12937 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 XLVII 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation ,) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 8:30 a.m., February 8, 14 2007, in Room 302 of the Polk County 15 Courthouse, Des Moines, Iowa. 16 17 18 19 20 HUNEY-VAUGHN COURT REPORTERS, LTD. 21 Suite 307, 604 Locust Street 22 Des Moines, Iowa 50309 23 (515)288-4910 24 25 12938 1 A P P E A R A N C E S 2 Plaintiffs by: BRADLEY M. BEAMAN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 MICHAEL R. CASHMAN 7 Attorney at Law Zelle, Hofmann, Voelbel, 8 Mason & Gette, LLP 500 Washington Avenue South 9 Suite 4000 Minneapolis, MN 55415 10 (612) 339-2020 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12939 1 Defendant by: DAVID B. TULCHIN 2 Attorney at Law Sullivan & Cromwell, LLP 3 125 Broad Street New York, NY 10004-2498 4 (212) 558-3749 5 BRENT B. GREEN Attorney at Law 6 Duncan, Green, Brown & Langeness, PC 7 Suite 380 400 Locust Street 8 Des Moines, IA 50309 (515) 288-6440 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12940 1 (The following record was made in the 2 presence of the jury at 8:34 a.m.) 3 THE COURT: Everyone else may be 4 seated. 5 Before you begin the next deposition, 6 it's my understanding that Exhibit 10066, page 7 6 was admitted, but now you have no objection 8 to the entire document; right? 9 MR. TULCHIN: Correct, Your Honor. 10 Thank you. 11 THE COURT: All right. It's admitted. 12 You may proceed. 13 MR. CASHMAN: Your Honor, before we 14 proceed with the next witness, Plaintiffs would 15 like to offer Plaintiffs' Exhibit 5355B. 16 THE COURT: Hold it. Let me get my 17 chart. Sorry. 18 MR. CASHMAN: While the Court is doing 19 that, if I may approach. 20 THE COURT: Sure. 21 MR. CASHMAN: I'm approaching with 22 three hard copies of these exhibits and a CD, 23 and I'm providing a CD and a hard copy to 24 Microsoft as well. 25 THE COURT: Thank you, sir. 12941 1 Okay. I found my place. 2 MR. CASHMAN: These exhibits are being 3 offered in connection with the testimony 4 provided by Mr. Dixon. 5 The exhibits are Plaintiffs' Exhibit 6 5355B, Plaintiffs' Exhibit 5421A, and 7 Plaintiffs' Exhibit 5263A. 8 MR. GREEN: No objection, Your Honor. 9 THE COURT: They are all admitted. 10 MR. GREEN: Your Honor, in connection 11 with the Dixon deposition, Defendant would like 12 to offer DX 230, PX 33, and DX 45A. 13 I have copies. Three of that one. 14 THE COURT: Thank you. I've got three 15 copies of the exhibits. Okay. 16 These are all Defendant's exhibits? 17 MR. GREEN: One of them is a PX, Your 18 Honor. 19 THE COURT: Oh, Plaintiffs' Exhibit 20 33; is that right? 21 MR. GREEN: That's correct, Your 22 Honor. 23 MR. CASHMAN: No objection, Your 24 Honor. 25 THE COURT: Plaintiffs' Exhibit 33, 12942 1 Defendant's Exhibits 230 and 45A are admitted. 2 MR. GREEN: And, Your Honor, in 3 connection with the Linnet Harlan deposition, I 4 think these are admitted, but we would just ask 5 the Jury to consider Plaintiffs' Exhibits 5128, 6 6476, and 5165 in connection -- 7 THE COURT: Those were all previously 8 admitted? 9 MR. GREEN: Yeah. I just wanted to 10 let the Jury know that we'd like to have those 11 considered in connection with that deposition. 12 THE COURT: Very well. 13 MR. GREEN: Do you want those numbers 14 again? 15 5128, 6476, and 5165. Those are all 16 Plaintiffs' exhibits. 17 THE COURT: Okay. 18 MR. GREEN: Thank you. 19 THE COURT: Any other exhibits? 20 MR. CASHMAN: Not at this time, Your 21 Honor. 22 THE COURT: Very well. 23 Are you ready to proceed? 24 MR. CASHMAN: Plaintiffs would next 25 like to call Glenn, that's G-l-e-n-n, Stephens, 12943 1 S-t-e-p-h-e-n-s, who provided testimony in 2 Caldera versus Microsoft on July 21st, 1998. 3 THE COURT: You may proceed. 4 MR. CASHMAN: Thank you, Your Honor. 5 (Whereupon, the following video was 6 played to the jury.) 7 Question: Would you please state your 8 name for the record. 9 Answer: Glenn Stephens. 10 Question: Where do you live, 11 Mr. Stephens? 12 Answer: Hungerford, Berkshire. 13 Question: Prior to today, have you 14 met with any of the lawyers for Caldera in this 15 case? 16 Answer: Yes, I have. 17 Question: And who have you met with? 18 Answer: Ralph Palumbo and Steve Hill. 19 Question: And when did you meet with 20 either Mr. Palumbo or Mr. Hill? 21 Answer: On several occasions over the 22 last few years. 23 Question: Where are you now employed? 24 Answer: I run my own company. 25 Question: And what is the name of 12944 1 that company? 2 Answer: Centennial. 3 Question: No. I want to know 4 basically what Centennial does. 5 Answer: We have a software product 6 for year 2000. 7 Question: What DOS-related products 8 did you have any responsibilities for while at 9 either DRI or Novell? 10 Answer: I was product development 11 manager for Novell DOS 7. Prior to that, I was 12 product development manager for multiuser DOS 13 and Concurrent DOS. 14 Question: And what is a product 15 development manager? 16 Answer: Manages the engineering team 17 for development on the product. 18 Question: And did you write any code 19 or perform any tasks related to the 3 version 20 of DR-DOS? 21 Answer: For 3? No. I was actually 22 working on Concurrent DOS at that time. 23 Question: What about 4 or 5? Did you 24 have any responsibilities for DR-DOS 5? 25 Answer: DR-DOS 5, I had some line 12945 1 item responsibilities. Some of the engineers 2 reported to me. 3 Question: For 6, what were your 4 duties, DR-DOS 6? 5 Answer: Again, I had line management 6 responsibility for some of the engineers 7 working on the DR-DOS 6. 8 Question: With respect to 7, who 9 reported to you? 10 Answer: Basically, all the 11 engineering team that worked on Novell DOS 7 12 reported to me. 13 Question: At the time that you were 14 involved with Novell DOS 7, did you have any 15 other engineering duties? 16 Answer: No. I think during that time 17 our whole focus was on Novell DOS 7. 18 Question: And -- 19 Answer: Sorry. We actually started 20 working on -- we took responsibility for 21 Personal NetWare as well. 22 Question: Do you recall the time 23 frame that the Personal NetWare product was 24 being manned and managed from Hungerford? 25 Answer: It was -- we had more and 12946 1 more engineers working on parts of it during 2 the whole 12-month period. We actually managed 3 it out of Hungerford, I think, from October of 4 that year. 5 I am not sure what the year was -- 6 actually, it could have been sooner. 7 September/October of the year that it was 8 actually shipped. It was shipped in December, 9 I believe. 10 Question: You don't recall which year 11 that was? 12 Answer: No. It was the year before 13 Novell DOS 7 was actually launched. Novell DOS 14 7 was launched in January. Personal NetWare 15 was launched in the previous December or 16 November. 17 Question: So if Novell DOS 7 came out 18 in January 1994, Personal NetWare would have 19 come out in December of 1993? 20 Answer: Correct. 21 Question: Okay. After Novell DOS 7 22 was released, what were your continuing 23 responsibilities? 24 Answer: We actually moved on to 25 looking at a new product to do with mobile 12947 1 computing. 2 Question: How long did you remain 3 with Novell? 4 Answer: Until November last year. 5 Question: And what was the 6 circumstances of your departure from Novell? 7 Answer: They moved all the 8 engineering back to Utah in November of last 9 year. 10 Question: So that's November of 1997? 11 Answer: Yes. 12 Question: And did they ask you to 13 come to Utah? 14 Answer: Yes, they did. 15 Question: And you declined? 16 Answer: I like England. 17 Question: I want to go back to before 18 you ever joined DRI or Novell. 19 Where were you educated, sir? 20 Answer: Swansea University. 21 Question: What degree did you receive 22 after Swansea University? 23 Answer: BA honors in geography. 24 Question: After that, what did you 25 do? 12948 1 Answer: I worked for a company called 2 Monotype on computer systems for the printing 3 industry. 4 Question: What year did you graduate 5 from college, from Swansea? 6 Answer: 1978, I think. 7 Question: How long were you with 8 Monotype? 9 Answer: I don't know. A couple of 10 years. 11 Question: Is that where you first 12 learned anything about computers -- 13 Answer: Yes. 14 Question: -- or did you learn 15 anything before? 16 Answer: We did a bit in university, 17 but not a lot. 18 Question: Had you ever designed 19 software before? 20 Answer: A bit at university, but not 21 much. 22 Question: How many courses did you 23 take in computer engineering? 24 Answer: It was part of our geography 25 course. There wasn't a computer course in 12949 1 those days. 2 Question: Was it one course, two 3 courses, three? 4 Answer: I can't remember. 5 Question: What type of software did 6 you develop at Monotype? 7 Answer: At Monotype we were working 8 on mini computers using assembler code for -- 9 they had laser typesetting equipment. We were 10 writing the software for driving these laser 11 typesetters. 12 Question: And did you have 13 responsibility for writing code during that 14 time? 15 Answer: Yes. 16 Question: How long were you with 17 Monotype? 18 Answer: A couple of years, I think. 19 Question: After Monotype, where did 20 you go? 21 Answer: I worked for a company called 22 ABS Computers. 23 Question: And what does ABS do? 24 Answer: They actually manufactured 25 mini computers and then they started developing 12950 1 a range of PCs. 2 Question: Did this job involve any 3 writing of software code? 4 Answer: Yes. 100 percent. 5 Question: What type of code would you 6 be writing? For applications, operating 7 systems? 8 Answer: No. It was low-level 9 operating systems, hardware driver code. 10 Question: And how many years were you 11 with ABS? 12 Answer: Again, I can't remember. 13 Maybe a couple of years. 14 Question: And was your next job after 15 those two working at Digital Research? 16 Answer: I was contracting for 17 probably eight months between ABS and Digital 18 Research. 19 Question: So while at ABS, you were 20 also doing contract work for Digital Research? 21 Answer: No, I left ABS. Then I was 22 contracting for another company. 23 Self-employed. 24 Question: Okay. And how did you 25 learn about a job opportunity with Digital 12951 1 Research? 2 Answer: I was actually -- when I was 3 at ABS and when I was contracting, one of the 4 jobs I was doing was implementing Digital 5 Research products on different hardware 6 platforms. 7 Question: Was it CP/M? 8 Answer: No. It was Concurrent DOS. 9 Question: Do you recall what year you 10 joined Digital Research? 11 Answer: It was about 12 and a half 12 years ago. So whenever that was. Somebody can 13 do the math. 14 Question: 1986, 1985? 15 Answer: Sounds about right. 16 Question: And what were your initial 17 responsibilities at Digital Research when you 18 arrived? 19 Answer: I was taken on as an OEM 20 consultant to work on a project for Phillips in 21 Vienna to implement DOS plus on a new PC 22 Phillips were developing. 23 Question: Can you tell me what DOS 24 plus is? 25 Answer: DOS plus is an operating 12952 1 system that was a combination of DOS 2 compatibility and CP/M compatibility so you 3 could run both DOS applications and CP/M 4 applications on the same machine. 5 Question: Can you tell me from what 6 piece of preexisting code the DR-DOS products 7 were developed from? 8 Answer: DOS plus was the product 9 before DR-DOS. 10 Question: And was the DOS plus used 11 as a basis to create the DR-DOS product? 12 Answer: It was -- parts of it were. 13 Question: Was DOS plus its own 14 operating system? 15 Answer: Yes. 16 Question: Okay. And what class of 17 microprocessors did it work with? 18 Answer: Intel. 19 Question: It would run applications 20 both that were DOS applications and CP/M 21 applications? 22 Answer: Yes. 23 Question: And was the basis for the 24 DOS plus product, was it -- did it find its 25 roots in CP/M or was it written from scratch? 12953 1 Answer: It found its roots in both 2 CP/M and Concurrent DOS. 3 Question: At some point, DOS plus 4 ceased to exist, correct? 5 Answer: DOS plus became DR-DOS. It 6 ceased to exist as a product by that name. 7 Question: Do you recall how much time 8 it took to convert the DOS plus product into 9 DR-DOS, the first released version of DR-DOS? 10 Answer: No, I don't remember. 11 Question: Was it a matter of months, 12 weeks? 13 Answer: No. Much longer than that. 14 Question: Much longer than months? 15 Answer: From the Amstrad release of 16 DOS plus to DR-DOS would have been at least a 17 year, I think. I can't remember exactly. 18 Question: How did you go about 19 identifying the API set that would be involved 20 in the DOS plus product? 21 Answer: Initially, most of the API 22 set are pretty well the same as CP/M, since 23 that is where DOS came from. 24 Question: And was new functionality 25 -- was there any new functionality contained in 12954 1 DOS at that time, in the Microsoft DOS 2 products? 3 Answer: New compared to what? 4 Question: Compared to CP/M. 5 Answer: I believe. They actually 6 changed some of the function numbers and the 7 registers used were different. 8 Question: Was the CP/M -- CP/M was 9 designed for Intel-based chips, correct? 10 Answer: Yes. 11 Question: Was it for the 8086? 12 Answer: I don't know which version it 13 was first designed for. It worked on the 8086, 14 Intel family. 15 Question: And to mimic DOS 16 functionality, did DR-DOS -- did DRI acquire 17 MS-DOS operating system products to see how 18 those operating system products worked? 19 Answer: We looked to see how the 20 applications worked on an operating system. 21 Question: Did DRI acquire Microsoft 22 operating system products to see how those 23 products worked? 24 Answer: We had versions of MS-DOS, 25 yes. 12955 1 Question: Was there disassembly of 2 MS-DOS? 3 Answer: No. 4 Question: Were you present at any 5 discussions where it was discussed to reverse 6 engineer the MS-DOS product? 7 Answer: No. 8 Question: Do you recall being present 9 in any conversation where there was a 10 discussion of the legality of reverse 11 engineering any MS-DOS product? 12 Answer: No. 13 Question: Are you familiar with the 14 term clean room in connection with software 15 development? 16 Answer: Yes. 17 Question: Can you describe that for 18 me? 19 Answer: My understanding of it is 20 basically you get a group of people to actually 21 understand another product. And that 22 information is passed to another group of 23 people not so much as information, but more as 24 a -- what is the word I am looking for -- a 25 development plan sort of thing. 12956 1 Question: I am showing you a document 2 that we've marked as Exhibit 1003. 3 Have you ever seen the Leopard 4 engineering specification before? 5 Answer: Yes. 6 Question: Do you know who -- well, 7 strike that. 8 Did you have any involvement in 9 drafting any portion of this? 10 Answer: Not the actual writing of it, 11 no. 12 Question: May I get you to look at 13 page 2 of Exhibit 1003. 14 It says page 2 on the upper right-hand 15 side. 16 Looking at performance, the heading, 17 this indicates, quote, the performance goal of 18 this release of DR-DOS is to get within 10 19 percent of the times achieved by a similarly 20 configured copy of Compaq MS-DOS 3.31. 21 Do you recall, was that the 22 performance goal for the DR-DOS 5 product? 23 Answer: I don't recall apart from 24 seeing it in here. 25 Question: Do you recall participating 12957 1 in any discussions where performance parameters 2 were discussed for the DR-DOS 5 product? 3 Answer: No. 4 Question: Can you tell me what 5 different elements of a computer might affect 6 an operating system's ability to run different 7 types of applications? 8 Answer: What elements of a computer? 9 Question: Right. 10 Answer: Hardware. You mean? 11 Question: Hardware, software. 12 Answer: From a hardware point of 13 view, different types of hardware, the drivers 14 that are used to drive the hardware can affect 15 the way things work. 16 Question: How? 17 Answer: Interactions between all the 18 various layers, basically. 19 Question: So different printers, 20 different disk drives, different floppies? 21 Answer: To a degree. It's more -- 22 fortunately, with a PC you have a fairly 23 standard set of hardware goods in there. But 24 it's more something obscure like a tape drive 25 or something like that. 12958 1 Question: Let me get you to look at 2 page 6 of this document. 3 In the engineering specification at 4 the bottom of page 6, there is an 5 identification of there being a disk cache. 6 Do you know if a disk cache was 7 implemented in DR-DOS 5? 8 Answer: Yes. I see now actually that 9 must have been our own disk cache in DR-DOS 5, 10 and then we used a third-party one in DR-DOS 6. 11 Question: Do you know why there was a 12 change from the disk cache in 5 to a 13 third-party's software in 6? 14 Answer: Feature improvements. We 15 were always continually improving the product. 16 Question: Did Digital Research have 17 any difficulties with its own disk cache and 18 thereby had to use the disk cache offered by a 19 third-party vendor? 20 Answer: No. It was just they had 21 more features. It was a different cache and 22 then we decided to work in that direction, 23 instead of enhancing our own cache. 24 Question: Why was that? 25 Answer: A tighter market. 12959 1 Question: Were you involved in the 2 selection of beta testers? 3 Answer: Yes, to a degree. I would 4 actually see lists and say this would be a good 5 beta tester. 6 If somebody proposed a beta site, I 7 would actually sort of also decide to select 8 the beta site. Again, this was for Novell DOS 9 7. 10 Question: Would it be important, 11 then, to have a sampling of different hardware 12 configurations as part of the beta testing 13 sample? 14 Answer: Yes, to a degree. 15 Question: Why to a degree? 16 Answer: You want to actually get a 17 sort of reasonable sample across the world. On 18 the other hand, when you are actually choosing 19 a beta program as well, the key factor in 20 actually choosing the beta site is to actually 21 get somebody who will give you very good 22 feedback. 23 Question: That means a continuous 24 source of feedback about the product? 25 Answer: Yes. The fact they will 12960 1 actually test the product as well. 2 It is one thing to say I have 40 beta 3 sites, but if they don't actually test the 4 product, then all you are doing is fooling 5 yourself. 6 Question: Other than the importance 7 of a beta test actually responding, actually 8 testing the software and responding, what is 9 the next most important item you believe is 10 appropriate for selecting a beta test site? 11 Answer: That is the fundamental 12 important one. If they don't test it, there is 13 no point anyway. 14 The fundamental one is making sure 15 they are actually going to test that product. 16 Just giving a version out to somebody who is 17 not going to test it is a waste of time, your 18 time, their time. And it kids you because you 19 have lots of numbers. 20 Question: What was done to ensure 21 that the beta testers actually tested the 22 product? 23 Answer: We would actually -- over the 24 years, again, I am referring to Novell DOS 7. 25 Over the years, we actually built up a 12961 1 good core of dedicated customers who were very 2 good at doing beta testing. They would always 3 be your primary target as a new beta site 4 because you know they are going to give you the 5 feedback. 6 You would actually keep in 7 communication with that beta site and even give 8 them updates in between major beta releases as 9 well. 10 Question: Would beta testers test on 11 multiple different computers, or would it just 12 be more computer at that beta site that would 13 be tested? 14 Answer: They would test on multiple 15 computers, good beta sites. 16 Question: Was there some requirement 17 that you had that they -- that you had that the 18 beta testers install on a certain number of 19 computers at their -- you know, within their 20 company? 21 Answer: Obviously, we would encourage 22 them to install it on as many PCs as they could 23 in their company. 24 But, obviously, as with any beta 25 software, you are not going to put it on all 12962 1 your main production machines. 2 Question: Why is that? 3 Answer: No beta site would do that 4 for any beta product realistically. 5 Question: Is that to do with the 6 stability of the beta product? 7 Answer: Not so much -- you actually 8 -- the reason for the beta product it is not a 9 final release code. You should not actually 10 put it out throughout your organization anyway. 11 Question: Were you presented with 12 identifications of the types of hardware 13 configurations that the beta sites had in order 14 to make a selection of whether or not that beta 15 site was a good beta test site? 16 Answer: We wouldn't make the 17 selection based on the hardware they had. They 18 would actually report back what hardware they 19 had at their sites. 20 Question: I'm sorry. I didn't 21 understand that. 22 Answer: We wouldn't make the 23 selection based on the hardware they had. They 24 would report back the hardware they had at the 25 sites. What they installed it on is useful 12963 1 information for us. 2 A PC is a PC at the end of the day. 3 Novell DOS 7 was released four or five years 4 ago. Most PCs were fairly standard by that 5 time. 6 Question: And did you regard Apple as 7 being in your same industry? 8 Answer: In the computer industry? 9 Question: More in connection with the 10 operating system industry. 11 Answer: No. 12 Question: Why is that? 13 Answer: It's a different platform. 14 It's on the Motorola platform, not the Intel 15 platform. 16 We were purely focused on the Intel 17 platform. 18 Question: Do you recall any 19 discussion about the third sentence of this 20 paragraph on clones, quote, pressure from users 21 and indirectly from IBM to force clone OEMs to 22 bundle Microsoft OS. 23 Do you recall a discussion about that? 24 Answer: I don't recall a discussion, 25 no. 12964 1 Question: Do you know what this is 2 referring to? 3 Answer: Again, I can only speculate 4 at this point that it was referring to probably 5 prior to this date manufacturers didn't have to 6 ship an operating system with their PCs. I 7 can't remember what time. 8 There was a period where PC 9 manufacturers were forced more and more to ship 10 an operating system with a PC. Prior to the 11 whatever time that was, particularly clone 12 manufacturers didn't actually ship operating 13 systems. They could just ship the PC. 14 Question: Do you know what is meant 15 here by the statement loss of revenue over 16 DR-DOS could force legal action buy-out or 17 lock-out by combining Windows and DOS in one? 18 Answer: Basically, that is a 19 reflection saying if Microsoft wanted to try 20 and compete against DR-DOS, these are some of 21 the options they could take. 22 Question: What was the concern that 23 Microsoft could combine Windows and DOS in one? 24 Answer: Basically, what they 25 eventually did. 12965 1 Question: Why was that a concern to 2 Digital Research? 3 Answer: Trying to actually force OEMs 4 to actually buy their Windows/DOS. 5 If you didn't buy their DOS, then you 6 couldn't get Windows. Therefore, you actually 7 kill the DOS market. 8 Question: And was this a concern that 9 you had in 1990? 10 Answer: Obviously it was, yes. 11 Question: Do you recall discussions 12 about competing against a combination of 13 Windows and DOS? 14 Answer: I don't recall any specific 15 conversations as such, no. 16 Question: What about general 17 conversations? 18 Answer: I mean, general, yes. I was 19 obviously -- it was obviously a concern for us 20 over a period of time that Microsoft would 21 actually at some point try and combine those 22 together, not necessarily technically, but 23 basically what they were doing with OEMs in 24 Taiwan, forcing them to actually buy the DOS; 25 otherwise, they wouldn't get Windows. 12966 1 Question: And do you have any 2 personal knowledge of any tying between DOS and 3 Windows in Taiwan? 4 Answer: Any personal knowledge? 5 Question: Yes. 6 Answer: No. Only what I heard 7 through our sales force. 8 Question: Do you recall talking to 9 any Microsoft employees where they indicated 10 they would not sell DOS without Windows or 11 Windows without DOS? 12 Answer: I didn't, no. 13 Question: So all your information 14 about any tie-in would have come second or 15 thirdhand from the sales force within Digital 16 Research? 17 Answer: Yes. 18 Question: In your career, have you 19 had any conversations with anyone from 20 Microsoft ever? 21 Answer: Yes, yes. 22 Question: On what subject matters 23 would you converse with individuals from 24 Microsoft? 25 Answer: They tried to recruit me to 12967 1 go and work for Microsoft in Seattle. 2 Question: When did they recruit you 3 to work at Microsoft? 4 Answer: They tried to recruit me in 5 -- I think it was 1990. 6 Question: And did you contact them 7 initially, or did they contact you initially? 8 Answer: No. They cold called my home 9 phone number. 10 Question: And how long was your 11 conversation with them? 12 Answer: I had a couple of 13 conversations with the personnel lady, and I 14 had one conversation on the telephone again 15 with Gordon Letwin. 16 Question: Was the first contact with 17 Mr. Letwin? 18 Answer: No. Personnel. 19 Question: And who was the personnel 20 person? 21 Answer: Susan somebody. I can't 22 remember. Voeller? It could have been 23 Voeller, Susan Voeller. 24 Question: And what was the length of 25 this conversation? 12968 1 Answer: I can't remember. Quarter of 2 an hour, half an hour. 3 With the personnel person? 4 Question: Yes. 5 Answer: There was a couple of 6 conversations with her. Probably quarter of an 7 hour, half an hour at the time. 8 Question: All total? 9 Answer: Possibly. Each one could 10 have been half an hour. I don't know. 11 Question: What do you recall about 12 those conversations? 13 Answer: Basically, they wanted to 14 recruit a team to build the next version of 15 MS-DOS. 16 Question: And this would be -- do you 17 know how they obtained your name? 18 Answer: I have no idea. 19 Question: And what was discussed 20 other than them recruiting a team to work on 21 the next version of MS-DOS? 22 Answer: They -- the conversation 23 regarding Gordon Letwin I remember more so than 24 the one with Susan. 25 Question: Let me ask. Did you 12969 1 express interest? Is that how you got to talk 2 to Mr. Letwin? 3 Answer: They asked whether I was 4 interested in actually working for Microsoft. 5 I said, well, I am always interested 6 in talking, what are you offering kind of 7 thing. 8 Question: Right. 9 Answer: She said the best thing you 10 can do is have a conversation with Gordon 11 Letwin. She set up the conference call for 12 Gordon Letwin to call me, and he did. 13 Question: How long did you and 14 Mr. Letwin talk? 15 Answer: Again, somewhere between a 16 half hour to an hour. Probably an hour. 17 Question: Had you ever talked to 18 Mr. Letwin before? 19 Answer: No. 20 Question: What did you and Mr. Letwin 21 discuss? 22 Answer: He basically did most of the 23 talking and tried to sell me on the position 24 that they were recruiting engineers in 25 particular in to work on the next version of 12970 1 DOS, which was going to be an all-singing, 2 all-dancing version of DOS. 3 He was basically recruiting a team to 4 do that. He did not have a team at that point 5 in time and was recruiting it. Obviously, he 6 was looking for some good people. 7 Question: Do you know when this was? 8 Answer: It was April 1990, I think. 9 Question: And what was your reaction 10 to Mr. Letwin's call? 11 Answer: I was very surprised. 12 Question: Why? 13 Answer: The fact they didn't have a 14 team to actually already work on it, for one 15 thing. 16 Question: On which version was he 17 talking about? 18 Answer: He didn't mention a version. 19 He said a future version of MS-DOS, the next 20 version. 21 Question: Did he indicate to you that 22 they didn't have a team at that time? 23 Answer: Yes. He was actually 24 building a team. 25 Question: What version had been 12971 1 released by this point in time? 2 Answer: Of? 3 Question: Of MS-DOS. 4 Answer: I think the last one that 5 Microsoft released at that point was MS-DOS 4, 6 which was several years before that. 7 Question: And in this conversation, 8 you mentioned the all-singing, all-dancing 9 version of MS-DOS. 10 Did he describe what features would be 11 contained in this? 12 Answer: The only thing I can remember 13 offhand is he mentioned sort of improving the 14 file system. 15 Question: Do you have any notes of 16 your conversation with Mr. Letwin? 17 Answer: Yes. 18 Question: Did you take notes? 19 Answer: Yes. 20 Question: And in preparing for 21 today's deposition, did you review those notes? 22 Answer: Yes. 23 Question: Do you know if those notes 24 -- were those your own personal notes? 25 Answer: Yes. 12972 1 Question: Did Mr. Letwin tell you 2 that any of the information he was going to 3 reveal was confidential? 4 Answer: No. 5 Question: At this point in time had 6 you seen anything about what Microsoft might do 7 in the next version of MS-DOS? 8 Answer: I am not sure. I might have. 9 Question: Do you have other documents 10 related to the development of DR-DOS in your 11 home among your personal effects? 12 Answer: No. 13 Question: These are the only notes 14 you have? 15 Answer: This is a personal note. I 16 actually sent my CV over with this. I sent my 17 curriculum vitae. 18 Question: Yes. 19 Answer: Resume, sorry. 20 Question: And to whom did you send 21 it? 22 Answer: Susan Voeller. That is 23 actually the copy of the fax that went over. 24 Question: Okay. At the end of your 25 conversation, were you still considering 12973 1 working for Microsoft? 2 Answer: No. I was considering 3 actually flying to Seattle because they were 4 willing to pay for me to fly over there. 5 Question: And did you, in fact, fly 6 over to Seattle? 7 Answer: No. 8 Question: Why not? 9 Answer: I decided not. 10 Question: Why is that? 11 Answer: I decided I didn't want the 12 job, and I had better things to do with my 13 time. 14 Question: Why didn't you want the 15 job? 16 Answer: I had a very good job as it 17 was. 18 They were offering an engineering 19 position. I wasn't doing engineering at that 20 time. I was actually managing product 21 development. He was looking for engineers to 22 code. That was very clear. 23 Question: Do you know who Mike 24 Dryfoos is? 25 Answer: No. I don't remember. 12974 1 Question: And did Mr. Letwin tell you 2 how he came upon you? 3 Answer: No. 4 Question: Do you recall -- what is 5 the next -- did he indicate which other 6 engineers he had recruited, the names of any of 7 them? 8 Answer: No. I didn't ask. 9 Question: What was discussed about 10 Microsoft's commitment to DOS for the future? 11 Answer: That was a statement he was 12 making. Obviously, he was trying to sell me 13 his position. He was saying we are very 14 serious about commitment to DOS for the future. 15 Question: Did you have any doubt that 16 Microsoft was committed to DOS at that point in 17 time? 18 Answer: I thought it was a very 19 strange conversation. Since they hadn't done 20 anything with DOS for many years, having a 21 conversation with this, with Gordon Letwin was 22 very strange. 23 Question: Do you recall what was said 24 about the embedded market? 25 Answer: Not really. Only that this 12975 1 was -- basically these points here were some of 2 the comments he made. 3 We are looking at the embedded market, 4 we are looking at the Japanese market, we are 5 looking to remove the old BDOS, BIOS interface 6 and go direct to ROM BIOS. I think at that 7 time he was probably talking about performance. 8 He went on to redo the file system, 9 speed it up. Obviously having to maintain 10 compatibility being a key factor. Looking at 11 redoing the redirector code. 12 Again, he was very much saying the 13 performance issue, wanted to improve 14 performance on the older version of DOS. 15 Then he mentioned actually doing 16 memory management features, which currently 17 weren't in MS-DOS at that point in time. But 18 they were in DR-DOS. 19 Question: Which feature of DR-DOS 20 related to the memory management? 21 Answer: Which feature? 22 Question: Yes. 23 Answer: That was one of the key 24 factors of DR-DOS 5. All the memory management 25 features were in there. That is why DR-DOS 5 12976 1 was so successful. 2 Question: At that point in time, 3 DR-DOS 5 had not come out, correct? 4 Answer: It was either shipping or was 5 about to ship. It was around that time was 6 actually going to be released. 7 Question: By April 1990, had there 8 been any announcement of what feature set would 9 be in DR-DOS 5? 10 Answer: I would think so. I don't 11 know exactly without actually looking through 12 records. 13 Question: Was DR-DOS shown at a 14 European expo in March 1990? 15 Answer: I don't recall. 16 Question: Did you report your 17 conversation with Mr. Letwin back to anybody at 18 Digital Research? 19 Answer: Yes. 20 Question: To whom did you report it? 21 Answer: Steve Tucker. 22 Question: What did you and Mr. Tucker 23 discuss? 24 Answer: We discussed the possibility 25 of me going out there for the interview, was I 12977 1 interested. 2 Question: Why did you have that 3 conversation with Mr. Tucker? 4 Answer: Because we were friends as 5 well as colleagues. 6 Question: And do you recall what you 7 and Mr. Tucker discussed? 8 Answer: Not much more than basically 9 I went through what they had actually said to 10 us, what Gordon Letwin had said. 11 Question: Prior to that time, did you 12 know that Microsoft was interested in the 13 embedded market? 14 Answer: I can't remember. 15 Question: Prior to this time, did you 16 know that Microsoft was interested in the 17 Japanese market? 18 Answer: I imagine. They sell product 19 in the Japanese market. I didn't see the 20 relevance of the Japanese statement. 21 Question: At this point in time, was 22 the Japanese market something that Digital 23 Research was interested in? 24 Answer: We were interested in all 25 markets. 12978 1 Question: At this point in time, did 2 Digital Research have any customers in Japan? 3 Answer: I am not in a position to 4 know. Possibly. 5 Question: Did you reveal any 6 confidential information of DRI to Mr. Letwin 7 during your conversation? 8 Answer: No. 9 Question: And were you careful not 10 to? 11 Answer: He did most of the talking. 12 He was trying to sell the position to me. I 13 listened. 14 Question: But were you careful not to 15 reveal any confidential information of DRI 16 during the conversation? 17 Answer: Absolutely. I would never. 18 Question: Did you have any further 19 contact with Mr. Letwin or anyone from 20 Microsoft about declining their offer to have 21 you visit Seattle? 22 Answer: I believe I had one more 23 conversation with Susan Voeller and told her I 24 wasn't interested. 25 Question: Is that set of 12979 1 conversations the only conversations you have 2 ever had with anyone from Microsoft? 3 Answer: As I said to you before, as 4 far as I can remember, yes. 5 Question: Looking at the last 6 sentence on this page where it says, selling 7 against the Windows 3/DOS? Combination to 8 major vendors will continue to be very 9 difficult on standard 386 PCs. Do you recall 10 what was said about this? 11 Answer: Again, no, I don't recall any 12 of the specifics. 13 Question: Do you recall generally the 14 subject matter? 15 Answer: Again, as I said to you 16 before, we had general discussions about the 17 combination of DOS and Windows and the fact 18 that, if they put those together, it would be a 19 very serious threat to DOS. 20 Question: Do you recall what was 21 discussed about how Digital Research would 22 respond if Microsoft combined DOS and Windows 23 into one product? 24 Answer: I don't remember any of the 25 outcomes of the actual discussion. I can't 12980 1 remember any specific discussion, to be honest. 2 It was more general. 3 Question: Did you think it important 4 that Digital Research develop a strategy to 5 respond if Microsoft were to combine DOS and 6 Windows? 7 Answer: Yes. My personal feeling is 8 it would be important to have a strategy, yes. 9 Question: Did you have a personal 10 strategy in mind that you discussed to others 11 at Digital Research about what ought to be done 12 in the event or in anticipation of Microsoft 13 combining DOS and Windows into one product? 14 Answer: Basically, my personal 15 feeling is it was going to kill the DOS market. 16 Question: Why is that? 17 Answer: DOS unless you bought 18 Windows. Combining them was actually going to 19 kill DOS because people were saying they had to 20 have Windows as well. 21 The only way you could get Windows was 22 combining them. How can you sell another DOS 23 in the marketplace? It is very difficult. 24 Question: Was it a concern that DOS 25 itself lacked demand without a graphically user 12981 1 interface? 2 Answer: No. I think there was a 3 market there for DOS for some time in the 4 future. DOS is still being used very heavily 5 today. 6 Question: So the death of the DOS 7 market was more the death of growth, any future 8 growth in the DOS market? 9 Answer: No. Basically, PC 10 manufacturers were forced to supply an 11 operating system with a PC. A lot of PC 12 manufacturers would have supplied any operating 13 system that met the criteria. They didn't 14 necessarily have to have DOS and Windows. They 15 would be quite happy to carry on supplying DOS. 16 There was a huge market for that. 17 Question: I am showing you a document 18 that has been previously marked as Exhibit 630. 19 Do you recall if DR-DOS 5 was released 20 in July of 1990? 21 Answer: I don't remember the dates. 22 Question: If DR-DOS 5 was released in 23 July of 1990, would there be information 24 available, public information, in April of 1990 25 about what feature set it had? 12982 1 Answer: We had a lot of beta product 2 out there. So as I say, I don't know from the 3 marketing side what had been announced. 4 From the engineering side, I know the 5 beta program had gone out there. There was a 6 lot of beta copies out there. The features 7 would have been fairly wide known at that 8 point. 9 Question: Were beta site required in 10 signing nondisclosure agreements? 11 Answer: Yes. 12 Question: Those nondisclosure 13 agreements would prohibit someone from 14 indicating what feature sets were within the 15 beta product? 16 Answer: Yes. 17 Question: Was it your understanding 18 that most beta sites honored the nondisclosure 19 statements? 20 Answer: Put it this way. Information 21 seemed to be fairly freely available in the 22 marketplace. Where it came from, I don't know. 23 Question: Looking at document Exhibit 24 630, do you recall -- you are an addressee of 25 this document, correct? 12983 1 Answer: Yes. 2 Question: This is a DR-DOS product 3 planning meeting summary. Do you recall 4 participating in a DR-DOS product planning 5 meeting? 6 Answer: Not this specific one, no. 7 Question: Do you know why you were a 8 participant in the DR-DOS product planning 9 meeting if you were not at that time assigned? 10 Answer: Actually, this is the one -- 11 yes, I do recall this meeting. I am sorry. I 12 have just seen who was actually at the meeting. 13 I do recall this meeting. 14 Question: This is in October 1990? 15 Answer: Again, yes. It says on here. 16 Question: And this, to your 17 knowledge, would follow -- I'm sorry. 18 I guess, the memo date is October 19 1990. It looks like there was a Tuesday, 20 September 25th, a Wednesday, September 26th, 21 and Thursday, September also 26th. I guess 22 that's the 27th. 23 Was this a three-day meeting, to your 24 knowledge? 25 Answer: It looks like, yes. 12984 1 Question: And do you know what was 2 the purpose of your attendance at this 3 three-day meeting? 4 Answer: I was one of the senior 5 engineering staff, manager in the development 6 center. We were basically involved in the 7 planning meetings at that point. 8 Question: What do you recall being 9 discussed about the timing of the introduction 10 of DR-DOS 6? 11 Answer: Nothing specific. 12 Question: Do you recall any 13 discussion of it being introduced at or around 14 the same time as Microsoft DOS 5 would be 15 released? 16 Answer: It sounds like a good idea. 17 Question: And do you recall if that 18 was the strategy that was adopted? 19 Answer: I don't recall offhand, no. 20 Question: Do you recall if it was 21 discussed to have a DOS 6 beta available for 22 demo at the same time as Microsoft launched 23 MS-DOS 5.0? 24 Answer: Again, I don't recall a 25 specific conversation. But that sounds like a 12985 1 good strategy. 2 Question: Okay. Why don't you look 3 at page 2 of this document. 4 And under the DR-DOS 6.0 development 5 strategy, the last two bullet points, the 6 second to the last bullet point says, introduce 7 MS 5.0 parity simultaneous to MS launch; i.e., 8 February 1991. 9 Do you recall what was said about 10 that? 11 Answer: Not specifically, no. 12 Question: And do you recall that it 13 was thought in September 1990 that Microsoft 14 DOS 5 would be released in February 1991? 15 Answer: Again, I don't recall the 16 dates, no. 17 Question: What do you recall being 18 discussed about this bullet point or the 19 subject matter described in this bullet point? 20 Answer: Sorry? Which one? 21 Question: The second to the last, 22 introduce MS 5.0 parity simultaneous to MS 23 launch. 24 Answer: I don't recall a lot about it 25 really apart from what it actually says. 12986 1 Basically, if we don't bring out a new 2 version of DR-DOS 6, we won't gain parity with 3 MS-DOS 5. 4 Question: I am sorry? 5 Answer: If we were bringing out 6 DR-DOS 6, we won't gain parity with MS-DOS 5. 7 Question: And why was that important? 8 Answer: Basically, I mean, I was 9 thinking it was something we had actually moved 10 DOS forward with DR-DOS 5. 11 Microsoft had woken up and decided to 12 copy a lot of what we had done and put a few of 13 their other little features in themselves. 14 Basically, we needed to actually get 15 our parity back and basically move the 16 goalposts forward again. 17 Question: Was the purpose of 18 introducing DR-DOS 6 to obtain parity with 19 MS-DOS 5? 20 Answer: No. It was to actually take 21 the DOS project further forward. 22 Even if MS-DOS 5 hadn't been there, we 23 would have done DR-DOS 6 anyway. We had a lot 24 of features that we didn't put into DR-DOS 5 25 that we still wanted to develop, a lot of 12987 1 ideas. 2 Question: What would be the purpose 3 of having the DR-DOS 6 beta available at the 4 same time as the Microsoft launch? 5 Answer: Good marketing strategy. 6 Question: Why? 7 Answer: Basically, you can talk about 8 it with OEMs and say, here is another product 9 that is going into the product, DR-DOS 6, and 10 its features. 11 Question: Do you think it's fair and 12 a good way to sell product to show an OEM a 13 beta version of your product in order to 14 persuade the OEM that they ought to license 15 your product as opposed to the released product 16 of a competitor? 17 Answer: I think showing our OEMs, our 18 customers, our future technology when it was 19 available in a demonstrable form was a good 20 thing to do. 21 Question: Do you think there is 22 anything wrong about that? 23 Answer: Not necessarily, no. 24 Question: Is that a standard industry 25 practice to show OEMs a demonstrable beta 12988 1 version of your product in order to attempt to 2 persuade that particular OEM to license your 3 product? 4 Answer: OEMs are typically asking 5 what you are developing futurewise. They are 6 very keen to know where you are going with your 7 future strategy. 8 As in any normal customer relation, 9 you would actually be presenting that future 10 strategy, and actually showing demonstrable 11 product is part of what they are actually 12 demanding from you. 13 Question: Why is it? 14 Answer: They want to know what your 15 future strategy is. 16 Question: Why is that important to 17 them? 18 Answer: Basically, they are 19 committing to actually stay with your product. 20 Then, obviously, it is important. 21 Question: For an operating system, is 22 it more important that the OEMs be kept advised 23 about your future development so they can 24 develop their hardware so it will operate with 25 the operating system? 12989 1 Answer: Not necessarily, no. 2 Question: Generally? 3 Answer: It might be a case where an 4 OEM might actually ask an operating system 5 vendor to develop PCs to actually take 6 advantage of any hardware they might be 7 developing. 8 From their point of view, it is 9 beneficial to have a good working relationship. 10 Question: The information flow, is it 11 important for an operating system developer to 12 tell the OEM what drivers, for example, it's 13 going to include in its next operating system 14 so that the OEM can include those new devices 15 in its next round of products? 16 Answer: I think it's more the other 17 way around. If they have a new device, they 18 would want the operating system developer to 19 include the driver. 20 Question: So, for example -- 21 Answer: Or be able to support that 22 driver. 23 To actually to be honest, in reality, 24 there is a standard interface for drivers. In 25 most cases, the manufacturers of specific 12990 1 hardware would write the driver that would work 2 with that interface. 3 Question: Well, during this time, 4 weren't there a number of different interfaces 5 that were being developed that didn't have 6 standard drivers in the 1990 through 1995 time 7 period? 8 Answer: Possibly. I can't remember. 9 Question: What about CD-ROMs, for 10 example? 11 Answer: Yes. That would be in that 12 period, yes. 13 Question: And was that an example of 14 a hardware device that didn't necessarily have 15 a series of drivers already assigned to it but 16 that software companies were having to write 17 for? 18 Answer: Yes. 19 Question: What about different types 20 of floppy drives? 21 Answer: No. That would really being 22 handled by the BIOS. It would be handled by 23 the PC manufacturer. It was hidden from the 24 operating system in most cases. You would have 25 to do something, maybe a format program. 12991 1 Question: What did you understand was 2 going to be the task switcher that was going to 3 be contained in the Microsoft DOS 5 product? 4 Answer: What did I understand then or 5 now? 6 Question: Then. 7 Answer: I can't remember what I 8 understood then, but I can tell you what I 9 understand now. 10 Question: I am more curious what you 11 understood then about the task switching 12 product. 13 Answer: A task switcher is fairly 14 obvious what it does. It switches one task to 15 another. It would be a static switch of that 16 task. 17 Question: A static switch? 18 Answer: Static switching as opposed 19 to multitasking, which is truly keeping 20 multiple tasks running. 21 Question: What was the load high 22 compatible with Windows feature that was being 23 referenced in this document? 24 Answer: I can't remember 25 specifically. We had already done a lot of 12992 1 memory management features in DR-DOS 5 to 2 moving stuff into high memory. We basically 3 pioneered that. 4 From what I remember, there was some 5 extra feature on top of that that Microsoft 6 tried to add to improve loading things high 7 under Windows. 8 Question: Was that to run Windows out 9 of the upper memory? 10 Answer: No. I think it was -- I 11 believe this is actually referring to being 12 able to load certain drivers high, not Windows 13 itself. 14 Question: And by loading the drivers 15 high, you would have more space in the lower 16 memory for applications to be run? 17 Answer: That is basically the 18 technology we developed in DR-DOS 5. We 19 pioneered that technology. 20 Question: And who -- does any other 21 product other than DR-DOS have that technology? 22 Answer: Does any in the market today? 23 Question: Yes. 24 Answer: In the market today, yes. 25 Question: Prior to the time that 12993 1 DR-DOS 5 came out, was that feature in the 2 marketplace? 3 Answer: I am not sure, to be honest. 4 I am not sure. We were certainly the first to 5 put it in the operating system. 6 Question: And extended memory was a 7 separate set of chips that the operating system 8 would access through a layer of the upper 9 memory? 10 Answer: Yes. It is extra memory that 11 the operating system can access. Basically, we 12 were actually using the similar technique in 13 Concurrent DOS prior to using the same 14 technique in DR-DOS 5. 15 Question: Looking at the feature 16 candidates for matching on page 2 of this 17 document, there is a notation 2.88 MBFDD 18 support. 19 Can you tell me what that is? 20 Answer: 2.88 megabyte floppy disk 21 drive. 22 Question: And was that a feature that 23 Microsoft 5 was to have? 24 Answer: It was a new floppy disk 25 drive that IBM had brought out in some of their 12994 1 newer PCs. It needed supporting. 2 Question: And was that to be a 3 feature in DR-DOS 5? 4 Answer: DR-DOS 5 or 6. I can't 5 remember the timing. 6 Question: I am sorry. 6? 7 Answer: It was a new piece of 8 hardware that IBM was shipping in their PCs. 9 Therefore, there would be a requirement for us 10 to support it. 11 Question: Was that an announced piece 12 of hardware that was going to be available, or 13 was it actually shipping at the time of this 14 conversation? 15 Answer: I can't remember dates. We 16 would have had that sort of information 17 available to us anyway. 18 Question: Looking further down on the 19 list, there is a reference to -- is that 20 greater than two hard disk drives? 21 Answer: Yes. 22 Question: And was that a feature to 23 be supported in DR-DOS 6? 24 Answer: It looks like. Obviously, 25 again, I guess around that time some of the 12995 1 manufacturers were starting to add more than 2 two hard disk drives into the machines as an 3 option. 4 Again, it was sort of specifications 5 in the PC World were moving forward. That is 6 the sort of thing that happens in every release 7 of every operating system. There are certain 8 things you have to keep moving forward. That 9 is what we did. 10 Question: Mr. Stephens, the meetings 11 that are described in Exhibit 630, was that the 12 first meeting about what products, what 13 utilities and features would be in DR-DOS 6? 14 Answer: What is the date of this one? 15 October? 16 No, I doubt whether that would have 17 been the first meeting. There would have been 18 marketing prior to that within engineering and 19 marketing. 20 Question: Were you present at any of 21 those other meetings? 22 Answer: Yes. Basically, I say there 23 would have been. I don't know exactly dates or 24 meetings. 25 Question: Do you have a specific 12996 1 recollection of any DOS 6, DR-DOS 6, planning 2 that preceded this? 3 Answer: Not specific, no. 4 Question: But do you have a general 5 recollection of some discussions about what the 6 feature sets would be in -- 7 Answer: Basically, the way we 8 actually develop product, you are continually 9 discussing feature sets from one product 10 release to another. 11 It's not we are going to sit down and 12 define a product. It's an ongoing process. It 13 is happening every day of your working life, 14 practically. 15 Question: Would you consider this to 16 be the first formalized discussion of what 17 features would go into the next DR-DOS 18 operations? 19 Answer: Again, I don't know whether 20 it would have been the first formalized. There 21 might have been one prior to this. This was a 22 formalized meeting about the DR-DOS 6. 23 Question: What is a LIM emulator 24 then? 25 Answer: Basically, LIM stands for -- 12997 1 I can't remember. Basically, LIM is an acronym 2 for the interface that was used for accessing 3 extended memory. 4 You could actually -- as we discussed 5 earlier, you can see a special chip set on the 6 286 for doing that. 7 Basically, when the 386 processor came 8 out, some applications, the way they would 9 access extended memory, was through this LIM 10 interface. 11 But you could emulate that on a 386 by 12 providing the same interface, the applications. 13 Question: Is that comparable to the 14 way memory management was undertaken on the 15 DR-DOS 5 product? 16 Answer: Your question is not very 17 specific. 18 Question: I am just trying to figure 19 out if the way in which the LIM emulator worked 20 was the way in which the DR-DOS 5 access to 21 extended or expanded memory worked? 22 Answer: If I can explain a bit more, 23 you might understand what you are trying to ask 24 me. 25 Question: Please do. 12998 1 Answer: I am not sure what you are 2 asking. 3 Basically, the LIM emulator, LIM was 4 an interface, an application. There were 5 function calls it could make. Through that, 6 they could access this extended memory. 7 Question: This is on a separate chip, 8 correct? 9 Answer: Sorry? 10 The application didn't know where the 11 memory was, didn't care. Through this 12 interface, it was hidden from it all. 13 Originally, it was provided by a device driver 14 back on the 386. 15 You had a device driver which did the 16 mapping of the memory. It made an interface 17 available to applications so they didn't have 18 to know about how to access the memory. They 19 could go through this interface. Any 20 application could work with that interface. It 21 was generic. 22 When we went to the 386, basically all 23 you do is provide that same interface, but at 24 the back end using the 386 processor for 25 accessing the extended memory. That is what 12999 1 the LIM emulator would have done. 2 Question: Is LIM an acronym for 3 Lotus, Intel and Microsoft? 4 Answer: Possibly. I can't remember. 5 Question: Do you know if any of the 6 Microsoft operating systems were able to use a 7 LIM emulator to access extended memory prior to 8 the introduction of DR-DOS 5? 9 Answer: Microsoft operating systems? 10 No. Certainly DOS wasn't, no. 11 (Whereupon, playing of the video 12 adjourned.) 13 MR. CASHMAN: Your Honor, this would 14 be a good time for the morning break. 15 THE COURT: Okay. We'll take a 16 ten-minute recess. 17 Remember the admonition previously 18 given. Leave your notebooks here. 19 Thank you. 20 (A recess was taken from 9:36 a.m. 21 to 9:53 a.m.) 22 THE COURT: Everyone else may be 23 seated. 24 Continuing with the deposition of 25 Mr. Stephens. 13000 1 MR. CASHMAN: Yes, Your Honor. 2 THE COURT: Very well. 3 (Whereupon, the following video was 4 played to the jury.) 5 Question: Do you recall there being a 6 discussion to add new features that weren't 7 present in MS-DOS 5.0 so that it would hinder 8 direct comparisons between the two products? 9 Answer: Not that -- we will be adding 10 new features in the product, as I said earlier. 11 Basically, we had lots of ideas for 12 the product anyway, regardless of whether 13 MS-DOS 5 had been there or not. We were going 14 to be putting out a new version of the DR-DOS 15 with new features in. 16 Question: Do you recall whether or 17 not this was discussed -- 18 Answer: I do not recall. 19 Question: -- in order to have a 20 direct comparison between the Microsoft product 21 and the Digital Research product? 22 Answer: No, I don't recall that. 23 Question: Do you recall this being 24 discussed at all during these meetings in 25 September of 1990? 13001 1 Answer: I recall basically we would 2 actually be putting new features into the 3 product. That was the whole purpose of the 4 meeting. 5 Question: Do you recall it being a 6 motivation to add features to the products in 7 order to hinder direct comparison between 8 Microsoft's operating system and Digital 9 Research? 10 Answer: We would be putting new 11 features in the product to be better than 12 MS-DOS 5. 13 Question: Is this document incorrect 14 in that there wasn't a conversation about 15 adding features to DR-DOS so it would hinder 16 direct comparisons to MS-DOS? 17 Answer: It's my recollection we were 18 adding new features to actually have a better 19 product. 20 Question: This is inaccurate? This 21 document expressing the views at the meeting is 22 inaccurate? Is it inaccurate? 23 Answer: As far as my recollection is 24 concerned, we were actually discussing putting 25 new features in DR-DOS to have a better product 13002 1 than MS-DOS. That is fairly clear to me. 2 Question: Did you write these words, 3 sir? 4 Answer: No. 5 Question: Is this an incorrect 6 summation of why features were added to the 7 product? 8 Answer: In my understanding, yes. 9 Question: So this is an incorrect 10 discussion in this document? 11 Answer: Yes. 12 Question: Looking at next in the 13 development plan, it indicates, add tasks which 14 are to ViewMax. Do not change main dock. 15 What does that mean? Do you recall 16 any discussions about that? 17 Answer: The first part of it is 18 fairly obvious. We were going to extend 19 ViewMax to add the tasks which functionality is 20 part of the ViewMax feature. 21 Do not change main dock means it is 22 actually less work. If we do it that way, we 23 don't have to have new documentation written 24 for a new utility, part of ViewMax with some 25 added features in it. That is my understanding 13003 1 of the line. 2 Question: Do you recall discussions 3 about that, or is that just your understanding 4 now? 5 Answer: The first idea, yes. I do 6 remember a discussion about putting task switch 7 in the ViewMax. The documentation bit is 8 fairly trivial, to be honest. 9 Question: Is fairly? 10 Answer: Trivial. 11 Question: Further down you have add 12 Windows XVD support on priority. Do you know 13 what that stands for? 14 Answer: I think that might be a typo. 15 That might be VxD. 16 Question: That is what I -- 17 Answer: I haven't got a clue what XVD 18 means. I think it might mean VxD. 19 Question: VxD is a virtual device 20 driver? 21 Answer: Yes. 22 Question: Go to the next page. 23 In the low end systems breakout, there 24 is an indication of task switching, improved 25 ViewMax. What is A1 front end? It is in the 13004 1 low end systems category. 2 Answer: Usually it means artificial 3 intelligence. It's possibly what we were 4 talking about. We had some pretty whacky 5 conversations. 6 Question: Then looking further down 7 on this same page, page 3 of this document, 8 there is a discussion of load high compatible 9 with Windows in DR-DOS 5.0X. 10 First of all, what was the reference 11 to the DR-DOS 5.0 X? 12 Answer: That is fairly 13 straightforward. DR-DOS 5. 14 Question: Was there some other 15 version planned after 5? 16 Answer: Sticking an X on the end just 17 meant anything to do with 5. 18 Question: Okay. Was there already a 19 load high compatibility with Windows in 5.0? 20 Answer: I can't remember. 21 Question: What is meant by load high 22 compatible with Windows? Is that putting 23 Windows up in the upper extended or expanded 24 memory? 25 Answer: I seem to remember -- I don't 13005 1 know exactly, but we were able to actually load 2 things high. 3 There were some things we weren't able 4 to load high if Windows was loaded as well when 5 Windows was running. 6 I think we put some features in to 7 allow you to continue to load these things high 8 even if Windows was there. I think that is the 9 discussion here. 10 Question: Do you know what XWin 11 refers to? Is that the X Windows -- kind of in 12 a comparable way to the X Windows offered by 13 Sun? 14 Answer: I don't know what it is 15 referring to in that context. 16 Question: Does that refer to 17 something else in a different context 18 generally? 19 Answer: Actually, I think what you 20 actually have there, I think a lot of this 21 information in here was actually written down 22 off various flip charts we had pinned up around 23 the room. I think you are going to get a lot 24 of typos. That might just be a single typo. 25 The fact he's put a question mark by it tells 13006 1 me he didn't know what was actually said. 2 Question: At this conference, people 3 would write down on boards of some variety 4 their ideas and whoever was drafting this 5 document was trying to reproduce what had been 6 written down on those boards around the room? 7 Answer: Yes. 8 Question: Turning to the next page, C 9 0011724, there is a reference with respect to 10 the high end systems. 11 What is a high end system? 12 Answer: In this context, it could 13 probably mean the machines and upwards. 14 Question: There is a discussion in 15 the second bullet point of a Windows clone. 16 Do you see that? 17 Answer: Yes. 18 Question: Do you recall what was 19 discussed with respect to a Windows clone at 20 this meeting in September 1990? 21 Answer: I don't recall, no. 22 Question: Do you recall considering 23 creating a Windows clone at Digital Research at 24 this time? 25 Answer: At this time? 13007 1 Question: Yes. 2 Answer: It was something that was 3 discussed between engineers at various points 4 in time, not necessarily at this time. 5 Question: Do you recall Mr. Constant 6 working on a project called project snowman 7 which would estimate how much time it would 8 take to clone a version of Windows? 9 Answer: Not Mr. Constant, no. 10 Question: Do you recall somebody else 11 working on something like that? 12 Answer: Yes. 13 Question: Who is that? 14 Answer: I believe it was Andy 15 Wightman. 16 Question: Do you recall the project 17 name for that? 18 Answer: No, I don't. 19 Question: Cutlass? 20 Answer: Yes. 21 Question: Were you at all involved in 22 project Cutlass? 23 Answer: No. 24 Question: Did you ever see any of the 25 product specs for project Cutlass? 13008 1 Answer: I can't remember. I am not 2 sure. I might have done. 3 Question: Who was the leader on 4 project Cutlass? 5 Answer: It was really would have been 6 done by Andy Wightman, from my recollection. 7 Question: Do you recall when project 8 Cutlass was commenced? 9 Answer: No, I don't. 10 Question: What was the purpose of 11 project Cutlass? 12 Answer: Basically, to try and put 13 some idea of time scales about how long it 14 would take to build a Windows-type application. 15 Question: And did you have 16 discussions with Mr. Wightman about why it 17 might be a good idea for DRI to make a 18 Windows-type product? 19 Answer: Not specifically with Andy 20 Wightman. As I said before, it was a 21 discussion topic that people would have around 22 the whole of the engineering. 23 Question: And do you recall the 24 specifics of any of those conversations? 25 Answer: Not really, no. It was more 13009 1 sort of wouldn't it be nice to. 2 Question: And was there a reason that 3 it would be nice to have a Windows application 4 product? 5 Answer: Yes. From a business 6 perspective, yes. We already had a product 7 prior to Windows coming out called GEM. 8 Basically, that was in the market 9 before Windows was in the market. We actually 10 sort of used that code base to do something 11 that could run Windows applications. It was a 12 very attractive idea. 13 We could have used that code base I 14 said. 15 Question: Did GEM launch other 16 applications? 17 Answer: Yes. 18 Question: And were applications 19 written for GEM? 20 Answer: Yes. 21 Question: By whom? 22 Answer: Third-party companies. 23 Question: Do you recall which 24 third-party companies? 25 Answer: Ventura. 13010 1 Question: And what did Ventura 2 produce for GEM? 3 Answer: Ventura Publisher. 4 Question: And did you publish any API 5 set for GEM? 6 Answer: Yes. It was in the market 7 for a long time. 8 Question: How many years? 9 Answer: Probably about ten years. 10 Question: When was GEM first 11 introduced? 12 Answer: Not long after I joined 13 Digital Research. So it would be about ten 14 years ago, 12 years ago. 15 Question: And at the point in time 16 when Digital Research introduced GEM, was there 17 any other graphical user interface technology 18 in existence? 19 Answer: There was the Xerox. 20 Question: And the Xerox Star? 21 Answer: Yes. I can't remember what 22 it was called. That was well before my time. 23 Question: And was there also Apple's 24 graphical user interface by this point in time? 25 Answer: Yes. 13011 1 Question: I am handing you a 2 document, which has been marked as Exhibit 3 1006. 4 Do you recall having seen this 5 document before? 6 Answer: Vaguely. 7 Question: Your name is on the second 8 page of that, correct? 9 Answer: Yes. 10 Question: Does this mean this was 11 your copy or that you wrote it? 12 Answer: This would have been my copy. 13 Copy number 11 of 15 for Glenn Stephens. 14 Question: And do you know who 15 actually wrote this document, if anyone in 16 particular? 17 Answer: I don't know. 18 Question: Do you know why Panther and 19 Buxton were combined in this product 20 requirement document? 21 Answer: No idea. I don't even know 22 what the document is at the moment. I don't 23 know. 24 Question: Are product requirement 25 documents at Digital Research the document that 13012 1 emerges from the marketing group to be provided 2 to the engineering group to allow the engineers 3 to actually design the product? 4 Answer: Yes. Typically, yes. 5 Although this one does seem to be a bit of a 6 strange one since it has both Panther and 7 Buxton on it. I am not sure what it is. 8 Question: Well, does this continue on 9 the notion discussed in the October -- or in 10 the September meeting of having a parity 11 product and then a product that comes beyond 12 that to exceed the next Microsoft product? 13 Answer: It might do. 14 Question: Going to the next page, 15 this document describes a strategic marketing 16 objective for DR-DOS. 17 Do you see that? 18 Answer: Uh-huh. Yes. 19 Question: It says to clone a flagship 20 OEM account. 21 Answer: Yes. 22 Question: Do you know what was meant 23 by that? 24 Answer: My interpretation of the word 25 flagship there would be a tier one OEM, 13013 1 top-level OEM. 2 Question: And why was that important? 3 Answer: Basically, a key OEM as one 4 of our customers was very important. 5 Question: But why? 6 Answer: To have a key name using 7 DR-DOS in the marketplace. 8 Question: And before that time, 9 DR-DOS did not have any flagship OEM accounts, 10 correct? 11 Answer: We didn't have Compaq. 12 Question: Or IBM or Dell? 13 Answer: No. 14 Question: Was DRI ever able to obtain 15 any flagship OEM account? 16 Answer: Novell. 17 Question: Was Novell an OEM? 18 Answer: No. They bought the company. 19 Question: What I am asking, was 20 Novell or Digital Research ever able to obtain 21 a flagship OEM account? 22 Answer: I don't recall, no. 23 Question: Looking at page 5, the 24 fifth paragraph down on that page, it says, 25 market intelligence indicates that Microsoft 13014 1 will launch their competing product MS-DOS 5.0 2 within the first six months of 1991. 3 Do you see that? 4 Answer: Uh-huh. 5 Question: Was that your understanding 6 as of November 1990 about when Microsoft would 7 be offering its MS-DOS product? 8 Answer: I don't recall particularly. 9 But if it is stated there, it must have been 10 what we discussed at the time. So, yes. 11 Question: Were these product 12 requirement documents, were they fairly well 13 researched at Digital Research? 14 Answer: Yes. 15 Question: And people spent a great 16 deal of time in making sure they were accurate 17 and true and correct? 18 Answer: As I said, depends which 19 draft version this would be. I don't know. 20 But there would be various iterations of any 21 document. They are all living documents 22 basically. 23 Question: But -- 24 Answer: People would review them and 25 actually correct them. There would be another 13015 1 draft come out. 2 Question: And the final version of 3 it, whichever one stopped the versioning, would 4 have reflected the views of the people as of 5 the date it is written? 6 Answer: Yes. 7 Question: Looking at the next 8 paragraph, it states, as such, the product road 9 map for DR-DOS calls for the launch of the 10 MS-DOS 5.0 parity product code-named Buxton. 11 Do you recall any discussions about 12 Buxton being an MS-DOS 5.0 parity product? 13 Answer: Yes, I do remember it being 14 discussed. But I can't remember for how long 15 we stayed with that strategy. 16 Question: Do you recall abandoning 17 that strategy? 18 Answer: As I said, I don't recall how 19 long we discussed it and stayed with it. So I 20 don't recall when we abandoned it either. 21 Question: Okay. Looking at the next 22 paragraph, which indicates, the Buxton product 23 should be available for consumer shipment 24 immediately following the release of MS-DOS 25 5.0, was that your recollection of how the 13016 1 product release was to be handled? 2 Answer: That was one of the criteria. 3 Obviously, another criteria is actually the 4 features we were developing for the product. 5 Question: But in terms of the timing, 6 was it envisioned with the Digital Research 7 engineering and marketing group that it would 8 be helpful to launch this as close of time as 9 possible to the launch of MS-DOS? 10 Answer: Yes. 11 Question: Why is that? 12 Answer: To basically make a big 13 marketing splash about DR-DOS at the same time. 14 Question: And was it important that 15 the product be introduced at the same time to 16 make the greatest possible marketing splash, to 17 use your words? 18 Answer: It is a factor. 19 Question: Well, was it a significant 20 factor? 21 Answer: You probably need to talk to 22 the marketing people to get a better 23 understanding than myself. 24 Question: But as it was expressed to 25 you in this process, you understood it as being 13017 1 important to get the product to market as 2 quickly as possible in time with the 3 introduction of MS-DOS so that there would be a 4 competing parity product of DRI available at 5 that time, correct? 6 Answer: There was a competing product 7 with DRI anyway because the DR-DOS 5 was 8 already in the market. To have another new 9 competing product is obviously another benefit. 10 Obviously, getting a product out in 11 that time frame would be a good thing to try 12 and achieve. It was a good goal. 13 Question: Hadn't sales of DR-DOS 5.0 14 slowed at this point in time? 15 Answer: I don't recall. 16 Question: Do you recall that there 17 was a great deal of market anticipation of when 18 Microsoft would be offering its MS-DOS 5.0 19 product? 20 Answer: I recall there was a lot of 21 hype around. 22 Question: And do you recall that 23 people were actually waiting for Microsoft to 24 introduce its MS-DOS 5.0 product in terms of -- 25 OEMs were waiting in terms of making their 13018 1 purchasing decisions? 2 Answer: I heard a lot of rumor and 3 read things in the press when Microsoft were 4 talking about a to-be-launched MS-DOS 5 5 product. 6 Question: A what? 7 Answer: A to-be-launched MS-DOS 5 8 product. 9 Question: Which was, in fact, 10 launched? 11 Answer: Eventually. 12 Question: And was there a concern at 13 Digital Research that if they didn't launch 14 6.0, DR-DOS 6.0, close in time to the launch of 15 MS-DOS 5.0, that a great deal of the demand 16 would be taken care of by Microsoft as opposed 17 to Digital Research? 18 Answer: Microsoft would actually 19 steal market share away from us by releasing 20 MS-DOS 5. If we can bring out DR-DOS 6 at the 21 same time, obviously, we would actually 22 maintain market share. 23 Question: Looking at the next 24 paragraph, it says, in order to maintain and to 25 extend the existing technical lead over 13019 1 Microsoft, it is recommended that an interim 2 version of DR-DOS be released. 3 Do you recall, was that the rationale 4 of Buxton, that it be an interim version? 5 Answer: As I said, I think we did 6 have discussions about doing this interim 7 release and then actually doing what became DR 8 6. 9 At some point that was scrapped. I 10 can't remember how long it was on for or when 11 it was scrapped. 12 Question: Looking at the last bullet 13 point on this page, add additional 14 functionalities to support product 15 differentiation. 16 Do you know what that references? 17 Answer: New features. 18 Question: Do you recall -- do you 19 know if that had anything to do with the 20 notation in Exhibit 630 which was that summary 21 of the September meeting to add new features 22 not in MS-DOS to hinder direct comparisons 23 between the two products? 24 Answer: It was to add new features. 25 As I said to you before, we were constantly 13020 1 adding new features to the product. 2 Question: Does the word product 3 differentiation mean anything to you in that 4 context? 5 Answer: To add new features so you 6 can say your product is better. 7 Question: Turning to the next page. 8 Do you know what is referenced by the 9 statement parity features for Buxton? 10 Answer: This would be parity with the 11 feature set in MS-DOS 5. 12 Question: Okay. And look at the 13 second feature, the ability to load high with 14 Windows 3. 15 Answer: Uh-huh. 16 Question: This indicates ability to 17 load DOS kernel, TSRs and device drivers into 18 upper memory when Windows 3 is in enhanced 19 mode. 20 Do you know what that reference is? 21 Answer: This is getting back to what 22 we discussed a minute ago. 23 We had the ability in DR-DOS 5 to load 24 certain things high. It wasn't possible when 25 Windows was in enhanced mode to actually do 13021 1 that. That was a feature we wanted added to 2 the next product. 3 Question: What was desirable of 4 having Windows be able to operate in enhanced 5 mode? Was there a product benefit for the 6 application that was running on top of Windows? 7 Answer: Yes, I believe so. I think 8 it could actually access more memory quicker. 9 Question: Right. Did it make the 10 program operate with more speed than it would 11 in real mode? 12 Answer: Yes. 13 Question: And that was a benefit to 14 the ultimate application running on top of 15 Windows because it meant that the application 16 would operate faster, correct? 17 Answer: Yes. 18 Question: And that speed was not 19 available if Windows was operating in standard 20 mode as opposed to enhanced mode? 21 Answer: Yes. 22 Question: Do you know if DR-DOS 5.0 23 was able to -- I'm sorry, do you know if DR-DOS 24 6 was ultimately able to allow Windows 3 to 25 operate in enhanced mode? 13022 1 Answer: Yes, I believe it was. 2 It could operate in enhanced mode 3 anyway. It's just we weren't able to load some 4 things high when we were running enhanced mode. 5 That is what this is referring to. 6 Question: And the reason why you want 7 to load those device drivers and TSRs was to 8 make more memory available, correct? 9 Answer: More conventional memory. 10 Question: Conventional memory? 11 Answer: Yes. 12 Question: And if you allowed more 13 conventional memory to be present, that in turn 14 allowed for the application to operate quicker, 15 correct? 16 Answer: It meant there would be more 17 conventional memory available for you to load 18 various device drivers, TSRs. 19 Question: But having freed the device 20 drivers and the TSRs to the upper memory, what 21 was the benefit to the application of allowing 22 that application to run with the full 23 conventional memory -- with as much 24 conventional memory available to it? 25 Answer: It could actually run 13023 1 quicker. 2 Question: Do you know if in the 6.0 3 version -- if I have asked the same question, 4 please tell me. 5 Was 6.0 able to load the DOS kernel, 6 TSRs and device drivers into the upper memory 7 and allow Windows to operate in enhanced mode? 8 Answer: I believe it was, yes. 9 Question: Was it an important 10 feature? 11 Answer: I wouldn't say it was 12 priority one, no. 13 Question: How would you evaluate it 14 among the new features to be included in 6.0, 15 its importance? 16 Answer: My personal recollection on 17 this sort of feature is John Constant was the 18 developer, so he was deciding the priorities. 19 But I wouldn't have said it was one of 20 the highest features. 21 Question: What features -- I am 22 sorry. 23 Answer: For DR-DOS 6. 24 Question: What would you say is a 25 higher priority feature? 13024 1 Answer: Disk compression. 2 Question: Any others? 3 Answer: That is the one that comes to 4 mind most at the moment. 5 Question: Why was that a high 6 priority? 7 Answer: It was a major new feature 8 for the product, major new feature for the 9 customers. 10 Question: At the time, were disk 11 compression facilities -- at this point in 12 time, November 1990, were disk compression 13 programs available by third-party vendors? 14 Answer: Yes. 15 Question: And can you identify for me 16 the third-party vendors that had disk 17 compression programs available at that point in 18 time? 19 Answer: The two I recollect is Stack 20 and Addstor. 21 Question: And both of those offered 22 -- they were both available in the marketplace 23 in this period of time? 24 Answer: Yes, I believe so. 25 Question: Looking at the next page, 13025 1 we talked a little bit about it before, support 2 for the 2.88 megabyte fixed disk drive. I'm 3 sorry, floppy disk drive. 4 Do you recall this being an important 5 feature for this product? 6 Answer: Again, it was a feature. 7 Technology moved. It was something that had to 8 be done. No big deal. 9 Question: It was no big deal? 10 Answer: Not really. 11 Question: Why would this, the user 12 benefit, why would it reduce the material cost 13 for the OEM? 14 Answer: They could presumably -- I am 15 speculating here back into recollection. 16 They could ship products on 2.88 Meg 17 floppy disks. They could save a number of 18 diskettes if they were shipping it. 19 Question: At this time, OEMs were 20 still sending out diskettes when one purchased 21 a computer? 22 Answer: Yes. 23 Question: Look at page 31. 24 There is a reference to dynamic file 25 compression and decompression. 13026 1 Is that the compression you were 2 talking about a moment ago, disk compression? 3 Answer: Yes, it looks like it. 4 Question: Was it the thought at this 5 point in time for Digital Research to write its 6 own code for disk compression? 7 Answer: We looked at all 8 possibilities. 9 Question: And was there any effort -- 10 well, was there actually any development time 11 spent trying to develop a disk compression 12 facility? 13 Answer: Yes. 14 Question: And who was in charge of 15 that? 16 Answer: I don't know who actually 17 started working on it. Ian Jack would have 18 done some. I think Roger Gross did some. 19 Question: And was it determined 20 ultimately that Digital Research development 21 time would be better spent by licensing from a 22 third party? 23 Answer: Yes. 24 Question: And do you recall what 25 reasons were given for selecting a third party 13027 1 as opposed to Digital Research to write this 2 piece of software? 3 Answer: Time to market. It was 4 already there. The technology was already 5 working. You could see it working. 6 Question: ViewMax was a part of the 7 GEM product, correct? 8 Answer: ViewMax was not part of the 9 GEM product. ViewMax was actually developed 10 from some of the GEM source code. 11 Question: And what were the features 12 of ViewMax? 13 Answer: I think basically it was a 14 graphical interface for the desktop. 15 Question: And was the thought to have 16 ViewMax in Panther originally and not Buxton? 17 Answer: I am not sure. It was 18 eventually shipped in DR-DOS 6, I believe. 19 Question: Looking at this document, 20 this follows on -- looking on page 33, this 21 mentions -- well, strike that. 22 Was ViewMax meant to compete with 23 Windows 3.0? 24 Answer: No. ViewMax was just, as I 25 said, it was a graphical user interface for 13028 1 basically a desktop. It wasn't going to be a 2 straight competitor with Windows. It didn't 3 run any Windows applications. 4 It was basically a way for you to 5 manage your desktop through a graphical 6 interface. 7 Question: And so you would be able to 8 see files, file structures? 9 Answer: Yes. 10 Question: Would you be able to delete 11 files and file structures through ViewMax 12 itself? 13 Answer: Yes. 14 Question: Would there be any other 15 functionality associated with the graphical 16 interface? 17 Answer: I can't remember exactly. 18 But there were other sort of features around 19 it. 20 It was all about managing the actual 21 desktop as opposed to providing an interface 22 for applications to run on top of. 23 This was a graphical interface for you 24 to run on the applications you already had, not 25 for applications to work with. 13029 1 Question: Was there a comparable 2 feature in the Windows 3.0 product that was out 3 at that time? 4 Answer: No. They were very 5 different. 6 Question: Well, could you -- in the 7 Windows 3.0 product, could you view your file 8 structures? 9 Answer: Yes. 10 Question: And could you delete file 11 structures? 12 Answer: Yes. 13 Question: And move them? 14 Answer: Yes. 15 Question: And tell me how the ViewMax 16 was different than that element of Windows. 17 Answer: Wait. That side they 18 probably are similar, yes. 19 Question: Okay. In what ways, then, 20 are they different? 21 Answer: Windows actually provide -- I 22 guess I am thinking more from the back end. 23 Windows actually provides a whole API 24 for applications to run. So they can actually 25 do graphical output themselves through the 13030 1 Windows interface. 2 Question: At this point in time from 3 a user's perspective, did Windows 3.0 have 4 multitasking? 5 Answer: Not what I would call 6 multitasking. It was more task switching. 7 Most applications would stop when they were in 8 the background. 9 Question: And the task switcher that 10 DR-DOS developed for inclusion with 6.0, was 11 that multitasking or task switching? 12 Answer: Task switching. 13 Question: When you would switch from 14 one task to another, the task would suspend 15 itself, correct? 16 Answer: Yes. 17 Question: So from the user's 18 perspective, would the user get the same 19 functionality from looking at it from the 20 Windows side as from the DR-DOS task switcher? 21 Answer: Similar. Not as easy to use. 22 Question: You believe the task 23 switcher from DRI was easier to use? 24 Answer: No. Through the Windows 25 interface, it was easier to use the switcher 13031 1 than the DOS one. 2 It was, again, kind of different. You 3 are switching DOS applications. It was a 4 different environment as opposed to switching 5 Windows applications. 6 Question: In the Windows product, 7 could you switch DOS applications? Could a 8 user switch DOS applications? 9 Answer: Yes. Bring up a DOS box and 10 switch them. 11 Question: What is ordinarily the next 12 step after a product requirement document is 13 written? 14 Answer: They would go through several 15 iterations. There may be a meeting between 16 engineering and marketing to go through that to 17 decide which ones are serious ones to actually 18 consider for doing further investigation on it. 19 As I said, with one that size, the way 20 that was produced, I would say that was very 21 much a first pass. 22 There would probably have been a 23 meeting following that to actually sort of go 24 through those features one by one and say we 25 seriously want to investigate this one, we 13032 1 don't want to investigate this one. 2 Question: And as a result of those 3 meetings, would a product development plan be 4 created? 5 Answer: The product would -- the 6 engineering specification would be created 7 first, the product development plan coming off 8 that. That would get thrashed out. 9 Question: Let me show you a document 10 that we've marked as Exhibit 1007. 11 Have you ever seen this document 12 before? 13 Answer: Yes, probably. 14 Question: Do you have any specific 15 recollection one way or the other whether or 16 not what has been marked as Exhibit 1007 is the 17 final product development plan that was 18 generated, whether or not there were 19 modifications through the product development? 20 Was this the final document produced? 21 Answer: This would very much become 22 the working document more so than this one. 23 This would kick off the development. 24 Marketing might have updated that 25 after this was done. This became the focus for 13033 1 discussion early on. Then as it moved more 2 into engineering, this would become the focus 3 of discussion and this document would be 4 developed. 5 Question: Okay. Because there is a 6 lot of this's and because the court reporter 7 won't be able to understand it, what you are 8 saying is that Exhibit 1006 you are saying is 9 the focus earlier on and then that gets 10 preempted by 1007 and is used more as the basis 11 of the product for development as time goes on 12 through the development process? 13 Answer: Yes. 14 Question: Can I get you to look at 15 page 4 of the product development plan of 16 Buxton. 17 What is a virtual memory driver? 18 Answer: It is basically a VxD which 19 allows real mode applications to work in 20 protected mode environment. It's one of the 21 things it can do. 22 Question: Does the virtual memory 23 driver fool the memory chip into believing that 24 it is operating at one point within the chip as 25 opposed to another? 13034 1 Answer: That is one of the things it 2 can do. It can basically say you are accessing 3 this memory here. It would be a real address 4 memory. If it was a real mode application, 5 address 400, say, but it is actually accessing 6 memory much higher up on the virtual driver, it 7 can basically fool it into that by mapping 8 memory behind it. 9 Question: Mr. Constant, I guess, 10 says, quote, currently, only real mode 11 execution is supported which severely restricts 12 the functionality of the Windows product. 13 Do you recall that DR-DOS 5 only 14 allowed real mode execution of Windows? 15 Answer: No. This is in context of 16 the EMM386 device driver that we had. 17 Basically, when that was loaded on to 18 DR-DOS 5, you couldn't run Windows in enhanced 19 mode and have EMM386 running. 20 Basically, what is happening, both 21 pieces of software are trying to use enhanced 22 mode of the 386. Only one can actually be in 23 control. 24 Question: And so when the EMM386 25 tried to use enhanced mode, the Windows product 13035 1 could not use enhanced mode, correct? 2 Answer: I think that was the issue. 3 Question: And, therefore, the 4 application would not get the benefit of 5 enhanced mode? 6 Answer: Yes. 7 (Whereupon, playing of the video 8 adjourned.) 9 THE COURT: Take a brief recess. 10 About five minutes. Remember the 11 admonition previously given. 12 (A recess was taken from 10:33 a.m. 13 to 10:41 a.m.) 14 THE COURT: Everyone else may be 15 seated. Thank you. 16 Please continue. 17 (Whereupon, the following video was 18 played to the jury.) 19 Question: Do you know if the file 20 version -- okay. 21 Do you know if this specification was 22 implemented in the final product, DR-DOS 6.0? 23 Answer: This particular part of it? 24 Question: Yes. 25 Answer: I know we actually resolved 13036 1 the issue of having EMM2386 running and having 2 Windows running in enhanced mode. How or when 3 we did it, I don't recall. 4 Question: You don't recall if you did 5 it in 6 or 7? 6 Answer: We might have even done it as 7 an update to 5. I am not sure. It would have 8 been just to the EMM386, that driver probably. 9 I think that is where the actual fix 10 was put in to get it to work in enhanced mode. 11 I don't recall if that was even shipped as a 12 separate update, just the driver. 13 Question: You think it was definitely 14 in place by no later than the introduction of 15 DR-DOS 6? 16 Answer: As I say, it could have been 17 in DR-DOS 6 or it could have been prior to 18 DR-DOS 6. 19 Question: Do you know, looking at the 20 the next page, do you know if this snapshot 21 utility was included in the final product, the 22 DR-DOS 6? 23 Answer: I think it was, yes. There 24 were various -- it all came under the undelete 25 functionality. 13037 1 There were various small parts of 2 undelete we did to try and improve undelete. 3 That was one of them. Whether that actually 4 made it in, I don't recall actually. 5 Question: And was undelete at this 6 point in time offered by other software 7 companies such as Central Point and Norton 8 Utilities? 9 Answer: Possibly. I don't know. 10 Question: Would Norton Utilities or 11 Central Point's undelete program operate with 12 DR-DOS? 13 Answer: They would have done, I would 14 imagine, yes. 15 Question: Do you recall approximately 16 how far into the development of DR-DOS 6 17 Digital Research developed its own disk 18 compression before selecting Addstor to draft 19 its disk compression software? 20 Answer: What point we stopped 21 developing our own? 22 Question: Yes. 23 Answer: I don't recall actually. It 24 was more a case of we had a couple of engineers 25 working on disk compression. 13038 1 It wasn't seriously aimed at we are 2 going to develop this. It was more how to 3 develop it trying to prove a concept as much as 4 anything else and see what we could do in what 5 sort of time frame. 6 You had to develop a certain point 7 before you know how long it would take you and 8 what kind of functionality you have. We 9 developed it, I seem to remember, to that sort 10 of level. 11 Question: Now, prior to the time that 12 you incorporated Addstor product, Addstor had 13 -- was it SuperStor? Was that its brand name? 14 Answer: Yes. 15 Question: They had the SuperStor 16 product separately available to consumers, 17 correct? 18 Answer: Yes. 19 Question: What about a disk cache? 20 Was a disk cache being considered at this point 21 in time to include -- 22 Answer: We already had a disk cache. 23 Question: Was that in 5.0? 24 Answer: Yes. 25 Question: And was that a disk cache 13039 1 that DRI developed? 2 Answer: Yes. 3 Question: At some point in time, did 4 it become determined that a disk cache from a 5 third party ought to be used instead of DRI's 6 disk cache? 7 Answer: Yes. 8 Question: And whose disk cache was 9 that? 10 Answer: We eventually went with PC 11 Quick. 12 Question: And did PC Quick have a 13 disk cache separately offered to consumers? 14 Answer: Yes. And they continued to 15 offer it to consumers afterwards. 16 Question: So PC Quick never changed 17 its marketing? It continued to offer to 18 consumers a disk cache during this period? 19 Answer: They continued to offer it to 20 consumers. Basically, I think they also had an 21 upgrade voucher with DR-DOS. You could upgrade 22 -- 23 Question: Upgrade voucher? 24 Answer: I think so. If I remember. 25 When you actually bought a copy of 13040 1 DR-DOS 6, you could upgrade your PC Quick to 2 the retail version that they had in the 3 marketplace. 4 Question: And was there any effort to 5 integrate the PC Quick disk cache into the 6 operating system? 7 Answer: Really only through install 8 as far as DR-DOS 6 was concerned. 9 Question: Do you recall there being a 10 high number of service calls as a result of the 11 inclusion of the Addstor product in the DR-DOS 12 6 release? 13 Answer: I believe we had a lot of 14 issues with it during the beta cycle. Most of 15 those had been resolved by the time the product 16 was shipped. 17 Question: Do you recall whether there 18 were SPRs still outstanding on Addstor product 19 at the time that it shipped? 20 Answer: I don't know. 21 Question: Addstor was ultimately 22 replaced, correct? 23 Answer: In Novell DOS 7, yes. 24 Question: Why was it replaced? 25 Answer: We started negotiating with 13041 1 Stack, and they offered us a better deal. 2 Question: Was Stack superior on a 3 technological basis? 4 Answer: Yes, I think it was. 5 Question: And was one of the features 6 that Stack had over Addstor was reliability? 7 Answer: No. It was actually just a 8 better product. 9 Question: What made it better? 10 Answer: It was faster. The 11 compression was better. 12 Also, at that point in time they had 13 actually -- there were issues around patent on 14 the compression algorithms and things. 15 Question: Were there ongoing meetings 16 that would occur to update the development team 17 about the progress of the projects? 18 Answer: We had what they call the PIP 19 meeting. You have seen those. I can't 20 remember what PIP stood for. 21 Anyway, they were regular meetings 22 with the actual management team. It would be 23 like the documentation manager, the test 24 manager, development managers. They were 25 actually held on a regular basis. 13042 1 Question: As part of your job during 2 this period of time, would you be attending 3 them for DR-DOS 6? 4 Answer: Yes. 5 Question: How frequently were these 6 PIP meetings held? 7 Answer: I think it was initially 8 fortnightly. They got more frequent -- 9 probably got weekly closer to release. It 10 might have been monthly even at the beginning. 11 I am not sure. 12 Question: I am going to show you a 13 document which has been marked 1008. 14 Can you identify what this is? 15 Answer: Looks like the minutes from 16 one of the PIP meetings for Buxton development. 17 Question: Looking at the next page, 18 am I correct in understanding the chart that 19 appears on page 2, B1 would be beta 1? 20 Answer: Yes. B2 would be beta 2? 21 Answer: Yes. 22 Question: ER is engineering release? 23 Answer: Yes. 24 Question: And FCS is first customer 25 ship? 13043 1 Answer: Yes. 2 Question: Do you know if this was the 3 schedule or at that time the schedule that was 4 reflected for the release of Buxton? 5 Answer: It would have been at that 6 time, yes. 7 Question: Looking at the -- and would 8 this have coincided approximately with the 9 release of the Microsoft DOS 5 product? 10 The FCS, the first customer ship, 11 would the release of Buxton have coincided with 12 the Microsoft DOS offering? 13 Answer: This FCS date here would be 14 an FCS date that was an engineering date based 15 on the engineering process where development 16 was at. 17 Question: Well, was it designed to 18 occur -- 19 Answer: It's based on -- it wasn't 20 based on it has to occur this. It was based on 21 the reality of the way the development was 22 going at that point in time. 23 Question: At or around this point in 24 time, which is April of 1991, had Microsoft DOS 25 5.0 shipped? 13044 1 Answer: I am not sure of the exact 2 date. I don't know. 3 Question: Do you recall when 4 Microsoft DOS 5.0 shipped? Was it the summer 5 of 1991? 6 Answer: Yes. It was sometime in that 7 time period in 1991. 8 Question: Was it designed so that the 9 German language edition would ship at the same 10 time as the English language edition of Buxton? 11 Answer: We always had a goal to try 12 and actually achieve that. 13 Question: Was that goal ever 14 achieved? 15 Answer: I think in the case of DR-DOS 16 6, I think it was. It was pretty close. 17 Question: Why was the -- was it 18 important that the -- why was the effort made 19 to release the German edition of DR-DOS 6 at 20 the same time as the English language edition? 21 Answer: The effort was made to try to 22 do German and French, but, in reality, German 23 was a higher priority for us -- 24 Question: Why was that? 25 Answer: -- over French because we had 13045 1 more customers in Germany. 2 Question: Was that because of the 3 relationship between DRI and Bogus? 4 Answer: I believe it was partly to do 5 with that, yes. 6 Question: Was there any other 7 customer that DRI had in Germany? 8 Answer: Germany was always a good 9 market for DRI. I am not sure of the exact 10 customers there, but we had a lot of interest 11 in Germany. 12 Question: Do you recall why PC 13 Quick's cache was being considered to be added 14 even though it would delay the current working 15 dates? 16 Answer: To give the product more 17 functionality. PC Quick had good recognition 18 in the market. So it would give us more market 19 recognition. 20 Question: And would the inclusion of 21 the PC Quick require a third beta cycle? 22 Answer: Quite possibly, yes. It 23 would have to because any new functionality 24 like that would require a beta cycle. 25 Question: I am sorry? 13046 1 Answer: Any new functionality like 2 that going into the product would require 3 another beta cycle. 4 Question: Why is that? 5 Answer: To make sure the full product 6 was going through the beta cycle with every 7 feature. 8 Question: Would you want to go 9 through one beta cycle or more than one? 10 Answer: It would really depend on 11 what it was you were getting in. 12 In the case of PC Quick, it was a 13 product already in the market. Basically, you 14 were making changes to install. So it was not 15 quite the same as if you were just developing a 16 cache from scratch. 17 Question: Let me show you a document 18 that has been marked as Exhibit 1009. 19 Could you identify what this is? 20 Answer: It is another meeting minutes 21 from a PIP meeting on Buxton held on the 23rd 22 of July, 1991. 23 Question: By this point in time, had 24 the ship date for Buxton been delayed? 25 By July 1991, had the ship date moved 13047 1 back? 2 Answer: Yes. 3 Question: Looking at page 2 of 4 Exhibit 1009, the paragraph underneath the 5 chart says, beta 3B was released to 6 manufacturing on Monday, 22nd of July, 1991. 7 Was this a fourth beta release, in 8 essence? 9 Answer: It looks like it. I am just 10 going by the actual numbering. I don't 11 actually know. 12 Question: There could have been more 13 beta releases? 14 Answer: There might have been 15 intermediate ones in between those as we tended 16 to have updates to maybe key beta sites who 17 actually are looking at specific problems or 18 something. We actually may give them an update 19 in between then. 20 We typically would manufacture sort of 21 major beta releases. There could be quite a 22 few minor updates in between those major ones 23 on there anyway. 24 Question: What are -- is it PRIA and 25 PRIB elements of that SPR chart? 13048 1 Answer: That would be priority A, 2 priority B. 3 Question: What is a priority A SPR? 4 Answer: Basically, the process we 5 went through before shipping a product, we 6 would go through and put a second category on 7 to SPRs. 8 During the development process, we 9 would have severity categories which basically 10 an engineering category was put on there by the 11 person putting the SPR in. That wouldn't get 12 changed. 13 Then close to release of a product, we 14 would go back through all the SPRs and put 15 second categories on them which would be very 16 much from a business perspective and a 17 marketing perspective. So we would have a 18 second tier of category against them. 19 A severity 3 could be the fact you 20 crashed your machine. If it crashed the 21 machine, that report could have been put in by 22 somebody running some very obscure games 23 package, but it is a severity 3. 24 But when you actually come back and 25 look at the SPR, which is what we typically 13049 1 did, you say, okay, it's severity 3 as far as 2 its category under that severity category, but 3 from a marketing business perspective, the 4 chances of anybody else in the world finding 5 that is pretty remote. 6 Therefore, you can put a second 7 category on it to say this is not really that 8 important an actual SPR. 9 Question: Can you describe what a 10 severity 3 versus a severity 2 SPR was? 11 Answer: I can't describe exact detail 12 of the wording we had. 13 Basically, a severity 3 would be 14 something that would crash your computer or -- 15 Question: Corrupt data? 16 Answer: Corrupt data on a hard disk. 17 Those are the two major factors. 18 Question: What would a 2 be? 19 Answer: Basically, it could cause an 20 application to stop working, but it might be 21 that particular application, but your whole 22 machine doesn't crash and it certainly doesn't 23 corrupt data. 24 Question: Would a hang be considered 25 a 2 or a 3? 13050 1 Answer: That is open to debate. 2 Again, it would be around -- you can only apply 3 criteria what is the inconvenience of that 4 hang, at what point did it hang, and things 5 like that. You have a certain amount of gray 6 areas between 2s and 3s, obviously. 7 Question: What is a 1? 8 Answer: 1 would be minor 9 inconvenience. 10 Question: Something about the program 11 not executing properly or a speed issue? 12 Answer: Maybe a feature of an 13 application not working. But the majority of 14 applications are working. 15 Question: You may not be able to pull 16 up a calculator but it saves the file -- 17 Answer: Yes. 18 Question: -- and runs. 19 Answer: If the calculator was a minor 20 feature of that product, it would be a 1. If 21 the calculator, that is what the application 22 was, obviously it is higher. 23 MR. CASHMAN: This would be a good 24 place to break for lunch, Your Honor. 25 THE COURT: Very well. We'll be in 13051 1 recess until 12 noon. 2 Remember the admonition. 3 Leave your notebooks here. 4 (A recess was taken from 11 a.m. to 5 12:00 p.m.) 6 (The following record was made out of 7 the presence of the jury.) 8 MR. CASHMAN: First a quick 9 housekeeping matter, Your Honor. 10 And after Stephens is finished, we are 11 going to play Adam Harris, and I am just going 12 to hand up to the Court and to Microsoft a copy 13 of the transcript, two copies for the court 14 reporter, and one copy for you. 15 THE COURT: Perfect. Thank you. 16 MR. CASHMAN: And, secondly, the Court 17 will recall that yesterday afternoon the 18 parties were in heated disagreement, to use Mr. 19 Holley's words, about the disclosure of the 20 deposition of Andrew Schulman that was taken 21 the day before yesterday. 22 And as a result of that order, the 23 Plaintiffs would like included in that order 24 Mr. Schulman's first deposition and his expert 25 report. 13052 1 So we would like the order that was 2 provided yesterday to include those two 3 additional pieces of information subject to 4 public disclosure. 5 THE COURT: All right. We'll give 6 Defendant time to -- 7 MR. TULCHIN: Thank you, Your Honor. 8 THE COURT: I suppose you want to talk 9 to Mr. Holley. 10 MR. TULCHIN: I don't know if there's 11 anything in there that is confidential or where 12 we would come out on that, but we appreciate 13 the opportunity to look at it. 14 THE COURT: Okay. Let me know then. 15 MR. CASHMAN: We can take it up after 16 court then. 17 THE COURT: Sure. 18 (The following record was made in the 19 presence of the jury at 12:02 p.m.) 20 THE COURT: Everyone else may be 21 seated. 22 Continue with the deposition of 23 Mr. Stephens, correct? 24 MR. CASHMAN: That's correct, Your 25 Honor. Glenn Stephens taken in the Caldera 13053 1 action on July 21st, 1998. 2 THE COURT: Thank you. 3 (Whereupon, the following video was 4 played to the jury.) 5 Question: Did you become aware of the 6 request to add the Novell networking protocols, 7 I guess the client, to the operating system 8 prior to the time of the merger? 9 Answer: Again, I don't know what 10 point the actual network client was put into 11 the product. 12 Actually, since this was July, 13 presumably, it was added before the 14 announcement because I think the announcement 15 of the merger was in August. That was the 16 first I knew about it. 17 Question: Is it your recollection 18 that the Novell code was added prior to your 19 knowledge of the merger? 20 Answer: That is what I am saying. 21 Question: Yes. 22 Answer: Yes. According to this -- it 23 is not my recollection. I am going by the date 24 on here. We are talking about the Novell shell 25 in July. 13054 1 Since the announcement of the merger 2 was in August, which is the first I knew about 3 it, then obviously this was added prior to the 4 announcement. 5 Question: Let me mark this as Exhibit 6 1010. 7 Can I get you to identify what is 8 Exhibit 1010? 9 Answer: The minutes from another PIP 10 meeting on Buxton dated 30th July, 1991. 11 Question: You were present at this 12 meeting? 13 Answer: Possibly. 14 Question: Look at the bottom of the 15 first page. 16 Answer: Oh, right. Thank you. Yes. 17 Question: Do you recall anything 18 about any -- well, strike that. 19 Do you recall anything about any 20 individual PIP meeting, or do they all run in 21 your head together? 22 Answer: I have done hundreds. 23 Question: So is it fair to say you 24 can't really tell me very much about what 25 occurred on the 30th of July, 1991 at a PIP 13055 1 meeting? 2 Answer: That is a pretty fair 3 statement. 4 Question: Do you recall what testing 5 was still in progress on undelete? 6 Answer: General testing. I mean, we 7 tested right up until the last minute. 8 A lot of those comments would have 9 typically been made, if a person happened to be 10 there, he would, say, make a comment and it 11 wouldn't get written down. It doesn't mean to 12 say that that is the only thing that was 13 happening. You have to take these into 14 context. 15 Question: Do you recall it being an 16 area of concern that the volume of SPRs 17 arriving at this late stage -- do you recall 18 that just generally being a concern? 19 Answer: I remember discussions on 20 that. One of the things you always have to 21 remember with SPRs is what you have to do with 22 the later stages of the development is to go 23 through every single SPR. 24 Early on in the development cycle, the 25 number is actually quite important. You are 13056 1 basically playing with numbers. This is the 2 number. You get the feel for the run rate. 3 When it gets closer to the final ship 4 of the product, you have to go and look at each 5 SPR because the number doesn't actually mean 6 that much. You have to see what the actual SPR 7 is about. 8 We typically kept SPRs in our database 9 until we had managed to reproduce them and do 10 something about them. 11 You could have an SPR which could have 12 been 12 months old on a very early version of a 13 beta product. It would still be in our 14 database. 15 Question: Do you recall this, which 16 talks about the volume of SPRs arriving at this 17 late stage? 18 Answer: Actually, again, the volume 19 you need to look at that and find out you could 20 have had 30 SPRs all about the same problem. 21 Volume doesn't mean anything on its own. You 22 have to look at what the SPRs are about to 23 understand what the -- is that 30 problems or 24 is it one problem. 25 Question: Well, do you recall, then, 13057 1 given that sensible explanation, if just 30 2 people are submitting the same one SPR, why it 3 was an area of concern about the volume of 4 SPRs? 5 Certainly the people at this meeting 6 would have understood the difference between 7 the volume versus the type of SPRs, correct? 8 Answer: At this meeting, it wasn't 9 necessarily -- those SPRs might not have been 10 looked at. They might have said 30 SPRs have 11 just arrived. The meeting might have occurred 12 after they arrived. Until you have gone and 13 looked at those, you don't know what they are 14 actually about. 15 Question: Do you have a specific 16 recollection of the 30 SPRs or the concern 17 expressed about the volume, or are you just 18 speculating? 19 Answer: Sorry? I am telling you -- 20 what I am saying is the way SPRs come in and 21 try to explain to you a number like that 22 doesn't necessarily -- to say there are 30 new 23 SPRs, you need to get behind that number and 24 see what they were about. 25 Question: I am asking you, do you 13058 1 have a specific recollection, or are you just 2 describing the process generally not with 3 respect to what was occurring at this time? 4 Answer: I am describing the process 5 generally without knowing specifically what 6 they were. 7 Question: Can I get you to identify 8 what has been handed to you, which is Exhibit 9 1011? 10 Answer: One week later -- two weeks 11 later. 12 Another copy of the minutes from a PIP 13 meeting of Buxton dated 13th August, 1991. 14 Question: Was Mr. Constant fairly 15 reliable in writing up what was stated at these 16 meetings? 17 Answer: I wouldn't say 100 percent, 18 no. There is a certain amount of cut and paste 19 that goes on. 20 If a person was not at the meeting to 21 report on the status, then typically the status 22 from a previous meeting might just be copied 23 forward through to the next document. 24 Question: Let me ask it a different 25 way. 13059 1 Would you get these documents in the 2 ordinary course of your work? 3 Answer: Would I get them? 4 Question: Yes. 5 Answer: Yes. 6 Question: And would you have to rely 7 upon the accuracy of the information contained 8 in these documents? 9 Answer: Not necessarily because I 10 could go and talk to John anyway or the person. 11 We were all in the same building. Most of the 12 people involved in the engineering side were in 13 the same building. 14 So this was more of a snapshot for 15 people outside the building. You could 16 actually go and talk to anybody in the building 17 and get a true and accurate statement. 18 Question: Would these be untrue or 19 inaccurate? 20 Answer: I think I just explained. It 21 depends on who was at the meeting, how the 22 actual minutes were put together. 23 Question: Let's talk about the 24 European Development Center as opposed to 25 Provo. Were they permitted or were they 13060 1 provided by Microsoft with beta for Windows 2 3.1? 3 Answer: No. 4 Question: Do you know why that is? 5 Answer: No. 6 Question: Did you know at that time 7 that Microsoft would not be providing the beta 8 to the European Development Center? 9 Answer: Yes. 10 Question: And did the European 11 Development Center ever obtain a copy of 12 Microsoft Windows, the beta version of 13 Microsoft Windows 3.1? 14 Answer: No, not to my knowledge. 15 Question: Do you know if Provo had a 16 copy of the beta for Microsoft Windows 3.1? 17 Answer: Yes. They had an official 18 beta from Microsoft. 19 Question: And did Provo share 20 information about the beta for Microsoft 21 Windows 3.1 with the European Development 22 Center? 23 Answer: Not to my knowledge. 24 Question: What happened to the 25 development of Panther in the period after the 13061 1 merger? 2 Was Panther on hold? Was Panther 3 being accelerated? What was happening to 4 Panther at that time? 5 Answer: Initially, the Panther 6 development was going ahead. Then it was put 7 on hold for a period of time. 8 Question: Do you recall why it was 9 put on hold? 10 Answer: I believe it was Novell 11 couldn't decide whether to go ahead and 12 actually ship Novell DOS 7. 13 Question: And how long was that hold 14 in place for? 15 Answer: I think it was two or three 16 months. 17 Question: Was that immediately after 18 the merger became final that this hold came 19 into effect? 20 Answer: No. 21 Question: So there was further 22 development after the merger and then the hold 23 occurred? 24 Answer: Yes. 25 Question: Do you recall how long 13062 1 after the merger it was before the hold? 2 Answer: No, I don't. No, I don't 3 recall. 4 Question: Were you ever involved in 5 any negotiations or discussions with IBM about 6 offering DR-DOS directly to IBM? 7 Answer: About offering which version 8 of DR-DOS? 9 Question: Any of the versions of 10 DR-DOS. 11 Answer: Yes. I was involved. 12 Question: And which versions were you 13 involved in potentially offering to IBM? 14 Answer: It was a long time ago. It 15 would have been DR-DOS 5 or 6. 16 Question: And did you personally meet 17 with any of the individuals from IBM? 18 Answer: Yes. 19 Question: And with whom did you meet? 20 Answer: I can't remember any names. 21 Question: Was this -- do you recall 22 -- what was the business plan from -- was this 23 while DRI was a part of Novell or was it before 24 and after? 25 Answer: The ones I was involved in 13063 1 was before, long before Novell was even 2 mentioned. I think it must have been between 3 DR-DOS 5 and DR-DOS 6, thinking about it. 4 Question: And did IBM evaluate the 5 DR-DOS product? 6 Answer: Yes, I believe so. 7 Question: And do you recall who at 8 IBM evaluated the DR-DOS product? 9 Answer: No. 10 Question: And did IBM license the 11 DR-DOS product? 12 Answer: Eventually, no. 13 Question: Going back to Exhibit 1015, 14 the trip report. 15 Looking at the third page of that 16 document, there is an item, test latest Windows 17 3.1 beta with DR-DOS 6.0 to confirm reports 18 that final beta displays the error number 19 4D53H. 20 Do you recall, was this part of the 21 trip? Was this something done during the trip 22 -- 23 Answer: No, it wasn't. 24 Question: -- with Mr. Constant? 25 Answer: No, it wasn't. 13064 1 Question: Is TS the initials for 2 somebody? 3 Answer: I would guess so. 4 Question: And do you know whose 5 initials they are? 6 Answer: Somebody in Provo. 7 Question: Do you know if Provo ran 8 DR-DOS 6 to confirm the reports of an error 9 message run with the Windows 3.1 beta? 10 Answer: Yes, they did. 11 Question: Well, did it just get done 12 by someone in Provo and not reported back to 13 the European Development Center? 14 Answer: It would have been done by 15 the person in Provo and the information sent 16 back to the European Development Center. 17 Question: What type of information 18 was sent back to the European Development 19 Center? 20 Answer: I don't know. I never saw 21 it. 22 Question: Was there a written 23 document describing it? 24 Answer: Not to my knowledge. 25 Question: How did you learn about the 13065 1 results of the testing of the Windows beta with 2 DR-DOS 6.0? 3 Answer: Through people talking at the 4 European Development Center. 5 Question: What did they talk about? 6 Answer: Just said it basically had an 7 error, was producing an error message. 8 Question: Do you recall there being 9 any effort to modify the code in Windows 6.0 to 10 alleviate the error message in that and in the 11 Windows 3.1 beta? 12 Answer: Yes. 13 Question: And what do you recall 14 about that, what discussions? 15 Answer: Sorry? About the 16 discussions? 17 Question: What do you recall about 18 these efforts? 19 Answer: There was an effort to try 20 and actually resolve what was going on. 21 Question: Was the effort successful? 22 Answer: I believe so. 23 Question: Can you tell me what 24 Exhibit 1016 is? 25 Answer: This looks like the marketing 13066 1 document for a requirement. 2 Question: And this is the document 3 that is created prior to an engineering 4 document is created? 5 Answer: Yes. 6 Question: Do you know if this was the 7 final version of this product requirement 8 document? 9 Answer: No, I don't know. 10 Question: Looking at -- we're going 11 to have to look at the Bates numbers, but it's 12 C0070406. 13 Do you recall there being a goal by 14 this point in time that Panther achieve an 15 engineering release by mid-August of 1992? 16 Answer: We had various deadline goals 17 in the development of Panther. I don't recall 18 them all. 19 Question: Was the product requirement 20 definition report, Exhibit 1016, was this 21 produced before or after the hold that you 22 testified to? 23 Answer: What year was the merger with 24 Novell again? Was it 1991? 25 Question: It was in 1991. 13067 1 Answer: August. 2 Question: Yes. August and I guess 3 the merger became final in October, I believe. 4 Answer: I think this was before the 5 hold. 6 Question: Novell DOS 7 was released 7 in January 1994? 8 Answer: You probably know better than 9 me actually. 10 Question: That is my approximate -- 11 Answer: It was in January. If it's 12 1994, yes. 13 Question: So that is approximately 14 slightly two more years after the date of this 15 document? 16 Answer: Yes. 17 Question: Looking at number 1.6: 18 Panther should support all printers supported 19 by the current release of IBM DOS 5.X. 20 Were there printers that were 21 supported by the IBM DOS 5 and MS-DOS 5 22 products not supported at that time by DR-DOS 23 6? 24 Answer: I don't recall any printer 25 problems. 13068 1 Question: Do you recall DR-DOS 6 2 being able to support all IBM PS/2 hardware 3 extensions? 4 Answer: Again, I don't recall what 5 that one is. 6 Question: What about supporting 7 Windows 3.X in all modes? Does this refresh 8 your recollection that prior versions of DR-DOS 9 did not support Windows 3.X in all modes? 10 Answer: I think these are basically 11 statements as opposed to things -- basically 12 saying it wasn't -- I don't think this is 13 actually saying that the prior version didn't 14 actually support them all. I think this is 15 more of a statement. This is a goal as opposed 16 to there was a problem in the first place. 17 Some of these things could be require 18 engineers efforts, some just make sure you 19 retest them. Test on engineering. 20 Question: For example, the kernel for 21 IBM DOS 5, that required engineering efforts, 22 correct? 23 Answer: Yes. 24 Question: And, for example, looking 25 at 1.9 -- well, 1.5 required some engineering 13069 1 effort, too, supporting all commands in 2 Panther? 3 Answer: Well, supporting all the 4 actual switches that had been added, yes. 5 Question: That required engineering 6 support, correct? 7 Answer: Yes. 8 Question: And looking at 1.9, the 9 Panther file system, supporting a mode to 10 enable user to take advantage of Windows 3.X 11 fast disk, that required engineering effort, 12 correct? 13 Answer: I don't recall that one. 14 Question: Did DOS 6 support 32-bit 15 applications? 16 Answer: DR-DOS 6? 17 Question: Yes. 18 Answer: Support 32-bit applications? 19 Question: Yes. 20 Answer: Any 32-bit applications would 21 be written for Windows, so, yes. 22 The fact that we supported Windows, we 23 supported 32-bit applications. DR-DOS 6 24 supported them. 25 Question: As part of your duties in 13070 1 connection with Novell DOS 7, were you now the 2 person to write the Panther PIP meeting 3 reports? 4 Answer: Yes. I actually took the 5 meeting, and I wrote a lot of the reports. 6 Sometimes I would have a secretary in to do 7 them. 8 Question: Do you know if there was an 9 announcement in April of 1992 by Mr. Edwards 10 that Novell would be coming out with a new DOS 11 product? 12 Answer: Quite possibly. 13 Question: Do you recall -- well, do 14 you recall a specific point in time when a 15 public announcement was made that there would 16 be a Novell DOS 7 product? 17 Answer: I remember there being one, 18 but I don't know when it was. 19 Question: Do you recall, was it close 20 in time to the ultimate release of the product? 21 Answer: No, I don't think the 22 original was based on what you just said. 23 Question: Were there PIP meetings 24 held during the whole period Novell was not 25 sure about whether there would be a DOS 7 13071 1 product offering? 2 Answer: No, I don't think there were. 3 Question: And so once it was 4 determined by Novell that there should be a 5 Novell DOS 7, the meetings commenced again? 6 Answer: Yes, I think so. 7 Question: Were there meetings -- were 8 there PIP meetings for Novell DOS or Panther at 9 a point in time before the freeze went into 10 effect or before they were -- it was being 11 considered and it wasn't certain whether or not 12 Novell DOS 7 would be released or developed? 13 Answer: I doubt it. They tend to 14 really get going more when all groups involved 15 were really getting involved. 16 Initially, in the early stage of 17 development it would just be the engineering 18 group. So there wouldn't necessarily have been 19 PIP meetings at that time. 20 Question: Let me show you a document, 21 which has been marked as Exhibit 1018. 22 Looking at page 3 of this document, 23 item number 6 indicates OEM RDK for DR-DOS and 24 NetWare Lite. 25 Do you know what that reference is? 13072 1 Answer: OEM redistribution kit for 2 DR-DOS and NetWare Lite. 3 Question: Was there to be a new set 4 of disks released that would have an 5 integration between DR-DOS and NetWare Lite? 6 Answer: There was a bundle product 7 available, which included NetWare Lite and 8 DR-DOS. I seem to remember a loose bundle with 9 basically the two packs put together. 10 Question: Looking down at item 8, it 11 indicates Panther full integration of NetWare 12 Lite and DR-DOS. 13 Was this a new direction for Panther? 14 Answer: New in what respect? 15 Question: Well, prior to this time, 16 had there been any conception of integrating 17 NetWare Lite and DR-DOS? 18 Answer: Possibly. I mean, there 19 would have probably been various discussions 20 about doing that. Whether this exact date was 21 the decision, I really don't know. 22 Question: Well, do you recall 23 Mr. Edwards visiting and you having a 24 discussion about the integration of NetWare 25 Lite and DR-DOS? 13073 1 Answer: Yes, I think that was one -- 2 in fact, actually I think at the same time John 3 Edwards was there, we had a discussion then or 4 maybe the day after with the product manager 5 for NetWare Lite as well. We discussed 6 possibilities of doing that. 7 Question: What would have been the 8 advantage to OEMs or the advantages to users of 9 having it on a single install? 10 Answer: Ease of installation. 11 Question: Let me show you a document 12 we have marked as Exhibit 1019. 13 Can you tell me what this is? 14 Answer: It is the minutes from a PIP 15 meeting on the Panther project held 19th of May 16 1992. 17 Question: Look at page 2 of this 18 document. 19 Looking at the first paragraph, last 20 line, you wrote, there are no definite dates 21 for Panther but engineering plans will continue 22 to be relevant. 23 Do you know what you were referring to 24 there? 25 Answer: We didn't have a definite 13074 1 ship date, but the plans we were working on at 2 that point we would continue. I mean, so the 3 engineers would continue to work on the time 4 schedules on the components they were working 5 on. 6 Question: Let me show you this 7 document, which is marked as Exhibit 1020. 8 What was Miss Mitchell's job in 9 Monterey? 10 Answer: She was one of the tech 11 support engineers in Monterey. 12 Question: Looking at page 2 of this 13 memo, do you recall having any discussions with 14 Miss Mitchell about a concern of a DR-DOS 6 15 customer, LA Gear, using WordPerfect Office 3.0 16 on its machines? 17 Answer: No. 18 Question: Was there any engineering 19 done in Panther to make certain that exepacked 20 applications did, in fact, work. 21 Answer: I believe the exepack issue 22 was resolved through a patch from the 23 maintenance group. 24 Question: And was that patched to 6.0 25 or was it patched to 7? 13075 1 Answer: I believe it was the 6.0. 2 You would have to check with somebody like 3 Michael Greenwood to confirm that. 4 Question: Going further down in issue 5 Number 2, it indicates, complaints from 6 customers about slow floppy access never stop. 7 Do you recall there being a concern 8 about slow floppy access? 9 Answer: I remember the issue being 10 raised. I think Liz Mitchell was the kind of 11 person who always tended to exaggerate. 12 Question: So she would write things 13 that weren't true or exaggerated in her 14 memoranda to -- 15 Answer: Tended to exaggerate to get 16 attention. 17 Question: So you don't think that the 18 customers were complaining about slow floppy 19 access? 20 Answer: There was -- there was an 21 issue, but the number of customers complaining 22 I don't think was that high. 23 Question: And what basis do you have 24 to believe that Miss Mitchell was exaggerating 25 here? 13076 1 Answer: It wasn't. It wasn't 2 actually happening. It was on certain systems, 3 it was actually slower. It was not like on 4 every single system out there. 5 There was some peculiar configuration 6 that was causing some floppy disk access to go 7 slower than it should. 8 Question: Do you recall that some 9 individuals reported that the conditions became 10 intolerable with the April '92 update and they 11 had to reinstall the December '91 update? 12 Answer: I don't recall that, no. 13 Question: Do you recall that being 14 reported to you? 15 Answer: No. A report like that would 16 typically have gone into Michael Greenwood's 17 group. 18 Question: Looking at the next page, 19 do you know what Miss Mitchell was discussing 20 when she identified with the addition of 21 multitasking, we are creating a product that 22 will require even more technical support than 23 currently is necessary for DR-DOS 6.0? 24 Answer: Multitasking is more complex. 25 She is making a feeling -- a statement that she 13077 1 feels is relevant. 2 Question: Do you know whether or not 3 the addition of multitasking did, in fact, 4 require more technical support? 5 Answer: No. The multitasker had been 6 around for many years on Concurrent DOS and 7 multi-user DOS. 8 Question: Wouldn't she have known 9 that? 10 Answer: Yes. But whether she 11 actually took that into consideration is 12 something you need to talk to Liz about. 13 Question: Let me show you a document, 14 which has been marked as Exhibit 1021. 15 Did you draft this document? 16 Answer: I was just trying to 17 remember. I did versions of this document. I 18 am not sure if John Constant did the first one 19 and then I took it over. I can't remember what 20 point it was handed over. 21 Question: Let me get you to look at 22 -- 23 Answer: 07. Sounds like it is 24 probably mine actually. 25 Question: -- what is in the document 13078 1 page 1 of 59. 2 Looking at the document history, are 3 you able to identify when the freeze occurred 4 by having to take a look at this? 5 Answer: The freeze? 6 Question: Where you indicated that 7 there was a freeze and there was no development 8 and an issue about whether or not there was 9 going to be a Novell DOS 7. 10 Answer: Remind me again. When was 11 the merger? Was it 1991? 12 Question: 1991. I think it was 13 effective -- Mr. Palumbo will correct me if I 14 am wrong -- in October 1991. That is the 15 effective date of the merger. 16 Answer: So I think the actual freeze 17 would have probably been in late '92. 18 Question: In late '92? 19 Answer: Yes. 20 Question: So -- 21 Answer: I seem to remember it being 22 around October, November time of one year. 23 And, basically, I think the development was 24 back on sometime in early the following year. 25 Question: Maybe I am misunderstanding 13079 1 you. 2 Are you now thinking that the freeze 3 was sometime in late 1992, even though the 4 merger was in 1991? 5 Answer: Yes. It could be. 6 Question: And so all of this work 7 was, then, being done prior to the freeze? 8 Answer: Quite a lot was done prior to 9 the freeze, yes. 10 Question: Including this, then, this 11 Panther development plan? 12 Answer: Yes. 13 Question: So this refreshes your 14 recollection and you now believe that the 15 freeze took place after this time? 16 Answer: Again, I need to confirm. I 17 have problems with all these years and what was 18 done in which year. I can tell you which month 19 more than the year. 20 Question: I'm trying to get -- is it 21 your best recollection now that the freeze was 22 after this document was written, not before? 23 Answer: Yes, I believe so. 24 Question: Looking at page 45 out of 25 59. 13080 1 In terms of testing and validation, 2 you have a statement about external 3 certification. 4 Do you recall writing that Panther 5 will be submitted to an independent external 6 test facility and then identifying a number of 7 reasons? 8 Answer: Uh-huh. 9 Question: Do you see that? 10 Answer: Yes. 11 Question: Was that your notion to 12 have external certification of the product? 13 Answer: Not necessarily mine, no. It 14 would have been a misstatement that was made in 15 this document through discussion with the 16 group. 17 Question: Did you think it was 18 important to have external certification? 19 Answer: We had done it previously. 20 So it was more probably we would do it again. 21 Question: Were there benefits to 22 external certification that you had achieved 23 beforehand? 24 Answer: In previous products? 25 Question: Yes. 13081 1 Answer: Yes, there were. 2 Question: Were you able to find 3 problems that other beta testers had not 4 identified? 5 Answer: Some. 6 Question: Was there also some value 7 to being able to advertise that an external 8 group had evaluated the software and found it 9 to be fully compatible with a number of 10 different applications? 11 Answer: Certainly in the early days 12 of the DR-DOS 5. It became less of an issue 13 later on in later releases. 14 Question: Why is that? 15 Answer: Because DR-DOS was accepted 16 as a compatible operating system. 17 Question: Accepted by whom? 18 Answer: By customers. 19 Question: And how do you know that? 20 Answer: Sorry? 21 Question: How do you know that? 22 Answer: Through the good press we 23 had. 24 Question: So the press is what 25 determines in your mind whether or not it was 13082 1 accepted by customers? 2 Answer: It is one acceptance and 3 through reports we had back through our 4 salespeople from customers. 5 Question: Was there any concern 6 expressed to you that Novell was not providing 7 adequate marketing support for Novell DOS 7? 8 Answer: Concern expressed to me? 9 Question: Were you aware generally of 10 that concern being expressed? 11 Answer: There was some concern within 12 Hungerford, yes. 13 Question: What was your -- were you 14 involved in the transfer of the business to -- 15 were you involved in the determination to no 16 longer develop Novell DOS 7 or any further DOS 17 developments? 18 Answer: No. 19 Question: Do you know who was? 20 Answer: No, apart from Frankenberg. 21 Question: Were you involved in the 22 determine -- in efforts to sell the business? 23 Answer: No. 24 Question: Were you involved in 25 efforts to turning over the business to 13083 1 Caldera? 2 Answer: No. 3 Question: Mr. Stephens, in response 4 to questions earlier today, you indicated that 5 there was a benefit to OEMs of bundling DR-DOS 6 and Personal NetWare in Novell DOS 7, correct? 7 Answer: Yes. 8 Question: What was that benefit? 9 Answer: Having a common install. 10 Question: Do you consider that to be 11 a significant benefit to OEMs? 12 Answer: It's a benefit. I wouldn't 13 say it was particularly a significant one. 14 Question: By bundling DR-DOS and 15 Personal NetWare in Novell DOS 7, did Novell 16 foreclose OEMs from bundling Personal NetWare 17 with MS-DOS instead of DR-DOS? 18 Answer: No. Personal NetWare was 19 still a stand-alone product running on top of 20 MS-DOS. 21 Question: Had Novell bundled DR-DOS 22 and Personal NetWare in a manner that 23 foreclosed OEMs from bundling Personal NetWare 24 with MS-DOS, would you consider that to be a 25 benefit to OEMs? 13084 1 Answer: My understanding is if we 2 didn't make Personal NetWare available on its 3 own. 4 Question: If you have -- if you would 5 have bundled DR-DOS and Personal NetWare in a 6 manner which would have foreclosed OEMs from 7 using Personal NetWare with MS-DOS, would your 8 bundling of DR-DOS and Personal NetWare have 9 benefited OEMs? 10 Answer: No. I mean, that would mean 11 that they wouldn't be able to ship Personal 12 NetWare without DR-DOS, which was not our aim. 13 So it would be detrimental to OEMs. 14 Question: So, in your view, bundling 15 DR-DOS and Personal NetWare, had you done it in 16 a way that would have foreclosed OEMs from 17 using Personal NetWare with MS-DOS, that would 18 have been a detriment to OEMs, correct? 19 Answer: Yes. 20 Question: At the time that DRI 21 released DR-DOS 5.0, what was the most recent 22 version of MS-DOS available in the marketplace? 23 Answer: That would probably have been 24 MS-DOS 4. 25 Question: Other than MS-DOS, did 13085 1 DR-DOS have other competitors, other desktop 2 operating system competitors? 3 Answer: No, not really. 4 Question: Can you compare the 5 features and functionality of DR-DOS 5.0 and 6 MS-DOS 4.0? 7 Answer: Can I compare them? 8 Question: Do you have an opinion 9 about which was the better product? 10 Answer: DR-DOS 5. 11 Question: And what is the basis for 12 that opinion? 13 Answer: No major OEMs were shipping 14 MS-DOS 4, no customers were really using MS-DOS 15 4. 16 Question: Did DR-DOS 5.0 have 17 features that were desirable to end users that 18 MS-DOS 4 did not have? 19 Answer: Yes. All the memory 20 management in particular. 21 Question: Now, you talked about Miss 22 Voeller and Mr. Letwin from Microsoft sometime 23 in mid to later April of 1990; is that correct? 24 Answer: Yes. 25 Question: At the time that Microsoft 13086 1 first contacted you, was Microsoft aware that 2 you were employed by DRI? 3 Answer: Yes. 4 Question: Did you discuss in your 5 conversations with Miss Voeller or Mr. Letwin 6 the fact that you were employed by DRI? 7 Answer: Miss or Mrs. Voeller 8 obviously asked what my position was, who I was 9 working with and we basically went through what 10 my job was at Digital Research. I sent them a 11 copy of my CV. 12 Question: At the time that you talked 13 with Miss Voeller and Mr. Letwin, was there 14 information available in the marketplace about 15 the features that would be included in DR-DOS 16 5.0? 17 In other words, was there information 18 generally available in the marketplace that DRI 19 was releasing a product called DR-DOS 5.0 and 20 generally the feature set that would be 21 included in that product? 22 Answer: The beta product was 23 definitely in the market at that time. There 24 might also have been public announcements made 25 before that time as well. So it was pretty 13087 1 generally known. It wasn't that far off us 2 actually shipping the product. So -- 3 Question: Do you know whether in 4 addition to yourself Microsoft also attempted 5 to recruit other DRI employees in this April 6 1990 time period? 7 Answer: I know they were also trying 8 to contact Steve Tucker because Susan Voeller, 9 when she called my home one evening, my wife 10 answered the phone. And she asked if she could 11 speak to Steve Tucker. She had the wrong name, 12 the wrong number. 13 Question: Other than yourself and 14 Mr. Tucker, do you know whether Microsoft 15 attempted to recruit DRI employees in this 16 period around April 1990? 17 Answer: Not that I'm aware of. Not 18 that anybody told me. 19 Question: If you'll take a look at 20 the document that's been marked Exhibit 1005 to 21 your deposition, which are your notes of your 22 conversation with Mr. Letwin. 23 Based on those notes and your 24 recollection of your conversation with 25 Mr. Letwin, did you form an opinion at the time 13088 1 you talked with Mr. Letwin as to whether 2 Microsoft had an MS-DOS 5.0 product that was 3 ready to be released in the next several 4 months? 5 Answer: My impression at the time 6 with Gordon Letwin was that they didn't even 7 have an engineering team. He basically was 8 saying they were trying to recruit a team to 9 work on a superior version of DOS. 10 Question: Based on the things that 11 Mr. Letwin told you, did you draw any 12 conclusions about how far ahead of Microsoft 13 DRI was in the development cycle? 14 Answer: Well, considerably ahead 15 because I don't think -- my impression was they 16 weren't working on anything. Actually one of 17 the things they were asking for me to work on 18 if I went over there was a file system. 19 Since that is a core component of the 20 DOS operating system, to not already have an 21 engineer assigned to that tells me there is 22 nobody working on it. 23 Question: I think you told us that 24 you talked with Steve Tucker about your 25 conversation with Mr. Letwin, correct? 13089 1 Answer: Yes. 2 Question: Did you and Mr. Tucker 3 discuss -- in discussing your conversation with 4 Mr. Letwin, did you and Mr. Tucker discuss 5 whether MS-DOS had a version 5 ready for 6 release or anything related to the 7 technological leap that DRI had achieved? 8 Answer: Yes, we did discuss that. 9 Question: What did you discuss? 10 Answer: Basically, I told Steve the 11 same feelings I just told you, that they were 12 basically recruiting core engineers to work on 13 core parts of the product. 14 So, therefore, obviously they didn't 15 exist. Therefore, we had a major leap on what 16 Microsoft were about to do. 17 Question: Did you discuss your 18 conversation with Mr. Letwin with any other 19 employee of DRI? 20 Answer: After having discussion with 21 Steve Tucker, we also had a conference call 22 with Dick Williams as well. 23 Question: What did you discuss in the 24 conference call with yourself and Mr. Tucker 25 and Mr. Williams? 13090 1 Answer: We speculated further about 2 the possibility of actually me going over there 3 for an interview. 4 Question: I am sorry. Could you 5 repeat that? 6 Answer: Sorry. We speculated further 7 about the possibility of me going over to 8 Seattle for the interview. 9 Question: Mr. Williams was president 10 of DRI at that point in time? 11 Answer: Yes. 12 Question: Did you discuss with 13 Mr. Williams your views as to whether Microsoft 14 had a version 5 MS-DOS product ready for 15 release? 16 Answer: Again, with Dick Williams, we 17 had the same discussion I had with Steve Tucker 18 and explained the way -- how my discussion had 19 gone with Gordon Letwin and the fact that they 20 didn't have any key engineers in place. 21 Therefore, the chances of them 22 actually working on an operating system was 23 pretty slim based on the fact they were looking 24 to recruit core engineers. 25 Question: Why don't you go ahead and 13091 1 tell us what you discussed with respect to you 2 potentially accepting Microsoft's invitation to 3 go to Redmond. 4 Answer: We basically discussed the 5 possibility of me going over to Redmond for the 6 interview. 7 Question: And what was the substance 8 of that discussion? 9 Answer: Obviously, one of the things 10 we talked about we talked about whether we 11 would actually find any more information by 12 doing that. We decided that that was not the 13 right thing to do. 14 Question: Sometime after your 15 discussion with Mr. Letwin, again the same 16 period, April, May, June when DRI announced and 17 released DR-DOS 5.0, sometime in that time 18 period, did you learn that Microsoft had also 19 announced MS-DOS 5.0? 20 Answer: There was announcements made 21 about forthcoming MS-DOS 5, public 22 announcements made about it. 23 Question: Did you learn anything 24 about the features that would be included in 25 MS-DOS 5.0, what Microsoft was telling the 13092 1 market about the features? 2 Answer: Yes. They were basically 3 telling the market they had the same features 4 as in DR-DOS 5. 5 Question: How did you feel about -- 6 based upon your conversation with Mr. Letwin -- 7 your understanding of what Microsoft's product 8 was in terms of coming out with a competing 9 product to your product, DR-DOS 5.0? 10 How did you feel when you heard these 11 announcements by Microsoft that they were 12 announcing an MS-DOS 5.0 product? 13 Answer: I basically believed there 14 was no way they actually had anything in 15 development that was even vaguely what they 16 were talking about. 17 Question: Did you think it was fair 18 for Microsoft to be announcing an MS-DOS 5.0 19 product at that point in time? 20 Answer: No, I didn't. I thought it 21 was terribly unfair. 22 MR. PALUMBO: Those are all my 23 questions. 24 (Whereupon, playing of the video 25 concluded.) 13093 1 MR. CASHMAN: Your Honor, that 2 concludes the testimony of Glenn Stephens. 3 The exhibits, the Plaintiffs' exhibits 4 discussed in Mr. Stephens' testimony have been 5 admitted, but I'd just like to identify them 6 for the Jury's consideration. 7 THE COURT: You may. 8 MR. CASHMAN: Plaintiffs' Exhibit 9 5081, Plaintiffs' Exhibit 5083, Plaintiffs' 10 Exhibit 5172, Plaintiffs' Exhibit 5186, 11 Plaintiffs' Exhibit 5221, Plaintiffs' Exhibit 12 5264, Plaintiffs' Exhibit 5322, Plaintiffs' 13 Exhibit 5331, Plaintiffs' Exhibit 5347, 14 Plaintiffs' Exhibit 5426, Plaintiffs' Exhibit 15 5442, Plaintiffs' Exhibit 5480, Plaintiffs' 16 Exhibit 5486, and Plaintiffs' Exhibit 5489. 17 Those are already in evidence, Your 18 Honor. 19 THE COURT: Mr. Green, there was one 20 defense exhibit. 21 Did you want to mention that? 22 MR. GREEN: Yes, Your Honor. 23 THE COURT: Has it been admitted? 24 MR. GREEN: It's not been admitted. 25 I'd like to offer it. 13094 1 It's Defendant's Exhibit 6763. 2 MR. CASHMAN: No objection, Your 3 Honor. 4 THE COURT: It's admitted. 5 Thank you, sir. 6 MR. CASHMAN: Shall we proceed, Your 7 Honor? 8 THE COURT: Yes. I think we'll take a 9 break at 1:15 if that's okay. 10 MR. CASHMAN: Okay. 11 Next, the Plaintiffs are calling by 12 prior testimony Adam Harris. 13 He testified in the Caldera versus 14 Microsoft case on December 14th, 1999. Adam 15 Harris, H-a-r-r-i-s. 16 THE COURT: Thank you. 17 (Whereupon, the following video was 18 played to the jury.) 19 Question: Good morning, Mr. Harris. 20 Would you state your full name for the 21 record, please? 22 Answer: Adam Ralph Harris. 23 Question: And where do you reside? 24 Answer: In 5 Sandown Grove, Tunbridge 25 Wells, Kent. 13095 1 Question: And where were you born, 2 sir? 3 Answer: In Scotland. 4 Question: And you understand that you 5 are here giving a deposition in the case of 6 Caldera versus Microsoft Corporation? 7 Answer: Yes. 8 Question: And you understand that 9 this deposition is being videotaped? 10 Answer: Yes. 11 Question: And did you also understand 12 that it is possible that this videotape could 13 be shown to a jury that eventually sits and 14 hears this case in the federal court in the 15 state of Utah? 16 Answer: Yes. 17 Question: Are you familiar with a 18 company known as Opus Technology? 19 Answer: Yes. 20 Question: What is Opus Technology? 21 Answer: Opus Technology was and is a 22 PC manufacturer of clone PCs within the UK. 23 Question: By UK, you mean United 24 Kingdom? 25 Answer: United Kingdom, and we also 13096 1 have some export business to places like France 2 and Germany. 3 Question: Is it fair to say that Opus 4 was an OEM, an original equipment manufacturer? 5 Answer: Absolutely. 6 Question: Did you ever work for Opus? 7 Answer: Yes. 8 Question: When did you work for Opus? 9 Answer: I worked within the group 10 from September 1987 to about September '94. 11 But I only worked for Opus from maybe '89 or 12 something like that. I can't remember the 13 exact time I transferred over. 14 Question: You initially worked for 15 some sister company? 16 Answer: Yes, ICS, which was a sister 17 company. 18 Question: But from '89 to 1994, you 19 worked for Opus itself? 20 Answer: Correct. 21 Question: And what was your position 22 during that time? 23 Answer: I basically started off as 24 purchasing director, then I became purchasing 25 and technical director, and then I became 13097 1 managing director. The first job was 2 purchasing. 3 Question: Was Opus a large, medium or 4 small OEM within the United Kingdom? 5 Answer: I would say it was probably 6 the number one clone manufacturer in the United 7 Kingdom, one or two. 8 Question: Did you have any 9 responsibilities with regard to licensing 10 software for Opus? 11 Answer: Yes. 12 Question: Did you ever negotiate a 13 software contract for MS-DOS with the Microsoft 14 Corporation? 15 Answer: Yes, I did. 16 Question: And when did you first 17 negotiate an MS-DOS contract with Microsoft? 18 Answer: Around about March 1990. 19 Question: Could we mark this as 20 Exhibit 9100, please? 21 Would you take a look at Exhibit 9100 22 and tell me if that is a software license 23 agreement that you negotiated and signed on 24 behalf of Opus with Microsoft for MS-DOS? 25 Answer: I am looking for the page 13098 1 with signatures on. 2 Yes, this is my contract that I 3 negotiated and ultimately signed. 4 Question: Just a moment ago you 5 referred to Opus as a clone manufacturer of 6 computers. 7 Answer: Yeah. 8 Question: What do you mean by a clone 9 manufacturer? 10 Answer: Basically at that time the 11 industry was set up by IBM. They made the 12 first personal computers, and the people that 13 copied them were called clone manufacturers. 14 So you made computers compatible to 15 IBM. You did not make your own computer and 16 just go into the world. So we were a clone 17 manufacturer which said our machines were 18 compatible with IBM. 19 Question: And some of the largest 20 computer manufacturers in the world, such as 21 Compaq and Dell, are, in fact, clone 22 manufacturers, correct? 23 Answer: Yes. Maybe overtaken by the 24 clone world and become the de facto standard, 25 but it is IBM clone manufacturer. 13099 1 Question: Looking, again, at the 2 Exhibit 9100, the license agreement that you 3 negotiated with Microsoft, when did you 4 negotiate this agreement? 5 Answer: From my memory, we started 6 talking around about March or April. 7 Question: Of what year? 8 Answer: Of 1990. 9 Question: And was there an existing 10 agreement that was expiring at that point? 11 Answer: Absolutely. Which was not 12 negotiated by me. It was before I started. 13 Question: Who did you negotiate with 14 from the Microsoft Corporation? 15 Answer: Basically, it was a salesman 16 called Sandy Duncan. 17 Question: And when you negotiated 18 this license with Mr. Duncan, did he offer you 19 any options as to what sort of license you 20 could get? 21 Answer: No. I mean, well -- you 22 could have different types of CPU, but there 23 was no option. This was it. You signed this 24 or you did not sign it. 25 Question: Is this a per processor 13100 1 license? 2 Answer: Absolutely. 3 Question: What do you mean by a per 4 processor license? 5 Answer: Basically there was, at the 6 time, maybe four or five processors made by the 7 company Intel, 8086, 286, 386. And they 8 actually charged a different price whether you 9 sold like a 486 system or you sold an 8088 10 system. 11 So you had to sign up for every system 12 that you sold that had a CPU in it and then 13 define what type of CPU it was. So we would 14 have said that 30 percent of our business would 15 be 8088, so we paid $23 or something. 16 Question: Did every one of your 17 computers have a CPU in it? 18 Answer: Every computer had a CPU, 19 yes. 20 Question: Does this license require 21 you to pay a fee to Microsoft for every 22 computer you ship? 23 Answer: Absolutely, 100 percent. 24 Question: Look, if you would, right 25 at the back, at Exhibit M1 and Exhibit M2. 13101 1 Do you see those? 2 Answer: I have M1. 3 Question: Does Exhibit M1 list the 4 two different types of CPUs? 5 Answer: 8088 and 8086 were basically 6 the same type of CPU with a different bus on 7 it. 286, 386 and 486 were the other ones I 8 noted as well. 9 Question: Did Opus manufacture any 10 machines at this time that did not use one of 11 the CPUs listed on Exhibit M1 or M2? 12 Answer: I would say when we signed 13 the contract, we only used Intel CPUs, but 14 possibly within the two years, this was a 15 two-year contract, we may have actually started 16 to use AMD CPUs, but we would still have paid 17 the royalty to Intel. 18 Question: To Intel? 19 Answer: Sorry, to Microsoft. 20 Question: And, in fact, Exhibit M1 21 and M2 refer to -- 22 Answer: It says nonIntel. 23 Question: The point is Exhibit M1 and 24 M2 refer to Intel microprocessors or nonIntel 25 microprocessors that execute the same 13102 1 instruction. 2 Answer: Yes. Within the four years 3 of all the contracts that I signed, we 4 definitely shipped machines with other people's 5 CPUs in it, but we still paid a Microsoft 6 license fee definitely. 7 Question: Did Mr. Duncan, the 8 Microsoft representative, offer you three 9 different kinds of licenses? 10 Did he offer you a per processor 11 license or a per system license or a per copy 12 license for MS-DOS? 13 Answer: Absolutely not, no. 14 Question: What did he offer you? 15 Answer: He offered me this, per CPU, 16 and it was taken. 17 Question: Do you have any notes that 18 you took contemporaneous with your meeting with 19 Mr. Duncan in early 1990? 20 Answer: Yes, I did. 21 Question: Would you mark that as 22 Exhibit 9101? 23 Would you look at Exhibit 9101, 24 please? 25 Is that a copy of the notes that you 13103 1 took after your meeting with Mr. Duncan? 2 Answer: Absolutely. 3 Question: And when did that meeting 4 occur? 5 Answer: I have not put a date on the 6 top of it, but I know it was around March or 7 April 1990. 8 Question: Okay. And looking at your 9 notes here, does this reflect that Mr. Duncan 10 was offering you only a per processor license? 11 Answer: Yes. He offered me per 12 processor with and without Windows. And for 13 different volumes, there was different pricing. 14 Question: What did Mr. Duncan tell 15 you that you could do to acquire Microsoft DOS 16 if you did not sign a per processor license? 17 Answer: If I did not sign any form of 18 OEM license, the only way that I could get it 19 is if I bought a retail box. 20 And you will notice down at the bottom 21 I actually have some pricing for OEM boxed 22 Windows to try to cover myself. 23 Question: Did Opus have an unpaid -- 24 or a prepaid royalty balance from its prior 25 license with Microsoft? 13104 1 Answer: Yeah, that was actually the 2 major problem. So the previous license, which 3 I said was not actually signed by me, was, 4 again, a two-year license for something like 5 $700- or $800,000 per year, which was based on 6 X amount of units being sold within that year. 7 Opus never achieved the quantities 8 they signed up for, but because you pay in 9 advance, we had already paid the full 1.0 or 10 1.7 million, and we then had $300,000 of 11 unshipped PCs, for example. 12 So we paid for maybe 10- or 11,000 PCs 13 that we hadn't shipped and we had paid a 14 royalty for. 15 We had $300,000 unused, and that is 16 actually on my notes there. 17 Question: If you did not sign a per 18 processor license in 1990 with Microsoft, would 19 you have been able to recoup any of that 20 $300,000? 21 Answer: Absolutely not, it was lost. 22 They made that very clear. 23 Question: What did Mr. Duncan tell 24 you about recouping that $300,000? 25 Answer: He made it quite clear that 13105 1 Microsoft had no obligation to give it back at 2 all. We had signed a contract. It was not 3 their problem we had not shipped that amount of 4 machines, so they had no obligation to give it 5 back. 6 However, he would investigate if we 7 signed another two-year contract, somehow maybe 8 amortizing some of that. 9 Question: And did that occur? 10 Answer: It did occur, yes. 11 Question: Did you want to sign a 12 two-year contract with Microsoft in 1990? 13 Answer: There were two things I 14 didn't want to do. I didn't want to sign a 15 two-year contract, and I didn't want to sign 16 any contract where I had to pay for every 17 machine I shipped. 18 Question: But you did sign a contract 19 that made you pay for every machine you 20 shipped, correct? 21 Answer: Correct. 22 Question: And you did sign a two-year 23 contract? 24 Answer: Correct. 25 Question: Neither of those were 13106 1 things that you wanted to do? 2 Answer: Absolutely not. 3 Question: Why did you do it then? 4 Answer: Well, two reasons. 5 One, there was no alternative. This 6 was the only contract that was put to us. 7 And the reason why we had to sign two 8 years is that, one, they would only offer us a 9 two-year contract, and, two, the only way they 10 would allow me to amortize my $300,000 back was 11 $200,000 in year one and $100,000 in year two. 12 So even if I hadn't managed somehow to 13 sign up for a second year, which was not an 14 alternative anyway, I would have still lost 15 $100,000, which was a lot of money to Opus at 16 the time and still is. 17 Question: Couldn't you just have not 18 signed the contract with Microsoft at all? 19 Answer: Well, of course, there's 20 always the option not to sign. But we would 21 have lost 300,000 and we definitely wanted with 22 a percentage of our machines to ship it with a 23 Microsoft operating system. We already had 24 existing customers that were using that 25 Microsoft operating system. 13107 1 Question: So you wanted to ship at 2 least some of your machines with Microsoft 3 operating system? 4 Answer: No doubt. 5 Question: But not necessarily all of 6 your machines with a Microsoft operating 7 system? 8 Answer: Definitely not all of them. 9 Question: In 1990, did you consider 10 licensing the Digital Research operating system 11 DR-DOS? 12 Answer: Yes, we did. 13 Question: And what steps did you take 14 towards licensing DR-DOS in 1990? 15 Answer: We obviously talked to the 16 people at DR-DOS. They visited Opus. They 17 gave us beta copies -- I'm not sure if they 18 were beta or final copies, but they gave us 19 copies of their operating system. We tested 20 them internally and we also gave some copies to 21 customers to test as well. 22 Question: Who was your primary 23 contact at Digital Research? 24 Answer: Basically, a gentleman called 25 Tony Speakman. 13108 1 Question: You said that Opus did some 2 testing of DR-DOS in 1990, correct? 3 Answer: Correct. 4 Question: And did Opus like the 5 product? 6 Answer: Opus -- or my technical 7 people internally were very impressed with the 8 product and the customers -- and some of the 9 customers were also impressed. 10 Question: Which customers saw it? 11 Answer: We gave it to a lot of 12 customers. I cannot remember them all, but we 13 dealt with most of the universities. And we 14 had very close bonds with them, so we knew we 15 could give them something and they would not 16 make outward press comments if it wasn't good. 17 So we could get it tested. And if it 18 was not good, they would have only told us and 19 they would not have told the other people, 20 which I think was kind of important. 21 So I know Liverpool University got it. 22 I think South Bank University got it. I cannot 23 remember the other ones to be honest. 24 Question: A number of Opus customers 25 tested the product? 13109 1 Answer: Definitely. 2 Question: Did any of them like it? 3 Answer: I do not know of anyone that 4 had any major criticism of it. There was no 5 problem. 6 When I say no problem, some of them 7 found some problems with it, but those type of 8 problems were either corrected or they were not 9 problems, they proved there were not. 10 Two things. One, we knew it offered 11 enhancement so that is why we took it to the 12 customers. So it had a number of features. 13 I honestly can't remember all of the 14 features that it did have, but it had a number 15 of features that we felt we could use to sell 16 our computers beyond our competitors. So that 17 was the reason that we were interested as well. 18 Question: As a result of the tests 19 and trials that Opus conducted with DR-DOS in 20 1990, did Opus wish to license DR-DOS? 21 Answer: We were very keen to offer it 22 as an alternative to our customers because of 23 the additional features and just as another 24 option to let the customer decide. 25 Question: Did you license -- did you, 13110 1 in fact, license DR-DOS in 1990? 2 Answer: I am not sure of the exact 3 year that we signed up. I know that we waited 4 until DR-DOS 6.0 came out. 5 So I think DR-DOS 5 probably we did 6 not sign, but DR-DOS 6, I think we signed. I 7 cannot remember the exact date, sometime in 8 1991 or end of 1990. I cannot remember the 9 time frame. 10 Question: Let us mark this next 11 document as Exhibit 9102. 12 Can you tell me what Exhibit 9102 is? 13 Answer: This is basically an OEM 14 software license for -- I am not sure if it was 15 DR-DOS 6 or 5. I'm not sure. 16 Question: Look at the last page. 17 Answer: Says DR-DOS 6, so we 18 obviously did not sign DR-DOS 5. 19 Question: So when did you sign this 20 document? 21 Answer: This is showing I signed it 22 the 4th of the 9th, '91. 23 Question: So that is what month, what 24 day? 25 Answer: So it's September, I think. 13111 1 4th of September, '91. Yeah, 10th is October. 2 Question: Let's go back to 1990. 3 You conducted initial tests of DR-DOS 4 in 1990, right? 5 Answer: Yeah. 6 Question: But you did not sign this 7 license until 1991 for DR-DOS? 8 Answer: Yes. 9 Question: Why did you not license 10 DR-DOS in 1990? 11 Answer: From my memory, we were 12 talking to Digital Research all the time so 13 there were some bugs and corrections they were 14 working on in the software. They actually -- 15 or between us we decided or recommended that it 16 would be best to go with DR-DOS 6 and basically 17 skip DR-DOS 5. 18 And also, when they first spoke to us, 19 they wanted to charge like more than 2 pounds a 20 copy. 21 So to start with, the negotiation was 22 more -- I do not want to use the word like a 23 Microsoft negotiation, because it's not -- this 24 is only -- for every machine that we shipped 25 with their software, we paid whatever the price 13112 1 they were asking at the time. And maybe that 2 was 18 or $20 or something. I cannot remember. 3 So it was definitely important to us 4 because we only had to pay every time we 5 shipped a machine. Because we had already 6 talked to Microsoft and signed with Microsoft 7 and were already paying 27 or $23. To pay that 8 again was a lot of money. 9 So I think the main reason -- there 10 was also some technical things, but the main 11 reason was surely the price was not as high as 12 Microsoft maybe, but still $20 or something 13 like $18. I can't remember. 14 Question: What role did -- the fact 15 -- strike that. 16 Did the fact you had signed a per 17 processor license with Microsoft in 1990 18 influence whether you licensed DR-DOS in 1990? 19 Answer: I don't think so, no. No. 20 Otherwise we would have stopped the 21 negotiation. 22 Question: What negotiation? 23 Answer: Well, we would have stopped 24 talking to Digital Research totally. We would 25 have signed Microsoft and that is the end of 13113 1 it, we are tucked up for two years. 2 I do not believe we would have kept on 3 talking to Digital Research and we did. And we 4 did a lot of beta testing in that time and 5 ultimately we signed with them. They dropped 6 their price. 7 Question: What was the price you 8 charged for Microsoft's product, MS-DOS? 9 Answer: Basically, for an 8088 10 processor, which was practically obsolete 11 during the end of this time, was $23. Every 12 other processor was $27. So about 70 percent 13 of our sales were already at the $27 price. 14 Question: Did the fact that you had 15 signed the per processor license with Microsoft 16 affect what you were willing to pay for DR-DOS? 17 Answer: Yes. 18 Question: In what way? 19 Answer: Well, if Microsoft's license 20 fee had been 2 or $3, then you can bundle that 21 in with everything because you are giving with 22 every machine 2 or $3 on a 1,000 pound machine 23 can be hidden, but when the price is $30, it is 24 an important part of the cost of the machine. 25 So to add another cost for something 13114 1 which you are giving the first bit away free 2 and the customer is not even using, then it is 3 quite an additional cost, so, yeah. 4 If we had not signed with Microsoft, 5 we probably would have paid more for this. 6 Question: You mentioned there were 7 some technical issues with DR-DOS? 8 Answer: Uh-huh. 9 Question: Did DR-DOS offer to assist 10 you and your clients with any of the technical 11 issues you had? 12 Answer: Hugely. Very, very much. 13 Question: Did you find their response 14 to your technical concern was prompt? 15 Answer: It was unbelievably prompt 16 and very efficient. 17 Question: How did Digital Research's 18 response to your technical issues compare to 19 Microsoft's response to technical issues you 20 and your clients had with MS-DOS? 21 Answer: Microsoft wasn't interested 22 in any issue that anyone had, whether it was a 23 customer or whether it was one of our 24 customers. They were not interested. 25 Question: Is it fair to say that 13115 1 Digital Research's response to your technical 2 concerns was superior to Microsoft's? 3 Answer: Vastly. 4 Question: When you and your customers 5 tested Digital Research's product in 1990, did 6 you consider that the problems that were 7 discovered to be major problems or minor 8 problems? 9 Answer: Well, they were major 10 problems as far as the customer was concerned 11 because it didn't do what they wanted it to do, 12 but they ultimately turned out to be minor from 13 the speed that DR-DOS fixed them. 14 So they were fixed in 24 hours, 15 sometimes less, half a day. 16 Question: Did you find while you were 17 at Opus that when customers first installed or 18 first used Opus products, regardless of whether 19 it had DR-DOS on it or MS-DOS, that they 20 frequently encountered problems or glitches? 21 Answer: I would not use the word 22 frequently, but if we shipped 3,000 machines a 23 month, you might have some months when nobody 24 noticed anything, and then the following month 25 you could ship 100 machines and then ten people 13116 1 found something. 2 So it absolutely depended on the 3 environment the people were using it in. It 4 wasn't in all of the same environment. With 5 both hardware and software things were 6 discovered with Microsoft, with DR-DOS, and 7 even hardware. 8 Question: So it was certainly not a 9 unique situation that customers encountered 10 technical issues with DR-DOS? 11 Answer: No, definitely not. 12 Question: They also encountered 13 technical issues with MS-DOS? 14 Answer: Correct. 15 (Whereupon playing of video 16 adjourned.) 17 MR. CASHMAN: This is a good place for 18 a break, Your Honor. 19 THE COURT: We will recess for ten 20 minutes at this time. 21 Remember the admonition previously 22 given. 23 See you then. 24 All rise. 25 (A recess was taken from 1:12 p.m. 13117 1 to 1:28 p.m.) 2 THE COURT: Everyone else may be 3 seated. 4 Please continue with Mr. Harris' 5 deposition. 6 MR. CASHMAN: Thank you, Your Honor. 7 (Whereupon, the following video was 8 played to the jury.) 9 Question: Now, in 1991, you did 10 license DR-DOS, correct? 11 Answer: Yeah, this license here, yes. 12 Question: And did you install DR-DOS 13 on any machines that Opus shipped? 14 Answer: Yes, we did. 15 Question: Do you have any sense of 16 what percentage of your machines that you 17 shipped after this license was signed went out 18 with DR-DOS on them? 19 Answer: I would estimate over 50 20 percent went out with Digital Research DOS. 21 Question: Do you think you lost any 22 customers because you started shipping machines 23 with DR-DOS? 24 Answer: I can categorically state 25 that Opus never lost a customer because of 13118 1 DR-DOS. 2 Question: Do you find that customers 3 were pleased with the product generally? 4 Answer: There was basically two bands 5 of customer. 6 There were the ones that had no 7 problem with it or no issue with it at all and 8 were more than happy to have it. 9 And there were some customers that had 10 no problem or issue with it, but they just 11 decided they wanted to stick with Microsoft 12 which was their option. 13 So we basically offered both, or tried 14 to, DR-DOS with every machine even though we 15 still paid the license for the other machines 16 as well, the Microsoft license. 17 Question: Why did you try to offer 18 the machines with DR-DOS on? 19 Answer: As I told you, we sold a lot 20 of machines to the education market and to 21 what, in those days, were emerging markets. 22 And the additional features, for 23 example, DR-DOS had password protection, very 24 strong password protection, which the education 25 places liked because they could protect 13119 1 machines if they were stolen and various other 2 things. 3 And one of the other features which it 4 had was I think called disk compression. So 5 basically in those days, computers went out 6 with pretty small hard disk drives, 40 megabyte 7 and 20 megabyte and so they very quickly filled 8 up. 9 The disk drive was very expensive and 10 if the customer could compress it so they could 11 make a 40 gigabyte disk drive, 80 or 120, this 12 was a nice feature. 13 Question: Were these password 14 protection and disk compression features that 15 appealed to your broad market or were these 16 features that appealed to the niche market of 17 high-end power users of computers? 18 Answer: I would say that every 19 customer was impressed with those features, 20 even the ones that ultimately did not buy 21 DR-DOS. They still admitted the features were 22 very, very good. 23 Question: My question is a little bit 24 different. 25 Did those features, password 13120 1 protection and disk compression, did you think 2 those were features that had broad appeal, or 3 did they only appeal to a small percentage of 4 computer users? 5 Answer: They had broad appeal to our 6 customers. 7 Question: The license price and the 8 DR-DOS contract you signed in 1991 is 2 pounds 9 per copy of DR-DOS, correct? 10 Answer: Yes. 11 Question: Do you have an idea of what 12 that price is in dollars? How many dollars was 13 2 pounds back in 1990? 14 Answer: $4 or something like that, $2 15 to the pound. 16 Question: You license DR-DOS for $4 17 and what was your Microsoft MS-DOS price back 18 then? 19 Answer: Our license was for 2 pounds. 20 You asked me what I thought the price was in 21 dollars. I guess it is about $4. 2 pounds we 22 licensed it for. I guess that is about $4. 23 We licensed Microsoft for $23 for what 24 we called the 8088 CPU, which was more or less 25 going obsolete, and $27 for the mainstay 13121 1 product. This was 2 pounds for any one. 2 Question: So the DR-DOS price was 3 roughly $4 and the MS price was roughly 23 or 4 27? 5 Answer: I would say 27, most of the 6 machines. 7 Question: Why was there such a 8 discrepancy between the two prices? 9 Answer: As I told you, I think I said 10 earlier, we could not afford to sign for two 11 expensive licenses. 12 So I honestly cannot remember what the 13 original price that they quoted to us, but my 14 feeling was about $18. 15 They wanted to offer us a product at 16 $18. And we basically just haggled it down and 17 were willing to go to the market with this 18 product, ship our machines with it, and, in the 19 end, Digital Research agreed to this very 20 special low price. 21 Question: Okay. Why was such a 22 special low price necessary to get into the 23 Opus account? 24 Answer: Because I couldn't afford to 25 pay more. 13122 1 Question: Why not? 2 Answer: Because I was already paying 3 $27 plus manuals, plus all the other bits of 4 the hardware. So we had competitors and some 5 of them did not even have a Microsoft license 6 at all. So they did not have to pay any 7 Microsoft license. 8 We had other competitors that had 9 better deals than us because maybe they bought 10 a lot more units. Already I was paying what I 11 thought was a high price in a very aggressive 12 market, and I could not afford to put much more 13 in. 14 But, as I said, 2 pounds or $4 is 15 hidden, it is not so serious, and there were no 16 manuals needed either, it was online. So it 17 really was just 2 pounds. 18 Question: Okay. You were already 19 paying the $27 on every machine whether you put 20 Microsoft DOS on it or not? 21 Answer: Absolutely correct. 22 Question: That is the effect of the 23 per processor license? 24 Answer: Absolutely correct. 25 Question: If you had not had to pay 13123 1 that fee on every computer shipped, that fee to 2 Microsoft, would you have been willing to 3 negotiate a higher price for DR-DOS? 4 Answer: I would have negotiated the 5 best price I could. But in my own mind -- and 6 it's kind of only hypothetical -- I believe I 7 would have paid a lot more. I would have tried 8 to get the best price I could. 9 Question: Was it your understanding 10 that Digital Research's willingness to license 11 DR-DOS to you at this price was being done 12 because they could not license it to you at a 13 market rate? 14 Answer: I can answer the question 15 anyway. 16 This was the only way that Digital 17 could get us to take their product to market. 18 I could not afford to pay any more. I mean, as 19 I say, I probably asked for a pound. I 20 probably tried to get it even lower than that. 21 Question: And the reason you couldn't 22 pay more was because you had to pay Microsoft a 23 fee on every computer you shipped regardless of 24 whether MS-DOS was on that computer or not, 25 right? 13124 1 Answer: We had to ship, even if we 2 sold a computer with no hard disk drive in it. 3 So we couldn't even install Microsoft, we still 4 had to pay the license. 5 If it had a CPU in it, we paid the 6 license, even if the customer didn't even want 7 Microsoft. Even if he refused it in his 8 building, we had to still pay the license for 9 which we charged him. 10 Question: Did you, in fact, ship 11 computers that did not have hard disks? 12 Answer: A great majority, yes. 13 Question: And you couldn't even 14 possibly load MS-DOS on those? 15 Answer: Impossible. Impossible. 16 Question: You still had to pay 17 Microsoft a fee? 18 Answer: Yes. 19 Question: The full $27? 20 Answer: Right, the full $27. 21 We even had machines -- just to add 22 one other thing -- we even had machines that we 23 had to install other people's software, like 24 Unix and Novell. The machine actually went out 25 with other people's software, but we still had 13125 1 to pay $27 to Microsoft. 2 Just as a point -- I know you have not 3 asked a question. I am looking at this last 4 page here -- 5 Question: Of what? 6 Answer: Of the exhibit, of DR-DOS 7 contract, 9102. 8 I just noticed there are two 9 handwritten or initialed bits added there which 10 just shows how aggressive the market was. 11 Even evaluation systems we could not 12 afford to pay the 2 pounds for. That is how 13 aggressive and important it was to have the 14 best price if we were already wasting $27. 15 Also, you will notice that this one 16 here, we made it very clear it is only if we 17 ship the machine with DR-DOS 6 do we pay the 18 license. It was not every system that we 19 shipped. If the customer didn't want it, we 20 didn't pay it. 21 Question: Digital Research did not 22 ask you to pay a fee for machines that shipped 23 without DR-DOS on it, correct? 24 Answer: Absolutely not. It was not 25 on what I would call a CPU basis. 13126 1 Question: But the Microsoft contract 2 required you to pay regardless of whether 3 MS-DOS was shipped on the machine? 4 Answer: Correct. 5 Question: Once you signed the DR-DOS 6 license in I think it's September of 1991 -- 7 Answer: Yeah. 8 Question: -- how long did it take you 9 to get to the point where you were selling more 10 than 50 percent of your computers with DR-DOS 11 on them? 12 Answer: Basically, we advertised and 13 offered machines with DR-DOS. So I would have 14 thought -- and, again, I cannot substantiate 15 it, but my gut feel is very quickly. But 16 within three or four months we would have been 17 shipping that quantity. 18 Basically there was only one or two 19 customers that absolutely did not want it. All 20 our adverts, everything showed Digital DOS, 21 that is what we were offering. 22 Question: When you signed the Digital 23 Research agreement in September of 1991, did 24 you have any discussions with Mr. Speakman 25 about what kind of license you would seek from 13127 1 MS-DOS when your Microsoft contract came up for 2 rebid in March of 1992? 3 Answer: Yes, we did. 4 Question: What were those 5 discussions? 6 Answer: I told him that we would 7 really fight very hard to try to get some sort 8 of license which was only basically per system 9 sold with Microsoft's operating system on it. 10 So if we could get Microsoft to agree 11 that only the systems that had their software 12 on it, then I would be much more willing to 13 sign in the future at a higher price. 14 Question: And did there come a time 15 in 1992 when you did renegotiate your MS-DOS 16 license with Microsoft? 17 Answer: Yes. 18 Question: And did you negotiate -- or 19 who did you negotiate in 1992? 20 Answer: Again, it was Sandy Duncan. 21 Question: Okay. And did Mr. Duncan 22 agree to let you ship your computers and pay 23 Microsoft only a fee for the products that -- 24 or machines that had MS-DOS on them? 25 Answer: Absolutely not. 13128 1 Question: Did he offer you any sort 2 of license choices other than per processor 3 license? 4 Answer: No, absolutely denied 5 anything like that. 6 Question: A per processor license was 7 not what Opus was looking for and desired in 8 1992, correct? 9 Answer: Nor in 1990. 10 Question: What did Opus want? What 11 kind of contract did it want with Microsoft? 12 Answer: Opus, or I, believed that we 13 should pay for what you use or what the 14 customer wants. 15 So we were willing without any problem 16 to pay the price for the machines that we 17 shipped with a Microsoft license to the 18 customers that definitely wanted Microsoft 19 software on it. 20 And the other ones, we didn't see why 21 we should pay it if the customer did not want 22 it or was not getting it. 23 So we wanted the option to offer the 24 customer and we would have paid either party, 25 whichever the customer decided. 13129 1 Question: Did Microsoft let you do 2 that? 3 Answer: No. Impossible. 4 Question: How did they prevent you 5 from doing that? 6 Answer: Basically, the contract was a 7 fixed contract and they basically intimidated 8 us because -- I don't want to use the word 9 threatened, but it was close to a threat. 10 Our contract was already running out, 11 the previous one that we already signed in 12 1990. And the tactic that was used was that, 13 you know, you can't ship any machines now with 14 Microsoft even while you are in discussion with 15 us at the moment unless you are ready to sign 16 up for these contracts. So we -- I was very 17 intimidated. We had no option. 18 Question: No option other than the 19 per processor license? 20 Answer: No option but to sign the 21 agreements that we signed. 22 Question: Let's look at -- let's mark 23 this next one as 9103. 24 Can you tell me what 9103 is? 25 Answer: It's an amendment to 13130 1 Microsoft's contract. 2 Question: Okay. If you look back at 3 Exhibit -- the third page of this document -- 4 fourth page. 5 Answer: Fourth page. 6 Question: This amendment added MS-DOS 7 5.0, correct? 8 Answer: Yes. It was the next 9 generation which Microsoft brought out. 10 Question: Okay. This one was signed 11 in October of '91? 12 Answer: Yes. It was just part of the 13 original one that I signed. 14 Question: All right. Let us look at 15 Amendment Number 2, which we will mark as 16 Exhibit 9104. 17 What's 9104? 18 Answer: It's another amendment, 19 called Amendment Number 2, April '92. So I 20 would guess -- this is the new license. 21 So this is the -- the first license 22 was in 1990 for two years. This must be -- 23 this is the new license. 24 Question: And did this extend the 25 term of the original per processor license? 13131 1 Answer: This was a new license 2 totally. So basically it was the same 3 principle, but this time there was only a 4 couple types of CPU. So I think it just says 5 SX CPU and above. 6 I don't want to use the word 7 extension. It is a new contract, but it is 8 basically the same style as the previous one. 9 It is minimum commitment by CPU. 10 Question: Well, this refers to the 11 March 1990 contract, right? 12 Look at the first page. 13 Answer: Yeah. First page. Yeah. 14 Question: The cover page. Effective 15 date March 1990. 16 Answer: So what is the question? 17 Question: This is an Amendment Number 18 2 to the March 1990 contract. Do you agree? 19 Answer: Okay. Yeah, I agree. 20 Question: When you look back at the 21 last page of it where it -- or if you look on 22 page 6 -- 23 Answer: Yes. 24 Question: -- where it's referencing 25 Exhibit M2 -- 13132 1 Answer: Yes. 2 Question: That is referring to 3 Exhibit M2 in the original contract, Exhibit 4 9101, right? 5 Answer: Exhibit 9101, is that -- 6 Question: Exhibit 9101, the very 7 first one. The big one there. 8 Answer: Yes. Agreed. Agreed. 9 Question: Okay. And that is the 10 exhibit that identifies the CPUs covered? 11 Answer: Yes. Understood and agreed. 12 Question: Okay. Now, this 9104 adds 13 a license per Windows, correct? 14 Answer: Yes. 15 Question: And on what basis were you 16 licensing Windows? Was that a per processor 17 basis also? 18 Answer: Yeah, it had to be exactly 19 the same as basically the processor. 20 So if you signed up for 25,000 21 processors, then you signed up for 25,000 22 copies of Windows. Equal amount, equal 23 business. 24 Question: When you were negotiating 25 this contract, Amendment Number 2, with 13133 1 Mr. Duncan, did you desire to license Windows 2 on a per processor basis? 3 Answer: No. We wanted to be able to 4 -- again, similar to the CP -- to the operating 5 system. Some customers wanted the operating 6 system, some didn't. Not all customers wanted 7 Windows at that time. 8 So we would have preferred to, again, 9 to try to pay for the Windows as a basis of the 10 ones that we shipped, but that was not allowed. 11 Question: How was that not allowed? 12 Answer: It wasn't an offer. You 13 couldn't get it. So even though we asked and 14 we argued and we requested it, it wasn't 15 available. It wasn't offered to us. 16 Question: Was Windows only offered to 17 you on a per processor basis? 18 Answer: Unless we went and bought it 19 from a retail box or something. And if you -- 20 I have made a note they had a white box version 21 at 26 pounds a copy, which is like $50. 22 Question: Let's mark this exhibit as 23 9105. 24 What is Exhibit 9105? 25 Answer: This is basically a -- I keep 13134 1 notes of all meetings where pricing and things 2 are discussed, and the first exhibit which you 3 used, which was 9101, showed the first 4 discussions, which I said to you were around 5 about March or April 1990. 6 I had not put the date on it, but I 7 could tell from the previous page roughly when 8 it was. This I have actually put the date. 9 This was the contract -- the original 10 contract had run out. This was now coming into 11 the new contract, March 1992. 12 And basically I think the only 13 difference is the processor. It is still the 14 same price, $27, that was the main one. 15 And, now, as the market was moving 16 more towards Windows, we had to consider having 17 Windows. And the only way we could get it was 18 if we signed a joint license or combined 19 license is a better word. 20 Unless we bought what I called this 21 white box Windows version, which was just going 22 into a retail shop and pay a retail price for 23 it. 24 Question: This was pounds? 25 Answer: That was pounds. 13135 1 Question: And so if you bought 2 Windows under a per processor license which you 3 ended up doing, the price was going to be $23? 4 Answer: Yes. 5 Question: And if you ended up -- if 6 you did not buy Windows on a per processor 7 basis and went out and bought what you called 8 white box Windows, it was going to be 26 9 pounds? 10 Answer: Correct. 11 Question: And that is roughly $50 you 12 say? 13 Answer: Yes. 14 Question: And that was more than 15 twice the Windows price under the per processor 16 Windows agreement that you signed? 17 Answer: Absolutely true. 18 Question: Did you consider buying 19 Windows at $50 a copy a viable option? 20 Answer: I didn't consider it a viable 21 option, but I actually considered it. 22 Question: Why did you consider it? 23 Answer: Because to add another 20 -- 24 it was painful enough to give $27 free for each 25 machine for people that did not want it, now I 13136 1 had to give $27 plus $23 so I was up to $50 on 2 some machines that other people, our customers, 3 did not want. It was actually becoming worse. 4 Question: Did you have customers in 5 1992 who did not want Windows on their 6 machines? 7 Answer: Yes. 8 Question: But nonetheless you had to 9 pay a royalty to Microsoft for Windows once 10 this agreement was signed? 11 Answer: Absolutely. 12 Question: In April '92, did you want 13 to license substantially more MS-DOS than MS 14 Windows? 15 Answer: Yes. At that time the 16 operating system was becoming essential in 17 nearly all machines that had a hard disk drive, 18 whereas Windows was not a -- was kind of just 19 starting to be the thing that people were 20 asking for. 21 Question: So is it fair to say you 22 wanted to license some greater number of MS-DOS 23 than, say, Windows? 24 Answer: Definitely. 25 Question: Okay. Mr. Duncan of 13137 1 Microsoft would not let you do that? 2 Answer: Microsoft would not let me do 3 that, no. 4 Question: They required you to buy 5 the same number of Windows copies as DOS 6 copies? 7 Answer: Yes. 8 Question: First, let me show you what 9 was previously marked as Exhibit 258. 10 This is a document that is titled 11 Microsoft limited systems report October 1990, 12 Sandy Duncan, OEM sales manager. 13 And that's the Sandy Duncan that was 14 your contact at Microsoft? 15 Answer: I guess so. 16 Question: Sandy Duncan was the 17 Microsoft salesman you dealt with, correct? 18 Answer: Yes. 19 Question: Okay. I want to direct 20 your attention down roughly three-quarters of 21 the way down the page. 22 There is a statement there that says, 23 Opus agreement has finally been signed by 24 Redmond. Another DRI prospect bites the dust 25 with a per processor DOS agreement. Opus looks 13138 1 good for a Windows license in March/April next 2 year. 3 Do you recall that your actual license 4 agreement, 9100, signed in 1990, was signed by 5 Microsoft in about October of 1990? 6 Answer: I can't remember when exactly 7 the date it was signed. 8 Question: Take a look at 9100. 9 Answer: Yeah, it was signed September 10 1990. 11 Question: Okay. Microsoft signed it 12 when? 13 Answer: They signed it -- so it is 14 the opposite way around. I'm going to guess 15 it's October something -- maybe the 15th or 16 something, 1990. 17 Question: Mr. Duncan's report, 18 Exhibit 258 here, is dated October 1990. 19 Answer: Yes, that makes sense. 20 Question: Mr. Duncan is exactly 21 correct, is he not, that DRI's prospects of 22 licensing DR-DOS to Opus bit the dust as soon 23 as that per processor license was signed? 24 Answer: It certainly took them from 25 having a 50/50 chance to having maybe only a 4 13139 1 or 5 percent chance. 2 So we didn't stop talking with Digital 3 Research, but, obviously, we had to tell them 4 we had signed a contract. And there was 5 absolutely no way we would ever pay anything 6 for their product. So if they wanted us to 7 give it free with the machines, yeah, we would 8 give it free. 9 You know, ultimately we did go on and 10 sign something with them, so Sandy's comment 11 here is actually wrong. We did not actually 12 bite the dust. We did move forward. It might 13 have taken some months, but we did do it. 14 Question: The 2 pounds license that 15 was signed for DR-DOS in 1991, that really was 16 the equivalent of giving it away free, was it 17 not? 18 Answer: I asked for it free by that 19 point. Obviously, they felt it was worth 20 something, which it was. And I decided, for 21 right or wrong, that Opus could swallow 2 22 pounds, and we swallowed 2 pounds and we signed 23 an agreement. 24 It more or less destroyed their 25 chances of having a fair crack at the whip. 13140 1 Question: The per processor license 2 destroyed their chance of having a fair chance, 3 correct? 4 Answer: Yes. 5 Question: Take a look at what was 6 previously marked in this case as Exhibit 1954. 7 This is a memo from Mr. Speakman to 8 Mr. Gunn, April of 1992. That's about when you 9 signed the second amendment to the Microsoft 10 contract, right? 11 Answer: So we actually signed a -- 12 yes, correct. 13 Question: Again, Mr. Speakman was the 14 Digital Research salesman you dealt with, 15 correct? 16 Answer: Yes, equivalent to Sandy 17 Duncan. 18 Question: Microsoft told you that you 19 had to renew your MS-DOS license on a per 20 processor basis, right? 21 Answer: Yes. And they also told me 22 that was the same as every other customer. 23 Question: Sandy Duncan told you that, 24 right? 25 Answer: Yes. 13141 1 Question: Sandy Duncan told you that 2 every other OEM in the world shipped MS-DOS on 3 a per processor basis? 4 Answer: Correct. 5 Question: Was it, in fact, the case 6 that in or about April of 1992 Opus was 7 shipping 70 percent of their PCs with DR-DOS? 8 Answer: Yeah. There was -- please 9 remember, there is one type of PC that didn't 10 have any operating software on it at all. 11 Well, we paid the Microsoft license, 12 but it didn't have any. So 70 percent is based 13 on the amount of machines that had a CPU and a 14 hard disk drive and some sort of license on it. 15 So they had 70 percent of that 16 business. There was some other business that 17 had nothing on it at all, even though we paid 18 Microsoft a license. 19 Question: Okay. And Microsoft had, 20 in fact, told you that the only agreement you 21 could sign was a per processor license? 22 Answer: Yes. 23 Question: Did Microsoft ever send you 24 a one-line fax stating that all of UK 25 agreements were per processor? 13142 1 Did Microsoft ever send you a one-line 2 fax in or about April or May of 1992? 3 Answer: From my recollection, I am 99 4 percent sure I remember, and it wasn't one 5 line. It was about two lines or two and a half 6 lines. 7 The only thing that I cannot guarantee 8 to remember is I don't think it just said the 9 UK. I think it said all agreements. I would 10 not state my life that it only said UK, but I 11 would state my reputation that a two or 12 three-line fax arrived which we insisted on. 13 Question: What, to the best of your 14 recollection, did that fax from Microsoft say? 15 Answer: It was very clever. It was 16 -- it really said -- again, it's -- I just 17 remember that it was cleverly worded in such a 18 way that it didn't actually state 100 percent 19 categorically. 20 It said from all the investigation or 21 from everything he knew or from everything -- 22 all the information he had, there was no one 23 who could get this. No one could currently get 24 this. Something like that. 25 So I just remember that it didn't 13143 1 quite -- you couldn't have gone to a lawyer and 2 said they have said this. It was woolly worded 3 in my opinion. 4 Question: Who sent the fax? 5 Answer: Well, I have to kind of 6 speculate and guess that it was from Sandy 7 Duncan. That's who I was talking to and that's 8 who I demanded it from. 9 But I have looked at my files and I 10 don't have it. It will be in Opus's files 11 somewhere, I guess, but I don't have it 12 anymore. 13 Question: So did you call Mr. Duncan 14 and ask him to send you a fax? 15 Answer: We insisted, yes. 16 Question: And what did you ask him to 17 send? 18 Answer: To verify -- to confirm in 19 writing what he told me that basically every 20 single customer in the world had the same type 21 of agreement as me, albeit with different 22 pricing or something -- for volume. 23 They all had to -- for every CPU they 24 shipped, they had to pay a DOS license and a 25 Windows license if they paid for Windows as 13144 1 well. 2 Question: To your mind, did Opus 3 consider DR-DOS to be a superior product to 4 MS-DOS? 5 Answer: Did we consider it or did the 6 customer? I wasn't -- 7 Question: I will ask you both. Did 8 Opus consider DR-DOS a superior product to 9 MS-DOS? 10 Answer: Opus considered it to be 11 equal with additional features on it. So we -- 12 they were both basically an operating system, 13 which DR-DOS added some additional features to. 14 We thought it was better because of those 15 features. 16 Obviously, if some customers did not 17 want the features, then it was equal to those 18 customers. It was not detrimental, put it like 19 that. 20 Question: Did Microsoft's insistence 21 on per processor licenses for MS-DOS limit the 22 choice of operating systems Opus could give its 23 customers? 24 Answer: Well, when we paid 2 pounds 25 for Digital Research, no, it didn't limit us 13145 1 because we decided we could swallow the 2 2 pounds. 3 If the price had been $20 or $18, 4 then, yeah, it did limit it. It did not limit 5 it. It stopped it. 6 Question: Did you recognize that 7 Digital Research couldn't continue to license 8 DR-DOS to you for 2 pounds on an indefinite 9 basis? 10 Answer: That had to be their 11 decision. 12 Question: You did not expect them to 13 continue giving it away to you for that price 14 indefinitely, though, did you? 15 Answer: I have to say I did not think 16 about it. That was their decision. They 17 negotiated for a one-year contract and then we 18 would negotiate after that. I did not 19 speculate whether they would do it or not. I 20 had no idea. 21 Question: Mr. Harris, my name is 22 Richard Klapper, and I represent Microsoft. 23 Before your deposition here today, 24 have you met with Mr. Southwick and 25 Mr. Tibbitts? 13146 1 Answer: I have, yes. 2 Question: When was that? 3 Answer: I met with Ryan maybe three 4 months ago, after he just made contact with me. 5 So he made contact with me and then he came 6 over to London to see me. 7 And then the second and only other 8 time was last night. 9 Question: You produced, I gather, to 10 the lawyers for Caldera at least the two pages 11 of notes that have been marked as exhibits here 12 today? 13 Answer: Yes. I did not produce them 14 for them. They were produced -- they were made 15 at those times. So these were written in 1990 16 and 1992. I did not write them in the last few 17 weeks. 18 Question: I understand. I will be 19 clear. 20 You provided those notes to the 21 lawyers for Caldera recently? 22 Answer: I showed them to them in the 23 first meeting about three months ago, but I did 24 not give them to them. 25 Question: Mr. Harris, in 1990 you 13147 1 indicated that around March of that year you 2 started discussions with Microsoft about a new 3 contract. 4 Answer: Yes. 5 Question: Well, it's fair to say, 6 isn't it, Mr. Harris, that as of March 1990, 7 Opus's license to ship MS-DOS had expired? 8 Answer: That is absolutely correct. 9 Question: And you were still shipping 10 copies of MS-DOS with your computers? 11 Answer: Yes. And Microsoft made it 12 very clear we were breaking the law. 13 Question: And you recognized that you 14 were breaking the law unless you got a new 15 license agreement from Microsoft; is that 16 clear? 17 Answer: Yes. That is why we were 18 discussing it with them. 19 Question: Now, it's true, though, 20 isn't it, Mr. Harris, that you put yourself in 21 the position of having to negotiate an 22 agreement with Microsoft in a very limited 23 period of time because you had not gone to see 24 when the license expired; is that correct? 25 Answer: That is fair comment. 13148 1 Question: And you were unhappy with 2 Microsoft in part because you didn't have any 3 choice because you weren't licensed to sell 4 MS-DOS at the time you were negotiating, 5 correct? 6 Answer: By that time, yes, correct. 7 Question: While this was going on in 8 1990, you were talking with DRI about the 9 DR-DOS operating system, correct? 10 Answer: That's true, yes. 11 Question: At the time you had these 12 discussions with Digital Research, did you feel 13 that Opus was in a position to license the 14 DR-DOS operating system? 15 Answer: Did I feel? Yes. 16 Question: There wasn't anything 17 preventing Opus from licensing DR-DOS, correct? 18 Answer: No. 19 Question: You also said that you had 20 customers who you had take a look at DR-DOS. 21 Answer: True. 22 Question: How many? 23 Answer: Again, I can only 24 guesstimate, but seven, eight -- five, six, 25 seven, eight. 13149 1 Question: How did you choose these 2 particular customers? 3 Answer: The ones we had the strongest 4 partnership with. The ones we believed could 5 do a full evaluation under different 6 environments. 7 Question: Now, one of those customers 8 was British Aerospace. 9 Do you recall that? 10 Answer: Yes. 11 Question: Did you consider them to be 12 a technically competent organization? 13 Answer: Obviously, Vipul Amin and 14 Paul Kemp did because that is why they gave 15 them the machines. 16 Question: Let's mark as Exhibit 9108 17 a memo from British Aerospace. 18 Mr. Harris, take a look at Exhibit 19 9108, and I'd ask you to let us know whether 20 you've seen that before. 21 Answer: I seem to recollect seeing 22 it. 23 Question: Do you recall that British 24 Aerospace, in fact, got back to Opus with their 25 assessment? 13150 1 Answer: Yes. Everyone came back with 2 an assessment. Every single company assessed 3 it for us. 4 So that's why I'm saying -- I may not 5 have read all seven pages, but I definitely 6 would have read the first page. 7 Question: Do you recall that British 8 Aerospace found that the claims of DRI that 9 DR-DOS had a greater memory efficiency were ill 10 founded? 11 Answer: I don't remember -- I 12 remember every customer that evaluated it found 13 both good things and bad things with it. There 14 was no doubt about that. 15 These were the first versions that 16 were given out, and every company made 17 comments. What those comments were of each 18 individual one, no, I can't remember, but all 19 of the issues were ultimately resolved between 20 five or six and various times like that. 21 Question: Do you recall that British 22 Aerospace also found that the claims by the 23 makers of DR-DOS that disk access is speeded up 24 were not well founded? 25 Answer: As I told you, it is the same 13151 1 answer as I gave you to the memory management 2 one. 3 I cannot remember their individual 4 comments. All I know is that DR-DOS then 5 worked to fix those things. 6 We also give Microsoft product for 7 evaluation as well, and Microsoft also gets 8 lists of things that it does not do. This is 9 very normal. 10 Question: Do you recall, however, 11 that British Aerospace found that it could not 12 recommend to any users the use of DR-DOS as 13 opposed to MS-DOS or PC DOS? 14 Answer: Yes. The current version of 15 DR-DOS, the one that we supplied to them, I 16 absolutely agree, neither British Aerospace nor 17 a number of other customers would have 18 immediately used it. That is true. 19 Question: So where you were in the 20 beginning of 1990 was that your customers were 21 telling you that the then current version of 22 DR-DOS was not one that they were recommending 23 that Opus supplied to either them or other 24 customers? 25 Answer: Correct. 13152 1 Question: I believe you mentioned 2 that the University of Liverpool was another 3 customer of Opus? 4 Answer: Yes. Correct. 5 Question: And were they one of the 6 people who received a copy of the DR-DOS 7 product from Opus back in 1990? 8 Answer: I believe they were, yes. 9 Question: Let's mark as Exhibit 9109 10 what appears to be a letter from the University 11 of Liverpool to Mr. -- actually, it looks to be 12 to Martin at Opus Technology. 13 Or I should say this is -- this 14 Exhibit 9109 is actually two letters. One is 15 from the computer lab at the University of 16 Liverpool. 17 Why don't we separate that and mark 18 that as -- just take off the first sheet and 19 mark that as the exhibit. 20 Do you recall who at the University of 21 Liverpool received a copy of DR-DOS for 22 testing? 23 Answer: Yes, I do. 24 Question: Who was that? 25 Answer: It was a guy called David 13153 1 Lewis. I think it was David Lewis. It was 2 Lewis. I think David. 3 Question: Do you recall Exhibit 9109 4 as the letter he sent back? 5 Answer: I recollect it in the same 6 way as I recollect the British Aerospace. 7 I remember getting the letters from 8 them, but I can't say that I have seen it since 9 1990. 10 Question: Do you recall that their 11 review of DR-DOS at the University of Liverpool 12 was not favorable back at the beginning of 13 1990? 14 Answer: Yeah, absolutely. I remember 15 that. 16 Question: And, in fact, the product 17 that was supplied to them, the DR-DOS product, 18 at that time was not one that they could even 19 get to work in a way that they thought was 20 compatible? 21 Answer: Correct. 22 Question: My question was, the 23 product that you provided to your customers 24 like British Aerospace and Liverpool University 25 was not a product that at the time Opus felt 13154 1 they could recommend to their customers? 2 Answer: Absolutely true. 3 Question: Instead, Opus discussed 4 that product with DRI and DRI said that the 5 product could be improved or changed to meet 6 these criticisms; is that correct? 7 Answer: Correct. Whatever bugs that 8 were said here, they could correct, that is 9 true. 10 Question: But as of the time you had 11 your discussions with Mr. Duncan, those 12 problems had not been corrected? 13 Answer: That is true. 14 Question: Were you aware that the 15 people at DRI were talking to your customers, 16 British Aerospace and South Bank Polytechnic 17 and the like? 18 Answer: Absolutely. We gave them all 19 the contacts and we asked them to talk direct. 20 Question: And you were aware that the 21 people at DRI were getting back from those 22 customers of Opus criticisms of the then 23 current DR-DOS product? 24 Answer: Absolutely true. 25 Question: If you take a look back at 13155 1 Exhibit 596. It's the one that was previously 2 marked. 3 If you take a look in the second 4 paragraph. 5 Answer: British Aerospace? 6 Question: It talks about how Opus has 7 been very positive towards DRI. 8 Answer: Yeah. 9 Question: In the second sentence of 10 that paragraph it says, they are surprised and 11 worried by the initial comments they have 12 received from these clients and I am very 13 concerned that we prove the claims we make 14 about our responsiveness and quality service. 15 Answer: Yeah. 16 Question: Does that statement by 17 Mr. Speakman accurately describe your initial 18 response to the comments that your clients were 19 making about DR-DOS? 20 Answer: Yes, it does. 21 Question: Now, as this process went 22 along, it's true that Opus told DRI that unless 23 the technical issues are resolved, Opus would 24 not be in a position to license DR-DOS; is that 25 correct? 13156 1 Answer: I'm sure it was correct, yes. 2 Question: Why don't you take a look 3 at Exhibit 597, which has been previously 4 marked. 5 Do you recognize that as a letter from 6 Mr. Breffit to Mr. Speakman? 7 Answer: Yes, I recognize Martin's 8 signature or that is ppld from him. 9 Question: Right. And in the second 10 paragraph, Mr. Breffit tells Mr. Speakman, that 11 as of the beginning of March of 1990, Opus was 12 not in a position to progress any further with 13 DR-DOS until all the technical issues are 14 resolved. 15 Do you see that? 16 Answer: Yes. 17 Question: That is an accurate 18 statement of where Opus was back in that time? 19 Answer: Yes. 20 Question: Nonetheless, you continued 21 to talk with DRI, correct? 22 Answer: Absolutely correct. 23 Question: All right. And through 24 June of 1990, you continued to talk with them 25 about licensing the DR-DOS operating system, 13157 1 correct? 2 Answer: Definitely correct, yes. 3 Question: Why don't you take a look 4 at Exhibit 599, which has been previously 5 marked. 6 This is, again, an internal DRI 7 document, but it talks about a meeting set up 8 with you for them to make a final presentation 9 on June 14th of 1990. 10 If you take a look at the second 11 paragraph. 12 Answer: Yeah, I see that. 13 Question: Did that meeting happen? 14 Answer: I'm sure it did. 15 Question: At the time that that 16 meeting happened, Opus had not signed a license 17 agreement with Microsoft, correct? 18 Answer: That's correct. 19 Question: And so you were free at 20 that point to sign a license agreement with DRI 21 to license DR-DOS, correct? 22 Answer: Possibly. 23 Question: Well, when you say 24 possibly, you've already testified that the 25 1988 agreement had expired, correct? 13158 1 Answer: True. 2 Question: And the 1990 agreement that 3 we looked at this morning wasn't signed until 4 September of 1990 by Opus, correct? 5 Answer: True. Correct. 6 Question: So you were in a position, 7 according to your license agreements at least, 8 to license DR-DOS as of the middle of 1990? 9 Answer: The answer is possibly. As I 10 explained to you, I cannot remember why the 11 delay was so long. 12 And at some point we basically 13 verbally committed to Microsoft because 14 otherwise they would have banned us from 15 shipping any more machines. 16 What I cannot tell you is whether that 17 was in May or April or June, at which point we 18 verbally said that we have to go ahead. So 19 that's why I'm saying we may have verbally 20 committed to it even though the contracts 21 hadn't come back signed. 22 Question: But there was something 23 else that was available to OEMs consisting of 24 quantities of boxed versions of Windows. 25 You are aware of that, aren't you? 13159 1 Answer: No. Possibly there was. It 2 was never offered to us. 3 Question: You're not aware of that at 4 all? 5 Answer: No. 6 Question: Did you go and ask around 7 other OEMs or dealers and the like to see 8 whether or not they were purchasing on a per 9 copy basis packaged products of both MS-DOS and 10 Windows? 11 Answer: No. 12 Question: So you didn't go and do any 13 investigation to see whether your competitors 14 were able to get MS-DOS in packages on a per 15 copy basis? 16 Answer: Basically, I am sure that 17 Microsoft sold boxed versions of both Windows 18 and DOS. I am sure of that. 19 But when you ask the price of it, it 20 was extortionately high. So it was not worth 21 having. 22 So even here we have a column in the 23 right-hand side for 6,000 units excluding 24 Windows. So if you look at the very right-hand 25 side of that exhibit -- and the price was so 13160 1 high, so extortionate, that I did not even 2 write the numbers down. 3 So Sandy said to me, Adam, it is going 4 to be four times the price. So what is 100 5 going to cost me? 6 Question: Were you aware that your 7 competitors, other OEMs, in fact, purchased 8 MS-DOS on a per copy basis with packaged 9 product? Were you aware of that? 10 Answer: Possibly. I can't remember 11 how aware I was. 12 I absolutely am sure that I would have 13 known that you could go and buy what I would 14 call a retail box. It would have had Microsoft 15 on the box. It did not have Dan Technology or 16 Elonex Technology on it. They did not make one 17 box or 100 boxes for OEMs. You bought a 18 Microsoft box. 19 Question: Mr. Harris, did you discuss 20 with Mr. Duncan volume discounts for packaged 21 product? 22 Answer: Yes. 23 Question: And what did he say? 24 Answer: It was astronomical. Exactly 25 as we have written down here, 50 pounds, and 13161 1 exactly the same way as we tried to talk about 2 6,000 units. It was implausible. It could not 3 be done. 4 Question: Did you discuss with him 5 volume discounts, that is, if you order 5,000 6 copies, you get a better price than if you 7 order 100 copies? Did you discuss that? 8 Answer: Of pure Windows, it was 9 impossible. 10 Question: Either Windows or MS-DOS? 11 Answer: As I told you, I tried to buy 12 6,000 copies and the price was extortionate. 13 So I discussed absolutely everything 14 with him, buying a boxed copy like what they 15 call an OEM based Windows or DOS version. 16 I talked about 6,000 units. I talked 17 about 50,000 units. So I talked on every level 18 of it, and the 50,000 units was definitely 19 cheaper. 20 But we knew we would get ourselves 21 back into the same hole where we owed them not 22 $300,000, but $600,000. There is no point. We 23 were not stupid. We knew to ask what the best 24 price we could get all ways but it was 25 unacceptable. 13162 1 Question: So what you are saying -- 2 why don't you object if you want to object. 3 So what you are saying is that if you 4 had been able to purchase more substantial 5 volumes, that the per copy or packaged product 6 price would have been much more comparable to 7 what you were being offered on a per processor 8 basis; is that correct? That's what you just 9 said. 10 Answer: I said -- and I'll repeat 11 what I just said -- if you went from 25,000 12 units for every CPU to 50,000 units for every 13 CPU, the price dropped from $23 to $17 or $18. 14 It did go down the more units that you were 15 willing to commit to upfront. 16 Question: That was not the question. 17 The question was, on a per copy basis, 18 did the prices go down as the units went up? 19 Answer: What do you mean by per copy? 20 Is this the box thing? 21 Question: Yes. 22 Answer: So the price went up, not 23 down. 24 He never said to us we can buy 50 25 units at this price, 100 units at that price, 13163 1 1,000 units at this price. 2 When we got to the 6,000 figure, which 3 is a quarter of 25, the price was already so 4 high to make it unobtainable. 5 So what was the point of saying, if it 6 is going to cost me $70 for 6,000, is 100 going 7 to be cheaper, Sandy? No, it is ridiculous. 8 Question: Are you aware of 9 compatibility problems reported in the press 10 about DR-DOS's product? 11 Answer: Yes. I recollect that the 12 press also made comments. 13 (Whereupon, playing of the video 14 adjourned.) 15 THE COURT: Let's take a five-minute 16 break here, please. 17 We'll take a five-minute recess. 18 Remember the admonition previously 19 given. 20 (A recess was taken from 2:24 p.m. 21 to 2:31 p.m.) 22 THE COURT: Everyone else may be 23 seated. 24 And you may continue Mr. Harris. 25 MR. CASHMAN: Thank you, Your Honor. 13164 1 (Whereupon, the following video was 2 played to the jury.) 3 Question: I don't know whether you've 4 seen the first page of that exhibit, but if you 5 take a look at the second page and the rest of 6 the exhibit, have you seen that before? 7 Answer: Yes, this was shown to me. 8 Question: Have you seen that before? 9 Answer: Yes, I have definitely seen 10 this page. I have seen this document before. 11 Question: All right. And this 12 reflects a survey that Opus did of its 13 customers back in April of 1990. 14 Is that what it is? 15 Answer: Yeah. 16 Question: And the reason that this 17 survey was done, Mr. Harris, was to determine 18 whether or not Opus's customers were interested 19 in DR-DOS as an alternative to MS-DOS? Is that 20 why this was done? 21 Answer: Can you ask me the question 22 again? 23 Question: Right. Was the reason that 24 the survey that's reflected on the second to 25 the last page of Exhibit 598, the reason for it 13165 1 was so that Opus could find out whether or not 2 its customers were interested in DR-DOS as an 3 alternative to MS-DOS? 4 Answer: The reason why I am delaying 5 answering because I do not think it is a yes or 6 no answer. 7 I think the survey was done. I think 8 -- and I can't guarantee it, but I think the 9 survey was done and the results shown to me 10 what our customers were currently using. 11 So if you look at the page, the one 12 that says what operating systems do you 13 presently use, we can see here we have people 14 using things like Unix, OS/2, and various 15 things like that. 16 So I cannot say the exact reason this 17 survey was done because it was too long ago. 18 Possibly it was done for that one reason, to 19 see if customers would accept DR-DOS, possibly 20 it was done to find out which type of customers 21 aren't using DOS, et cetera. So it's difficult 22 to say the exact answer. 23 Question: If you look on the first 24 page not of the exhibit but of the memo from 25 Mr. Herman to Mr. Breffit, under observations, 13166 1 the second paragraph, it says, although the 2 sample is small, the conclusions are not 3 spurious. All respondents show a strong 4 preference for MS-DOS. 5 Do you recall that being a conclusion 6 drawn from your survey? 7 Answer: Where are we reading? 8 Question: Under observations, second 9 paragraph. 10 Answer: And that's why I am 11 questioning the correct way to answer it. 12 You have to remember at this time 13 DR-DOS was not really in the market. So 14 obviously everyone had to come back and say 15 they were using MS-DOS. There was no major 16 customer base at that time for DR-DOS. 17 So that's what I'm saying. I do not 18 know if the survey was to find out who was 19 using DR-DOS or to find out the spread of 20 people that were using MS-DOS, which ones were 21 using MS-DOS and Unix, which ones were using 22 OS/2 and various other things. 23 Question: Are you disagreeing with 24 the statement in this memo that a result -- a 25 conclusion of the survey was that all 13167 1 respondents showed a strong preference for 2 MS-DOS? Are you disagreeing with that, 3 Mr. Harris? 4 Answer: No, I don't think so. 5 Question: You testified this morning, 6 Mr. Harris, that you were concerned there were 7 customers of Opus who would want MS-DOS but not 8 Windows. 9 Answer: Absolutely correct. 10 Question: And you had a concern that 11 you did not want to ship Windows to each of 12 those customers or to pay for this, correct? 13 Answer: Yes. 14 Question: In fact, Mr. Harris, you 15 negotiated with Mr. Duncan at Microsoft the 16 same kind of exclusion from the Windows license 17 that DRI had given you on the DR-DOS contract? 18 Answer: You have lost me. 19 Question: You remember the DR-DOS 20 contract had an exclusion that you were to put 21 DR-DOS on every single machine that you sold of 22 the types covered by the contract unless the 23 customer said they did not want it? 24 Answer: Correct. 25 Question: Now, you negotiated the 13168 1 exact same exclusion for Windows in this 2 contract. 3 Do you recall that? 4 Answer: No, I do not. 5 Question: Take a look on page 7. 6 Answer: Yeah. 7 Question: Additional provisions A. 8 Do you see that? 9 Answer: Yes. 10 Question: And that provides that when 11 an end user of a company says in writing that 12 it doesn't want Windows on the product, you 13 don't have to install it and you don't have to 14 pay for it, correct? 15 Answer: Yeah. 16 Question: That's the same provision 17 that you got out of DRI and you negotiated that 18 with Mr. Duncan at Microsoft? 19 Answer: For six months, yes. 20 Question: Now, in fact, you got the 21 same exclusion when you extended the license, 22 didn't you? 23 Answer: I can't remember, sir. 24 Question: Why don't we mark as this 25 big thick exhibit as the Microsoft licenses 13169 1 with all the amendments, and we will mark it as 2 Exhibit -- what are we up to -- 9115. 3 Right. If you look at it, I believe 4 they are exactly the same pages, from the first 5 page through page -- the page that's got the 6 Bates number 62761. 7 That is the original license plus 8 Amendments 1 and 2. 9 Mr. Harris -- 10 Answer: I'm sorry. Which page are 11 you talking about? 12 Question: You know, we are referring 13 to these little numbers on the bottom of the 14 page, MS627 and then various numbers. 15 Answer: Yeah. 16 Question: If you turn to page 62762. 17 Answer: Okay. 18 Question: That's the first -- that's 19 the first piece of this exhibit that's in 20 addition to what we've already marked. This is 21 Amendment Number 3. I do not really have 22 anything to ask you about that. But if you 23 take a look at 62765. 24 Answer: 65, yeah. 25 Question: And that's Amendment Number 13170 1 4. 2 Answer: Yeah. 3 Question: Which is dated 31 December, 4 1992. 5 Answer: 31, yeah. 6 Question: And if you look at the 7 second page of that part of the exhibit, that 8 is your signature there? 9 Answer: True. 10 Question: That's signed on -- by you 11 on, I guess, January 7, 1993? 12 Answer: 7th of January, yes. 13 Question: And that exhibit amends -- 14 that amendment amends various exhibits to the 15 old license agreement -- 16 Answer: Yeah. 17 Question: -- including, if you take a 18 look at Exhibit C9. 19 Answer: C9. Yeah, go ahead. 20 Question: All right. First off, that 21 does not have a limitation on term that the 22 other one had. 23 In other words, this -- do you recall 24 that this license that you signed in the 25 beginning of '93 ran for Windows for the same 13171 1 period as for MS-DOS? 2 Answer: No, I don't remember that, 3 but if that is the thing, fine. 4 Question: If you turn to the next 5 page, additional provisions. Take a look at 6 it. 7 Once again, you negotiated and 8 obtained from Microsoft an exclusion from the 9 Windows license for those customers of Opus who 10 requested that Windows not be installed. 11 Do you see that? 12 Answer: Uh-huh. Yes, I see it. 13 Question: And Opus would not pay for 14 Windows if the customer requested that it not 15 be installed? 16 Answer: Yeah, I understand. 17 Question: So with respect to the 18 Windows license -- 19 Answer: Yeah. 20 Question: It's fair to say, is it 21 not, that the terms of that license parallel 22 the terms of the DRI license for DR-DOS in the 23 sense that you were to install the product on 24 all your computers except for those where there 25 is an exclusion? 13172 1 Answer: Yes, I agree. 2 Question: If you take a look at 3 Exhibit 598. That's one of the ones that was 4 previously marked. It's the survey. 5 Answer: Yeah. 6 Question: If you look at the second 7 page of that document, which is the first page 8 of the memo. 9 Answer: Yeah. 10 Question: Among the conclusions is -- 11 actually, below the conclusions it's got a 12 Roman IV where it says it should be noted that 13 bundled software is considered to be useful. 14 First off, is it your understanding 15 that bundled software is software that takes 16 features that may have been available in 17 different software previously and puts them 18 together? 19 Answer: No. Bundled software is you 20 either sell a machine, as some people do, 21 without any software to it at all. Bundled 22 software is the more additional free software 23 you give. The first thing is DOS, and the 24 second one is Windows, then it might be 25 Microsoft word, et cetera, et cetera. 13173 1 The more bundled free software -- not 2 free to me, but free to the customer -- then 3 that is the definition of bundled software. 4 So what they were saying here is that 5 they believed that by bundling software, the 6 more you bundle, the more people like the 7 machine. 8 Question: Your view of the 9 marketplace, Mr. Harris, is that if a software 10 developer hears that features are popular -- 11 Answer: Yes. 12 Question: -- and it could be features 13 in a competing product or it could be features 14 in, let's say, an add-on type of software, that 15 the reaction of the software developer in order 16 to satisfy the marketplace is to include those 17 features in the new versions of its software? 18 Answer: As long as they are not 19 breaking any patent infringements, yes, I think 20 they do. That is not just software, but 21 hardware as well. 22 Question: And the natural course of 23 history in the software industry and the 24 hardware industry is that features have been 25 added continually to hardware and software? 13174 1 Answer: Agreed. 2 Question: And that trend reflects the 3 desire of consumers to have the features 4 bundled together? 5 Answer: Yes. 6 Question: Mr. Harris, just a couple 7 of follow-up questions here. 8 In all of your discussions with 9 Mr. Duncan, the Microsoft sales representative 10 that you dealt with, did he ever once tell you 11 that the reason he wanted Opus to sign a per 12 processor license had anything to do with 13 Microsoft's desire to combat piracy of 14 software? 15 Answer: I don't remember or recollect 16 him ever saying that, especially in the 1990 17 times. 18 That didn't -- that doesn't come to me 19 as anything that was raised in those periods. 20 Whether it was raised in '94, it could be, but 21 not in 1990. 22 Question: Mr. Klapper pointed out a 23 clause in Opus's Windows license that he 24 indicated represented that if you got a written 25 letter from a client saying I don't want 13175 1 Windows, you didn't have to pay for that. 2 Answer: Yes. 3 Question: Did you ever have any kind 4 of exclusion comparable for your MS-DOS per 5 processor license? 6 Answer: No. I honestly didn't even 7 remember that was there. So it kind of threw 8 me when I saw it because I was absolutely 9 convinced that that wasn't the case. 10 But what happened was, if you 11 remember, in one of these exhibits, Sandy 12 Duncan said they will have signed up for 13 Windows by the middle of 1991, but we never 14 because the market was not there for it yet. 15 Microsoft was so keen by 1992 for us 16 to sign. That's why they conceded. I remember 17 now that is why there were these amendments. 18 Originally it had to be on the main thing. But 19 I had forgotten we did have that. 20 Question: Did Microsoft ever give you 21 any comparable exclusion on the MS-DOS license? 22 Answer: Absolutely not. 23 Question: Okay. So let's see what 24 the implication of that is. 25 You always had to pay the MS-DOS 13176 1 license? 2 Answer: $27, yes. 3 Question: Right. Sometimes if a 4 customer in writing said I don't want Windows, 5 you didn't have to pay the Windows? 6 Answer: That was specifically in 7 writing. 8 Question: Was there any way where you 9 could sell to one of your customers Windows, 10 but not MS-DOS? 11 Answer: No, absolutely not. 12 Question: There are no circumstances 13 under the license Microsoft had you sign where 14 you could ship a copy of Windows and not pay an 15 MS-DOS license, correct? 16 Answer: Correct. And, in fact, 17 Microsoft came and audited Opus around about 18 '94 or '95 to absolutely confirm how many 19 machines we had shipped out the door and we 20 paid an equal amount of licenses. 21 So we were one of the first companies 22 to be audited. They probably did not trust 23 Opus that we actually paid it. We were audited 24 in, I think, '94, maybe '93. 25 Question: So this was an important 13177 1 thing to Microsoft that you not be shipping 2 Windows without MS-DOS, correct? 3 Answer: They did not care whether we 4 shipped it. We had to pay them the license. 5 They didn't care what we did with it. We did 6 not ship it with every machine, they did not 7 care. 8 Question: It was important to them 9 that you not pay a Windows license without also 10 paying a DOS license? 11 Answer: Correct. 12 Question: Look at some of the 13 documents Mr. Klapper showed you. 14 Take a look at 9111. It is a one-page 15 software performance report. 16 Answer: 9111. Got it. 17 Question: Okay. I believe Mr. -- or 18 Microsoft's lawyer indicated in this report a 19 problem with DR-DOS on an Opus machine. 20 I want to direct your attention up to 21 the box on the top left where it says report 22 type. 23 Answer: Yeah. 24 Question: What box is checked there? 25 Answer: Suggested enhancements. 13178 1 Question: This is not a report of a 2 problem with Digital Research software, is it? 3 This is a report of a suggestion for an 4 enhancement, correct? 5 Answer: Yes, and the other box says 6 causes inconvenience. 7 Question: Presumably if you made 8 enhancements, that inconvenience would be 9 eliminated. 10 Answer: That seems to be true. 11 Question: It is not a bug report? 12 Answer: It does not seem to be. 13 Question: Okay. Now, let's go back 14 and talk about the timing of your agreement to 15 the per processor license for MS-DOS in 1990. 16 Okay. 17 And Mr. -- or Microsoft's attorney 18 asked you some questions indicating that there 19 was perhaps several months of time in there 20 between the expiration of your previous license 21 in March of 1990 and the signing of the written 22 contract in September of 1990. 23 Answer: Okay. 24 Question: The indication being there 25 were months and months where you could not 13179 1 negotiate. That wasn't the case, was it, sir? 2 Answer: My recollection is that we 3 actually verbally agreed everything within 4 about four, five or six weeks. The contract 5 took a long time to come. That is my 6 recollection. 7 Question: Getting the contract typed 8 up and signed was not anything within Opus's 9 control, was it? 10 Answer: No. It had to go to 11 headquarters. It was not done in the UK. 12 Question: So you had committed 13 yourself to Microsoft per processor license 14 verbally months before they actually got around 15 to sending you the hard copy paper contract, 16 correct? 17 Answer: Yes. And one of the things 18 that it shows in one of the other exhibits, 19 9101, is there is a discount of $100,000 if we 20 signed quickly. So that was one of the reasons 21 why I know it didn't take seven months. 22 I think if you check, Microsoft, the 23 person who signs these contracts, disappeared 24 and was replaced during this period. And 25 that's why the first set of contracts that came 13180 1 we had to return because it had the wrong 2 person on it. 3 But I can't -- that's my recollection 4 of why there was this six months' delay. Some 5 set did come, then Sandy Duncan said that 6 person -- we have to change the title or 7 something like that. 8 Question: But Microsoft did not give 9 you six months' worth of running room here to 10 go cast about for different licenses with 11 DR-DOS, did they? 12 Answer: Absolutely not. 13 Question: In fact, they told you in 14 March as your other license was expiring, that 15 if you do not agree with us right now you are 16 going to be in violation of contract? 17 Answer: Correct. 18 Question: Now, I think you said that 19 in late 1989, perhaps even early 1990, with the 20 versions of DR-DOS that came before DR-DOS 5, 21 that was a product that was not necessarily 22 especially acceptable to customers. 23 Do you recall that testimony? 24 Answer: Yes. 25 Question: Okay. Is it fair to say 13181 1 that with the release of DR-DOS 5, there was -- 2 DRI had released a product that was very 3 acceptable to a broad range of customers? 4 Unidentified attorney: Objection, 5 leading. 6 Answer: I guess so. As I say, we 7 didn't sign DR-DOS 5. So whether there was a 8 problem with it or whether we were still 9 improving things, I can't remember at this 10 time. 11 All I am willing to say is that DR-DOS 12 6, we wouldn't have signed and taken it to 13 market if we weren't 100 percent satisfied with 14 it. 15 I don't know whether DR-DOS 5 was 16 perfect or not. I can't remember. 17 Question: Okay. Dig through your 18 pile and see if you can find the Document 19 Number 596, a memo, a memo from Mr. Speakman to 20 Mr. Constant dated January 31, 1990. 21 Dig through your pile and see if you 22 can find Document Number 596. It's a memo from 23 Mr. Speakman to Mr. Constant dated January 31, 24 1990. 25 The second paragraph says Opus have -- 13182 1 Opus have been very positive toward us and 2 DR-DOS and very critical of the service and 3 support of their current supplier. 4 Who was your current supplier at that 5 time? 6 Answer: Microsoft. 7 Question: Opus was very critical of 8 Microsoft's service and support at this time, 9 were you not? 10 Answer: Yes. 11 Question: DRI offered better service 12 and support even just on the testing basis that 13 you saw. 14 Answer: Offered and administered. 15 Question: Offered and administered, 16 thank you. 17 Do you recall whether your license 18 agreement with Microsoft had confidentiality 19 provisions in them or nondisclosure provisions 20 in them? 21 Answer: Absolutely. 22 Question: You were not free to talk 23 about your license terms with other OEMs, were 24 you? 25 Answer: No. Absolutely not. 13183 1 Question: So when Mr. -- when 2 Microsoft's attorney was asking you did you not 3 go and talk about your license with other OEMs 4 and find out what they were getting or 5 available to purchase certain kind of products, 6 you were not free to do that. OEMs were not 7 free to discuss their Microsoft license terms 8 with each other, were they? 9 Answer: We were not allowed to talk 10 to Microsoft terms, but I could have phoned 11 somebody up and said do you buy a boxed 12 version, but, no, it was strictly confidential 13 and that is why we could not show it to Digital 14 Research. 15 Question: You were shown a couple of 16 documents, 9113 and 9114, but the implication 17 being that there were problems with DR-DOS 6's 18 disk compression program. 19 Just from your recollection now, did 20 DR-DOS 6's disk compression program cause major 21 problems for your customers? 22 Answer: I can't think of any customer 23 that ever wrote to me. 24 So there is no letter to me, that is 25 the MD. If they were really pissed off that 13184 1 they had lost data or something had gone wrong, 2 I would have got a letter and it would be 3 somewhere in these files. 4 Question: It did not happen, right? 5 Answer: No. 6 Question: There has been some 7 discussion of a fax that you asked Mr. Duncan 8 to send you, and we don't have the fax with us. 9 There has been some question of what was in it 10 and what it said and what it did not say. 11 The purpose of asking Mr. Duncan for 12 the fax was what? 13 Answer: Because I was going to have 14 to basically move forward with a contract that 15 was going to be costing me nearly $2 million. 16 And I wanted to show to Roger 17 Sanderford, the chairman of the company, that I 18 was getting the best deal. Because he didn't 19 believe that the competition was paid the same 20 -- not the same price as us, but the same 21 terms. 22 (Whereupon, playing of the video 23 concluded.) 24 THE COURT: We are going to stop there 25 for the day so the Jury can get out on time. 13185 1 Remember the admonition previously 2 given. Leave your notebooks here. 3 See you tomorrow morning at 8:30 a.m. 4 (The following record was made out of 5 the presence of the jury at 2:58 p.m.) 6 MR. TULCHIN: Your Honor, if we may. 7 Here's the situation with the 8 Plaintiffs' expert Schulman. As it turns 9 out -- at least this is what I was informed of 10 this afternoon -- the Plaintiffs themselves 11 designated Mr. Schulman's deposition and his 12 expert report as confidential. 13 And at least the expert report 14 contains Microsoft documents which may be in 15 evidence, but may not be. I just don't know. 16 And, of course, I've been sitting in the 17 courtroom all day today. 18 So we'd like an opportunity at least 19 overnight to go look at this. We've been 20 relying on the fact that the Plaintiffs 21 themselves have designated this material as 22 confidential, and just -- we don't know right 23 at the moment whether there's anything in there 24 that might be a cause of concern. 25 THE COURT: Okay. I'll give you until 13186 1 morning. 2 MR. TULCHIN: Thank you, Your Honor. 3 MR. CASHMAN: That's fine, Your Honor. 4 THE COURT: Okay. See you then. 5 MR. CASHMAN: Thank you. 6 THE COURT: You guys have a good 7 night. 8 (Proceedings adjourned at 3 p.m.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 13187 1 CERTIFICATE TO TRANSCRIPT 2 The undersigned, Official Court 3 Reporters in and for the Fifth Judicial 4 District of Iowa, which embraces the County of 5 Polk, hereby certifies: 6 That she acted as such reporter in the 7 above-entitled cause in the District Court of 8 Iowa, for Polk County, before the Judge stated 9 in the title page attached to this transcript, 10 and took down in shorthand the proceedings had 11 at said time and place. 12 That the foregoing pages of typed 13 written matter is a full, true and complete 14 transcript of said shorthand notes so taken by 15 her in said cause, and that said transcript 16 contains all of the proceedings had at the 17 times therein shown. 18 Dated at Des Moines, Iowa, this 8th 19 day of February, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25