anyone ever was 17 denied necessary information; right? 18 A. No. 19 Q. You're speculating about whether any 20 developer of an alternate shell, like Packard 21 Bell, was denied information they needed to 22 create the shell, are you not, sir? 23 A. No, I'm not. 24 Q. Okay. What testimony are you relying 25 on from Packard Bell that they were unable to 7507 1 develop the shell that they created? 2 A. That they were unable to develop -- I 3 wasn't responding to Packard Bell specifically. 4 The question was more general, I believe. Your 5 question asked with respect to anyone, not just 6 Packard Bell. 7 Q. Okay. You're not testifying, are you, 8 sir, that Packard Bell was denied information 9 it needed to create the shell that it did, in 10 fact, create? 11 A. That wasn't part of their issue, if 12 you will. 13 Q. Okay. And I just want to be clear. 14 The answer to my question, which is there was 15 no restriction at any time on the ability of an 16 OEM to put an icon on Windows desktop that 17 launched into an alternate user interface like 18 the Packard Bell Navigator; correct? 19 A. I'm unaware of that. 20 Q. And that applies equally, does it not, 21 sir, to the notion of tutorials? 22 There was at no time ever a 23 restriction on the ability of OEMs to put icons 24 on the Windows desktop that launched tutorials 25 if the user decided that he or she wanted to 7508 1 watch it; correct? 2 A. I, again, am unaware of those kinds of 3 restrictions. 4 Q. Now, you testified that from 1995 to 5 1999, Microsoft prevented computer 6 manufacturers from placing large nonsquare 7 icons on the Windows desktop; is that correct? 8 A. Well, larger icons. I'm not sure I 9 described the limitations on geometry, but -- 10 Q. Well, but you were suggesting that 11 there was a restriction not only on size, but 12 on shape, or did I not understand that? 13 A. I think the -- I think focused 14 primarily on size and attributes associated 15 with them. 16 Q. Now, there was nothing ever, was 17 there, sir, that prevented an OEM from putting 18 as many icons as they wanted for any given type 19 of software preinstalled on the Windows desktop 20 so that the user saw it the very first time 21 they turned on the PC; correct? 22 A. Well, there was the awareness by OEMs 23 that the more icons you put on the desktop, the 24 more cluttered the computer appeared and the 25 more confusing the computer screen was. 7509 1 And, accordingly, there was a definite 2 awareness of the problems associated with 3 putting more icons or icons that were 4 duplicative of the same functionality. 5 So, I mean, there is something about 6 putting as many icons as you want. It reduces 7 the quality of your product. 8 Q. I'd like to show you a slide, which is 9 a screen shot of a Toshiba Satellite PC. And 10 I'm going to ask you a question about it. 11 Now, you told the Jury that you have, 12 I think you said, hundreds of PCs at your 13 office; right? 14 A. Well, I wouldn't go as far as 15 hundreds. More than 100, yes. 16 Q. More than 100. 17 A lot? 18 A. That's a lot, yes. 19 Q. That's okay. I think we can agree 20 that it's a lot. 21 Now, on this particular PC, despite 22 your testimony that OEMs are concerned about 23 desktop clutter, there are quite a few icons 24 preinstalled by Toshiba; correct? 25 A. There are quite a number of icons on 7510 1 the screen, that's correct. 2 Q. And among the icons that Toshiba 3 elects to put on the Windows desktop are one 4 relating to Toshiba console, one relating to 5 Toshiba access, and one which is a user's guide 6 for this particular PC; correct? 7 A. That's -- that's correct. 8 Do I -- or would it be helpful if I 9 knew what time period this was in or -- 10 Q. Well, have you within the last five 11 years purchased either a Sony VAIO or a Toshiba 12 Satellite PC and looked at what appears on the 13 Windows desktop the very first time you turned 14 the PC on? 15 A. Yes, I have. 16 Q. Okay. And so you are familiar, are 17 you not, sir, that both Sony and Toshiba 18 provide on the Windows desktop access to 19 tutorials for their PCs? 20 A. I believe that's the case, yes. 21 Although the user's guide is not a tutorial, I 22 believe. I believe it's a document, not a 23 tutorial in that sense. 24 Q. But there would be nothing to prevent 25 Toshiba, from your understanding, and there 7511 1 never was anything that would prevent Toshiba 2 from putting an icon on the Windows desktop 3 that would launch an interactive tutorial with 4 lots of audio and video? 5 A. That's correct. 6 Q. Now, let's shift gears slightly and 7 talk about dual booting software and your 8 testimony concerning the Be operating system. 9 First of all, I just want to 10 understand what your testimony was. 11 You said that Microsoft took actions 12 that inhibited the ability of Be to get its 13 operating system installed on new PCs. 14 Was that your testimony? 15 A. That's correct. 16 Q. Okay. Now, just so we understand what 17 the BeOS was, Be was never marketing the BeOS 18 as a replacement for Windows, were they? 19 A. Replacement for Windows. It was a 20 replacement for a personal computer or a 21 computer for use by people. 22 Q. Okay. That's my fault for not 23 identifying the time period. 24 So there was a period of time in which 25 Be was marketing these devices that were 7512 1 replacements for PCs, and then a time came when 2 BeOS was being marketed for use on Intel PCs; 3 correct? 4 A. That's correct, yes. 5 Q. Okay. My apologies. 6 So let's focus on the second phase of 7 the existence. 8 And in that phase, the BeOS was not 9 being marketed as a replacement for Windows, 10 was it? 11 A. I believe that the Be's strategy was 12 not to challenge the Windows desktop operating 13 system as a complete replacement. 14 Q. Okay. And as a consequence of that, 15 your understanding, based on your review of the 16 evidence, is that what Be was trying to get 17 OEMs to do was to install the BeOS together 18 with Windows in what's called a dual boot 19 configuration; right? 20 A. That was correct. 21 Q. Okay. Now, you have testified that 22 dual booting can have disastrous consequences 23 for users; is that right? 24 A. I don't think that's correct. 25 Q. Okay. Well, I'm not sure where we 7513 1 stand on whether I -- did you give this back to 2 me, your July deposition? I think you may 3 have. 4 MR. HOLLEY: Your Honor, may I -- 5 A. Oh, I don't have anything here, so -- 6 Q. Okay. You are back to square one. 7 MR. HOLLEY: Your Honor, may I 8 approach the witness? 9 THE COURT: Sure. 10 Q. So this is your July 18, 2006 11 deposition in this case. 12 And I'd like you to turn, sir, to page 13 159 of that deposition. 14 A. Uh-huh. 15 Q. And I've got to find it myself. 16 Okay. Let's start on 158 to get some 17 context for this. 18 Do you remember being asked this 19 question and giving these answers -- and I'm 20 starting on line 14, sir. 21 I asked you, have you used any dual 22 boot software provided by third parties? 23 And you answered, I'm not sure which, 24 what would qualify. I use parallels, I use 25 zen, I use grub, and I use -- in the utilities 7514 1 area, I use partition magic, and a couple of 2 other pieces of software like that. 3 And I asked you the question, do you 4 find them difficult to use? 5 And you gave the answer, I find them 6 requiring a level of skill and knowledge that 7 is, while improving over time, it is 8 nevertheless a source of intimidation and 9 concern for the uninitiated user. 10 I think at the time we're talking 11 about here, a dual boot -- dual booting 12 software was very unuser friendly -- or very 13 user unfriendly. It has since improved, but 14 it's nevertheless an activity, dual booting or 15 installation of dual booting software, that can 16 have disastrous consequences for users. 17 You gave that testimony, did you not, 18 sir? 19 A. That's correct. 20 Q. And just to be clear, in that question 21 and answer, the period that you and I were 22 discussing at the deposition is the period in 23 which Be was attempting to get OEMs to dual -- 24 to install its BeOS in a dual-boot 25 configuration; correct? 7515 1 A. Correct. And, in fact, it was with 2 reference to something that was in a report 3 that I had written about the installation of 4 dual boot software. And that's the particular 5 element that I'm commenting on, that the 6 installation of dual boot software is something 7 that is -- was daunting for users. That's the 8 key point. 9 Not the operation of the system once 10 the system has been -- once the dual boot 11 software has been installed. 12 It's the configuration of your 13 computer to accommodate multiple operating 14 systems that's the -- that I lamented was 15 somewhat nonuser friendly at the time. 16 Q. Okay. Well, let's focus on the words, 17 sir. 18 I asked you a question. This is 158, 19 line 20. 20 Do you find them difficult to use? 21 And your answer was, it has since 22 improved, but it's nevertheless an activity, 23 dual booting or installation of dual booting 24 software, that can have disastrous consequences 25 for users. 7516 1 You were talking about both things in 2 response to a question do you find them 3 difficult to use, isn't that right, Mr. Alepin? 4 A. I'm sorry, but, no. I think if you go 5 back to page 157, you asked me, and I'm 6 interested in your statement that installing 7 dual boot software is not a task for the faint 8 of heart. 9 And included in the list of software 10 that I answered you back, partition magic is 11 not a dual boot operating system software. 12 It's a system that prepares -- it's a software 13 utility that prepares your computer to have 14 multiple operating systems. 15 Similarly, grub is not an operating 16 system, but, rather, it's a utility to 17 configure and to assist you in installing 18 multiple operating systems. 19 So I think that the entire context of 20 our conversation was the problem of installing 21 dual boot software. 22 Q. Okay. And I have no desire to fight 23 with you about this because it's your 24 testimony, but I just want to be very clear 25 what your testimony is. 7517 1 It's your current testimony that when 2 I asked you do you find them, meaning dual 3 booting software programs, difficult to use, 4 that the testimony you gave in response to that 5 question related solely to installation? 6 A. Well, dual booting software is 7 software that is in -- that provides users the 8 choice of which operating system they want to 9 use. 10 And it has to -- they assist in the 11 installation and the configuration of your 12 system and they are difficult to use. They 13 were difficult to use. 14 And I don't think anything was unclear 15 about what I said at the time in response to 16 your question. 17 Q. I didn't mean to suggest that it was, 18 sir. 19 Now, when you gave your testimony 20 about the Be operating system, did you have 21 occasion to review internal documents from Be 22 about its own view of the BeOS in this time 23 period? 24 A. I read some, some Be documents. 25 Q. Okay. But in deciding to tell the 7518 1 Jury that it was Microsoft's actions which 2 inhibited Be in its efforts to get dual booting 3 configurations for its software, you reviewed 4 every internal Be document that you thought you 5 needed to in order to reach that judgment, 6 didn't you? 7 A. I would have to say yes. 8 Q. Okay. In the context of that, did you 9 review -- well, first of all, let's -- I think 10 we need to establish a few identities here. 11 Jean-Louis Gassee is a man who was the 12 CEO of Be in 1998; correct? 13 A. He's the founder of -- former Apple 14 computer executive, yes, who was at the time 15 the CEO. 16 Q. Okay. And did you review a document 17 written by Alex Osadzinski to Mr. Gassee 18 describing the state of the Be operating system 19 in August of 1998? 20 A. Maybe -- 21 Q. I know you are going to ask to look at 22 it, and so I'm just going to show you. 23 MR. HOLLEY: May I approach the 24 witness, Your Honor? 25 THE COURT: Yes. 7519 1 Q. Now, this is an internal e-mail from 2 Be to the CEO, Mr. Gassee, talking about the 3 situation with the Be operating system; 4 correct? 5 A. If you give me a moment or two to read 6 it. 7 Q. Yes. I'm sorry, take as much time as 8 you need to read it, sir. 9 A. Thank you. 10 It appears to be a -- I've read it, 11 I'm sorry. 12 Q. Okay. Now, in forming your opinion 13 about what happened to Be, did you take account 14 of the statement in this document to 15 Mr. Gassee, the CEO, where Mr. Osadzinski says, 16 my take -- and I'm looking under point 2. My 17 take, we have a geek OS positioned as a geek 18 OS. Geeks don't buy apps, nor are there that 19 many of them who buy an OS. 20 Fairly intensive marketing to the 21 Japanese geek market resulted in 5,500 sales 22 with clear saturation at that point. We gave 23 away 10,000 copies to mostly U.S. developers 24 and sold another 8,000 or so. My guess is that 25 we're mostly saturated in the U.S. now. 7520 1 Did you take account of this view 2 expressed to the CEO of Be that a sale of 5,500 3 copies in Japan, giving away 10,000 in the 4 United States, and selling 8,000 in the United 5 States had met all demand for the BeOS? 6 A. Well, I think this is a -- there was a 7 difference here in terms of what the 8 capabilities were of the system versus the 9 position of the product that the OS in whom 10 they were trying to sell to. 11 And in response to your question, I 12 think that Mr. Osadzinski is commenting about 13 the saturation of the BeOS in the geek market 14 and not to your larger question which was 15 saturated demand for the BeOS. 16 Q. But he says at the outset, Mr. Alepin, 17 we have a geek OS positioned as a geek OS. 18 So if there's any demand for that geek 19 OS, in his view, it's been saturated; correct? 20 A. Well, I mean, you can have a geek OS 21 or a nongeek OS and position it as something 22 else. 23 You can try and position a sedan as a 24 sports car and it doesn't change whether it's a 25 sedan or not. It just changes how you position 7521 1 it in the market and whether customers, 2 nongeeks are likely to buy it or whether in 3 this case geeks are likely to buy it, many of 4 them. 5 Q. Well, in forming your views about the 6 reasons for the success or lack thereof of the 7 BeOS, did you take into account the fact that 8 in 1998 nobody at Be used the BeOS on a daily 9 basis? 10 And if you want a reference for that, 11 turn to the second page of this document. 12 And I'm interested in your view of the 13 sentence that says, show me one person at Be 14 who uses the BeOS as their primary 15 nondevelopment system. If we don't, for good 16 reason, it just doesn't do enough, then how can 17 we expect others to? 18 Did you look at that, sir, in forming 19 your views in this case? 20 A. I looked at -- how can I word -- 21 similar assessments of the capabilities and the 22 availability of applications for the Be 23 platform. And that explains why the strategy 24 of being a system -- an alternate for the 25 performance of certain functions and available 7522 1 on the user's -- on the same computer that the 2 user was running his Windows applications was a 3 good idea. 4 Q. You certainly didn't say on direct 5 that you were aware of internal and external 6 assessments of the BeOS that are as negative as 7 Mr. Osadzinski's, did you, sir? 8 A. I did not say -- I don't recall saying 9 very much about the Be operating system as a 10 complete platform for all applications. 11 Q. Now, it is not your testimony, is it, 12 sir, that there was ever any restriction that 13 prohibited an OEM from putting an icon on the 14 Windows desktop that the user could click to 15 launch the BeOS? 16 A. Well, that would have been quite 17 difficult to do given that it would have been 18 an operating system as a technical matter, I 19 think. 20 Q. Well, Compaq did it, didn't they? 21 A. At one point in time they may have 22 after some changes, but I'm not sure what the 23 time frame is. 24 Q. Well, did you review an e-mail from 25 Mr. Hester at Compaq to Rick Thompson, who was 7523 1 running the Compaq PC business I believe at the 2 time -- and this is October 1998 -- an e-mail 3 in which he says that Compaq has developed a 4 system with an icon on the Windows 98 desktop 5 that boots into the BeOS? 6 A. I may have, but I don't recall sitting 7 here now. 8 Q. Well, do you have any reason to 9 believe, sir, that that is untrue? That as of 10 October 30, 1998, Compaq had figured out how to 11 boot the BeOS from an icon on the Windows 98 12 desktop? 13 A. I'm not recalling the specific 14 technical details of that. I think there's 15 some -- there were some technical issues 16 associated with the way in which that was done 17 or the hardware that was required by the user 18 in order to be able to do that. But I don't -- 19 I don't sitting here recall that. 20 THE COURT: We are going to take our 21 recess at this time. 22 Remember the admonition previously 23 given. 24 See you at noon. 25 (A recess was taken from 11:01 a.m. 7524 1 to 12:01 p.m.) 2 (The following record was made out 3 of the presence of the jury.) 4 THE COURT: Before we bring back the 5 Jury, I made a ruling yesterday regarding the 6 trade press. And I was looking through the 7 transcript, and I did not realize at the time 8 but there was a portion of the testimony of 9 Mr. Alepin where he says the trade press is a 10 source of information about current events, and 11 he did rely on it. 12 So I think, therefore, there was 13 foundation for you to talk to him about that 14 one article. So if you want to go back into 15 that, you can. 16 MR. HOLLEY: Thank you, Your Honor. 17 And consistent with -- before the Jury 18 comes back, consistent with our discussion in 19 chambers earlier, I would like -- and I want to 20 object to this process because I don't think 21 it's fair, but I do think that I should tell 22 opposing counsel apparently, and the Court, 23 that in the next session I intend to talk about 24 vaporware and FUD. 25 And what Mr. Alepin said about those 7525 1 subjects on direct, and in the context of that, 2 it is my intention, Your Honor, to talk about 3 what IBM and DRI and other companies did in 4 terms of preannouncing new products to the 5 marketplace and also in engaging in comparative 6 advertising. 7 I do not intend to suggest that that 8 is illegal behavior. I do not intend to 9 suggest that it is anticompetitive behavior. 10 But as I said earlier, Your Honor, for 11 the Jury to understand and apply the Court's 12 instruction about deciding what is and is not 13 anticompetitive behavior, which the 14 instructions properly say can sometimes be 15 difficult, the Jury needs to know what is 16 standard in the market. And that is the only 17 reason that I will be going into those topics, 18 Your Honor. 19 THE COURT: Are you going to try to 20 get some testimony from him that that is a 21 general business practice of people in the 22 industry? 23 MR. HOLLEY: I'm going to -- I'm going 24 to be purely responsive to things that he said 25 on direct, which said that what Microsoft did 7526 1 was inappropriate. And in impeaching that 2 testimony, I'm going to seek to show that the 3 same things were done by other people in the 4 industry. 5 I'm not going to then take the further 6 step of asking this witness to opine about what 7 was or was not the general practice of the 8 industry. 9 THE COURT: I think my ruling goes to 10 the effect that you have to show that it was a 11 general practice of others in the field. 12 MR. HOLLEY: Well, that will be our 13 submission through the course of the evidence, 14 but in order to -- and if you want me to ask 15 Mr. Alepin that, I will, Your Honor, but it 16 wasn't my understanding that for evidence to be 17 admissible, the particular witness being asked 18 the question had to opine about whether it was 19 a common practice in the industry. 20 And I'll just note, Your Honor, that 21 Mr. Alepin is sitting here. So the more I talk 22 about what I'm going to do, the more I'm at 23 something of a disadvantage. 24 MS. CONLIN: Would you like us to ask 25 him to leave? 7527 1 THE COURT: He can step out if you 2 want. 3 MR. TULCHIN: Your Honor, I don't want 4 to be a second voice arguing this, but just as 5 a piece of information, on December 13th, 2006, 6 we filed a memorandum on this topic because it 7 had come up I believe in the course, if I 8 recall correctly, of an objection that the 9 Plaintiffs made to something in my opening 10 statement. 11 The Plaintiffs have never responded to 12 our memorandum on this topic. I believe that's 13 correct. I don't recall any response by them. 14 I have another copy of these papers 15 here if it will be helpful to the Court. 16 THE COURT: Your memorandum? 17 MR. TULCHIN: Yes, sir. 18 So our memorandum filed on December 19 13th, 2006. It's entitled Microsoft's 20 memorandum on evidence concerning other 21 software companies' legal business practices, 22 unquote. 23 And, again, I don't believe the 24 Plaintiffs ever responded to this. And I think 25 it is very much on point to the discussion we 7528 1 had in the roving room earlier and Mr. Holley's 2 statement of a moment ago. 3 THE COURT: Okay. 4 MS. CONLIN: Your Honor, if I may 5 speak briefly. 6 THE COURT: Sure. 7 MS. CONLIN: And I certainly wish the 8 Court had a roving room. 9 I don't know that this December 13th 10 memorandum -- it's certainly possible that we 11 overlooked something in the course of this, but 12 I do have a sort of hazy recollection that that 13 may have been filed after we discussed this 14 issue yet again with the Court. And Microsoft 15 maybe asked -- this is -- as I said, Your 16 Honor, I'm not sure, but I think maybe 17 Microsoft asked to file additional authorities 18 and the like. 19 But the Court has indeed indicated 20 Defendant did not. 21 The Defendant may not produce evidence 22 of other entities' illegal anticompetitive 23 conduct merely to show that the illegal conduct 24 occurred or to justify its own conduct. Such 25 evidence must be relevant to a specific defense 7529 1 or claim that it is appropriate. 2 And here, Your Honor, is the key 3 phrase which Microsoft has repeatedly violated. 4 A defense of everybody else is doing 5 it will not be allowed. 6 That is what the Court's ruling. That 7 is a correct ruling. The offer of this 8 evidence is, first of all, irrelevant, and, 9 second of all, in direct violation of the 10 Court's ruling that the everybody's doing it 11 defense, the me too will not be allowed. 12 MR. TULCHIN: May I hand up this 13 memorandum, Your Honor? 14 THE COURT: You may. 15 MR. HOLLEY: And, Your Honor, I just 16 would like to point out, you'll see this in 17 Section 2 of the memorandum, but -- and I 18 apologize for my misspeaking earlier in 19 chambers. 20 It's Preliminary Instruction Number 8, 21 and I said 9, but my argument still applies. 22 The Court has instructed the Jury that 23 Microsoft must -- that the Plaintiffs must 24 prove that Microsoft, quote, willfully obtained 25 or kept monopoly power through exclusionary or 7530 1 anticompetitive conduct, close quote. 2 The instructions then go on to say 3 that that's an often difficult distinction. 4 And, of course, the Court's 5 instruction in that regard is consistent with a 6 long line of cases which say that it is a very 7 thorny question to distinguish aggressively 8 pro-competitive conduct on the one hand and 9 conduct that is anticompetitive. 10 And so what the Court's Instruction 11 Number 8 goes on to say, and I quote, in 12 determining whether Microsoft's conduct was 13 anticompetitive or whether it was legitimate 14 business conduct, you should determine whether 15 that conduct is consistent with competition on 16 the merits, whether the conduct provides 17 benefits to consumers and whether the conduct 18 would make business sense, apart from any 19 effect it has on excluding competition or 20 harming competitors. 21 Now, in order to determine whether 22 something is consistent with competition on the 23 merits, you have to know what competition on 24 the merits is in the given industry at issue in 25 the case. 7531 1 It turns out that competition on the 2 merits in this business means continually 3 integrating new functionality into your 4 products, preannouncing those products in order 5 to permit people to test them and to create 6 products that are compatible with your 7 products, and then engaging in comparative 8 advertising, sometimes quite aggressive and 9 rude, in which you compare the features and 10 functionality of your products to those of your 11 competitors. 12 It is not possible to determine 13 whether something is consistent with 14 competition on the merits in a vacuum. 15 The Jury needs to know whether 16 something makes business sense in terms of 17 whether that is what people in the business do. 18 Now, I'm fully aware of the Court's 19 motion in limine ruling, and it's specific, and 20 the Plaintiffs keep trying to read it as if it 21 is as broad as the side of a barn, and it is 22 not. 23 What it says is you can't say that if 24 you did something illegal, it's okay because 25 somebody else did it too. 7532 1 We are not saying that IBM did 2 anything illegal. We're not saying that Apple 3 did anything illegal. We're not saying that 4 DRI did anything illegal. 5 And it's interesting to note that no 6 court anywhere -- we're not talking about the 7 government case now. We're talking about 8 things that the FTC looked at and the DOJ 9 looked at and they elected not to bring a case 10 on. 11 And the reason why, because they're 12 not illegal. 13 Now, these people have decided, for 14 whatever reason, to resurrect those claims and 15 to try to persuade this jury that they are 16 illegal. 17 Well, they are going to have to do 18 that, Your Honor, or they should have to do 19 that, within the confines of Section 2 law as 20 applied to the Iowa Competition Law. 21 And what that law is is a notion that 22 you have to look at what is market in a given 23 business, how do people behave in the 24 marketplace in the software business, and then 25 look at Microsoft's conduct in that context and 7533 1 determine whether or not on the one hand it is 2 aggressively pro-competitive conduct or it 3 crosses the line into anticompetitive conduct. 4 And the notion that that can be done 5 without any sense of what other companies do is 6 wrong. And there is no case that the 7 Plaintiffs can provide where a court has told 8 an antitrust defendant in this sort of case 9 that it is restricted from proving what 10 constitutes competition on the merits. 11 And if that occurs, it will gut our 12 defense and we will be severely prejudiced 13 because we will be unable to put on evidence 14 that we have -- that the Jury is expecting us 15 to put on based on what Preliminary Instruction 16 Number 8 says, Your Honor. 17 THE COURT: Anything else? 18 MS. CONLIN: I have just a few more 19 things, Your Honor. 20 As I indicated to the Court when we 21 were in the back room that one of our 22 objections to the way that Microsoft is 23 conducting its defense is that it has not 24 followed the procedures laid out by the Court. 25 And the procedure that we follow which 7534 1 is you don't come close to any mention of 2 something that has been precluded by a motion 3 in limine without first seeking the Court's 4 approval. 5 And that is what the Court ordered 6 Microsoft to do in connection with this very 7 thing. 8 The Court will consider such offers as 9 evidence on an issue-by-issue basis. 10 I also, Your Honor, did not correct 11 what Mr. Holley said earlier about what 12 happened in the district court. 13 And for the record, I feel compelled 14 to do that. 15 I do not have the vast knowledge that 16 Mr. Holley does of either antitrust law or of 17 the DC Circuit opinion. I have not committed 18 it to memory. 19 My best recollection, however, is what 20 the Court said is that the government had not 21 presented enough evidence on the tying issue. 22 My understanding of the problem for 23 the government was that they had not separately 24 proved the market for Internet Explorer, for 25 browsers. 7535 1 And when it went back to the district 2 court for that further proof, the 3 administration had changed and a different view 4 of antitrust law had come into being, and so 5 that some Assistant Attorney General or some 6 staff member of the United States Department of 7 Justice went to court and said we can't 8 possibly prove that does not necessarily make 9 it so. That they cannot prove it does not mean 10 that we cannot prove it. 11 But we cannot -- you know, we cannot 12 prove it if Microsoft continues to violate the 13 Court's motion in limine. 14 They can put in evidence to justify 15 Microsoft's conduct, but they cannot put in 16 evidence that is simply an attempt to show that 17 competitors did similar things. 18 Microsoft is a monopoly. The 19 competitors are not. 20 THE COURT: All right. Why don't you 21 bring Mr. Alepin in. 22 I want to hear this testimony. I want 23 to listen to him first. 24 MR. HOLLEY: As an offer of proof, 25 Your Honor? 7536 1 THE COURT: Uh-huh. 2 MR. HOLLEY: Okay. 3 I will just say for the record, Your 4 Honor, that this may occupy quite a lot of time 5 because there was an entire section of his 6 testimony about vaporware and another section 7 of his testimony about FUD. So it may take a 8 while, but I guess we'll take whatever time it 9 takes. 10 MR. LAMB: For purposes of clarity, 11 Your Honor, should he just go ahead and elicit 12 all the testimony and then we'll argue the 13 objection so we're not -- 14 THE COURT: Well, yeah. Yeah. 15 MR. HOLLEY: And just for clarity's 16 purposes, I mean, I did this now because it was 17 coming up this afternoon. It was not the very 18 next topic I'm going to go into. 19 THE COURT: Oh, it wasn't the next? 20 MR. HOLLEY: No, it was not, Your 21 Honor. I was just trying -- 22 THE COURT: Okay. Let's do your area 23 first. 24 MR. HOLLEY: And then we'll stop. 25 THE COURT: Yes. 7537 1 MR. HOLLEY: Okay, Your Honor. I was 2 just trying to avoid any notion of unfair 3 surprise. 4 THE COURT: Okay. Let's do that. You 5 can get the Jury. Sorry. 6 (The following record was made in the 7 presence of the jury at 12:19 p.m.) 8 THE COURT: Everyone else may be 9 seated. 10 You are still under oath, sir. 11 THE WITNESS: Thank you. 12 BY MR. HOLLEY: 13 Q. Good afternoon, Mr. Alepin. 14 I now want to turn to a different 15 topic, which is add/remove programs utility in 16 Windows. And you gave testimony on that topic 17 on direct, did you not, sir? 18 A. I did. 19 Q. And I'd like to show you a slide that 20 you put up on the screen during your direct 21 testimony. It's Slide 796. 22 Now, as you explained to the Jury, 23 this is the add/remove programs section of the 24 Windows user interface; correct? 25 A. That's -- yes, correct. That's 7538 1 correct. 2 Q. And any program can register itself in 3 this utility; is that correct? 4 A. Yes. 5 Q. And the behavior that occurs when you 6 hit the remove button, which is up there in the 7 blue box, is entirely decided by the person who 8 wrote the program and registered it in the 9 generic utility; correct? 10 A. That's correct. 11 Q. So if, for example, Adobe chose to 12 hide access to photo shop when the remove 13 button was clicked rather than literally 14 removing the code, that would be Adobe's 15 choice? 16 A. Adobe could do that. 17 Q. Okay. Now, if you click what you call 18 SPAD, set program access and defaults, down 19 there on the left, you get a screen that looks 20 like Slide 790. 21 We are going to put that up now. 22 And you've seen this before, have you 23 not, sir? 24 A. I have, yes. 25 Q. So this -- you click SPAD and you get 7539 1 this menu, and one of the things that this menu 2 allows you to do is to select what's going to 3 be the default web browser. 4 And you testified on direct that that 5 means the web browser that is invoked in 6 certain circumstances, for example, if somebody 7 clicks on an HTML link in the user interface? 8 A. That's correct. 9 Q. And it also allows you, for example, 10 in this particular PC there are three different 11 web browsers installed. It allows you not only 12 to pick one -- which one is the default, but it 13 also allows you to enable access or not to the 14 other ones? 15 A. It does. 16 Q. And it always allows you to hide 17 direct end user access to Internet Explorer? 18 A. The button always appears, yes. 19 Q. Okay. And if you click that button, 20 the IE will disappear from the Windows desktop 21 and from the various menus in Windows that you 22 described in your direct testimony; correct? 23 A. The visible means of access will 24 disappear. 25 Q. Okay. And I'd like to ask you the 7540 1 same kinds of questions with regard to media 2 player. 3 This menu allows you to pick the 4 default handler of audio and video file types 5 in the system; correct? 6 A. Yes. 7 Q. And it also allows you to enable or 8 disable access to other media players that 9 happen to be installed on the system; correct? 10 A. That's correct. 11 Q. And it allows you to remove visible 12 means of access in the Windows user interface 13 to Windows Media Player; correct? 14 A. That's the purpose. 15 Q. Now, in Windows 95 and Windows 98 and 16 Windows Millenium Edition, which I think lots 17 of people refer to as Windows ME; right? 18 A. Millenium Edition, ME, yes. 19 Q. ME, Windows ME. 20 In those three operating systems, if a 21 user wanted to go into the file system -- this 22 is a brave user -- wants to go into the file 23 system and remove the components of the system 24 referred to as Internet Explorer, nothing's 25 going to stop them; right? 7541 1 A. I think that's correct. I think that 2 changed afterwards, but I think that's correct. 3 Q. But as to the operating systems I 4 asked you about, 95, 98, and Millenium Edition, 5 if I wanted to go into the Windows directory 6 and the systems subdirectory and delete, for 7 example, mshtml.dol, which is the rendering 8 engine, I could do that. 9 MR. LAMB: Objection. Relevance as to 10 time, '95 to '99. Conclusions of law 4.5. 11 MR. HOLLEY: There's no binding 12 finding on this point, Your Honor. 13 THE COURT: Overruled. 14 A. I believe that's the case. 15 Q. All right. I'd like to switch topics 16 again. And I'm going to talk about now the 17 distinction that you drew in your direct 18 testimony between published APIs on the one 19 hand and internal APIs on the other. 20 And you recall giving testimony about 21 that, do you not, sir? 22 A. I do. 23 Q. Okay. Now, it is not your testimony, 24 is it, sir, that Microsoft hides from software 25 developers the APIs exposed by Windows? 7542 1 A. Microsoft does not disclose all of the 2 APIs. 3 Q. Okay. You accept the proposition that 4 there is something, as you testified earlier, 5 called MSDN, the Microsoft developer network, 6 the entire purpose of which is to provide 7 information about Windows APIs? 8 A. Well, it has a broader purpose, but 9 one of its purposes is to provide information 10 about these application programming interfaces 11 in Windows, in other of Microsoft's products. 12 Q. And you are also familiar from your 13 experience in the industry of books published 14 by Microsoft press, the Microsoft publishing 15 arm, and independent publishers, the entire 16 purpose of which is to explain to people how to 17 write Windows applications by calling Windows 18 APIs; correct? 19 A. I'm familiar and a consumer. 20 Q. You've looked at a number of those 21 books? 22 A. My book shelves sag under their 23 weight. 24 Q. There are that many of these books; 25 correct? 7543 1 A. That's right. 2 Q. Now, you testified on direct that in 3 order to develop an application to run on top 4 of Windows, you don't need to know about the 5 internal -- what you call the internal APIs; 6 correct? 7 A. That's -- there's a couple of problems 8 with that, one of which is time. I'm not a -- 9 this is just at different points in time that 10 was different. 11 Q. All right. Well, do you remember 12 being asked -- and I'm at page 6794 of the 13 trial transcript, and I can go grab it if you 14 want me to, but I think it will be easier if I 15 just ask you and you can tell me if you don't 16 remember. 17 But do you remember being asked by 18 Mr. Lamb: 19 Question: Okay. But the application, 20 does it need to know the internal APIs for the 21 operating system? 22 Answer: Not if the product is written 23 properly. No, it should not. 24 And Mr. Lamb asked the question, 25 should just be able to do it on the external 7544 1 APIs? 2 And your answer to that question was 3 that's correct. 4 And you agree with that; right, that 5 testimony? 6 A. That's correct. The particular caveat 7 that I had was proper design. And so that was 8 what I believe I testified to with Mr. Lamb. 9 Q. Okay. Just checking to make sure you 10 haven't changed your mind. 11 Now, in the context of forming your 12 views about whether there are undocumented APIs 13 in Windows, did you look in the record for 14 testimony from people who write applications 15 for Windows? 16 A. I did. 17 Q. Okay. And you testified, I believe, 18 at the end of the day -- I'm losing track of 19 time -- Monday, you had a chart which we can 20 look at if we want to, which seemed to suggest 21 that some amount of information was given to 22 Windows developers and a lesser amount of 23 information was -- internal -- I'm sorry. I 24 should have said -- let me start again. 25 You were suggesting that some amount 7545 1 of information about Windows was given to 2 Microsoft's own developers, a lesser amount of 3 information was given to external developers 4 who weren't writing competitive products with 5 Microsoft's product line, and then there was 6 the lowest category of information for people 7 who were developing competing applications. 8 Did I understand that correctly? 9 A. Yes. I think I made the point of 10 quality, completeness, and timeliness as kind 11 of the attributes that were applied to the 12 information in those three categories, that's 13 correct. 14 Q. Okay. And so presumably it would have 15 been very important for you to look at the 16 testimony of people like Lotus and WordPerfect 17 and IBM who did write products that competed 18 with Microsoft's products? 19 A. Among others, certainly. 20 Q. And you tried, to the extent you 21 could, to look at that testimony, did you not, 22 sir, in the record in forming your opinions? 23 A. That's correct. 24 Q. Did you read the testimony of Mr. 25 Kliger, K-l-i-g-e-r, who testified that he was 7546 1 a developer for IBM and then later for Lotus 2 and then for WordPerfect in forming your views 3 about whether Microsoft had undocumented APIs? 4 A. I mean, the name sounds quite 5 familiar, but I'd have to see the specifics in 6 order to confirm that. 7 MR. LAMB: For the record, the problem 8 is I don't know what case this came from. You 9 haven't established it. One of the many cases. 10 So I don't know what testimony you are 11 referring to. 12 When I get a one-page, rather than a 13 transcript, it's impossible to determine 14 whether it's objectionable or not. My memory 15 is not so extensive that I know. 16 THE COURT: You can show it to the 17 witness and see if he identifies it. 18 MR. HOLLEY: All right. My point, 19 Your Honor, is -- and I guess maybe we are 20 going to have to have a sidebar about this, but 21 let's see if we can avoid that. 22 MR. LAMB: Okay. 23 MR. HOLLEY: May I approach the 24 witness, Your Honor? 25 THE COURT: You may. 7547 1 Q. Now, I haven't given you the whole 2 transcript because it's a great big document 3 and I'm trying to avoid killing trees, but can 4 you look at the cover page of this deposition 5 and tell me whether this is the Mr. Kliger's 6 testimony that you recall? 7 A. No, I don't -- excuse me. 8 I don't know whether Mr. Kliger gave 9 two depositions or not in different matters. 10 Can I read some specific portion or -- 11 Q. Yeah, please. I mean, that's my 12 request, is that -- see if that triggers a 13 recollection on your part. 14 A. No, this -- I'm afraid this isn't 15 jogging my memory. I might remember him based 16 on the beginning where there's the -- his 17 background and other discussion of him. That 18 may be the way I'm -- 19 Q. Well, you can see, can you not, sir, 20 from the question on page 191 that Mr. Kliger 21 says that he worked -- his answer is in the 22 last 12 years I think I've kind of done it all. 23 I did operating system development at IBM. I 24 did applications software development at 25 WordPerfect and Lotus, and then at my own 7548 1 company, Narrative, we did all types of 2 Internet development. 3 A. Right. 4 Q. So, it's clear to you, is it not, sir 5 that Mr. -- 6 A. I'm sorry, you said page 191? 7 Q. Well, sorry. 8 A. I don't see that. 9 Q. We may have a technical glitch here. 10 Let me -- 11 Ah, my apologies. My bad handwriting. 12 So can I ask you to look at the top of 13 page 192. 14 And there Mr. Kliger is talking about 15 his experience as a software developer and he 16 says that he's done it all over the last 12 17 years; correct? 18 A. Yes. 19 Q. And so he is precisely the sort of 20 person that you would have been interested in 21 learning about; right? Because he's somebody 22 who developed applications for Lotus, 23 WordPerfect, and IBM, all Microsoft 24 competitors? 25 A. Yes. 7549 1 Q. Okay. And what he's -- 2 MR. LAMB: Objection. Relevance. It 3 doesn't say anything about undocumented APIs. 4 I can show the excerpt to the Court if 5 you'd like it. 6 THE COURT: Overruled. You may 7 proceed. 8 Q. Okay. I'd like to play you an excerpt 9 from Mr. Kliger's deposition, and then I'm 10 going to have a question for you if I may. 11 (Whereupon, the following video was 12 played to the jury.) 13 Question: Now, moving beyond this, 14 you've worked as a developer now in a variety 15 of different contexts; is that right? 16 Answer: Correct. 17 Question: WordPerfect, Lotus -- 18 Answer: In the last 12 years, I think 19 I've kind of done it all. I did operating 20 system development at IBM. I did application 21 software development at WordPerfect and Lotus, 22 and then at my own company, Narrative, we did 23 all types of Internet development. 24 Question: Focusing on your experience 25 as an application developer -- 7550 1 Answer: Sure. 2 Question: -- over that period, what 3 has your experience been over those years in 4 getting -- with regard to getting information 5 that you needed to develop for the Windows 6 platform? Has it been favorable or 7 unfavorable? 8 Answer: It has been very favorable. 9 Microsoft, you know, going back to the '93 and 10 '94 time frame and the professional developers 11 conference and the tool kits and beta versions 12 of the operating systems that have been 13 available, has always been, you know, right 14 there in providing application developers the 15 tools that they need and the documentation that 16 they need in order to create applications that 17 exploit the platform as best possible. 18 In recent years, Microsoft has started 19 Microsoft developers network, MSDN, which is a 20 subscription service that is available to 21 application developers that provides them with, 22 you know, knowledge bases, essentially 23 encyclopedias of all of the reference material 24 that is available for everything that you would 25 ever need to know in order to develop a Windows 7551 1 application, to develop an application that ran 2 in the Windows environment. 3 Any of the software developers that 4 worked for me at Narrative or that I worked 5 with at Lotus would tell you that those 6 resources were really invaluable to them. 7 Question: At these different 8 application companies that you worked at, 9 Lotus, WordPerfect, and more recently 10 Narrative, are there any major problems that 11 you've encountered with Microsoft in terms of 12 getting the information that you needed to 13 develop applications for Windows? 14 Answer: Never. 15 (Whereupon playing of video 16 concluded.) 17 Q. Now, Mr. Alepin, when you created this 18 taxonomy of application developers that you 19 said got differential access to Windows 20 information, why did you ignore the testimony 21 of Mr. Kliger that he was in your disadvantaged 22 category three and yet he couldn't be happier 23 about the information that he got from 24 Microsoft about writing applications for 25 Windows? 7552 1 A. Because I considered and assessed the 2 views of many developers and came to the 3 conclusion different from Mr. Kliger's view. 4 Q. So you decided that even though Mr. 5 Kliger actually did it at Lotus and WordPerfect 6 and IBM and his little company called 7 Narrative, that you knew more than he did about 8 what information application developers got 9 from Microsoft? 10 A. I don't think that's quite the follow 11 on from what I said. I have spoke with -- I 12 have spoken with many, many developers from 13 many companies in order to reach the assessment 14 that I reached. 15 Q. Now, let's focus on these internal 16 interfaces that I talked about on direct. 17 You agree, do you not, that there are 18 perfectly good engineering reasons why a 19 developer of operating systems like Microsoft 20 would not want to disclose internal, purely 21 internal interfaces; right? 22 A. There are a variety of good reasons 23 why you would not wish to disclose internal 24 interfaces inside your product, not just 25 operating system product. 7553 1 Q. And one of the reasons, the legitimate 2 engineering reasons, why you would not want to 3 disclose an internal interface is that you may 4 intend to change the code internally, rearrange 5 it for performance reasons or scalability 6 reasons or security reasons, and you don't want 7 to disclose the interfaces because that would 8 impair your ability to improve the product; 9 correct? 10 A. You make decisions about which 11 interfaces you expose and which interfaces you 12 don't expose for purposes of attachment. 13 And to come back to your question more 14 directly, certain of those interfaces you don't 15 wish to expose because of those reasons that 16 you identified. 17 For example, that they may change with 18 different versions of the system. You're not 19 necessarily committing yourself to one 20 particular -- to this interface for your users. 21 That's one, as you described it, legitimate 22 engineering reason why you would not disclose 23 that. 24 Q. And another legitimate engineering 25 reason for why you might not want to disclose 7554 1 an internal interface in your software product 2 is that doing that, exposing that internal 3 interface, might short-circuit internal 4 checking routines that are important to 5 maintaining the stability of the operating 6 system? 7 A. One would hope not, but that might be 8 the case. One would hope that there is 9 sufficient protection built into your product, 10 in particular operating systems, that that kind 11 of connection or attachment would not result in 12 a reduction in the stability of the system, but 13 it's a possibility. 14 Q. Okay. And you're familiar, are you 15 not, sir, with the testimony of the 16 government's technical expert, Professor Andrew 17 Appel, who is a professor of computer science 18 at Princeton on this subject? 19 A. This would be in the remedies 20 proceedings? 21 Q. That is correct, sir. 22 A. I have read testimony in these 23 proceedings. 24 Q. Right. And you don't disagree with 25 Professor Appel's testimony that another reason 7555 1 you might not want to disclose internal 2 interfaces inside a software product is because 3 you might, in his words, short-circuit 4 privileged checking routines that are important 5 to maintain the stability of the operating 6 system? 7 A. I think that's what I just described 8 for you, right. 9 Q. And then you have testified previously 10 that yet another legitimate engineering reason 11 why you might not want to disclose internal 12 interfaces is because you may not have an 13 intention of supporting those going forward and 14 you, therefore, don't want external parties 15 relying on them? 16 A. That's -- there are two cases, one of 17 which is if you've already exposed them, then 18 you are kind of stuck with them. 19 But if you haven't exposed them, then 20 there might be the concern about whether they 21 will be a part of the going forward features or 22 functions in your product. 23 Q. Now, so we have this category of 24 purely internal interfaces. And, as you've 25 testified, there are various legitimate 7556 1 engineering reasons why you might not want to 2 disclose those. 3 Isn't it also true that software 4 products have external interfaces which are 5 sometimes not documented for business reasons? 6 A. And those business reasons you had in 7 mind would be, for example? I'm sorry, I don't 8 mean to ask you a question like that. 9 Q. You probably feel like turnabout is 10 fair play at this point. 11 Well, do you recall, sir, being asked 12 at your deposition in -- 13 MR. HOLLEY: Your Honor, may I 14 approach the witness? 15 THE COURT: Yes. 16 A. Thank you. I have one of these. Did 17 you intend -- 18 Q. Oh, well, it might make it easier if 19 you saw my highlights. It wasn't what I 20 intended. 21 Mr. Alepin, I'll give you the clean 22 one. There you go. 23 Now, my interest is on page 86 of your 24 July 18, 2006 deposition. 25 Maybe we should start on 85 just for 7557 1 context. 2 I asked you the question, well, for 3 example, it is a benefit to a vendor of a 4 software product not to disclose internal 5 interfaces which may not have been sufficiently 6 hardened -- and just for purposes of 7 understanding, what does that mean as a 8 technical matter, hardening of interfaces? 9 A. Well, it's not sclerosis. It's really 10 the -- it's where you -- in software 11 development, where you provide a sufficient 12 amount of checking or insulation or other kinds 13 of protection to make sure that the interface 14 will be exercised by the right application 15 programs or by the right other pieces of 16 software. 17 Q. Okay. And you give the answer, no, I 18 don't think that's -- I don't think that's of 19 benefit. 20 Now, that testimony, of course, is 21 inconsistent with Professor Appel's testimony 22 in the remedies case, right, because he said 23 the opposite, that one reason you might not 24 want to disclose an internal interface is 25 because it hadn't been hardened? 7558 1 A. Well, I think that in the -- just in 2 my answer immediately preceding that I was 3 discussing a particular instance of where the 4 design of the product does not permit 5 sufficient interfaces that are of a kind that 6 would allow you to perform the functions you 7 needed to with your software. 8 That's what I mean by if you fail to 9 disclose or to provide -- or provide means to 10 use certain functionality, then people will 11 connect to internal interfaces in order to 12 achieve certain levels of functionality. 13 That's the answer before, and I think 14 what I had -- I don't think the answer that you 15 just read was consistent with -- or intended to 16 amplify the point about connecting to internal 17 interfaces when there are no choices for 18 developers other than those internal 19 interfaces. 20 Q. Okay. And so you were not intending 21 to disagree with Professor Appel at Princeton 22 about this notion that there is a legitimate 23 business reason for not disclosing internal 24 interfaces that have not been hardened? 25 A. Certain internal -- as long as they 7559 1 are internal, that's correct. 2 Q. Okay. And then the next question was, 3 well, can you tell me what you did have in 4 mind? 5 And your answer is, what software 6 vendors choose not to disclose by way of 7 interfaces are those that they have -- that 8 they may not have the intention of supporting 9 going forward. 10 And that you still believe is correct; 11 right? That one reason you would not want to 12 disclose an interface is because you don't 13 intend to support it going forward? 14 A. Again, that's the subject to the 15 provision that if it were disclosed before, 16 there is a process that we use in software 17 engineering called deprecation. 18 And deprecation does not call for no 19 longer discloses interfaces. It calls for 20 identifying the interfaces as deprecated or not 21 supported in the future. 22 Q. Now, let's turn back, sir, to page 83, 23 and I asked you the question -- I'm on line 10. 24 So let me know when you are there. 25 A. I'm there. 7560 1 Q. Okay. I asked you the question, in 2 every software product that you've ever worked 3 on in the last 35 years, have all of the 4 interfaces been documented? 5 And I'm interested now in looking at 6 the portion of your answer that refers to 7 external interfaces. 8 And you can read as much of this as 9 you want, but you first talk about internal 10 interfaces and then starting on line 24, you 11 start talking about external interfaces; 12 correct? 13 A. I see that. 14 Q. Okay. And with regard to the second 15 category, you say, with respect to external 16 interfaces, it is sometimes the case that some 17 interfaces are omitted, but when called to the 18 attention of the owners are documented 19 subsequently. And there are some interfaces 20 which although they are external, the firm 21 refuses to document. 22 Correct? 23 A. That's what it says. 24 Q. Okay. And those are situations in 25 which there are external interfaces, but, for 7561 1 whatever business reason, the owner of the 2 product refuses to document them? 3 A. And those would be -- yes, that's 4 correct. 5 Q. Now, on direct you spent some period 6 of time talking about a function called 7 iShellBrowser. 8 Do you recall that, sir? 9 A. I do. 10 Q. All right. And it was your testimony, 11 I believe, that Microsoft injured WordPerfect 12 by initially putting support for iShellBrowser 13 in a beta test version of Windows 95 and then 14 taking it out. 15 Did I understand your testimony 16 correctly, sir? 17 A. I think I said that it cost them 18 significant amounts of time and wasted effort. 19 Q. Okay. And you were shown Plaintiffs' 20 Exhibit 2151 in this context, and I'd like to 21 put that back up on the screen. 22 And, in particular, you were shown the 23 first two paragraphs of this e-mail from 24 Mr. Gates to basically the senior executive 25 staff of the Windows group. 7562 1 Do you remember that, sir? 2 A. I do. 3 Q. Okay. And what Mr. Gates says here 4 is, it's time for a decision on iShellBrowser. 5 This is a tough decision. The Chicago team -- 6 and just I think you said this once, but I want 7 to make it clear. 8 Chicago was the code name for Windows 9 95; correct? 10 A. While the beta programming, it was 11 called Chicago. 12 Q. Okay. The Chicago team has done some 13 great work in developing a user interface -- 14 And then Mr. Lamb stopped reading, but 15 I want to keep reading. 16 -- that will be a big step forward 17 for millions of people. 18 Now, from your technological 19 standpoint, what did Mr. Gates mean when he 20 said that the Windows 95 user interface will be 21 a big step forward for millions of people? 22 A. What did he mean? 23 Q. Yes. From a technological standpoint. 24 A. Well, I'm understanding him to say 25 that the new user interface in Windows 95 will 7563 1 be a significant improvement over the old user 2 interface that millions of users, millions of 3 PC users are using. 4 Q. A big step forward technologically; 5 correct? 6 A. Yes. 7 Q. Now, is it your testimony that there 8 was no technical justification for Microsoft's 9 decision to deprecate, in your words, the 10 iShellBrowser interface? 11 A. Well, I don't -- I don't think I 12 referred to it as deprecation. I think I 13 referred to it as removal, but -- 14 The answer is, based on my review of 15 the record and the evidence, no. 16 Q. Okay. And just I want to back up now. 17 It is your testimony that this 18 interface was removed? 19 A. Well, it's my understanding that -- it 20 was not made available to be used in the way 21 that the Novell folks, for example, the 22 WordPerfect were using it. 23 Q. But it still was in the system; 24 correct? 25 A. It was partitioned, I think, as the 7564 1 e-mail goes on to describe into two segments 2 made available. 3 I think if you would scroll down 4 further, I think there's a reference to the 5 ways in which the interface would be contained. 6 MR. HOLLEY: All right. Chris, can we 7 blow up the whole text of the e-mail because 8 it's very hard to read? 9 You don't have to do the to/from 10 because we know that. 11 But -- yeah, thank you. 12 Q. Now, is there a particular part of 13 this, Mr. Alepin, that you are referring to? 14 A. I think if you go down -- I'm pointing 15 on the screen here, but that's not having much 16 effect. 17 Go down to I decided that we should 18 not publish these extensions, and then the 19 second line in that paragraph at the end 20 beginning, this means that it can still live in 21 the top level of the Explorer namespace, but 22 will run separately. We can continue to use 23 the iShellBrowser APIs for MS provided views 24 such as control panel. 25 So it's in that context. 7565 1 Q. All right. Now, in forming your views 2 on this subject, did you talk to Mr. Schulman, 3 one of Plaintiffs' other technical experts, 4 about his personal involvement in this 5 iShellBrowser issue? 6 A. I may have had discussions with 7 Mr. Schulman. I've talked to Mr. Schulman on 8 many occasions on a wide variety of subjects. 9 Q. Okay. But you don't have any specific 10 memory of talking to him about iShellBrowser? 11 A. Sitting here, no, not right now. 12 Q. Okay. I'd like to show you 13 Defendant's Exhibit 3066. 14 MR. HOLLEY: Your Honor, may I 15 approach the witness? 16 THE COURT: Yes. 17 Q. I'd like you to look at this. It's a 18 very long document. Feel free to look at as 19 much as you like. 20 But my particular question relates to 21 an exchange on page 25 between Andrew Schulman, 22 and it's dated March 13, 1996, to the man who 23 was then the head of the Windows shell team, 24 the Windows user interface team, a man named 25 Joe Belfiore. 7566 1 Now, and you're familiar with 2 Mr. Belfiore from looking at Microsoft 3 documents; correct? 4 A. And I think from public appearances. 5 Q. Okay. Now, in this e-mail from 6 Mr. Schulman to Mr. Belfiore, Mr. Schulman asks 7 him for documentation to create namespaces in 8 Windows 95. 9 Do you see that? 10 A. Yes. 11 Q. Okay. And is your understanding that 12 what Mr. Schulman is asking for is 13 documentation of the iShellBrowser interface; 14 correct? 15 A. Well, it's not -- I could suppose that 16 that's the case. I'd have to read maybe some 17 more of the back and forth. 18 Q. Okay. Well, maybe I can short-circuit 19 this. 20 Why don't you turn back two pages, 21 because this is in reverse chronological order, 22 this set of pages. 23 A. Okay. 24 Q. And look at Mr. Belfiore's response to 25 Mr. Schulman. 7567 1 A. So this is page 93 perhaps? 2 Q. 93, yes, sir. 3 I just think for ease, we are going to 4 put this up. This is Defendant's Exhibit 3066, 5 page 93. 6 And the e-mail that I'm interested in 7 starts Joe Belfiore all the way down to -- 8 right there, yes. 9 Now, in this e-mail, Mr. Belfiore is 10 writing back to Mr. Schulman, and he says -- 11 and the title is create willing namespaces 12 question. 13 And he says, we have a preliminary doc 14 that we've been giving to people who ask for 15 it. And we're getting this cleaned up and 16 putting together sample code to post on the web 17 and ship in the April MSDN. 18 And then he talks about a letter of 19 explanation that goes out with the document, 20 and he says, this gives the background as to 21 why these have been B-list in the past. We 22 want to reduce the possibility of shell 23 extensions getting written that run in process 24 and take down the shell and other shell 25 extensions, and explains the solution we're 7568 1 adopting in order to publish these more widely. 2 Now, this is using a lot of sort of 3 jargon and technical shorthand. And I want to 4 make sure we all understand what Mr. Belfiore 5 is saying. 6 He's saying that Microsoft has put 7 together some documentation of the namespace 8 extension interfaces; correct? 9 A. Yes. 10 Q. And he says that they're going to give 11 it to people who ask for it and they're going 12 to put it in the April MSDN CD or DVD; correct? 13 A. That's what I'm -- what I would 14 understand. 15 Q. Okay. And then down in his PS, he 16 says that Microsoft is interested in reducing 17 the possibility of shell extensions getting 18 written that run in process. 19 And that means that, for example, 20 Adobe might run a shell extension that's 21 running in the same process, in the same 22 computing process as the Windows UI, and if the 23 Adobe program faults, the entire system blue 24 screens. 25 That's what he's saying; correct? 7569 1 A. It would take down the shell, the 2 Windows shell, yes. 3 Q. Okay. Now, let's turn to this letter 4 of explanation to ISVs, which is attached to 5 this e-mail. 6 And I'm interested -- and read as much 7 of it as you want, but I'm interested in the 8 section of the letter -- 9 MR. HOLLEY: Chris, can we move to 10 that? The letter, which is on like page 96 or 11 94, excuse me. 12 Q. And the section entitled limitations 13 with the current implementation. 14 In this section of the letter to ISVs 15 explaining why Microsoft has done what it did 16 to the iShellBrowser interface, Mr. Belfiore 17 says, with the current implementation of the 18 Windows 95 shell, all of the applications that 19 make up the shell run in the same process. 20 IE, the desktop, which includes the 21 task bar, my computer, network neighborhood, 22 the briefcase, the recycle bin, and any other 23 instances of the Explorer that are launched are 24 run in a single process. 25 What this means is that if any of the 7570 1 above applications fail, they will bring down 2 the entire shell, including all of the shell 3 extensions and the desktop. 4 Under the current extension mechanism, 5 that means that any outside application -- like 6 my Adobe example -- that was written as a shell 7 extension via iShellView and iShellFolder, 8 would also have the capability to bring down 9 the entire shell, or be brought down if another 10 shell extension failed. 11 And you have no reason to doubt that 12 Mr. Belfiore, who is in charge of the Windows 13 user interface, is accurately describing the 14 architecture of the Windows 95 shell, are you, 15 sir? 16 A. No, I do not. 17 Q. Now, let's turn to the question and 18 answer section which is appearing on -- I have 19 a Bates number, but it's -- I think it's the 20 fourth page of -- ah, I need to go to another 21 document. Sorry. 22 Let's look at Defendant's Exhibit 23 1029. 24 MR. HOLLEY: Your Honor, may I 25 approach the witness? 7571 1 THE COURT: Yes. 2 Q. And I'll take -- do you want me to 3 take that? 4 A. Yeah. We are going to get that all 5 cluttered here. 6 Q. All right. There is 1029. 7 Now, this 1029 is an e-mail that 8 follows the Plaintiffs' Exhibit 2151 that you 9 testified about on direct; correct? I mean, 10 follows in time. 11 A. Oh. October 12th, 1994. I think 12 that's correct. 13 Q. Okay. 14 MR. HOLLEY: Chris, can we look at the 15 Q and A section -- well, first of all, I should 16 spend a little time about who wrote this. 17 On the first page, can we blow up the 18 from/to line? Not for that e-mail, Chris, but 19 the lower one. It says from Scott Henson. 20 Q. From Scott Henson to various people. 21 Subject, namespace extension decision. 22 And do you know who any of these 23 people are? 24 A. James Plamondon I recognize. Others 25 of these I may recognize by their e-mail handle 7572 1 than by their full name, but they appear to be 2 Microsoft employees, I think. 3 Q. And the ones that you know of appear 4 to be Microsoft employees engaged in the 5 process you've referred to as developer 6 evangelism; correct? 7 A. In the DRG, developer relations group. 8 Q. And that's the process I believe you 9 testified on direct about where Microsoft goes 10 out and tries to encourage developers to write 11 to Windows? 12 A. It's an -- it contains evangelical 13 component. 14 Q. All right. Now, let's go to the 15 fourth page of this document to something 16 called Q and A. And you understand that to 17 mean questions and answers; right? 18 A. I do. 19 Q. Okay. And there is a section here 20 called why has Microsoft decided not to publish 21 the namespace extension interfaces? 22 And Mr. Henson explains, there are a 23 number of reasons. And the first one he lists 24 is compatibility. 25 We have determined that it will be 7573 1 very difficult to support these APIs for 2 applications as we move forward with our 3 operating systems. We did not want to 4 encourage ISVs to support interfaces that would 5 go away in the future. 6 Now, in offering your opinions about 7 iShellBrowser, did you consider the 8 compatibility of iShellBrowser's architecture 9 with the Windows NT shell? 10 A. I understood at the time that 11 Microsoft was developing iShellBrowser in 1994, 12 thereabouts, that the Windows NT, Microsoft 13 workstation and several operating systems, had 14 a different shell from the Windows family and 15 the Chicago to become Windows 95. 16 So I don't believe that there was a 17 unification of that shell until '96 or 18 thereabouts is my recollection. 19 Q. Okay. And just because the 20 terminology can be so confusing, I want to make 21 sure we're clear. 22 At this time, in 1996, there were two 23 groups of Microsoft -- two tracks of operating 24 system development at Microsoft. 25 One was the Windows 95, Windows 98, 7574 1 Windows Millenium Edition track, and then there 2 was an entirely different track which was 3 Windows NT 3.51, Windows NT 4, Windows 2000, 4 and then Windows XP; correct? 5 A. Yes, that's right. 6 Q. But it's your understanding that by 7 1996-97, Microsoft was at least trying to have 8 the shells of those two tracks of operating 9 systems be similar? 10 A. That's my understanding. 11 Q. Okay. Now, in pursuing the goal of 12 unifying the shells, the user interfaces of 13 these two families or evolutions of operating 14 systems, did you give consideration to the fact 15 that iShellBrowser, which was developed for 16 Windows 95, was incompatible with the NT shell, 17 the Windows NT shell? 18 A. I did. 19 Q. Now, he also says here, system 20 robustness. Namespace extensions were designed 21 to part of the system. As such, they run in 22 the Explorer's process space. 23 Badly written namespace extensions 24 could cause the reliability of Windows 95 to be 25 less than what it should. 7575 1 So this is another statement, is it 2 not, sir, that if you allowed third parties to 3 write extensions -- and maybe we should back up 4 here. 5 Extension in this context means 6 writing a piece of software that would plug in 7 and extend the functionality of the Windows 8 shell, the Windows user interface; correct? 9 A. That's my understanding of extension 10 in this particular point. 11 Q. Okay. And the concern that 12 Mr. Belfiore -- excuse me, Mr. Henson is 13 describing here, is that if you allowed people 14 to write these code blocks that extended the 15 Windows shell and they did a bad job, they 16 could cause the entire operating system to 17 crash; correct? 18 A. That's the concern he appears to be 19 stating here. 20 Q. Okay. And then at the bottom of this 21 section of the Q and A, he says -- there's a 22 heading that says equivalent visual 23 functionality, and it says, we will provide 24 common controls (listview, preview, column 25 heading, et cetera) that will allow ISVs to 7576 1 create their own views in the same manner that 2 the Explorer does. 3 This allows ISVs to write applications 4 with the same look and feel of the Windows 95 5 Explorer that run on Windows NT 3.5 and Windows 6 3.11. 7 Now, in giving your testimony about 8 what Microsoft did about iShellBrowser, did you 9 take into account that Microsoft created an 10 alternate solution for software developers that 11 let them make their file systems view look just 12 like the Windows user interface view files, but 13 in a way that was consistent with both the 14 Windows NT architecture and the Windows 9X or 15 Windows 95, 98, ME architecture? 16 A. Yes. 17 Q. Now, do you know whether Microsoft 18 told WordPerfect about what Mr. Henson is 19 writing here in Defendant's Exhibit 1029? 20 A. I believe they did. 21 Q. Okay. And, in particular, did you 22 review Defendant's Exhibits 1020, an e-mail 23 from Paul Maritz? And just so we're clear -- I 24 hate to keep doing this, but it's important. 25 At this point, Mr. Maritz is 7577 1 Mr. Silverberg's boss; right? He's reporting 2 straight to Mr. Gates, and he's in charge of 3 all operating systems at Microsoft? 4 A. I believe that was his position. 5 Q. Okay. So Mr. Maritz is writing to 6 Mr. Gates, and the title is re: Shell 7 extensions. And let me show you this document. 8 MR. HOLLEY: May I approach the 9 witness, Your Honor? 10 THE COURT: Yes. 11 Q. I'd like you to take a look at, if you 12 would, sir, at Defendant's Exhibit 1020. 13 Now -- and we are going to put it up 14 on the screen. 15 I want you to -- well, first of all, 16 let's look at the title block there. 17 MR. HOLLEY: Well, actually, that's 18 one coming the other direction, Chris. Can we 19 look at -- yeah, that's the one. 20 Q. So this is an e-mail from Mr. Maritz 21 to Mr. Gates entitled shell extensions. And 22 now we've moved into November of 1994; correct? 23 So 2151, the exhibit you testified 24 about on direct was in October of '94, and this 25 is early the following month; correct? 7578 1 A. I think that's correct. 2 Q. All right. And let's look at item 3 3 of Mr. Maritz's e-mail to Mr. Gates. 4 Here he says, based on this stance by 5 Marvel -- and Marvel was the code name for the 6 MSN -- the Microsoft network client access 7 software in Windows 95; correct? 8 A. That was its beta or code name 9 internally prior to release. 10 Q. Okay. He says, based on this stance 11 by Marvel, we will not disable the interfaces, 12 but will not document the iShellFolder in 13 regular documentation, but we will have them 14 documented in a resource kit so that if someone 15 really, really does want to use them, they can. 16 So, in fact, not only did the code 17 stay in the system, but, as Mr. Belfiore 18 explained in his e-mail to Mr. Schulman, if you 19 asked Microsoft for documentation of 20 iShellBrowser and its associated interfaces, 21 they would give it to you, but tell you that 22 you really shouldn't use it? Isn't that what 23 happened? 24 A. That's correct. 25 Q. All right. I'd like to move now to a 7579 1 slightly different topic, which is Lotus. 2 And you remember being shown that 3 e-mail from Mr. Silverberg where he says, you 4 know, let's tilt Lotus into a death spiral and 5 he says I can't do it tomorrow, but I could do 6 it any time on Saturday? 7 Do you remember giving testimony about 8 that? 9 A. I remember that e-mail and that 10 testimony. 11 Q. Okay. And is it your testimony that 12 that was anything other than a joke? I mean, 13 that Microsoft actually did something to tilt 14 Lotus into a death spiral? 15 A. I'm not sure I understand the question 16 in relation to the e-mail. 17 Q. Well, wasn't -- I presume that when 18 you testified about what the e-mail meant, what 19 you meant to suggest was that people at 20 Microsoft got together, whether it was Thursday 21 or Saturday, and tilted Lotus into a death 22 spiral. 23 Was that the import of your testimony, 24 sir? 25 A. Well, the first import was that you 7580 1 had the operating systems group being invited 2 to a meeting held by the applications group, 3 both within Microsoft, the purpose for which 4 was to address the competitive challenge of 5 Lotus applications. 6 That was the principal thrust of the 7 testimony, was that -- and it was in the 8 context of church and state and this separation 9 of the applications team from the operating 10 systems team for purposes of allowing that 11 applications -- other companies' applications 12 to have a level playing field, if you will. 13 Q. Okay. At Sun Microsystems, is there a 14 Chinese wall between the people who develop 15 SPARC processors and the people who develop 16 Solaris operating systems and the people who 17 develop Java technology? 18 A. Chinese wall, you mean -- 19 Q. In the way that you used the term on 20 direct. 21 A. I don't recall using Chinese wall. 22 Q. Okay. Well, let's -- then let's not 23 -- I don't want to fight about terminology. 24 Is there a barrier within Sun 25 Microsystems between the teams that work on 7581 1 SPARC microprocessors on the one hand, the 2 people who work on Solaris operating systems on 3 another hand, and the people who work on Java 4 runtimes and associated class libraries for the 5 third? 6 A. No, I don't know. I don't know 7 whether there's a wall or barrier as you put 8 it. I don't. 9 Q. What about at Apple between the people 10 who write Mac OS X and the people at Claris who 11 write applications to run on top of the Apple 12 Macintosh? Is there a barrier between those 13 groups, sir? 14 A. I don't know. 15 Q. Okay. And at the IBM corporation, IBM 16 basically does it all. They have a group that 17 makes microprocessors; correct? 18 A. Yes. 19 Q. And they have a group that makes 20 operating systems? 21 A. Yes. 22 Q. And they have a group that makes 23 middleware like MQ series and other sorts of 24 things, CICS? 25 A. J2EE servers. 7582 1 Q. J2EE servers. And they also have a 2 division called Lotus, which makes applications 3 that run on IBM and other operating systems. 4 Are there barriers, sir, within the 5 IBM Corporation between those different groups 6 creating compatible products? 7 A. You mean interoperable products -- 8 compatible in the sense of interoperable? 9 Q. Your word choice is better than mine, 10 yes. 11 A. I'm not aware of such barriers. 12 Q. Now, Lotus Notes is still very much 13 alive and well, isn't it, as we sit here today? 14 A. It's alive. 15 Q. Okay. Well, have you looked at any -- 16 have you looked at any Lotus documents that 17 talk about the health of Lotus Notes in forming 18 your opinions in this case? 19 A. I have from time to time looked at 20 various documents about Lotus. 21 Q. But my question is a little more 22 specific than that. 23 A. Sorry. 24 Q. Have you looked at internal -- excuse 25 me -- internal IBM Lotus documents that talk 7583 1 about the health of Lotus Notes? 2 A. I don't recall recent contact with 3 that information. Instead, I relied on 4 publicly disclosed information. 5 Q. Okay. Well, one of the things that's 6 publicly disclosed about Lotus Notes is the 7 section of the IBM website devoted to that 8 topic; correct? 9 A. That's one public source, yes. 10 Q. Okay. Have you looked at the IBM 11 website recently and what it says about Lotus 12 Notes? 13 A. Gosh, you know, I visit that Lotus 14 website periodically. But maybe you have 15 something specific in mind. 16 I look at what product, what features 17 they have, what they are saying about their 18 products, what their plans are. I do that as a 19 regular matter, as well as looking at what 20 analysts, industry analysts, say about it. 21 Q. Okay. Have you had occasion recently 22 to visit the page of IBM's website devoted to 23 Lotus entitled top ten reasons to choose Lotus 24 Notes client for corporate messaging and 25 collaboration? 7584 1 A. Top ten lists are very popular. 2 There's quite -- it resonates very well. And I 3 think I may have looked at the top ten, yes. 4 Q. Okay. And would it surprise you, sir, 5 to know that IBM says in the very first 6 sentence of this web page, IBM Lotus Notes 7 software continues to set the standard for 8 innovation in message and collaboration market 9 that Lotus defined 16 years ago? 10 A. Continues to set the standard, that's 11 -- that sounds fine. 12 Q. Okay. Have you seen any documents 13 anywhere in the record of this case which 14 suggest that IBM intends to abandon Lotus 15 Notes? 16 THE COURT: Mr. Holley, the witness 17 turned to me and indicated he needs a break. 18 MR. HOLLEY: Oh, I'm sorry. I'll be 19 happy to do that. 20 THE COURT: So I'm going to give him 21 and the Jury and everybody else. 22 So we will take a 10-minute recess at 23 this time. 24 Remember the admonition previously 25 given. 7585 1 Leave your notebooks here. 2 (A recess was taken from 1:25 p.m. 3 to 1:41 p.m. ) 4 THE COURT: You are still under oath, 5 sir. 6 THE WITNESS: Thank you. 7 BY MR. HOLLEY: 8 Q. Mr. Alepin, I wanted to move on to a 9 new subject area, and what I want to talk about 10 now are the things that you said that Microsoft 11 did in relation to DR-DOS in the time frame in 12 which Windows 3.1 was getting ready for 13 release. 14 And you recall testifying about that 15 general area, do you not, sir? 16 A. I do. 17 Q. Okay. One of the things you talked 18 about was something called the AARD code, 19 A-A-R-D, which you said was some sort of 20 representation of the initials of the man who 21 wrote it, Aaron Reynolds; is that right? 22 A. I believe that's the case. 23 Q. And you have seen, have you not, sir, 24 the message that the AARD code in the beta test 25 version of Windows 3.1 displayed? 7586 1 A. I have. 2 Q. So I'd like to show you Slide 702. 3 So this is a sample of what the 4 message in the beta test version of Windows 5 showed when the AARD code was triggered. 6 It says nonfatal error detected, error 7 number 4D53 (please contact Windows 3.1 beta 8 support). Press enter to continue. 9 There is no mention, is there, sir, of 10 what is causing this message to be displayed? 11 A. You mean what the condition was that 12 caused the error to be displayed or the program 13 that was running? 14 Q. No indication in the message about 15 what is causing the message to be displayed? 16 A. No, other than the 4D53. I mean, if 17 that's -- 18 Q. Well, is that meaningful to you? Can 19 you read 4D53 and determine, oh, this is 20 happening because this code is looking for 21 internal data structures and MS-DOS does not 22 find them and is reporting this condition? Is 23 that -- 24 A. Well, just the way we organize 25 messages quite often, not to the credit of the 7587 1 software industry generally, is that we 2 sometimes assign them numbers. And the number 3 would be used as an index into a list or a 4 table of error messages. 5 So, for example, an error 123, we 6 would go to the table and look at error 123. 7 The 4D53 is actually a number. It's a 8 number using a base 16 arithmetic. 9 Base 16 is like we use base 10. Base 10 16 has -- the number one zero means 16, not 10. 11 The letter A means 10. 12 So 4D53 looks like a message number 13 that would be indexed somewhere where you would 14 find some additional information that related 15 to the message. 16 Q. You could do that if you worked at the 17 Microsoft Corporation, but you couldn't do that 18 if you were a beta tester; correct? 19 A. That depends on whether Microsoft 20 disclosed the table of error messages. 21 Microsoft discloses other tables of 22 error messages. In fact, the one for Windows 23 errors, which are disclosed are in the hundreds 24 of pages of error message numbers. 25 Q. You have been looking at this issue 7588 1 since 1994; correct? 2 A. I think since 1994, yes. 3 Q. Okay. Have you ever seen an 4 externally disclosed table of error messages 5 that indicates what is causing this message to 6 be displayed? 7 A. I have not seen a table of messages 8 that includes 4D53. 9 Q. Now, it is not your testimony, is it, 10 sir, that the AARD code in the Windows 3.1 beta 11 impaired the operation of DR-DOS in any way, is 12 it? 13 A. Impaired meaning? 14 Q. Caused it to malfunction in any way. 15 A. It didn't cause it to operate in a way 16 different from the way it was originally 17 developed to operate. 18 That's -- so it did not change the way 19 the DR-DOS code ran. 20 Q. Okay. Well, do you remember, sir, 21 being asked the following question at your 22 deposition on July 18th of last year. 23 Question: Is it your testimony that 24 the AARD code in the Christmas beta of Windows 25 3.1 caused DR-DOS to malfunction? 7589 1 Answer: I don't think my testimony is 2 that it causes DR-DOS to malfunction. So, no. 3 You remember that testimony, sir? 4 A. That's -- thank you. I remember it 5 now. 6 Q. Okay. And it's right, isn't it? 7 The AARD code in the Christmas beta of 8 Windows 3.1 did not cause DR-DOS to 9 malfunction? 10 A. That's what I just said, yes. 11 Q. Now, in your years of experience in 12 the computer industry, you've been a beta 13 tester of software; right? 14 A. I have the scars to show it, yes. 15 Q. Yes. And the reason you have the 16 scars is because people understand that beta 17 software is still under development and you 18 might encounter strange things; correct? 19 A. That's -- you might encounter some 20 strange things, yes. 21 Q. And you have seen some fairly 22 inflammatory error messages produced by beta 23 software? 24 In fact, you've seen some inflammatory 25 messages in production software, is that not 7590 1 right? 2 A. Well, inflammatory -- impenetrable is 3 a better word for most error messages, but I've 4 seen in beta software lots of half-baked 5 messages. 6 Q. Okay. And you recall that I asked you 7 in July whether you'd seen inflammatory 8 messages, and you said that you had? 9 A. Uh-huh. 10 Q. Okay. Now, in considering your 11 testimony about the AARD code, did you look at 12 the declaration filed by a man from Microsoft 13 named David Weise, spelled W-e-i-s-e, from back 14 in 1993, July of 1993, in which he lists a 15 sampling of some of the error messages that 16 were displayed by this very same beta test 17 version of Windows? 18 A. That's a long -- a long time ago, 19 1993. I may have looked at it at some point in 20 the past, yes. But I don't recall at the 21 moment. 22 Q. All right. But you got yourself ready 23 to come testify in this trial about the AARD 24 code; correct? 25 A. I don't know what you mean by I got 7591 1 myself ready, but I came here ready to testify, 2 yes. 3 Q. Okay. And, in doing so, you looked at 4 the things, you reminded yourself of the things 5 that you thought you needed to know in order to 6 tell this jury about the AARD code, didn't you, 7 sir? 8 A. Yes. 9 Q. Okay. And it didn't occur to you, 10 then, I take it, to look back at the 11 declaration of Mr. Weise to see what he said 12 about other error messages displayed by the 13 Windows 3.1 beta? 14 A. Insofar as I had considered the record 15 in reaching my conclusion, I didn't believe 16 that I needed to have at my fingertips every 17 piece of evidence that I considered with 18 respect to this particular issue, with respect 19 to the AARD code. 20 Q. Okay. So you didn't think it was 21 relevant to remind yourself that among the 22 errors that were displayed by the Windows 3.1 23 beta, the very same one at issue here, was the 24 error that read in all capital letters fatal 25 error, incompatible disk software installed, 7592 1 turn off your computer now, exclamation mark? 2 A. I had seen that perhaps in a 3 hexadecimal listing of the error messages. 4 I think it's -- just so we're clear 5 here, this is not an error. And so looking at 6 a list of error messages that Windows beta 7 software might have been capable of producing 8 is interesting, but it's for errors. 9 At least I believe that they were -- 10 that that was a catalog of errors and not this 11 condition here which was, in fact, not an 12 error. 13 Q. Well, in this error message, which 14 appeared in the Windows 3.1 beta, error unable 15 to locate CD area for MDVMD, crash and burn. 16 When you were testifying about the 17 impact of this message, whether it reflected an 18 error condition or not, did you consider the 19 fact that there were messages displayed to beta 20 testers of Windows 3.1 which were of a 21 radically different nature, talking about 22 baling out, crashing and burning, turn off your 23 system now? 24 Did you take that into account? 25 A. Yes. 7593 1 Q. Now, you testified on direct that the 2 code that generated this message was disabled 3 before Windows 3.1 was commercially released; 4 correct? 5 A. That's my recollection, yes. 6 Q. And as a consequence of that, not a 7 single person, not one, who went and bought 8 Windows 3.1 in a retail store or got a PC that 9 had Windows 3.1 installed ever saw that 10 message; right? 11 A. From that piece of software, that's 12 correct. 13 Q. Now, you have testified in an earlier 14 case that it is not possible to tell how many 15 beta testers, these people who agree to use the 16 software under development, actually saw the 17 message? 18 A. That's correct. I think that's what I 19 testified to. 20 Q. Right. In fact, you said it was 21 impossible to tell; correct? 22 A. That's correct. 23 Q. Okay. But there is evidence in the 24 record, is there not, that only eight people, 25 eight beta testers, ever asked Microsoft what 7594 1 does this message mean? 2 A. I have seen that evidence, the 3 evidence to which you're referring. 4 Q. Right. And you, from your own 5 personal knowledge, sir, have no basis to 6 disagree with it, do you? 7 A. That -- 8 Q. That only eight people ever asked what 9 that message means? 10 A. Eight people ever contacted Microsoft 11 support asking about that message. That's my 12 understanding. 13 I don't have any reason to doubt that 14 the records that reflected those eight calls or 15 contacts were incorrect. 16 Q. And you also have -- well, actually, 17 it's my fault. I should have -- 18 Only eight people contacted Microsoft 19 to say that they'd seen it, and only four 20 people went to the second stage and said, hey, 21 what does this mean. That's what the evidence 22 shows; correct? 23 A. I believe that's the case. The 24 numbers are close. You know, I don't know 25 whether four is the right number. 7595 1 Q. Okay. Less than a handful. At least 2 on my hand; right? 3 Okay. Now, you also are aware, are 4 you not, sir, that Microsoft decided not to 5 tell those four people anything, just decided 6 to ignore their question, don't tell them what 7 this thing means? 8 A. Well, I think there was a little bit 9 more in the way of confusion surrounding the 10 appropriate response. 11 So I think there was -- at least as my 12 memory of the record goes, there was some 13 concern about how to respond. And so during 14 that period, there was no response. 15 Q. Right, no response. 16 Now, you are aware, are you not, that 17 the first time anything ever appeared in print 18 in a publication about this error message was 19 when Mr. Schulman, who's going to come testify 20 later in this case, wrote an article about it 21 in something called Doctor Dobbs' journal in 22 1993; correct? 23 A. That sounds about correct. 24 Publication's right and the article's right and 25 the author's right. The date -- 7596 1 Q. So you'll accept my representation it 2 was 1993. 3 A. Sounds good. 4 Q. Now, you are familiar, are you not, 5 sir, with the CompuServe forum that various 6 developers used at this time to communicate 7 about software products; right? 8 A. I am. Or was. 9 Q. And this was before the era of chat 10 rooms and Google groups. 11 And the function served by this 12 CompuServe forum was to permit people to talk 13 to each other, people who shared a particular 14 interest to talk to each other about, for 15 example, the Windows 3.1 beta? 16 A. That's correct. Forums would be 17 organized around topics and people would 18 contribute or read postings on those forums. 19 Q. Okay. And there was a forum, was 20 there not, sir, devoted to Windows 3.1 beta 21 testing? 22 A. There was. 23 Q. And you have no reason to disagree 24 with Professor Bennett from the University of 25 Colorado's analysis that only a handful of 7597 1 messages, fewer than ten messages, ever 2 appeared in the CompuServe forum devoted to 3 Windows 3.1 about this message? 4 A. I want to make sure that we're talking 5 about during the period of the beta. That's 6 the -- 7 Q. That's a very good clarification, 8 which I appreciate. That's exactly what I 9 meant to ask, yes. 10 During the period of the beta testing, 11 you have no reason to doubt Professor Bennett's 12 analysis, that no more than a handful of 13 messages appeared in the forum about this 14 message? 15 A. No, I don't. 16 Q. And you are aware, are you not, sir, 17 that no one from Microsoft ever posted anything 18 in the CompuServe forum explaining what was 19 causing the message to be displayed? 20 During the time period that the beta 21 testing was going on. 22 A. Thank you. 23 I don't recall any postings that were 24 noted by Microsoft employees. 25 Q. All right. I'd now like to move to 7598 1 something -- a different topic, but still in 2 the same general vein, which is the nested task 3 flag. 4 And you said this is quite a 5 complicated subject; correct? 6 A. It had the potential to be 7 complicated. It certainly does. It has the 8 potential. 9 Q. Okay. I'd like to show you a slide 10 that I prepared, and I tried to convey the same 11 thing that you drew up on the board, but I was 12 hoping that it was slightly clearer. But you 13 can tell me. 14 It's 787. No. 15 A. No. 16 Q. It's 753. Okay. We are getting off 17 to a bad start. 18 Now, so what you said on direct was 19 that the way the nested task flag works is that 20 application A transfers control to application 21 B -- and then the question is whether control 22 gets returned to application A or instead goes 23 off to some higher level in the system; 24 correct? 25 A. That was an analogy by -- or a 7599 1 metaphorical explanation because there are lots 2 of potentially complicated subjects that could 3 get in the way. But that's my -- that looks 4 like an approximation of my diagram. 5 Q. Okay. And the nested task flag's role 6 in this process is depending on whether it's 7 set to 1 or 0, the process either returns to 8 the originating process or it goes someplace 9 else? 10 A. Yes. And it changes the specific 11 meaning of an instruction in the system -- in 12 the 386 architecture. 13 Q. Intel specified a default setting on 14 386 microprocessors for the nested task flag; 15 correct? 16 A. You mean, a power on setting? 17 Q. Yes. 18 A. I believe it sets the value of the 19 nested task flag to a real mode operation, yes. 20 Q. Right. And you are aware, are you 21 not, that when DR-DOS runs, it changes that 22 power on setting of the nested task flag? 23 A. It changes it -- yes, it changes -- 24 this is a control register. So, yes, it 25 changes it. 7600 1 Q. And Mr. Constant, who is coming next 2 to testify, said in his deposition that they 3 did that at DRI. They changed it not because 4 they needed to do it for any shipping product, 5 but, as he says in his deposition down here, it 6 was purely as a research exercise. 7 Do you see that? Down -- it's the 8 last -- 9 A. Oh, it's the bottom. Yes. 10 Q. Right. Now, you're also aware, are 11 you not, that when I asked Mr. Constant back in 12 1998 whether Digital Research told anyone that 13 it had made this change from what Intel 14 specified as the power on default, he said no? 15 A. Told anyone -- 16 Q. Outside of DRI. 17 A. I recall reviewing Mr. Constant's 18 deposition at some point in time. That may 19 have been part of it. 20 Q. And you -- sorry, I didn't mean to 21 interrupt. 22 You don't have a memory one way or the 23 other whether Mr. Constant said that no one 24 outside of DRI was informed that DRI had made 25 the decision to change the default setting of 7601 1 the nested task flag and didn't tell anyone 2 else outside the company? 3 A. I think I may have seen it in one of 4 Microsoft's pleadings, a reference, but not in 5 the deposition. So I think I saw it. 6 Q. Now, did you read the section of 7 Plaintiffs' opening statement where Ms. Conlin 8 said that it is not the Plaintiffs' position 9 that Microsoft has any duty to fix other 10 people's products? 11 A. I think so. 12 Q. And you agree with that, don't you, 13 sir, that it is not Microsoft's obligation to 14 fix problems that other people create in their 15 products? 16 A. No, it's not. Under normal -- I'm 17 sorry, under normal circumstances, it's not. 18 Q. Now, when DRI realized that having the 19 nested task flag set to 1 instead of 0 was 20 causing Windows 3.1 to fail on installation, 21 how big a patch did DRI have to write to fix 22 that problem? 23 A. My recollection is that it's quite 24 small. 25 Q. Okay. It's a 2-bit patch; correct? 7602 1 And I don't mean that in a derogatory sense. 2 A. I forget how they implemented it, but 3 it may have just to have been to change the 4 value of a constant in the program or it may 5 have been to change an instruction. 6 Q. Okay. 7 A. But it's a small -- small change. 8 Q. Okay. 9 A. I don't mean that other -- it's a 10 small change. 11 Q. Okay. Mr. Constant testified -- I 12 asked him the question, how did DRI fix the 13 nested task flag problem, and his testimony was 14 it just reset the bits that we saw. The F200 15 was modified to a 0200 and that was the patch. 16 Can you explain to the jurors what it 17 means to say that the F200 was modified to a 18 0200? 19 A. I believe that he's referring to -- I 20 mentioned hexadecimal earlier. 21 And so if you count from -- in basic 22 arithmetic from zero to ten, then we start 23 using A, B, C, D, E, F. F is 15. 24 And what I'm recalling from this now 25 is that they -- so you would represent the 7603 1 value 242 as F2. 2 And what Mr. Holley has just read, I 3 believe, is changing it from 242 to 2. And -- 4 I'm resisting the temptation to go to a board, 5 but what that would look like if you were 6 looking at it in zeros and ones, it would be 7 four ones followed by 0010. 8 That would be that bit pattern to 9 represent F2 or 242, and what it was changed to 10 was four zeros, 0010. 11 Q. And do you know how soon after the 12 release of Windows 3.1 DRI released that very 13 small patch that fixed this issue with the 14 nested task flag? 15 A. I think we discussed that Windows 3.1 16 shipped in March or April of '92. And I think 17 the patch was -- I'm speculating. I believe it 18 was in the second quarter of 2002, which is 19 May, April, May, June. 20 Q. Now, I'd like to move from nested task 21 flag to something you talked about on direct 22 called verified DOS. 23 And I believe you testified that this 24 was a function that was added to certain 25 Microsoft programming language products. 7604 1 I think you referenced particularly 2 QuickPascal that looked to see whether it was 3 running on MS-DOS. And if it didn't find 4 MS-DOS down there, it put up a message saying 5 this may -- using this product with something 6 other than MS-DOS may void valuable warranty 7 protection; is that correct? 8 A. That's correct, yes. 9 Q. Now, it is not your testimony, is it, 10 Mr. Alepin, that the verify DOS code interfered 11 in any way with the operation of DR-DOS? 12 A. It did not change the way DR-DOS 13 functioned. The answer is, no, that's not my 14 testimony. 15 Q. And so maybe this is clear, but I want 16 to make sure it is. 17 It is not your testimony that the 18 verify DOS code caused the program DR-DOS to 19 malfunction in some way, is it? 20 A. That's not my testimony -- these 21 negatives are -- no, it is not my testimony 22 that it caused the code to malfunction. 23 Q. Okay. Now, Mr. Lamb showed you on 24 direct examination a trip report that Mr. Gates 25 wrote about some visit that he made to 7605 1 Olivetti, Italy. Do you remember that? 2 A. I do. 3 Q. And one of the things that Mr. Lamb 4 directed your attention to was a statement by 5 Mr. Gates about including the message in all of 6 Microsoft's products. 7 Do you remember being shown that 8 section? 9 A. I do. 10 Q. And the suggestion was made that 11 Microsoft did that, that Microsoft put the 12 verify DOS code in all of its products. But 13 that's not right, is it? 14 A. When was the suggestion made? 15 Q. Well, that wasn't what you meant in 16 your testimony about that document? You didn't 17 mean to suggest that Microsoft had, in fact, 18 included the verify DOS code in all of its 19 products? 20 A. I don't think that's what I said. 21 Q. Okay. Fine. 22 And, in fact, that didn't happen, did 23 it? That the only products that this verify 24 DOS message went into were QuickBasic, Quick C, 25 and QuickPascal, and then a Korean version of 7606 1 Windows never marketed in the United States; 2 correct? 3 A. Hanguel Windows. 4 Q. Hanguel, correct. 5 And so it wasn't in Microsoft's entire 6 product line, was it, sir? 7 A. No. 8 Q. How difficult was it for DRI to 9 circumvent the verify DOS code so that it no 10 longer displayed this message about warranties? 11 A. How difficult -- in engineering terms 12 or development time or -- 13 Q. Let's talk about development time. 14 Did you look at Mr. Constant's 15 testimony and the testimony of other Digital 16 Research employees about how easy it was for 17 them to circumvent the verify DOS code so that 18 this warranty message was no longer displayed? 19 A. I recall at some point in the past 20 reviewing that material. 21 Q. And it is your understanding, is it 22 not, sir, that within one month of the 23 commercial release of Windows 3.1, in March of 24 1992, DRI had released an upgrade to its 25 operating system that circumvented this code? 7607 1 A. I'm a little confused on the dates 2 here because -- I mean, that sounds like the 3 dates for the availability of nested task flag 4 as well, but I -- but the time frame -- the 5 amount of time seems correct. I'm not sure 6 what the -- 7 Q. Okay. Fair enough. 8 So without regard to whether it was in 9 March of '92 or some other time, the one month 10 from -- the one month to fix it time frame is 11 consistent with your memory of the facts; 12 correct, sir? 13 A. It's consistent. 14 Q. Okay. Now, Professor Martin -- or I'm 15 not sure if he's a professor, whatever he is, 16 David Martin, he's someone that you are 17 familiar with; correct? 18 A. I have read his book, yes. 19 Q. And at some point he was going to 20 testify here in this case. That's your 21 understanding, isn't it? 22 A. That he might have been called to 23 testify. He submitted a report in here. Might 24 have, yes. 25 Q. Okay. And in the context of looking 7608 1 at this verify DOS situation, did you have 2 occasion to look at Doctor Martin's deposition 3 testimony on this subject in prior cases? 4 A. I believe I read Doctor Martin's 5 deposition. 6 Q. And do you remember this question and 7 answer? 8 He was asked, using an untested 9 operating system would have an impact on their 10 warranty. Isn't that something a consumer 11 might want to know? 12 Answer: I would say that that could 13 be relevant to consumers who have recently 14 installed QuickPascal, yes. 15 Do you disagree with Professor Martin 16 that knowing that using a language product on 17 top of an untested operating system might have 18 an impact on the warranty is something that 19 somebody who just bought QuickPascal might want 20 to know? 21 A. Well, it might be interesting to know 22 what the limits of the warranty are. 23 Q. Okay. And QuickPascal is not 24 something that -- or Quick C or QuickBasic, 25 those aren't products that my mom is likely to 7609 1 be using; right? 2 MR. LAMB: Objection. Calls for 3 speculation. 4 THE COURT: Overruled. 5 You may answer. 6 A. Well, it's never too late to become a 7 computer programmer. 8 Q. You can talk to her about that. 9 A. There's lots of opportunities. 10 Q. Okay. 11 A. But this is a product -- this is, as I 12 believe I testified, a developer tool. 13 Q. So this is not something that ordinary 14 consumers are using, QuickPascal; correct? 15 A. I like to think of myself as an 16 ordinary consumer from time to time, but it's a 17 developer tool, yes. 18 Q. You are not aware, are you, sir, of 19 any contemporaneous reports in newspapers or 20 magazines about the verify DOS code, are you? 21 A. Sitting here, I don't have a 22 recollection of them. 23 Q. Let's move from verify DOS to 24 something with the code name Bambi. 25 You testified on direct that Microsoft 7610 1 created a disk caching utility for use in 2 Windows 3.1, and it had the code name Bambi; is 3 that right? 4 A. Yes. 5 Q. And the eventual name of that disk 6 caching utility was SmartDrive; correct? 7 A. S-M-A-R-T D-R-V, yes. 8 Q. Correct. 9 Now, disk caching, you would agree 10 with me, is a highly delicate and dangerous 11 process; correct? 12 A. You have to know what you're doing to 13 cache data or to emulate a disk driver. 14 Q. And if you get it wrong, the 15 consequences are relatively dire from the 16 user's standpoint; correct? You could end up 17 with what is referred to as a cross-linked mess 18 where what used to be your nice hard drive with 19 all the information organized in a way that's 20 accessible ends up being a completely unusable 21 mass of information? 22 A. I think I would agree with that with 23 respect to compressed drives, but with respect 24 to virtual or these smart drives, the in memory 25 drives, what is happening is the portion of the 7611 1 memory of the computer is being reserved for 2 the simulated disk drive to increase 3 performance. 4 So, typically, the stuff that you put 5 in there is stuff that once the -- once you 6 shut the machine off, you don't care about. 7 So disk caches don't tend to hold, at 8 least as the way Windows was using them and 9 other systems were using them, didn't have the 10 purpose of holding important data that would 11 persist from machine reboot to machine reboot. 12 Q. I agree with you completely, but in 13 the following situation you could have a 14 disaster; correct? 15 If you copied -- if you're working on 16 a word processing document, for example, and 17 it's residing in the cache, because that's much 18 faster than keeping -- going to the hard drive 19 constantly to get it, it's sitting in the 20 cache, and somehow when you write the new 21 version of the document back to the cache, it 22 stomps on something else, you're going to have 23 data corruption, aren't you, sir? 24 A. Yes. But I -- that's an atypical use, 25 especially in those -- in that period given the 7612 1 reliability of the computer systems and the 2 electrical grid and everything else. 3 If you are using -- if you are 4 updating a document in the disk cache, if the 5 power fails or anything else fails, you've lost 6 the document. 7 So there's kind of a concern that 8 would lead users to shy away from doing that 9 particular activity as a general matter. Just 10 a higher incidence of failure for different 11 reasons, including the cross-link file problem 12 that you're referring to. 13 Q. Now, you remember giving a deposition 14 back in January of 2003 and being asked 15 questions about this Bambi disk cache, don't 16 you, sir? 17 A. Yes. 18 Q. And do you remember being asked the 19 question by Mr. Hawk, rewrite -- excuse me. 20 Read/write disk caches, that's a very 21 complicated process, isn't it? 22 Answer: It's a -- it's certainly one 23 that's fraught with danger. 24 And what did you mean when you said 25 that read/write disk caches are fraught with 7613 1 danger? 2 A. Well, you need to write a device 3 driver, essentially something that will 4 simulate the operation of a disk drive, except 5 using memory, and will pass data back and forth 6 to -- in the case of Windows, this is -- it's 7 being used to cache portions of a running 8 system. So that if you don't get it right, 9 there are going to be problems. 10 Q. Now, this -- I think what you said on 11 direct was that Bambi at some point was altered 12 so that it would refuse to run on top of 13 DR-DOS; is that correct? 14 A. Yes. 15 Q. Okay. And how many weeks or days did 16 that situation persist where Bambi, the test 17 version of SmartDrive, refused to load on top 18 of DR-DOS? 19 A. You know, I don't -- I don't recall 20 sitting here. 21 Q. But it's clear in your mind, is it 22 not, sir, that by the time Windows 3.1 was 23 commercially released, Microsoft had fixed 24 SmartDrive so that it knew how to deal with the 25 particular disk access interface that DRI had 7614 1 copied from Compaq, and so there was no longer 2 any need to prevent Bambi from running on top 3 of DR-DOS? 4 A. Well, I believe that this went in two 5 steps. At least my memory has it in two steps. 6 The first of which involved the 7 refusal to load, as you described. 8 And the second one was the corruption 9 of the Microsoft code, which had erroneously 10 considered the condition to be an error 11 condition -- erroneously considered an error 12 condition. Had mistakenly identified the 13 particular area of memory as being DR-DOS, and, 14 in fact, it was a Compaq-defined memory 15 structure. 16 So that was -- the second step was 17 fixing the underlying software. 18 Q. Okay. So I want to understand the 19 progression. 20 DRI elected to implement a disk access 21 interface called Big Foot. These names are 22 unbelievable. 23 But the disk access interface was 24 called Big Foot, and it was in the Compaq 25 version of DOS; correct? 7615 1 A. That's correct. Big Foot to support 2 big drives. 3 Q. Big drives, okay. 4 And as Microsoft was developing -- so 5 both Compaq DOS 3.31 and DR-DOS 3.31 both 6 implemented this Big Foot disk access 7 interface; correct? 8 A. That's correct. 9 Q. And that was a different disk access 10 interface than MS-DOS and IBM's PC DOS used; 11 correct? 12 A. Well, different. It was largely the 13 same, small amount of difference. 14 Q. Small amount of difference, okay. 15 Now, when Microsoft was developing its 16 disk caching utility, it failed to realize 17 initially that its new disk cache called Bambi 18 didn't know how to deal with this Compaq disk 19 access interface that DRI copied; correct? 20 A. I guess you could say it failed to 21 realize that. 22 Q. Okay. And when it realized that Bambi 23 was dangerous when running on top of either 24 Compaq DOS 3.31 or DR-DOS 3.31, it decided, 25 temporarily, to ensure that Bambi would not run 7616 1 on top of those two operating systems; correct? 2 A. Well, I don't think that that's quite 3 the conclusion that I would come to based on 4 the record. I mean, it's certainly correct to 5 say that Microsoft recognized that its software 6 mistakenly did not allow for support for this 7 Big Foot specification, and then I would 8 disagree with sort of the narrative about what 9 happened after that. 10 Q. Okay. Well, you don't know, do you, 11 because you've not done the work necessary to 12 make this determination, what would have 13 happened during this beta testing period if 14 Microsoft had allowed the version of SmartDrive 15 that didn't understand the Big Foot interface 16 to load on top of DR-DOS? 17 A. Part of that process of beta testing 18 is to find out what works and what doesn't 19 work. 20 Q. Okay. Do you remember me asking you 21 in July this question -- 22 The question I asked you is, what 23 would happen if Microsoft allowed the version 24 of SmartDrive in that beta version of Windows 25 3.1 to load if it was incompatible with the 7617 1 disk interface in DR-DOS? 2 Answer: I don't know what would have 3 happened had the execution continued. 4 That's correct, sir, you do not know? 5 A. That's correct. 6 Q. Okay. Now, are you familiar with 7 Doctor Martin's testimony on whether or not 8 Microsoft's reaction to discovering that Bambi 9 did not understand the Big Foot interface was 10 the proper thing to do from a software 11 engineering standpoint, i.e., refusing to load 12 until the problem could be resolved? 13 A. I don't remember that particular 14 passage of his testimony. 15 Q. Okay. Well, in his earlier deposition 16 in another case, Doctor Martin was asked this 17 question. 18 And the purpose of a beta is to test 19 it to make sure that bad things don't happen to 20 a user of the ultimate retail product; right? 21 Answer: That's one of the purposes of 22 a beta, yes. 23 Next question. And a technique 24 employed in a beta process, when you encounter 25 an incompatibility that you do not have fixed 7618 1 yet is to disable your code so that it doesn't 2 cause harm to the beta tester's machine; right? 3 Answer: From Doctor Martin, that's 4 true. And in this case I think that Bambi did 5 the right thing when it encountered an error. 6 It stopped and it did not cause any errors to 7 be transmitted to the disk drive. 8 And you have no basis to disagree with 9 Professor Martin's opinion, do you, sir, that 10 what Microsoft did was the right thing? It 11 prevented Bambi from loading on top of DR-DOS 12 until Bambi could be fixed so that it 13 understood the Big Foot interface; correct? 14 A. That's correct. 15 Q. Now, I believe you testified -- and 16 I'd like to move to a related but slightly 17 different topic. 18 I believe you testified on direct that 19 Microsoft refused to provide DRI, Digital 20 Research, Inc., with versions of the Windows 21 3.1 beta and that if Microsoft had given those 22 to DRI, they could have fixed all these 23 problems faster than they did. 24 Did I understand you correctly? 25 A. If Microsoft had provided DR-DOS -- 7619 1 Digital Research, Inc., the developers of 2 DR-DOS with early access to the information, 3 then some of these errors could have been 4 fixed, that's true, or circumvented. 5 Q. Okay. Well, they were all eventually 6 fixed, weren't they, sir, either by Microsoft 7 or by DRI? 8 A. Eventually, yes. 9 Q. Did you in reaching that determination 10 about what DRI could have done look at 11 testimony from DRI personnel about whether they 12 did have the Windows 3.1 beta? 13 A. I recall some discussion on the record 14 of that. 15 Q. And do you recall in particular the 16 testimony of a man named Toby Corey who was the 17 boss of Mr. Constant, who's going to come here 18 and testify next, did you read Mr. Toby Corey's 19 testimony? 20 A. Perhaps. There's a long list of names 21 here now. 22 Q. But you presumably read the testimony 23 of the DRI people and the Novell people that 24 you thought you needed to read before you could 25 offer opinions about what DRI could have done 7620 1 if it had had access to the Microsoft beta of 2 Windows 3.1; correct? 3 A. Yes. 4 Q. Sorry for that delay. 5 I'd like to play you an excerpt from 6 the deposition testimony of Toby Corey on the 7 28th of September, 1998, and then I'm going to 8 ask you a question about it. 9 (Whereupon, the following video was 10 played to the jury.) 11 Question: Were there other efforts, 12 either by DRI or by Novell, to figure out ways 13 -- 14 (Whereupon, playing of video 15 concluded.) 16 MR. HOLLEY: Whoop, sorry, sorry. 17 That's not right. 18 Your Honor, may I consult for one 19 moment? 20 THE COURT: Sure. 21 MR. HOLLEY: All right. We're going 22 to get there yet, Mr. Alepin. 23 All right. I'd like to play you the 24 excerpt that I described. 25 (Whereupon, the following video was 7621 1 played to the jury.) 2 Question: Would that lead you to 3 believe, Mr. Corey, that, in fact, Novell did 4 have access to betas? 5 Answer: Yes. We had access to these 6 betas. 7 Question: How did you get access to 8 them? 9 Answer: I don't exactly know how we 10 got them. To the best of my memory, I believe 11 one of our customers, who was in the beta 12 program, was giving it to our research and 13 development team. 14 Question: Do you know who in the 15 research and development team? 16 Answer: No, I do not. 17 Question: Was there any beta that you 18 know of that Novell didn't have? 19 Answer: No, there is not. 20 Question: They got them all? 21 Answer: To the best of my knowledge, 22 yes. 23 (Whereupon playing of video 24 concluded.) 25 Q. Now, just so we are clear, at this 7622 1 point in time, by the time that Windows 3.1 was 2 in beta, DRI had been acquired by Novell; 3 correct? 4 A. I believe that's correct. At this 5 point in time -- I should have been a little 6 more curious there. At this point in time 7 being? 8 Q. The point in time that we're talking 9 about, the period of time of the Christmas beta 10 of Windows 3.1, which is December of 1991. 11 A. Yes. 12 Q. Okay. And did you take account of 13 Mr. Corey's deposition testimony that, in fact, 14 they had these betas? 15 A. Yes. 16 Q. Now, I believe you testified, sir, 17 that in your view Microsoft should have given a 18 beta of Windows 3.1 to DRI because DRI was 19 developing a lower level complement to Windows 20 as opposed to a competitor to Windows. Did I 21 understand that correctly? 22 A. That's correct. I mean, that's -- 23 yes, that's correct. 24 Q. Okay. In giving that testimony, did 25 you take account of evidence in the record 7623 1 that, in fact, DRI was engaged in efforts to 2 develop a competitor to Windows under projects 3 named Cutlass and Star Trek? 4 A. I looked at the record concerning 5 DRI's investigations into the possibility of 6 developing a follow on GUI to what they had 7 done with Gem. 8 Q. And, in fact, I presume you have 9 looked at Mr. Corey's testimony that early in 10 1992, before the release of Windows 3.1, Apple 11 and DRI created a top-secret project called 12 Star Trek, the goal of which was to create a 13 competitor to Windows 3.1; correct? 14 A. I'm not sure that the goal was to 15 create it, but, rather, to access the 16 feasibility is my understanding. 17 It was not -- at least as I understood 18 it, it was not funded at anywhere near the 19 level that would have permitted to go forward, 20 so -- 21 Q. But at the very period of time that 22 you said Microsoft should have given a beta 23 test copy of Windows 3.1, there were Apple and 24 Digital Research engineers holed up in 25 California attempting to clone Windows; 7624 1 correct? 2 A. In our -- in our business it is quite 3 often the case that you have different 4 organizations that are performing different 5 functions, and we have ways of -- and we do 6 continuously make sure that the people that we 7 don't want the stuff to get in our organization 8 don't see the stuff that they shouldn't see. 9 Q. Well, I just want to -- I appreciate 10 that. But I want to focus on my question, 11 which is, when you suggested in your direct 12 testimony that Microsoft should have given DRI 13 a copy of an advanced release of a new product 14 still under development because that other 15 company was not competing with Windows, you 16 didn't say, did you, sir, that in Santa Clara, 17 California, there were people working for DRI 18 and Apple assessing how they could clone 19 Windows? 20 A. That wasn't the basis on which I 21 understood Microsoft's executives made the 22 decision to preclude access to the beta by DRI. 23 Q. Well, how did you come by that? Did 24 you read the testimony of Mr. Silverberg in the 25 FTC case where he said precisely what I just 7625 1 said in 1993? 2 A. I read that testimony and other 3 testimony on that subject. 4 Q. Okay. And what Mr. Silverberg said in 5 his FTC deposition was that he didn't want to 6 give a beta test version of Windows 3.1 to DRI 7 because he believed that they were actively 8 engaged in determining how to clone Windows. 9 And it turns out he was exactly right, 10 isn't that true? 11 A. That were determining the feasibility 12 of creating a product that would compete with 13 Windows. 14 Q. Okay. Now, we've been through this 15 afternoon the AARD code and the nested task 16 flag and we've been through Bambi and we've 17 been through verify DOS. 18 And your suggestion, is it not, sir, 19 is that these pose serious problems for Digital 20 Research? 21 A. They pose serious problems for Digital 22 Research, yes. 23 Q. Okay. In reaching that decision, that 24 opinion, excuse me, did you take into account 25 Mr. Corey's testimony, the vice president or 7626 1 whatever his title was, we'll see it in a 2 second, the senior marketing guy at DRI, about 3 what he thought about all of these supposedly 4 big serious problems? 5 A. As I indicated before, quite possible 6 that I read Mr. Corey's deposition or 7 testimony. 8 Q. I'd like to show you some testimony 9 Mr. Corey gave on the 7th of November, 2001. 10 I'm going to ask you a question about it. 11 A. Of 2001, did you say? 12 Q. Yes, I did, sir. 13 A. Oh, there it is. 14 (Whereupon, the following video was 15 played to the jury.) 16 Question: The incompatibility that 17 surfaced just prior to the release of Windows 18 3.1 I think you said was technically minor or 19 something like that; is that right? 20 Answer: That's right. 21 Question: Was it just one 22 incompatibility or was there more than one? 23 Answer: Well, there were several. I 24 mean, as I said, no software is 100 percent 25 bug-free. 7627 1 There are always incompatibilities. 2 And it's impossible to test for every 3 environment, every application, when it loads 4 in memory, when it unloads from memory. But it 5 was my opinion that all prior problems were par 6 for the course. 7 (Whereupon playing of video 8 concluded.) 9 Q. Now, in telling the Jury on direct 10 over an extended period of time that the AARD 11 code and verify DOS and Bambi and the nested 12 task flag were serious problems for DRI, didn't 13 you think it was important to note that one of 14 the most senior executives in the organization 15 regarded them as relatively minor and par for 16 the course? 17 A. I concluded based on my review that 18 the impact of the incompatibilities were to 19 create the impression that DR-DOS was, in fact, 20 a product that was not par for the course, 21 imperfect in the sense that as Mr. Corey's 22 describing it, but, rather, to make the product 23 appear to be incompatible as a matter of 24 business policy by Microsoft. 25 So he's describing there were some 7628 1 technical incompatibilities. And if you look 2 at them as we've been discussing them, they 3 were, in fact, small in some instances, errors 4 that would be fixed. 5 But the issue that led me to my 6 conclusion here was that they were not part of 7 what would happen in the normal course of our 8 industry where the nine million or so users of 9 DR-DOS who were potentially Windows users would 10 have the benefit of joint testing or testing 11 separately to make sure that when they 12 purchased the Microsoft product, that it would 13 work with a Digital Research product. In fact, 14 that's not at all what happened. 15 Q. Well, you're asking the Jury to 16 substitute your post hoc review of the record 17 for the views of the man who was in charge of 18 marketing DR-DOS at the time? 19 Is that what you're asking the Jury to 20 do? 21 A. I'm suggesting, I think, that Mr. 22 Corey did not have the benefit of a full review 23 of the material in this proceeding and that his 24 view may not be that informed. That's -- 25 Q. Okay. 7629 1 A. That's -- so that's the end of the 2 sentence. 3 Q. Okay. I agree with that. 4 MR. HOLLEY: Your Honor, I'm now about 5 to move on to a topic that we discussed at the 6 recess. 7 THE COURT: Very well. 8 Members of the jury, it's ten minutes 9 to 3:00. I'll let you go early today. 10 Please remember the admonition 11 previously given. And leave your notebooks 12 here. 13 We will see you tomorrow at 8:30 a.m. 14 THE COURT: We will take a recess 15 first. 16 I need to see counsel back here on a 17 matter. 18 (The following record was made out of 19 the presence of the jury at 2:47 p.m.) 20 (At this time, a sealed-by-the-Court 21 record was made by Janis Lavorato.) 22 (The following record was made out of 23 the presence of the jury at 3 p.m.) 24 MR. HOLLEY: I have a serious 25 misgiving about the idea of conducting a dress 7630 1 rehearsal with Mr. Alepin of my cross. 2 I think it's one thing for me to tell 3 the Court what testimony I hope to elicit 4 outside of his presence. And I even have a 5 suggestion, which I think is fairly usual, but 6 I would be happy on an in-camera basis to show 7 Your Honor what it is -- the questions I 8 propose to ask him. 9 It seems highly irregular and 10 prejudicial to Microsoft to have Mr. Alepin get 11 to go through it once and find out where I'm 12 going so that he can then get up and do it 13 again. 14 THE COURT: Well, let's try it first. 15 If I think it's enough -- let's just take it in 16 stages. We will go out on the record, and you 17 tell me what you're going to go through. 18 Mr. Alepin will be out of the room. 19 Try to be as specific as you can. Then if I 20 don't think it's sufficient enough -- 21 MR. HOLLEY: Can we have an 22 understanding because it is just -- we are now 23 in an overnight recess, and I don't think it 24 would be fair in these circumstances for 25 plaintiffs' counsel to prep Mr. Alepin 7631 1 overnight for the lines of cross that I intend 2 to pursue in the morning. 3 THE COURT: You want to do it tomorrow 4 morning then? 5 MR. HOLLEY: I would prefer that. 6 THE COURT: How long will it take? 7 MR. HOLLEY: I would suggest that we 8 start earlier than 8:30 so that we can -- 9 THE COURT: Eight o'clock? 10 MR. HOLLEY: Eight o'clock. And that 11 way we are -- 12 THE COURT: Thanks. 13 MS. CONLIN: Wait a minute, Your 14 Honor. 15 Before we leave the record, I have an 16 alternate suggestion, and that is the way we 17 would usually do this because as the Court is 18 well aware, the Iowa Supreme Court doesn't like 19 offers of proof except in Q and A fashion. 20 What we would usually do is if the 21 evidence was admitted, and it may not be 22 satisfactory, but we would -- rather than your 23 asking him again, you know, it would be read. 24 He would read. You would read. And that -- 25 the Supreme Court has on more than one occasion 7632 1 made its view of this subject matter quite 2 clear. 3 MR. HOLLEY: But this seems -- 4 MR. TULCHIN: I think that's on 5 direct, Your Honor, not on cross. 6 THE COURT: What I'm particularly 7 curious about, though, is not so much about the 8 questions you're going to ask him. 9 I want to know the information that is 10 going to come from your mouth regarding what 11 these other people have done. 12 MR. HOLLEY: Okay. And I -- but I 13 think -- 14 THE COURT: That's where it's going to 15 come from. Not from him. You want his comment 16 on it. 17 MR. HOLLEY: No. I'm asking him 18 questions about what he relied on. 19 THE COURT: Right. But you're going 20 to be -- I assume you're going to phrase it in 21 the way that such and such company did this. 22 MR. HOLLEY: Yeah, that's true. 23 THE COURT: That's what I need to 24 know. 25 MR. HOLLEY: Okay. I think 7633 1 Mr. Tulchin's suggestion is exactly dead-on. 2 It's one thing if your motion in limine is 3 granted against you, and then you would like to 4 make an offer of proof about what it is you 5 would have proved. Then I understand exactly 6 what Ms. Conlin is saying. You would like the 7 Q and A in the record so that the appellate 8 court can see it. 9 Here we're making a preliminary 10 determination about the areas in which I'm 11 entitled to seek to impeach the witness. I may 12 well decide, Your Honor, depending on how it 13 goes, you know, to ask a different set of 14 questions or something, and then having it read 15 into the record really is kind of devoid of 16 interest. It takes what could be an 17 interesting cross and turning it -- 18 THE COURT: Let's just do it first 19 thing first because I think that might solve 20 the whole thing. 21 MR. HOLLEY: I agree with you, Your 22 Honor. 23 THE COURT: I'll be able to -- 24 MR. TULCHIN: Your Honor, if I could 25 just say one other thing. The briefs we gave 7634 1 you on December 13th was in response to a 2 request that you made on December 12th on the 3 record. It might be page 4426 or something 4 like -- 5 THE COURT: For authority. 6 MR. TULCHIN: Yes. For authority on 7 this point. And the next day we provided this 8 brief and the plaintiffs still have provided 9 nothing, which I think -- I don't want to say 10 whether they have anything or they don't. They 11 only know that. What I think is germane to 12 this question is whether we should be permitted 13 to go forward tomorrow morning. 14 After all the Court asked for these 15 authorities, and here we are, it's almost a 16 month later. And I think the Court has already 17 ruled on this. I think your decision on the 18 motion in limine you said granted in part and 19 sustained in part -- or denied in part, I'm 20 sorry. 21 MR. LAMB: I like that. 22 MR. TULCHIN: That was a Freudian slip 23 or whatever you might call it. I think the 24 part that was granted, I thought your opinion 25 made it clear with respect to illegal conduct 7635 1 and lawful, normal business conduct would be 2 permitted. 3 THE COURT: Right. 4 MR. TULCHIN: And so I think we should 5 just be permitted to go forward but -- 6 THE COURT: After I see it tomorrow, 7 I'll make it crystal clear. 8 MS. CONLIN: But, Your Honor, 9 Mr. Tulchin's recitation of what happened I 10 think is not entirely correct. We had filed a 11 brief with our motion -- 12 THE COURT: That's right. 13 MS. CONLIN: -- and with a vast amount 14 of authority, and they had not responded, 15 apparently, in exactly the way that they wished 16 to. So they took the Court's opportunity, but 17 we've got a great plenty of case law supporting 18 our position in the record already, Your Honor. 19 I don't think that the Court needs more paper, 20 but we can get you some if you don't have 21 enough. 22 MR. LAMB: Housekeepingwise, Your 23 Honor, do you not want to have the witness here 24 at 8 and then have him here at 8:30? 25 THE COURT: 8:30 is fine. 7636 1 MR. LAMB: But me be here at 8? 2 THE COURT: You're not going to talk 3 for half hour, are you? 4 MR. HOLLEY: No, I'm not, Your Honor. 5 MS. CONLIN: I was going to say we 6 should call all the jurors and tell them not to 7 get here until after lunch. 8 MR. HOLLEY: Oh, no, no. 9 THE COURT: He's going to be brief. 10 MR. HOLLEY: I am going to be brief, 11 Your Honor. I understand the Court's interest 12 in that. 13 One very last question. The Court -- 14 I understand the Court's ruling that I can go 15 back to that Java article. 16 There was testimony elicited that was 17 stricken from the record. Am I entitled to go 18 back and elicit that same testimony again? 19 THE COURT: Oh, I can just tell the 20 jurors -- 21 MR. HOLLEY: It's not stricken? 22 THE COURT: -- it's not stricken. 23 MS. CONLIN: Your Honor, I have 24 another motion to strike, but we might want to 25 take a quick break before we do it. 7637 1 THE COURT: Now? 2 MS. CONLIN: Yes, please. 3 THE COURT: Let's take a break then. 4 (A recess was taken from 3:10 p.m. to 5 3:15 p.m.) 6 THE COURT: Ms. Conlin, you wanted to 7 make a record? 8 MS. CONLIN: Yes, I do. Thank you, 9 Your Honor. 10 May it please the Court, comes now the 11 Plaintiffs and hereby moves to strike the 12 testimony of this witness elicited by Mr. 13 Holley when he asked whether in Win 95 and Win 14 98 you could go into the operating system and 15 simply remove the components, and he said 16 nothing's stopping them; right? 17 The suggestion that Mr. Holley made 18 and implied that users could remove these 19 components. 20 So there was no harm from what 21 Microsoft did with respect to binding the 22 Internet Explorer to the operating system. 23 In a case from which these findings of 24 fact and conclusions came, which Mr. Holley was 25 one of the principal lawyers for, Microsoft's 7638 1 defense was that, in fact, you could not remove 2 the Internet Explorer from the Windows 98 3 operating system. 4 In fact, a Doctor Felten developed a 5 program that was designed to do that, after 6 much work, as I understand it, for which I'm 7 sure that the Plaintiffs paid dearly. 8 But, in any event, Your Honor, it took 9 a special program designed by a computer 10 scientist to get that code out of the operating 11 system and, in fact, as a part of the defense 12 Mr. Allchin presented a videotape indicating 13 that, in fact, or endeavored to indicate, 14 though the videotape was at least incorrect and 15 perhaps fraudulent, Mr. Allchin's testimony was 16 designed and the videotape was designed to show 17 that if you removed the Internet Explorer code 18 from the Windows operating system, that the 19 operating system performance was significantly 20 degraded. 21 The conclusions of law from that case, 22 which are found beginning on page 0, which is 23 our sort of second set of instructions, are as 24 follows: 25 Number 4. Microsoft maintains a 7639 1 monopoly power in the operating system market 2 by the following anticompetitive conduct, that 3 is, conduct which caused harm to the 4 competitive process and thereby harm to 5 consumers. 6 And Number 5, Your Honor, is by 7 excluding Internet Explorer from the add/remove 8 programs utility in Windows. 9 And Number 6 is commingling code 10 related to browsing and other code in the same 11 files in Windows. 12 And there are numerous findings of 13 fact that say the same thing. 14 I would give you a couple of examples, 15 Your Honor. 16 173, 174, and 192 at page 36, which is 17 sort of in the middle. 18 Microsoft has forced Windows users who 19 do not want Internet Explorer to, nevertheless, 20 license, install, and use Internet Explorer in 21 order to obtain the unrelated benefits. 22 This was simply and explicitly a 23 collateral attack on the judgment. And 24 Plaintiffs ask the Court to strike pages 89, 25 line 21, through page 90, line 20. 7640 1 THE COURT: Okay. 2 MS. CONLIN: Of the rough transcript, 3 Your Honor. Of the rough transcript. 4 THE COURT: Yeah. I was looking at 5 the time it was given. Okay. 6 Line 81? 7 MS. CONLIN: I beg your pardon. 8 89 line -- page 89, line 21, through 9 page 90, line 20. 10 MR. HOLLEY: May I respond, Your 11 Honor? 12 THE COURT: Just a second. 13 MR. HOLLEY: Sure. 14 THE COURT: Okay. Go ahead, sir. 15 MR. HOLLEY: My first point is a 16 procedural one. 17 Mr. Alepin is not Ms. Conlin's 18 witness. No objection was made to his 19 testimony at the time that it was elicited, and 20 no motion to strike was made after the 21 testimony was elicited. 22 I followed the proper procedure during 23 the direct examination which was to move to 24 strike testimony that I believed was improper, 25 and I suffered the consequence of that, which 7641 1 was that the Court didn't agree with me and 2 that motion to strike was denied in the 3 presence of the jury. 4 That's the way this is supposed to be 5 done, not motions made after the fact out of 6 the presence of the jury seeking to do 7 something that could have been done at the time 8 and was not. 9 So that's my procedural objection to 10 what is now happening. 11 My substantive objection is as 12 follows: Everything that Ms. Conlin just said 13 about what occurred in U.S. v. Microsoft is 14 false. 15 It was never Microsoft's defense that 16 it was impossible to remove the code that 17 comprises Internet Explorer from Windows. 18 For example, Mr. Allchin's testimony 19 was that although IE was integrated into 20 Windows, it was possible to remove the code. 21 There would be consequences on other parts of 22 the system, but the code could be removed. 23 As Mr. Allchin said, my arm is 24 integrated into my body, but it has a name and 25 you can cut it off. 7642 1 That's obviously true. 2 Professor Felten did not remove any 3 code from Windows despite the fraud perpetrated 4 on the district court in that respect. 5 What he did was to create a program 6 which found out whether something was calling 7 the Internet Explorer components of Windows. 8 And if that was, in fact, occurring, he did 9 what is called stub out the code and display an 10 error message. 11 He testified on cross that 99.9 12 percent of the Internet Explorer components in 13 Windows remained in the system, and there is no 14 finding of fact that Professor Felten actually 15 removed the code, because he never did. 16 Mr. Allchin -- just because this has 17 been said on the record in a public proceeding, 18 and I need to correct it -- did not submit a 19 false or misleading video. 20 And the video that was created in 21 response to criticisms from the government was 22 never challenged on the basic points made 23 there, which is that other parts of Windows and 24 applications running on top of Windows used the 25 Internet Explorer components and, therefore, 7643 1 that they would be damaged if that code was 2 pulled from the operating system. 3 As I said in our last review of this, 4 although the Plaintiffs wish mightily that the 5 opposite were true, there is no binding 6 conclusion of law that the inclusion of 7 web-browsing software in Windows was a 8 violation of the antitrust laws. 9 There are two findings which are 10 binding here, and I am not suggesting for a 11 moment that we are not bound by them. 12 They relate to the manner, the manner 13 in which Microsoft put web-browsing 14 functionality in Windows. 15 One is, as Ms. Conlin said, that IE 16 was not in the add/remove program utilities. 17 The other one is that Judge Jackson 18 found, and we are bound by the findings, that 19 the code related to IE was commingled with 20 other code in the operating system. 21 But as it is clear from the Court of 22 Appeals decision in reversing and remanding the 23 tying decision, not because of a lack of 24 evidence or because the government failed to 25 prove a browser market. Neither of those is 7644 1 true. 2 There is a new standard for tying 3 claims articulated by the DC Circuit sitting en 4 banc in cases involving platform software. 5 Judge Jackson found that there was a 6 per se rule against including IE in windows. 7 The en banc DC Circuit reversed and announced a 8 new standard that said when you're dealing with 9 platform software, you have to balance the 10 pro-competitive benefits of adding a function 11 like web-browsing against whatever adverse 12 effect that inclusion of new code may have on 13 competing vendors of operating system software. 14 The case was remanded to the district 15 court and the Assistant Attorney General of the 16 United States -- and I hope Ms. Conlin was not 17 suggesting that he did this in derogation of 18 his powers under the constitution, decided that 19 he could not prove that claim. 20 There is no basis for her assertion 21 that that was some sort of political fix. 22 It was done because the government 23 realized -- the U.S. Department of Justice 24 realized that it could never prove that the 25 inclusion of Internet Explorer in Windows 7645 1 violated Section 1 of the Sherman Act under the 2 standard articulated by the DC Circuit. 3 I am sorry to go on for so long, but 4 what Ms. Conlin said is, frankly, infuriating 5 and reflects a complete ignorance of what 6 occurred in the government case. 7 And as a consequence, both because her 8 procedural posture here is completely improper 9 and because everything she said in support of 10 her motion to strike is wrong, it should be 11 denied. 12 MS. CONLIN: I assume I can respond to 13 that atomic attack. 14 THE COURT: Sure. 15 MS. CONLIN: First of all, Your Honor, 16 I believe an objection was timely made to the 17 line of questioning, and the record will 18 reflect that. 19 We are not up on the feed, Your Honor, 20 but that's my recollection. 21 Nonetheless, Your Honor, I should 22 remind the Court that Microsoft on several 23 occasions have used this exact process, a 24 subsequent motion to strike, sometimes even -- 25 you know, the next day without ever having made 7646 1 any kind of objection, and the Court considered 2 those, as I hope the Court will consider this 3 one. 4 For Mr. Holley to suggest that 5 everything I say is false is quite stunning 6 given the fact that Finding of Fact 177 deals 7 directly with the Felten program, which I 8 described, and it says, indicative of this 9 fact, Microsoft could easily supply a version 10 of Windows 98 that does not provide the ability 11 to browse the web and to which users could add 12 the browser of their choice. 13 Indicative of this fact -- indicative 14 of this is the fact that it remains possible to 15 remove web-browsing functionality from Windows 16 98 without adversely affecting nonweb-browsing 17 features of Windows 98 or the functionality of 18 applications running on the operating system. 19 In fact, the revised version of 20 Professor Felten's prototype removal program 21 produces precisely that result when run on a 22 computer with Windows 98 installed. 23 That is a binding finding of fact. 24 Mr. Holley acknowledges that Internet 25 Explorer was integrated and the consequences of 7647 1 removal were degradation of performance, at 2 least as I understand what he's saying. 3 And I am also too happy to describe 4 for the Court in enormous detail what happened 5 during Mr. Allchin's testimony and what that 6 videotape looked like, but I will just say 7 this, Your Honor, Mr. Allchin acknowledged from 8 the stand that the videotape that he presented 9 that purported to be one computer, one computer 10 that was running with Internet Explorer 11 installed and another computer that was running 12 without it -- I beg your pardon. 13 One computer running with Internet 14 Explorer loaded and the same computer running 15 without it, was, in fact, two separate 16 computers. 17 And, in fact, the computer that was 18 supposed to not have -- well, that's enough. 19 And also, Your Honor, the district -- 20 the circuit court did not announce a new 21 standard for tying. They simply adopted the 22 rule of reason. 23 Whereas, Judge Jackson thought that 24 the tying engaged in by Microsoft was a per se 25 violation of the antitrust laws, the circuit 7648 1 court said it was -- it required the 2 application of the rule of reason. 3 And in connection with the final thing 4 that he brings up, that is the question of what 5 motivated whoever in the United States 6 Department of Justice made the determination 7 that the case should not go forward, made no 8 comment about that. 9 But certainly when administrations 10 change, the philosophy, legal philosophy of the 11 individual selected may differ. 12 So that is, Your Honor, why -- that 13 and the reasons that I previously stated are 14 reasons that we believe that the testimony that 15 I have cited should be stricken. 16 The objection, Your Honor, appears at 17 90, 15; page 90, line 15. 18 MR. HOLLEY: And I'll observe, Your 19 Honor, that the objection was denied. 20 Testimony was elicited. No motion to strike 21 was made. 22 I don't want to get into a he said/she 23 said contest. I'm perfectly happy if given 24 sufficient time to provide citations to the 25 record for everything that I said, which is all 7649 1 true, but it's slightly irrelevant because, A, 2 because this is procedurally improper, and, B, 3 because the testimony that Mr. Alepin gave is a 4 fact. 5 You can go into the file system and 6 delete the files. 7 And I made it clear in asking the 8 question that there might be adverse 9 consequences from doing that, but I think it's 10 important for the Jury to know that if you want 11 to -- and this is a fact. It can't be changed. 12 -- you can go into the file system and delete 13 the files that comprise Internet Explorer. 14 And nobody ever said anything else. 15 The government never denied that fact. 16 Professor Felten created this fancy 17 hiding program. But the government never 18 denied, because I asked the Professor farther 19 during his cross-examination that you could go 20 in and take out the files. 21 We elicited exactly that same 22 testimony in the government case. And no one 23 ever said that there was anything misleading 24 about it, and there's no collaterally estopped 25 finding that says you can't do it. 7650 1 THE COURT: So you don't read 173, 2 174, 177, and 192 as being opposite to the 3 testimony elicited from Mr. Alepin? 4 MR. HOLLEY: No, I don't, Your Honor. 5 THE COURT: In any way, shape, or 6 form? 7 MR. HOLLEY: No, I don't. 8 I mean, there is no -- Judge Jackson 9 never found that you can't go into the file 10 system and delete the files. 11 What he said was, there was no ready 12 mechanism -- that's what that conclusion of law 13 is about. 14 There was nothing in the add/remove 15 programs utility that made it easy for users to 16 go in and delete Internet Explorer by one click 17 of a button. 18 But Judge Jackson's findings don't say 19 that you can't go into the file system and do 20 it. And that's because it is a fact that you 21 can. 22 And the government in the government 23 case never took the opposite position. They 24 never said that you can't. 25 MS. CONLIN: Your Honor, it's a 7651 1 distinction without a difference. 2 You have said repeatedly that we 3 cannot elicit testimony -- elicit facts that 4 would undermine the conclusions of law or the 5 findings of fact that are binding on the Jury 6 in this case. That's exactly what Mr. Holley 7 did and intended to do. 8 He said nothing's stopping them; 9 right? In an effort to suggest to the Jury 10 that you just go right in there and take it out 11 and nothing bad will happen to you. 12 MR. HOLLEY: Well, on that last point, 13 no. 14 If you look at the transcript, what I 15 said was just the opposite, that because -- 16 that's our point. 17 The code is integrated, and there are 18 dependencies. And so if you go in and take it 19 out, bad things will happen. 20 But no one has ever suggested, up 21 until this woman, as far as I know, that you 22 can't -- if you want to take the risk and 23 suffer the consequences, go into the file 24 system and delete those files. You can. 25 And I really do not believe, Your 7652 1 Honor, that that undermines those findings of 2 fact. That was certainly not my intention. 3 MS. CONLIN: Well, there are numerous 4 findings of fact that there is no technical 5 justification for Microsoft to offer -- for 6 Microsoft not to offer a browserless version of 7 Windows 95 and Windows 98, and again, Your 8 Honor, as you have said, those are binding. 9 MR. HOLLEY: I accept that 10 proposition. 11 There are findings which say that -- 12 and it led to a conclusion of law which says 13 that Microsoft should have put IE in the 14 add/remove programs utility. 15 But that's a different proposition 16 from whether or not a user can go into the file 17 system and delete the files. 18 MS. CONLIN: It's intended to 19 undermine the findings of fact and conclusions 20 of law. 21 THE COURT: All right. I'll rule on 22 this tomorrow morning. 23 MS. CONLIN: Thank you, Your Honor. 24 MR. HOLLEY: Thank you, Your Honor. 25 Your Honor, apparently Mr. Hagstrom 7653 1 has yet another matter that he wants to address 2 before Mr. Cashman and Mr. Tuggy talk. 3 THE COURT: Go ahead. 4 MR. HAGSTROM: I just wanted to remind 5 the Court that on last Friday there was a 6 discussion regarding Plaintiffs' motion to 7 modify the protective order. And we wanted to 8 pursue it. Ms. Nelles suggested it might get 9 worked out. 10 THE COURT: Oh, right, right. 11 MR. HAGSTROM: We received a very, 12 very lengthy stipulation that's unacceptable. 13 And Your Honor had said on Friday at 14 6861 of the transcript, well, Wednesday it will 15 be either by agreement or the Court is going to 16 decide it. How is that? 17 THE COURT: That's right. 18 MR. HAGSTROM: And Ms. Nelles said 19 that's fine by Microsoft, Your Honor. The 20 Court said is that okay with you? 21 And I said have a good weekend, Your 22 Honor. I think you may have remembered that. 23 THE COURT: All right. This is issues 24 that have been briefed; is that right? 25 MR. HAGSTROM: Yes. 7654 1 THE COURT: Which one was it 2 specifically? 3 MR. HAGSTROM: Oh, I take it back. We 4 have briefed it. 5 THE COURT: Did they do a response? 6 MR. HOLLEY: Your Honor, I must 7 confess that I've been preoccupied so I'm not 8 up on the gory details. 9 THE COURT: Which one is it? 10 MR. HOLLEY: It's the motion, Your 11 Honor, to modify the protective order to permit 12 the Plaintiffs to communicate certain 13 information to the Department of Justice 14 concerning alleged noncompliance with the 2002 15 final judgment. 16 MR. HAGSTROM: And it's based upon 17 Mr. Schulman's findings from reviewing the 18 source code. 19 THE COURT: Okay. 20 MR. HOLLEY: And, Your Honor, my 21 understanding, just so -- and I'm subject to 22 being corrected by somebody who knows more 23 about this than I do. 24 Microsoft does not object in principle 25 to the Plaintiffs going to the Department of 7655 1 Justice and telling them what it is that 2 Mr. Schulman claims he has found. 3 The only concern Microsoft has is that 4 Mr. Schulman not do that in a manner that 5 causes Microsoft's confidential information, 6 including source code, which Mr. Schulman got 7 pursuant to protective orders in this case, 8 that he not give that information to the 9 Department of Justice in a manner -- and to the 10 states, because they are parties to that case 11 as well -- in a manner that causes it to become 12 public. 13 So we're not trying to stop them. If 14 they want to go yell at the government, God 15 bless them, but we don't want it done in a way, 16 Your Honor, such that information that this 17 court order be maintained in a protective way 18 somehow finds itself in the public domain. 19 And I don't know exactly what 20 objections the Plaintiffs have to the 21 stipulation that Mr. Neuhaus delivered to them, 22 but we really don't have a dispute here, Your 23 Honor. 24 We're not trying to stop them from 25 doing this. Our concern is only that the 7656 1 confidentiality of the information be 2 preserved. 3 And as Your Honor will remember, 4 Mr. Schulman is the man who got access to all 5 of this Windows XP source code. And we are 6 very concerned, Your Honor, that that 7 information not find its way into the hands of 8 competitors and the open source community and 9 hackers and God knows who else. 10 So, you know, do we oppose the motion 11 to stop them from talking to the government? 12 Of course, we don't. They're free to go talk 13 to the government. It's purely a question of 14 what happens to Microsoft's information. 15 THE COURT: Anything else on this? 16 MR. HOLLEY: Your Honor, I am informed 17 by my colleague, Mr. Nelson, that our 18 opposition brief is on its way here now. 19 I have no explanation for why it 20 wasn't here earlier, but that's what I am told. 21 And I think the answer is, Your Honor, 22 because we thought we had this worked out. But 23 if it's not worked out, then we oppose the 24 motion to the extent that I said. 25 To the extent that it implicates a 7657 1 process whereby Microsoft's source code and 2 other business secrets are transmitted in a way 3 that their interaction with FOIA and other 4 government statutes doesn't protect them. 5 That's all we care about. 6 THE COURT: Okay. Anything else on 7 this? Mr. Hagstrom? 8 MR. HAGSTROM: Your Honor, I'd like to 9 have Mr. Jacobs just make a couple of comments 10 about the proposed procedure because basically 11 the proposed new protective order that 12 Microsoft has provided is so burdensome and 13 complicated that it would take literally weeks 14 to try and turn over information. 15 THE COURT: What new protective order? 16 Did I sign a new one? 17 MR. HAGSTROM: No, no. As far as the 18 proposed stipulation of Microsoft. 19 They want to add layers upon layers 20 upon layers of regulations, so to speak. But 21 Mr. Jacobs is going to address that quickly. 22 THE COURT: Be brief. 23 MR. JACOBS: Yeah, Your Honor. 24 Basically, Microsoft's concern appears 25 to be that under the protective order in the 7658 1 government case, because the Microsoft 2 information would be coming through the 3 Plaintiffs in this case, that it would not be 4 considered information produced by Microsoft 5 for purposes of the protective order in the 6 government case and, therefore, they say it 7 wouldn't be accorded confidential treatment. 8 You know -- but as a remedy for that, 9 what Microsoft says basically is that, well, 10 Plaintiffs -- that Plaintiffs have the 11 obligation to go out and obtain some sort of 12 undertaking, whatever -- we're not really sure 13 what that would mean -- from the DOJ, from the 14 Plaintiffs states, from everyone to whom we 15 want to give this information, and then we 16 would have to come back and give Microsoft time 17 to object to that undertaking. 18 And then if we can't resolve it, we 19 would have to come back with another motion to 20 this Court. 21 Basically, our position is we don't 22 think Judge Kollar-Kottely would have any 23 problem, or the Department of Justice or anyone 24 would have any problem treating information 25 that Microsoft produced to Plaintiffs in this 7659 1 case as Microsoft information for purposes of 2 the protective order. 3 And it seems like it should be 4 Microsoft's job to go to Judge Kollar-Kottely 5 and seek clarification of that ruling. 6 THE COURT: Well, just for 7 clarification here -- I'm trying to simplify 8 this thing. You're saying that Mr. Schulman 9 has additional information which is relative to 10 an order by another court; is that correct? 11 MR. JACOBS: Correct. 12 Mr. Schulman has -- 13 THE COURT: Well, why do you think you 14 need permission from me to go do that? 15 MR. JACOBS: Because part of the -- 16 the protective order in this case says that the 17 -- anything that -- basically, a source code 18 that Mr. Schulman examined where he confirmed 19 some other observations that he made about 20 whether or not Microsoft -- 21 THE COURT: Well, don't you think if 22 he goes to them and says I have some 23 information for you that's important for your 24 case, that the government's going to subpoena 25 him and make him come in and testify? 7660 1 MR. JACOBS: We don't even know if he 2 can -- 3 THE COURT: You don't even need a 4 protective order. 5 MR. JACOBS: -- if he can do that 6 because he obtained this information pursuant 7 to the protective order. 8 THE COURT: I think the Department of 9 Justice would be all over him, but maybe I'm 10 wrong. 11 MR. HOLLEY: I think you're right, 12 Your Honor. 13 The government has basically under the 14 final judgment unlimited powers to seek 15 information both from Microsoft and from third 16 parties. 17 They have, you know, their normal 18 compulsory process powers. 19 We have our own views which I, you 20 know, don't want to prolong this about whether 21 the government will care at all what 22 Mr. Schulman thinks, but if they do, then they 23 are free, as Your Honor says, to subpoena him. 24 They have that power. They are, after all, the 25 United States government. 7661 1 And why this Court should be taking 2 its time to worry about whether the Justice 3 Department does something, I find mystifying. 4 What does this have to do with the 5 evidence being presented to this jury? I don't 6 understand it. 7 THE COURT: I didn't mean to cut you 8 off, Mr. Jacobs. Go ahead. Finish your 9 thought. 10 MR. JACOBS: A couple things, Your 11 Honor. 12 If it's Microsoft's position that 13 Mr. Schulman going and talking to the DOJ and 14 talking about his conclusions and how he 15 discovered the conclusions without disclosing 16 the source code is not going to violate the 17 protective order, then I suppose we can go 18 ahead and do that. 19 Is that Microsoft's position, I guess, 20 is the question? 21 MR. HOLLEY: Microsoft's position -- I 22 probably better ask, but I think Microsoft's 23 position is that Mr. Schulman can go like any 24 citizen and tell the Justice Department, as 25 people do all the time in my experience, I have 7662 1 some information that would be interesting to 2 you in Case XYZ, but I'm governed by this 3 protective order, send me a subpoena. He can 4 have that conversation. 5 I don't think that he needs in that 6 conversation to disclose the information that's 7 covered by the protective order. They know who 8 Mr. Schulman is. He's quite notorious. If 9 they're interested in talking to him, they can 10 issue him a subpoena. 11 MR. JACOBS: Well, then, I guess I 12 don't understand why they should have any 13 reason for us to just not be able to go in and 14 talk to the Department of Justice and say 15 here's what Mr. Schulman has found, here's how 16 he knows what he found, so perhaps you should 17 listen to him. 18 MR. HOLLEY: Well, that's a different 19 matter because that conversation discloses 20 information that was provided to Mr. Schulman, 21 as the protective order in this case says, 22 solely for purposes of this litigation. 23 And if they want the Justice 24 Department to subpoena that information, they 25 can go encourage the DOJ to do that. I think 7663 1 anybody's who dealt with the government on 2 behalf of clients knows that if you tell a good 3 story, that's quite easy to do. 4 As Your Honor said, they'll be all 5 over it. 6 But that doesn't require in that 7 initial conversation to have Mr. Schulman 8 disclose the gory details of the things that 9 are covered by the protective order in this 10 case, Your Honor. 11 THE COURT: All right. Anything else? 12 I think I understand the issue. 13 MR. JACOBS: Okay. No, Your Honor. 14 THE COURT: Okay. And his brief is 15 coming. Is that right? 16 MR. HOLLEY: That's my understanding. 17 I am told and believe -- 18 THE COURT: All right. 19 MR. HAGSTROM: And one other quick 20 calendaring update. 21 THE COURT: I'll rule on it. 22 MR. HAGSTROM: Microsoft had asked 23 about whether or not we could move up the 24 sanctions argument to Thursday from Friday and 25 I told them earlier today we'd like to keep it 7664 1 on Friday. 2 THE COURT: Okay. We'll talk about it 3 more tomorrow. 4 Okay, let's go. 5 MR. HOLLEY: Thank you, Your Honor. I 6 don't want to agree to that because I know that 7 we have a scheduling problem on Friday, but we 8 can take it up in the morning, Your Honor. 9 THE COURT: All right. 10 Mr. Cashman? 11 MR. CASHMAN: Good afternoon, Your 12 Honor. 13 THE COURT: You are ready to go line 14 through line? 15 MR. CASHMAN: Before we go line by 16 line and following up on where we left off 17 yesterday, I have a few additional cases that 18 I'd like to bring to the Court's attention. 19 And I'm handing up a copy of each, and 20 I've given a copy to Mr. Tuggy. And these 21 cases, I've put flags on the pertinent portions 22 of the cases and highlighted the relevant 23 passages from these cases. 24 And I'd like to identify them for the 25 record and make some comments on each as to why 7665 1 they're pertinent. 2 The first case I handed up to the 3 Court is called Agfa-Gevaert, AG, versus the A. 4 B. Dick Company. This is 879 F. 2nd 1518. 5 This is a Seventh Circuit case. 6 This is the actual decision written by 7 Judge Posner that was quoted in the IBEW case. 8 And, importantly, the IBEW case did 9 not even quote fully what Judge Posner said, 10 which is very relevant to this case. 11 If you turn to page 5 and 6 of the 12 Agfa case -- and I've highlighted the pertinent 13 passages from this case for the Court -- but 14 most of the quote that was contained in the 15 IBEW case starts down at the bottom of the page 16 on the right-hand column. 17 But, above that, you'll see where 18 Judge Posner says he disagrees with the key 19 assertion that was made to keep out this 20 testimony that was alleged to be hearsay and 21 not within the personal knowledge of the 22 officers of this company. 23 And Judge Posner goes on to state, 24 quote, business executives cannot make 25 assessment of a product's quality and market 7666 1 built by inspecting the product at firsthand. 2 Their assessments are inferential. 3 And as long as they are the sorts of inference 4 that businessmen customarily draw, they count 5 as personal knowledge, not hearsay. 6 Then he goes on. I won't quote again 7 what Mr. Gralewski quoted yesterday or the day 8 before in relation to Ms. Harlan, but on page 9 -- the next page, page 6 of the Westlaw 10 printout, the last statement that I have 11 highlighted there where Judge Posner says, such 12 a statement -- and he's referring to a hearsay 13 statement -- is different from a statement of 14 personal knowledge merely based, as most 15 knowledge is based, on information obtained 16 from other people. 17 Now, this case contradicts virtually 18 all of the objections that have been made by 19 Microsoft and demonstrates why the rulings by 20 the Special Master were incorrect. 21 Because testimony by business 22 executives about their knowledge based on what 23 customers have told them is not hearsay. It's 24 their personal knowledge. That's what the 25 Seventh Circuit says. 7667 1 The Seventh Circuit pointed out that 2 the repetition of a statement by another 3 person, a statement offered on the authority on 4 that out-of-court declarant that is not vouched 5 for as to its truth by the actual witness on 6 the stand would be hearsay. 7 That's like repeating a statement by 8 someone else that hasn't been internalized by 9 the witness. 10 It would be, for example, if I said 11 Mr. Gralewski told me that the world is round, 12 that would be hearsay. 13 But if I testified the world is round, 14 and then the question was how do you know that, 15 and I say I learned that from Mr. Gralewski, 16 that's not hearsay. That's my personal 17 knowledge. Something that I have internalized. 18 So, again, the key statement from the 19 Agfa case is that a hearsay statement is 20 different from a statement of personal 21 knowledge because the statement of personal 22 knowledge is based on information obtained from 23 other people. 24 Now, turning to the next case in this 25 stack, which I provided to you is Robinson v. 7668 1 Water. The citation of this case is 685 F. 2nd 2 729. 3 And I have highlighted on page 11 for 4 the Court, under the headnote 11, in the 5 left-hand column, the pertinent portions of 6 this case. 7 What was happening is that a business 8 owner was testifying about the value of his 9 business, and that testimony was alleged to be 10 outside the witness's personal knowledge 11 because in his testimony he said -- they asked 12 him where did you get that knowledge, and he 13 said I got that knowledge from talking to 14 people in the community. 15 And the Court said -- rejected that 16 objection and stated that, quote, we note that 17 this is a common and reliable way of obtaining 18 knowledge. Most knowledge has its roots in 19 hearsay. 20 So what they're saying is, even if my 21 knowledge is derived from conversations with 22 third parties, that is -- is personal knowledge 23 and is not hearsay. 24 As long as I've internalized it, it's 25 my personal knowledge. 7669 1 The Kansas City Light case, which I 2 have handed up to the Court, is along a similar 3 line. 4 And here -- the cite, by the way, is 5 995 F. 2nd 1422. This is an Eighth Circuit 6 case. 7 And I've highlighted the pertinent 8 portions of the opinion on page 10 and 11. 9 Here what was happening is the 10 defendant alleged that the Plaintiffs in the 11 case could not obtain admission of testimony by 12 two of its officers, in this case the CFO and 13 the CEO, on what actions they thought or 14 predicted or believed were going to be taken by 15 the Missouri Public Utility Commission if the 16 commission had learned of a decision not to 17 redeem stock. 18 And the Eighth Circuit rejected that 19 argument and said that the experience that 20 these people had in dealing with this kind of 21 situation provided the foundation and the 22 personal knowledge and made it not hearsay for 23 them to provide this kind of testimony. 24 And that's very much like, as we will 25 see as we go line by line in Dixon, but also 7670 1 what happened in Harlan, that in the case of 2 Mr. Dixon, having conversations over the years 3 as a high-ranking executive for DRI, where 85 4 percent of his time is out in the sales -- 5 making sales and working with customers, and he 6 has conversations with those people. He gains 7 information from those conversations. He 8 internalizes that information. That becomes 9 his personal knowledge. 10 That's what the basic principle was in 11 Kansas City Power and Light and Robinson v. 12 Water, and in the Agfa case. 13 So they all three stand for the 14 proposition that when you have conversations 15 with customers, as in this case, or third 16 parties, and they provide you with information, 17 that becomes personal knowledge and is not 18 hearsay. 19 I also provided you with a copy of a 20 case called Jordison versus State of Iowa. 21 This is an Iowa appeals court case 22 which the citation is -- I don't have the 23 Westlaw -- here it is. The 2002 Westlaw 24 1585647. 25 This is a July 19th, 2002 case. 7671 1 And on page 4, I have highlighted the 2 relevant testimony. 3 This is a criminal case, but, again, 4 it highlights that when you get information 5 from third sources, it becomes personal 6 information. 7 It's only hearsay if you're repeating 8 for its truth something that somebody else has 9 told you and where you're not vouching for the 10 truth of that statement yourself, you're 11 leaving that to the person whose statement 12 you're repeating. 13 And I think maybe the most important 14 point to draw from the Jordison case is that in 15 Iowa, personal knowledge should be inferred and 16 should be rejected, or the absence of personal 17 knowledge should be concluded only if there's 18 conclusive evidence showing absence of personal 19 knowledge. 20 And as we go through the line by line 21 of Mr. Dixon, I think we'll see that indeed he 22 has personal knowledge and it's not hearsay 23 under the principles discussed in the cases 24 that I've mentioned earlier. 25 Indeed, this principle is so well- 7672 1 known that one of the leading treatises on 2 evidence, Weinstein's Federal Evidence, states, 3 quote, although firsthand observation is 4 obviously the most common form of personal 5 knowledge, that is not the only basis for it, 6 close quote. 7 That's at Weinstein's second edition 8 2006, section 602.03, left paren 1 (A), and 9 that's at page 602, 8 through 11. 10 And amongst other cases that Weinstein 11 cites, they cite the Agfa case and they also 12 cite the Kansas City Power case. 13 So it's clearly appropriate for a 14 witness to provide testimony based on 15 information obtained from customers and from 16 other third sources when they have internalized 17 it and when they are not repeating an 18 out-of-court statement for its truth. 19 I'd like to turn now briefly to the 20 IBEW case, which we were talking about 21 yesterday. 22 And Mr. Tuggy attempted to embrace the 23 case based on the one statement by Ms. Pastore 24 that he pointed out, which the Court excluded. 25 But the Court in the IBEW case 7673 1 reviewed -- I counted these up -- reviewed 41 2 pieces of evidence that the defendants in that 3 case alleged was hearsay or not personal 4 knowledge. 5 And the Court concluded that 38 of 6 those pieces of evidence should have been 7 admitted because they were within the personal 8 knowledge of the witness and were not hearsay. 9 They found only three pieces of 10 evidence that should be excluded. Two of those 11 were instances in which the witness was 12 repeating verbatim, was repeating -- that's the 13 key -- was repeating statements made by an 14 out-of-court declarant for their truth. 15 And the other, the third instance was 16 a statement by Miss Pastore, which as I pointed 17 out yesterday, based on what's reported in this 18 case, was just a naked assertion of her 19 opinion. 20 And I pointed out yesterday why that's 21 different from this case, because as we go 22 through the line by line, we'll see that the 23 witness identifies the foundation for its case 24 or for its statements. 25 Now, next, and this is -- I don't 7674 1 think this is going to apply to any of the 2 specific Dixon comments, but it really 3 highlights why Microsoft's position is so 4 wrong. 5 Because even a witness -- under Iowa 6 law, as recognized by the Iowa Practice Guide, 7 in 5602.2, a witness can testify about what 8 another person has told him or her if that 9 other statement satisfies -- either isn't 10 hearsay or satisfies an exception to the 11 hearsay rule. 12 And I have a copy of 5602 that I'll -- 13 I'll give a copy to Mr. Tuggy and a copy to the 14 Court. 15 THE COURT: Thank you. 16 MR. CASHMAN: And quoting for the 17 record, quote, witnesses frequently testify 18 about out-of-court statements which are offered 19 for the truth of the matter asserted in the 20 statement. 21 Assuming such statements are 22 admissible as nonhearsay under Iowa Rule 5.801 23 or under the hearsay exceptions in Rules 5.803 24 or 5.804, a witness is not precluded by 25 application of Rule 5.602 from reporting such 7675 1 hearsay statements if the witness has personal 2 knowledge that the statement was made. 3 The testifying witness need not have 4 personal knowledge of the truth of the 5 statement, only personal knowledge the 6 statement was made. The out-of-court 7 declarant, however, must be shown to have 8 personal knowledge. 9 I won't quote the rest because that's 10 the pertinent passage here. 11 But the point is that Plaintiffs wish 12 to make that in this kind of instance, a 13 testifying witness can relate what was told to 14 them, even if they are repeating a statement 15 that was made to them by somebody else. 16 Repeating a statement for its truth. That 17 would still be proper if the statement -- that 18 the repeating is not hearsay or subject to an 19 exception. 20 And in this kind of situation, if and 21 when it comes up, that's when Callahan applies. 22 If they say my supplier, Mr. Gralewski, told me 23 X, Y, Z. 24 If that were to fall within the 25 Callahan exception, then my testimony about 7676 1 what Mr. Gralewski said based on -- would be 2 admissible based on the Callahan exception. 3 So Microsoft's objections on this 4 point are extremely overbroad and they're 5 improper. And when we go through each one, I 6 think it will become clear that they are 7 improper and should be overruled. 8 And just by way of wrapping this up, I 9 wish to hand up to the Court one more case, and 10 this is called -- this case is called U.S. 11 versus Stratton, 779 F. 2nd 820. This is a 12 Second Circuit case from 1985. 13 And the pertinent passage is under 14 headnote 12. That's on page 10 of this Westlaw 15 printout. 16 And this explains, Your Honor, the 17 principle that I was just discussing that's 18 laid out under Iowa law under 5.602.2 in the 19 Iowa Practice Guide, but this puts some flesh 20 on the statements that I quoted earlier in a 21 case specific context. And in this case it was 22 statements of a coconspirator. 23 So that's a little bit -- it may come 24 up with some of our witnesses, but as it 25 relates to Dixon and Harlan, it would come up 7677 1 in the context if they're quoting somebody, one 2 of their OEMs, and then the Callahan exception 3 would apply. 4 So we think that these cases 5 demonstrate pretty clearly and, in particular, 6 when you go through line by line that the 7 exceptions should be overruled. 8 At this point, I'm happy for Mr. Tuggy 9 to respond to these cases before we go line by 10 line if he'd like to do that. Otherwise, we 11 can go to the specifics. 12 THE COURT: Mr. Tuggy? 13 MR. TUGGY: Yes, Your Honor. Do you 14 need to pass that out? 15 THE COURT: Oh, I'm sorry. 16 Mr. Neuhaus, do you have have 17 something. 18 MR. NEUHAUS: Your Honor, I do have 19 the motion papers to discuss and the motion to 20 modify the protective order. Here they are and 21 I'll hand a copy to the counsel. 22 We did have an agreement that this 23 will be heard next week, but, I gather, Your 24 Honor -- here are the papers. 25 THE COURT: This is in regard to the 7678 1 -- what I talked about earlier, the information 2 that Mr. Schulman has? 3 MR. NEUHAUS: Correct, Your Honor. 4 MR. CASHMAN: That's correct, Your 5 Honor. 6 MR. NEUHAUS: And there had been an 7 agreement this morning by E-mail that this 8 would be heard next week, which is why we 9 hadn't gotten the papers to you until now. 10 THE COURT: Okay. 11 MR. TUGGY: Yes, Your Honor, I'd like 12 to respond to the legal argument Mr. Cashman 13 made here and also that he made. 14 It's the same argument that he and 15 Mr. Gralewski made when we did Ms. Harlan's 16 testimony for a couple days. 17 When Justice McCormick took a look at 18 this, he applied Iowa law and he was exactly 19 right in sustaining these objections. 20 I have for the Court and for 21 discussion five decisions of the Iowa Supreme 22 Court, all of which are on point supporting 23 Microsoft's position on what the nature of 24 hearsay is. 25 I did not expect this to be a matter 7679 1 of dispute because it is not that difficult. 2 These are the cases that I will 3 discuss briefly which establish the proper rule 4 in the state of Iowa and are on point on the 5 issue. 6 And the issue as the Plaintiffs frame 7 it is whether when a witness makes the 8 statement without attributing it to another, it 9 is that witness's personal knowledge and that 10 it only becomes hearsay when the witness is 11 quoting or stating what another person has 12 said. 13 The first case I've handed up is the 14 case entitled Frunzar versus Allied Property 15 and Casualty Insurance Company, 548 N.W. 2d 16 880. 17 It's a decision out of the Iowa 18 Supreme Court in 1996. 19 In the Frunzar case, there was an 20 issue regarding whether the district court had 21 properly awarded to the plaintiff money on an 22 uninsured motorist coverage provision under an 23 insurance policy. That was the issue in the 24 case. 25 So during the course of the trial, and 7680 1 actually a post-trial -- a motion for a 2 directed verdict, the insurance company made 3 the point that the plaintiff had to prove that 4 the other driver was uninsured for the 5 plaintiff to be able to recover under the 6 uninsured motorist coverage provision of the 7 plaintiff's policy. 8 And in the opinion, at page 11 of 16 9 in the upper right-hand corner, it's actually 10 page 887 of the Northwest Reporter, there is a 11 section on a hearsay objection. 12 And as the Court said at trial, 13 plaintiff was asked the following question and 14 gave the following answers regarding the 15 alleged uninsured status of the motor vehicles 16 involved in the accident. 17 Question: Have you talked with Bobby 18 Kilgore, which was the driver of the vehicle in 19 which plaintiff was riding at the time of the 20 accident, to see whether he had insurance on 21 his vehicle? 22 Answer: Yes, I did. 23 Question: And what were you told? 24 Defense counsel: Your Honor, I'm 25 going to object. That calls for hearsay and I 7681 1 don't believe it's admissible under any 2 exception to the hearsay rule. 3 The Court: What exception would that 4 be? 5 Plaintiff's counsel: I'm not sure 6 that there is a exception for what Mr. Kilgore 7 would have told her, so let me redirect that. 8 Question: To the best of your 9 knowledge, is there any insurance that covers 10 this accident other than the insurance that 11 Allied has? 12 Answer: No. 13 So the clean-up question is exactly 14 the type of question the Plaintiffs are trying 15 to support and the testimony that you are going 16 to hear. 17 It's where the witness is asked to the 18 best of that witness's knowledge what they 19 know, but their knowledge is based upon what 20 they are told. 21 So in the right-hand column at 22 headnotes 8 and 9, the Iowa Supreme Court 23 states, we agree with Allied that plaintiff's 24 testimony was plainly hearsay and was 25 improperly considered by the Court with respect 7682 1 to the uninsured status of the motor vehicles 2 involved in the accident. 3 The Court goes on to say, plaintiff's 4 testimony was based solely on alleged 5 out-of-court statements made to her by a 6 nontestifying declarant, Bobby Kilgore, and it 7 was offered to prove the truth of the matter 8 asserted, that the two motor vehicles were not 9 covered by liability insurance at the time of 10 the accident. 11 Admission of hearsay evidence over 12 proper objections is presumed to be prejudicial 13 error unless the contrary is affirmatively 14 established. We believe prejudice exists in 15 this instance and the verdict was reversed. 16 Similarly, the second case is out of 17 the Iowa Supreme Court. It's dated March 17, 18 1913. Because of its date, it will involve a 19 different form of transportation than we're 20 used to now. 21 The cite is 140 N.W. 397. The 22 official cite 160 Iowa 119. 23 The name of the case is Howell versus 24 J. Mandelbaum, M-a-n-d-e-l-b-a-u-m, and Sons. 25 This case involved a corporation 7683 1 called J. Mandelbaum and Sons, and it's 2 important for understanding the case that it's 3 understood that this is a corporation that was 4 operating here in Des Moines, and it operated a 5 retail dry goods store. 6 And the plaintiff here was struck, 7 collided with a horse and delivery wagon. 8 And one of the issues in this case was 9 who owned this wagon. Was it owned by the 10 defendant corporation, J. Mandelbaum and Sons. 11 And at page 4 of 6 of the printout 12 I've given you, which is, I believe, at page 13 398 of the Northwest Reporter, the Court in the 14 first column on the left recites what occurred. 15 And it's important with these cases to 16 see the actual questions and answers because 17 that's what we're doing, is we're going through 18 Q and A in depositions. 19 The plaintiff was asked, according to 20 the Court, quote, do you know whose horse and 21 wagon this was that ran over you? 22 Answer: J. Mandelbaum and Sons. 23 Defendant objected to the question and 24 moved to strike the answer out as the 25 conclusion of the witness. 7684 1 Quote, the Court, you may tell yes or 2 no. 3 Answer: Yes, sir. 4 Mr. Allen: Whose horse and wagon was 5 it? 6 Answer: Mandelbaum and Sons. 7 Then the cross-examination. 8 Cross-examination. 9 Question: Did you see that horse that 10 struck you? 11 Answer: No, sir, I didn't. 12 Question: You did not see him before 13 or after he struck you? 14 Answer: No, sir. 15 Mr. Parsons: I now move to strike 16 from the testimony of Mrs. Howell her evidence 17 as to whose horse it was because it was 18 necessarily based upon hearsay and she did not 19 see the horse. 20 The Court: It must have been entirely 21 by hearsay. 22 Mr. Allen: No, it was not. 23 The Court: Then show what it was. 24 Mr. Allen: It would not be hearsay if 25 it was by admission. 7685 1 The Court: It would be hearsay unless 2 she knew herself. 3 Witness: If Mr. Mandelbaum told me it 4 was, wouldn't that be admissible from him? 5 Defendant moves to strike out the 6 testimony as to what Mr. Mandelbaum said as 7 immaterial and being a conclusion. 8 Mr. Allen: How do you know that was 9 J. Mandelbaum's horse? 10 Answer: A Mr. Morris Mandelbaum told 11 me it was and that he was very sorry for it. 12 Defendant moves to strike out the 13 testimony as incompetent and immaterial for any 14 purpose. 15 The Court: Who is Mr. Morris 16 Mandelbaum? 17 Objection by the defendant. 18 Answer: He is Mr. Mandelbaum's 19 brother, J. Mandelbaum's son. 20 Mr. Allen: Is he one of the sons 21 referred to? 22 Answer: Yes, sir. He is one of the 23 sons referred to in J. Mandelbaum and Sons. 24 Question: Did you do business with 25 them? 7686 1 Answer: I have paid them hundreds of 2 dollars. 3 Question: Do you know them all? 4 Answer: I'm not as well acquainted 5 with this gentleman as I am with his younger 6 brother. 7 Question: It was one of the members 8 of the firm that told you? 9 Answer: Yes, sir. One of the members 10 of the firm that came to my home. 11 Mr. Parsons: I move to strike out the 12 testimony of this examination as incompetent 13 and for the reason it is not binding on this 14 defendant. 15 The ruling is overruled, and the 16 defendant excepted. 17 So at the Supreme Court level, the 18 Court had to determine whether Morris 19 Mandelbaum spoke on behalf of the firm. 20 And in the next paragraph of the 21 opinion, the Court states, for all that 22 appears, Morris Mandelbaum may have been one of 23 the sons included in the corporate name, but 24 have had no connection whatever with the 25 corporation itself. 7687 1 Before the declarations of an agent 2 are admissible, a party offering to prove them 3 must at least give some evidence tending to 4 show that he had the power to act for his 5 principal. 6 And the Court concludes right at the 7 end of page 398, the motion to strike out the 8 testimony of what he had said should have been 9 sustained. 10 And the judgment is reversed. 11 In this case, just like what the 12 Plaintiffs are arguing, Plaintiffs were first 13 asked whose horse and wagon it was, and the 14 Plaintiffs said it was Mandelbaum and Son. 15 The plaintiff on cross-examination 16 admitted that that information was based solely 17 on what a Mr. Morris Mandelbaum had said, and 18 since Morris Mandelbaum's statement was not an 19 admission under the hearsay rule, the testimony 20 should have been stricken. 21 Third case is Ruby versus Easton and 22 the citation is 207 N.W. 2d 10. 23 This case involves point of impact in 24 a car accident action. 25 This was an unfortunate case where a 7688 1 pedestrian was struck by a motorist and the 2 pedestrian's father brought an action against 3 the motorist for injuries sustained by the 4 pedestrian. 5 And at page 14 of 15 of the opinion, 6 the Court there discusses the testimony of one 7 Officer Pettit. 8 There was an officer who came to the 9 scene. And part of his job responsibility was 10 to try to determine where the point of impact 11 was where the motorist struck the pedestrian. 12 At that page, which is page 20 of the 13 Northwest Reporter, it's the right-hand column 14 near the top, the Court says, there was a 15 dispute in the evidence as to where on the exit 16 street the accident occurred. 17 Kim placed it south of the 46th Street 18 intersection. Witnesses Pettit and Binnebose 19 placed it in the intersection. Officer 20 Pettit's testimony is what relates to what 21 we're discussing here today. 22 Officer Pettit, according to the 23 Court, was called to the scene and made an 24 extensive investigation, including 25 interrogation of two of Kim's companions. 7689 1 There's no question raised as to his 2 qualifications generally to express opinions as 3 to point of impact. 4 We have consistently held such an 5 investigating officer upon proper foundation 6 may give his opinion as to point of impact. 7 The Court continues, however, where 8 the opinion is based in part on hearsay, it is 9 inadmissible. 10 Here the officer was asked to base his 11 opinion in part on his out-of-court interview 12 with witnesses. 13 Plaintiffs made timely objection, 14 including the grounds that called for an 15 opinion based on hearsay. It was overruled. 16 The objection should have been sustained. The 17 judgment reversed and remanded. 18 The next case is called Brooks versus 19 Gilbert, out of Supreme Court of Iowa. 20 The case involved, again, a police 21 officer testifying about point of impact, and 22 the portion, the relevant portion of the 23 opinion is at the Northwest -- the opinion is 24 at 250 Iowa 1164, and at 1168 of that volume 25 through 1169, there is the question and answer 7690 1 -- series of questions and answers where the 2 officer gave opinion on where the point of 3 impact was. 4 And what's interesting about this case 5 is that, in fact, the Court sustained the 6 hearsay objection. 7 The problem was, is that the lawyer 8 examining the witness at trial asked the same 9 question 13 times about whether, in fact, the 10 point of impact, was where the witness was 11 saying it was. 12 And the point of impact information by 13 this officer while collected in the course of 14 his employment was based upon information in 15 part that he received from others. 16 And so the key paragraph and where the 17 Court comes to its conclusion on this section 18 is at page 1169 or page 5 of 8 of what I've 19 handed up at Note 1 where the Court recites, 20 Officer Simmons did not see the accident. His 21 testimony, based upon what Danny and Eddie told 22 him as to the point of impact was clearly his 23 opinion and conclusion based wholly on hearsay. 24 The matter of the point of contact was 25 important and material. It pertained to how 7691 1 far defendant skidded and how far Debbie was 2 thrown after she was struck. 3 These were matters the Jury would 4 consider in arriving at Defendant's speed and 5 whether or not he could have stopped after he 6 saw her. 7 And the Court -- and emphasis is in 8 the Court's opinion. This fundamental fact 9 should not be permitted to rest on opinions, 10 conclusions, and hearsay evidence. 11 So there the witness was going to 12 testify about something that he, as Plaintiffs 13 say, internalize, but, in actual fact, it was 14 based on hearsay and had to be excluded on that 15 basis. 16 And there the court found that the 17 constant repetition of questions asking for 18 hearsay was unduly prejudicial. 19 Finally, in Lovely versus Ewing -- 20 Ewing is spelled E-w-i-n-g -- 183 N.W. 2d 682, 21 the Supreme Court of Iowa addressed this same 22 issue. 23 And this was in the context of 24 testimony by a doctor who was both a treating 25 physician and apparently also testified in an 7692 1 expert capacity. 2 At page 5 of 7 of what I've handed up 3 in this opinion, which is at page 685 of the 4 Northwest Reporter, the Court at the top 5 left-hand side of the opinion recounts that the 6 objection to the testimony of the doctor was 7 based on hearsay. 8 Now, this was -- what was at issue in 9 this case is whether a plaintiff's injuries 10 were permanent and the extent of those 11 injuries. 12 And according to the Court, the doctor 13 here did not see the plaintiff until 14 approximately one year after the accident. He 15 examined her several times, and he testified as 16 to her permanent injuries. 17 The objection, according to the Court, 18 of Doctor Lindquist's testimony as inadmissible 19 was based upon the fact that his opinion, in 20 part, was based on -- here's what the doctor 21 said. 22 I am relying on the record of 23 examinations by other doctors insofar as what 24 their examination showed to give me history as 25 to the way the patient was when she was seen on 7693 1 previous occasions, yes. 2 Question: And has this study of those 3 records played a part in your determination of 4 her present condition? 5 Answer: Yes. 6 Question: Has it played a part in 7 your determination and evaluation of her 8 disability? 9 Answer: Yes. 10 The Court concluded, right at the end 11 of page 685 and as it carries over to 686, the 12 opinions expressed here by Doctor Lindquist are 13 based partially on his own findings and 14 partially on the hearsay findings of other 15 doctors. 16 Clearly, such opinions should have 17 been excluded. We believe this, too, was 18 reversible error, which alone should have 19 required a new trial. 20 The Plaintiffs' cases do not in any 21 way undermine the five Iowa Supreme Court cases 22 we've just discussed. 23 The Plaintiffs' cases are all cases 24 where the witness had personal knowledge of the 25 facts about which the witness testified. And 7694 1 the Court identified that personal knowledge 2 and explained why it was sufficient to support 3 the witness's testimony. 4 Briefly, in the Robinson versus Water 5 Detective Agency case, which is the First 6 Circuit case, Plaintiffs cited -- Plaintiffs 7 pointed us to page 11 of the document. 8 And this was the case where an 9 individual, a business owner, was asked to give 10 a valuation of the property owned by the 11 witness. 12 And the witness said that he used a 13 gross sales valuation formula as part of coming 14 to his view of the value of his property. 15 And the only hearsay at issue is he 16 was told by others that that formula was 17 reliable. 18 So the Court concludes, appellants are 19 mistaken moreover in their assertion that his 20 opinion came solely from the opinions of 21 others. 22 Sullivan's testimony was that he 23 relied on this valuation formula in part. And 24 there was evidence from which the district 25 court properly could have found Sullivan's 7695 1 substantial personal familiarity with the 2 property such that his opinion would be 3 admissible. 4 In the Kansas City Power and Light 5 Company case, which is the Eighth Circuit case 6 cited by Plaintiffs, there the only question 7 was not the truth of the statements heard by 8 the witnesses, but whether, in fact, they had 9 personal knowledge that the statements were 10 made. 11 There I don't even see that being an 12 issue in this case because the Plaintiffs are 13 offering out-of-court statements for their 14 truth. 15 The Posner case which Plaintiffs cite 16 is dictum and not inconsistent with Microsoft's 17 position. 18 It only becomes inconsistent when it's 19 read far too broadly, which Plaintiffs do, and 20 they are able to do that because it's only 21 dictum. It doesn't apply to specific 22 statements. 23 And, finally, the unpublished opinion 24 that Plaintiffs handed up, Jordison 25 J-o-r-d-i-s-o-n, versus State of Iowa, the 7696 1 Court concluded that the declarant's statements 2 could be admitted because the information the 3 declarant knows could be inferred from facts 4 personally known by the declarant. 5 The practice guide information that 6 was provided to the Court is directly 7 supportive of Microsoft's position. 8 There the court says that out-of-court 9 statements can be admitted for their truth if 10 they're nonhearsay or if the hearsay exception 11 applies. 12 And the Court says the out-of-court 13 declarant, however, must be shown to have had 14 personal knowledge. 15 So there's two requirements. It's 16 nonhearsay or hearsay exception applies, and, 17 second, the out-of-declarant had personal 18 knowledge. 19 Now, the Plaintiffs have spent a lot 20 of time on this legal authority, as has 21 Microsoft at this point, because it is 22 important. 23 It's important when looking at the 24 testimony of both Harlan and Dixon, because 25 both witnesses, when testifying about 7697 1 Microsoft's conduct, based their testimony 2 entirely on what was reported to them by 3 others. 4 It's based entirely, as the evidence 5 will show, based on Microsoft's 6 cross-examination of the witness, just like in 7 that horse delivery case, the cross-examination 8 we established that all these conclusions these 9 witnesses came to were based entirely on 10 out-of-court statements made to them by others. 11 And on the authority of the five Iowa 12 Supreme Court cases we cited, the Iowa Rules of 13 Evidence and the hearsay rule and the views and 14 rulings of the justice -- of the Special Master 15 McCormick, Microsoft's position is that these 16 rulings must be sustained. 17 And with this lengthy discussion of 18 applicable law and the cases, I think we ought 19 to be prepared to move into the individual 20 lines of testimony when we next meet. 21 THE COURT: Very well. 22 Thank you, sir. 23 When we meet tomorrow, we will start 24 on that. 25 MR. CASHMAN: I will have some 7698 1 comments on the cases. 2 THE COURT: That's fine. 3 MR. CASHMAN: Because I think 4 Microsoft is incorrect. 5 But it won't take too long, and then 6 we are ready to go to the specifics. 7 THE COURT: All right. 3 o'clock. 8 MR. TUGGY: Thank you, Your Honor. 9 MR. CASHMAN: Thank you, Your Honor. 10 THE COURT: Thanks. Have a great day. 11 MR. CASHMAN: Thank you. You too. 12 (Proceedings adjourned at 4:38 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 25 7699 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 10th 19 day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25