Bonum Certa Men Certa

Comes request access to class members

Comes request access to class members ..


MR. HOLLEY: Good morning, Your Honor. Yesterday there was a request from the plaintiffs for a curative instruction with regard to a question that Mr. Tulchin asked Mr. Bradford about a lawsuit brought by Lantec, a competing maker of network software, against Novell alleging violations of Section 2 of the Sherman Act.


MS. CONLIN: Your Honor, my request or an instruction was, in fact, a departure from our normal procedure because for the Defendant to ask such a question was a departure from our normal procedure.

The purpose of testimony with respect to the FTC and the DOJ was to assure that the witness was not vulnerable on cross-examination to a surprise assertion that he was simply a pawn of the government or the government was simply a pawn of his because DOJ, FTC all over the documents in this matter, Your Honor, with respect to this witness and others.

And there is also a difference in that it was Microsoft who was under investigation. Microsoft is a party to this lawsuit. lawsuit. Novell, however, is not a party, and the idea that there needs to be parity, I think, is an erroneous idea.


MS. CONLIN: Your Honor, the Court issued an order some time ago which precluded either side from contacting class members without the permission of the Court.

Plaintiffs have honored that order and -- but now we request the Court's permission to contact members of the Plaintiffs' class, all of them. We want to -- we want that opportunity, Your Honor. The Court may have seen the article today, and we thought perhaps it would be time for us to contact our own clients.

THE COURT: Response?

MR. TULCHIN: Your Honor, this is a surprise to us. I didn't know this motion was coming. I'd like an adequate opportunity to respond some point next week.

THE COURT: Very well.

MR. TULCHIN: Thank you, Your Honor.

MS. CONLIN: Well, I thought it would be noncontroversial, Your Honor. I was wrong.

Full Text


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 XXXVIII 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 8:20 a.m., January 25,

14 2007, in Room 302 of the Polk County

15 Courthouse, Des Moines, Iowa.






21 Suite 307, 604 Locust Street

22 Des Moines, Iowa 50309

23 (515)288-4910


25 � 10400

1 A P P E A R A N C E S

2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 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 ROBERT J. GRALEWSKI, JR. Attorney at Law 12 Gergosian & Gralewski 550 West C Street 13 Suite 1600 San Diego, CA 92101 14 (619) 230-0104

15 KENT WILLIAMS Attorney at Law 16 Williams Law Firm 1632 Homestead Trail 17 Long Lake, MN 55356 (612) 940-4452 18







25 � 10401

1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY SHARON L. NELLES 3 JEFFREY C. CHAPMAN Attorneys at Law 4 Sullivan & Cromwell, LLP 125 Broad Street 5 New York, NY 10004-2498 (212) 558-3749 6 ROBERT A. ROSENFELD 7 KIT A. PIERSON Attorneys at Law 8 Heller Ehrman, LLP 333 Bush Street 9 San Francisco, CA 94104 (415) 772-6000 10 DAVID SMUTNY 11 Attorney at Law Heller Ehrman, LLP 12 1717 Rhode Island Ave. NW Washington, D.C. 20036-3001 13 (202) 912-2000

14 HEIDI B. BRADLEY Attorney at Law 15 Heller Ehrman, LLP 333 South Hope Street 16 Suite 3900 Los Angeles, CA 90071-3043 17 (213) 689-0200

18 DAVID E. JONES Attorney at Law 19 Heller Ehrman, LLP One East Main Street 20 Suite 201 Madison, WI 53703-5118 21 (608) 663-7460




25 � 10402

1 BRENT B. GREEN Attorney at Law 2 Duncan, Green, Brown & Langeness, PC 3 Suite 380 400 Locust Street 4 Des Moines, IA 50309 (515) 288-6440 5




















25 � 10403

1 (The following record was made out of

2 the presence of the jury at 8:20 a.m.)

3 THE COURT: Morning.

4 Mr. Tulchin, you wanted to be heard?

5 MR. TULCHIN: Yes. With the Court's

6 permission, Mr. Holley will address this issue.

7 MR. HOLLEY: Good morning, Your Honor.

8 Yesterday there was a request from the

9 Plaintiffs for a curative instruction with

10 regard to a question that Mr. Tulchin asked

11 Mr. Bradford about a lawsuit brought by Lantec,

12 a competing maker of network software, against

13 Novell alleging violations of Section 2 of the

14 Sherman Act.

15 And for various reasons, it's

16 Microsoft's position that no such instruction

17 is warranted.

18 Initially, as Mr. Tulchin pointed out

19 yesterday, various questions by both sides on

20 direct and cross have been objected to in -- at

21 the time, and the Court has either sustained or

22 overruled those objections, and there hasn't

23 been some curative instruction telling the jury

24 that the question was improper.

25 So this would be a departure from � 10404

1 normal procedure and would call attention to

2 something which isn't warranted.

3 So that's our procedural objection.

4 On substance, Your Honor, the question

5 was perfectly appropriate because Mr. Bradford

6 testified extensively on direct examination

7 about the fact that Microsoft was investigated

8 both by the Federal Trade Commission starting

9 in 1990 and then by the Department of Justice

10 starting in 1993.

11 And the mere purpose of that testimony

12 being elicited was to suggest to the jury that

13 the fact of those investigations could be --

14 could give rise to an inference that Microsoft

15 had done something wrong. Otherwise, why was

16 the testimony being elicited.

17 And, of course, the fact of the matter

18 is that the Federal Trade Commission never did

19 anything having, investigated the matter for

20 some time.

21 On two occasions the commission

22 considered the question of bringing enforcement

23 action against Microsoft, and on both

24 occasions, there was a 2-2 vote and the

25 commission did not proceed. � 10405

1 So it is not a fair inference that

2 because the government investigated Microsoft

3 that Microsoft had done something wrong.

4 As the Iowa Supreme Court has said in

5 State against Monroe, when lawyers make

6 tactical choices that create inferences that

7 help their clients, they open the door to

8 rebuttal by their adversary.

9 So if Plaintiffs make a choice to

10 suggest through the testimony not only of

11 Mr. Bradford, but also of Mr. Alepin, that

12 Microsoft has been subjected to numerous

13 government investigations and private lawsuits

14 -- and the Court will recall that Mr. Lamb took

15 Mr. Alepin through numerous lawsuits that have

16 been filed against Microsoft in the course of

17 talking about Mr. Alepin's credentials.

18 So the jury has heard all about Sun

19 suing Microsoft and RealNetworks suing

20 Microsoft.

21 And the clear implication of this is

22 that where there's that much smoke, there must

23 be fire.

24 And that -- if that suggestion has

25 been created in the minds of the jurors, it's � 10406

1 perfectly appropriate for Microsoft to counter

2 that door opening by noting that other

3 companies that are successful in the

4 marketplace and acquire large market positions

5 are sued by their competitors.

6 It is a routine practice in American

7 business, there is an entire field of study

8 about the strategic use of antitrust litigation

9 against competitors, so it's our position, Your

10 Honor, that there was nothing improper about

11 the question and therefore no need for an

12 instruction.

13 Now if the Court is nonetheless

14 inclined to give an instruction, which we don't

15 think is appropriate, we certainly don't think

16 that the instruction that Ms. Conlin read to

17 the Court yesterday is the appropriate sort of

18 instruction because there needs to be parity on

19 this point.

20 The jury needs to be told, if they're

21 going to be told, that testimony from witnesses

22 on either side about prior investigations and

23 prior litigation should not be assumed to mean

24 that there's any merit to those cases.

25 That was not Mr. Tulchin's suggestion. � 10407

1 His point was, and it's a perfectly valid point

2 given what Plaintiffs have done, is that people

3 who are successful in business often get sued.

4 That's the point.

5 But, Your Honor, I'd like -- if I

6 could approach the Court, I'd like to hand up

7 our suggestion -- and I need to give one to

8 Ms. Conlin first -- of the sort of instruction

9 that we would suggest if the Court is inclined

10 to give it and what -- it's a neutral

11 instruction. It would apply to both parties.

12 And it would say that witnesses have

13 testified and will continue, I assume, to

14 testify about government investigations that

15 have been instigated against Microsoft, Novell,

16 and other companies.

17 The existence of these lawsuits or

18 investigations is not proof of any wrongdoing

19 and you are not to conclude from the fact that

20 a lawsuit is brought or an investigation was

21 undertaken that those claims have any merit.

22 So, Your Honor, that -- if an

23 instruction is going to be given, and as I

24 said, we don't believe it's necessary or

25 appropriate, but if it happens, we think it � 10408

1 should not be some sort of attack on Microsoft

2 or its counsel. It should apply equally to

3 both parties, and as with all of the Court's

4 other instructions, it should be a neutral

5 statement of the law.

6 That's all I have on that, Your Honor.

7 MS. CONLIN: Your Honor, my request

8 for an instruction was, in fact, a departure

9 from our normal procedure because for the

10 Defendant to ask such a question was a

11 departure from our normal procedure.

12 The purpose of testimony with respect

13 to the FTC and the DOJ was to assure that the

14 witness was not vulnerable on cross-examination

15 to a surprise assertion that he was simply a

16 pawn of the government or the government was

17 simply a pawn of his because DOJ, FTC all over

18 the documents in this matter, Your Honor, with

19 respect to this witness and others.

20 And there is also a difference in that

21 it was Microsoft who was under investigation.

22 Microsoft is a party to this lawsuit.

23 That investigation of the FTC and

24 subsequently the DOJ, as the Court is well

25 aware, forms a part of the basis of this � 10409

1 lawsuit.

2 Novell, however, is not a party, and

3 the idea that there needs to be parity, I

4 think, is an erroneous idea.

5 There's not parity of questioning and

6 there therefore should not be parity of -- in

7 connection with the instruction.

8 It was Mr. Tulchin who suddenly out of

9 nowhere brought up this antitrust lawsuit. And

10 the Court will recall it wasn't just that

11 Novell was sued. That's not the point that

12 Mr. Tulchin was making.

13 First he asked, as I recall, what the

14 market share of Novell was, and then he asked

15 the question about the lawsuit, which was, as

16 he carefully pointed out, for antitrust

17 violations.

18 If the Court is not going to instruct

19 on this issue, then -- I, of course, will not

20 do this without asking the Court's permission,

21 but I assume that when I get to the defense

22 case and the defense witnesses are here, I can

23 ask them about the lawsuits against Microsoft.

24 And I'll try to divide them up in some fashion

25 that creates parity among the witnesses. � 10410

1 The point that Mr. Tulchin was making

2 and the point that I fear the jury has gotten

3 from the question, even though it was objected

4 to and the objection was sustained, was that

5 Microsoft -- or that Novell was also guilty of

6 antitrust violations.

7 So, Your Honor, I believe that the

8 instruction is warranted, and I think that it

9 can be given, and I think that Mr. Tulchin's

10 questioning of this witness on that issue was

11 highly prejudicial to the Plaintiffs.

12 THE COURT: Anything else?

13 MR. HOLLEY: Your Honor, just briefly.

14 I'm surprised to hear Ms. Conlin say

15 that the investigation by the Federal Trade

16 Commission forms part of the basis of this

17 lawsuit.

18 There is no collateral estoppel as to

19 what is usually referred to as Microsoft I,

20 which is the series of investigations first by

21 the FTC, then taken over by the DOJ, resulting

22 in the consent decree which was signed on the

23 15th of July of 1994.

24 That is entirely separate, that

25 proceeding, from what is frequently referred to � 10411

1 as Microsoft II, which is the lawsuit which was

2 begun on the 18th of May of 1998, and that is

3 the only lawsuit that has been -- as to which

4 any findings or conclusions have been given

5 collateral estoppel effect.

6 If the Plaintiffs want to seek to

7 prove the claims that the FTC considered

8 investigated and abandoned, then they have to

9 prove them. That's their obligation, and they

10 can't piggyback on the fact that some

11 government agency looked at these claims.

12 If they do, Your Honor, then we would

13 press again our argument that we are entitled

14 to ask, as we sought to do with Mr. Alepin,

15 witnesses to show that although the FTC looked

16 at FUD, vaporware, integration, and all of the

17 claims relating to DR-DOS, that the Plaintiffs

18 are pursuing here in the exercise of their

19 public interest obligations they decided not to

20 bring those claims.

21 If they want to open the door to that,

22 then we should be able to walk right through

23 it.

24 So I just want to make that point,

25 Your Honor. � 10412

1 There is no collateral estoppel effect

2 to anything other than the second DOJ case.

3 The first DOJ case, they have to prove

4 they have no benefit of collateral estoppel.

5 THE COURT: Mr. Holley, what was the

6 case Mr. Tulchin mentioned?

7 MR. HOLLEY: There is a case, Your

8 Honor --

9 THE COURT: The one he specifically

10 asked?

11 MR. HOLLEY: There is a case brought

12 by a company called Lantec, L-a-n-t-e-c, Your

13 Honor.

14 THE COURT: Okay. And the question

15 about -- to Mr. Bradford was with regard to FTC

16 or government investigation; right?

17 MR. HOLLEY: Those questions were

18 asked by Ms. Conlin on direct.

19 THE COURT: Right. And they were

20 about FTC and the government; right?

21 MR. HOLLEY: That is correct, Your

22 Honor.

23 THE COURT: How is there parity when

24 there's a private company sued?

25 MR. HOLLEY: Because the suggestion is � 10413

1 that claims made either by private parties or

2 by the government gives rise to some inference

3 that -- no one said that explicitly, but that's

4 the clear purpose of all of this.

5 The notion is that, you know, if

6 you're investigated, there must be something

7 under there. And frankly, it's much worse when

8 the notion is that the government did it

9 because, you know, everyone can accept the

10 proposition that there are Plaintiffs out there

11 who are off the wall and bring completely

12 frivolous claims. But the jurors are much less

13 likely to believe that the Federal Trade

14 Commission brought some entirely frivolous

15 claim.

16 So in my view, Your Honor, it's

17 actually much worse when the implication is

18 created that, you know, there was a government

19 investigation because people tend to believe

20 that the government doesn't act in a completely

21 irrational way.

22 THE COURT: So according to your

23 interpretation of Monroe, any witness who

24 appears here, they can be asked if they've been

25 sued in any case whatsoever for anything; is � 10414

1 that right?

2 MR. HOLLEY: Well, I'm not sure I'd

3 go that far, Your Honor, but I believe a

4 witness --

5 THE COURT: Wouldn't that be parity?

6 After all, you're being sued.

7 MR. HOLLEY: No, Your Honor.

8 I think the point that I was seeking

9 to make is that a company -- that a witness who

10 works for a company or worked for a company

11 that had a market share within the range that

12 the Court has instructed the jury would give

13 rise to an inference of monopoly power and who

14 has been sued for antitrust violations could be

15 asked whether such a claim was brought because

16 the Plaintiffs have opened the door to that by

17 noting that Microsoft with its high market

18 share has been both sued by numerous

19 competitors and investigated by various

20 government agencies.

21 They didn't have to do that, but they

22 did.

23 THE COURT: Anything else on this

24 issue?

25 MS. CONLIN: Just very briefly, Your � 10415

1 Honor.

2 Mr. Holley just made my point in his

3 last remark.

4 Mr. Tulchin did, in fact, say to this

5 witness again and again, you know, when you

6 were complaining every day to the federal

7 government and when you were making all of your

8 complaints to the federal government -- and, of

9 course, we know there's no collateral estoppel.

10 I hope that I was clear to the Court.

11 What I meant when I said forms the basis was

12 that we, in fact, have and have relied on the

13 documents, the statements, the depositions, and

14 so on from that -- those early investigations

15 which were three- or four-fold, as I recall.

16 So, Your Honor, I believe that the

17 instruction is justified and that the record as

18 it stands is highly prejudicial to the

19 Plaintiffs.

20 THE COURT: Anything further?

21 MR. HOLLEY: No, Your Honor.

22 THE COURT: Very well.

23 Court is going to give the following

24 instruction.

25 A question was asked on the � 10416

1 cross-examination of Plaintiffs' witness

2 Mr. Bradford regarding Novell being sued by

3 another company or entity. An objection to the

4 question was sustained.

5 You are instructed that you are not to

6 find or infer anything from the question to

7 Mr. Bradford, nor may you speculate as to what

8 the answer may have been regarding any alleged

9 lawsuit against Novell.

10 A copy will be given to the parties.

11 Carrie, I need 11 copies for the

12 jurors, and give two to the parties. Then you

13 can get the jury.

14 MR. HOLLEY: Your Honor, just for the

15 record, I would note that Microsoft objects to

16 this instruction, and it's highly prejudicial

17 to us and not the sort of instruction that the

18 jury should be given in these circumstances

19 just for the record.

20 (An off-the-record discussion was

21 held.)

22 (The following record was made in the

23 presence of the jury at 8:42 a.m.)

24 THE COURT: Everyone else may be

25 seated. � 10417

1 Ladies and gentlemen of the jury.

2 Thank you for your patience. We had a matter

3 that's had to be conducted by the Court only

4 and the attorneys.

5 You've been handed Preliminary

6 Instruction No. 36 regarding David Bradford.

7 I'll read it to you real quickly.

8 A question was asked on the

9 cross-examination of Plaintiffs' witness

10 Mr. Bradford regarding Novell being sued by

11 another company or entity. An objection to the

12 question was sustained.

13 You are instructed that you are not

14 to find or infer anything from the question of

15 Mr. Bradford, nor may you speculate as to what

16 the answer may have been regarding any alleged

17 lawsuit against Novell.

18 THE COURT: You may proceed with

19 cross.

20 Mr. Bradford, you're still under oath.

21 MR. TULCHIN: Thank you, Your Honor.


23 recalled as a witness, having been previously

24 duly sworn, testified as follows:



2 Q. Good morning, Mr. Bradford.

3 A. Hello.

4 MR. TULCHIN: May I approach the

5 witness, Your Honor?

6 THE COURT: Yes, you may.

7 Q. Mr. Bradford, I'm handing you

8 Defendant's Exhibit 6776, and this is a

9 memorandum that you wrote, is not, sir?

10 A. Yes.

11 Q. It's a memorandum you wrote around

12 December 3rd, 1991; correct?

13 A. That's right.

14 Q. And it records your notes of your

15 meeting of November 24, 1991, with Bill Gates

16 and Steve Ballmer; right?

17 A. Well, it records the interaction

18 between Darrell Miller and Ray Noorda, not my

19 meeting with Gates and Ballmer.

20 Q. Fair enough. I stand corrected.

21 MR. TULCHIN: Your Honor, we offer

22 Defendant's Exhibit 6776.

23 MS. CONLIN: No objection.

24 THE COURT: It's admitted.

25 MR. TULCHIN: If we could just look at � 10419

1 the first page.

2 Q. And again, Mr. Bradford, this is --

3 those are your initials there next to your

4 name?

5 A. They are.

6 Q. Is that something you commonly did

7 when you were sending a memo to the files at

8 Novell?

9 A. Yes, it is.

10 Q. And it says, results of November 24th

11 meeting with Microsoft.

12 Just below in the first paragraph, it

13 says, on Sunday, November 24, Darrell Miller

14 and Ray Noorda met with Bill Gates and Steve

15 Ballmer at the San Francisco airport.

16 Do you see that, sir?

17 A. I do.

18 Q. And I think you testified briefly

19 about that meeting on direct examination.

20 Do you recall that?

21 A. I think I testified specifically about

22 a Ray Noorda/Bill Gates meeting that occurred

23 earlier in the year.

24 Q. Was it also at the San Francisco

25 airport, is that -- � 10420

1 A. Yes.

2 Q. -- maybe why --

3 A. Yes.

4 Q. Okay, fair enough.

5 And I want to direct your attention

6 for the moment, if I may, to the second page.

7 And you'll see the letter A.

8 You have a heading which says

9 complicating factors, and then there is the

10 letter A, and then, Mr. Bradford, you say this,

11 neither Novell nor Microsoft want the source

12 code which would be shipped to these testing

13 teams to be shared with other parts of the

14 other entities' company.

15 Now, let me just pause there if I may.

16 We're talking about the source code to

17 various software products made either by Novell

18 or by Microsoft; correct?

19 A. That's right.

20 Q. And the source code, of course, is the

21 property of the company that developed that

22 software?

23 A. That's right.

24 Q. And I take it from your memorandum

25 that there had been some discussion at this � 10421

1 meeting on November 24, '91, with Microsoft

2 about testing one another's beta versions of

3 software products; correct?

4 A. Well, I assume there was. I wasn't at

5 the meeting, but these are my recollections

6 from what Darrell or Ray told me when they

7 returned.

8 Q. Right, but I skipped over the first

9 page in the interest of time.

10 A. Okay.

11 Q. But that's what's being discussed

12 here, is it not, at least in part?

13 Testing one another's software

14 products so that the two companies could find a

15 way to make each company's software work better

16 with the other company's software?

17 A. I'm sure, among other things, that

18 interoperability was discussed at that meeting.

19 Q. Right. And I think you'll see

20 reference to that on the first page.

21 But so let's go back to point A on

22 page 2.

23 You go on to say, for example, Novell

24 would not want the source code to the NetWare

25 shell to be transferred to Microsoft's LAN � 10422

1 manager group.

2 Again, I want to stop for just a

3 moment.

4 The NetWare, of course, is Novell's

5 product?

6 A. That's right.

7 Q. And Microsoft had a competing LAN

8 manager product?

9 A. Correct.

10 Q. And I think what you're saying here is

11 that if the -- if Novell, for example, is to

12 send a beta version of its product to Microsoft

13 for testing, Novell wouldn't want that beta

14 version of the NetWare shell to be used by

15 people at Microsoft who are developing a

16 competing product.

17 Is that what that means?

18 A. I suppose. Again, I'm recording the

19 discussions that Ray and Darrell had with Bill

20 and Steve as opposed to my own personal

21 opinion, et cetera, et cetera.

22 Q. I understand that, but did I state

23 accurately what your sentence is intended to

24 mean; Novell doesn't want the people at

25 Microsoft who are competing, making a competing � 10423

1 product at Novell's to get Novell's source

2 code?

3 A. Yes, in general that would be correct.

4 Q. And the other side of it is stated in

5 the next sentence.

6 By the same token, Microsoft would not

7 want the Windows source code transmitted to

8 Novell's Digital Research subsidiary. Is that

9 right?

10 A. All right, uh-huh.

11 Q. Was that a proposition that both

12 companies adhered to over the period that you

13 worked at Novell?

14 Novell didn't want its source code to

15 be used at Microsoft by people making a product

16 that competed with Novell's NetWare, and

17 Microsoft didn't want its operating system for

18 Windows source code to be used by the Digital

19 Research subsidiary of Novell?

20 A. As a general proposition, that's

21 right.

22 Q. Thank you, sir.

23 MR. TULCHIN: Your Honor, may I

24 approach the witness?

25 THE COURT: Yes. � 10424

1 Q. I want to hand you next, Mr. Bradford,

2 a memorandum that appears to have been written

3 by John Constant on the 25th of January, 1992.

4 This is Defendant's Exhibit 145.

5 MR. TULCHIN: We offer this document,

6 Your Honor.

7 MS. CONLIN: Your Honor, may we

8 approach?

9 THE COURT: You may.

10 (The following record was made out of

11 the presence of the jury at 8:49 a.m.)

12 MS. CONLIN: Your Honor, here is the

13 memorandum. I have no objection to the

14 document, but where Mr. Tulchin is going is in

15 direct violation of the Court's order with

16 respect to the question of where betas came

17 from and the like, at least that's my

18 understanding. That would be my guess where

19 he's going.

20 I'm at somewhat of a disadvantage,

21 Your Honor, because you'll recall that

22 Mr. Constant came to testify and had to return

23 to England, so he will be back. I don't want

24 this document used for this witness. He knows

25 nothing about it. It's unfair, and it also � 10425

1 violates the Court's motion in limine.

2 THE COURT: Go ahead, Mr. Tulchin.

3 MR. TULCHIN: Your Honor, I'm not

4 using this to show that Novell acquired the

5 data in some improper way, only that Novell had

6 it.

7 And the third page -- my only question

8 to this witness is on the third page. There

9 was no objection, by the way, to this document

10 ever lodged, and I didn't think there was

11 anything controversial about it. The document

12 itself doesn't reveal how Novell obtained the

13 beta, and there's no question to this witness

14 on that subject that I plan to ask.

15 But at the very top of the third page,

16 it says test latest Windows 3.1 beta with

17 DR-DOS 6.0.

18 And all I wanted to do was to ask this

19 witness whether, as far as he understood it,

20 Novell had a copy of the Windows 3.1 beta.

21 Your Honor, on direct, of course, this

22 witness said that Novell was injured over a

23 course of years because it didn't get the betas

24 or didn't get them as frequently as other

25 companies. I think this is legitimate cross. � 10426

1 I have no intention of violating the Court's

2 order by trying to explore how they got it.

3 MS. CONLIN: Your Honor, I have no

4 objection to him asking the question: Did

5 Novell have access to the betas.

6 THE COURT: Okay.

7 MS. CONLIN: That is a legitimate

8 question. But to use this document with this

9 witness, I don't have an objection to the

10 document, David. I just have an objection to

11 the document being used with this witness who

12 knows nothing about it, and it's just unfair to

13 the witness.

14 MR. TULCHIN: Well, Your Honor, if he

15 knows nothing about it, it will be very brief.

16 He'll say I know nothing about it.

17 THE COURT: Okay. Just stay away from

18 the one thing. Off the record.

19 (The following record was made in the

20 presence of the jury at 8:53 a.m.)

21 THE COURT: Sorry for the delay.

22 You were offering 145?

23 MR. TULCHIN: Yes, sir.

24 MS. CONLIN: No objection.

25 THE COURT: It's admitted. � 10427

1 Q. Mr. Bradford, sorry for the delay.

2 If you could look at the third page --

3 well, let's just look at the first page for a

4 minute.

5 John Constant is somebody you've

6 mentioned in the past; correct?

7 A. Yes.

8 Q. And he worked at Digital Research?

9 A. That's right.

10 Q. And, of course, the other names we've

11 talked about. I think you've mentioned Steve

12 Tucker, Andy Wightman, and John Bromhead

13 before. I'm not sure about Glenn Stephens.

14 A. Right. All DRI employees.

15 Q. Okay. And I just would ask you, sir,

16 to turn to the top of the third page.

17 There's a heading at the top which

18 says Windows 3.X. Do you see that?

19 And just below it, there's an entry

20 that says, test latest Windows 3.1 beta.

21 That's the symbol, is it not, for

22 beta, the Greek beta letter?

23 A. I suppose, but I -- typically, you

24 write beta if you mean beta.

25 Q. But it says, test latest Windows � 10428

1 3.1 -- and maybe that's a beta -- with DR-DOS

2 6.0, et cetera.

3 And my only question to you,

4 Mr. Bradford, is whether or not as of January

5 25, '92, the date of this memo, you were aware

6 that Mr. Constant apparently had a copy or

7 Novell had a copy of the latest Windows 3.1

8 beta?

9 MS. CONLIN: Your Honor, I object to

10 the question as compound.

11 THE COURT: Overruled. He can answer

12 if he understands.

13 A. No, I had no personal knowledge of

14 that.

15 Q. Did you become aware at around this

16 time in 1992 that Novell was getting copies of

17 the 3.1 beta, the Windows 3.1 beta?

18 A. Not necessarily.

19 As a general proposition, I remember

20 the companies exchanging betas at some point in

21 time, and we talked ad infinitum about the

22 exchange of betas, so --

23 But I have no specific recollection of

24 DRI -- again, at this point in time, remember,

25 Digital Research was a separate legal entity � 10429

1 from Novell, Inc. They were operating pretty

2 much independently of what we were doing.

3 So I had no recollection of tests,

4 latest Windows 3.1 b, or beta, with DR-DOS 6.0.

5 MR. TULCHIN: May I approach the

6 witness, Your Honor?

7 THE COURT: Yes, you may.

8 Q. I want to give you two documents at

9 the same time, Mr. Bradford.

10 Just at the end of the day yesterday I

11 think one or both of us mentioned contracts

12 between Microsoft and Novell concerning betas,

13 and I've handed you Defendant's Exhibits 3628

14 and 3627.

15 Do you have them, sir?

16 A. I do.

17 Q. Are these indeed contracts between

18 Microsoft and Novell for the beta versions of

19 certain Microsoft products?

20 A. Well, let's read through.

21 I apologize, I don't have my glasses

22 on me.

23 MS. CONLIN: Do you have your glasses?

24 THE WITNESS: I don't have them on me.

25 They're in my coat at the back of the room. � 10430

1 MS. CONLIN: Do you want me to get

2 them for you?


4 MS. CONLIN: Because you're squinting

5 like this.

6 A. So Microsoft Corporation nondisclosure

7 agreement.

8 Q. Are you looking at 3628?

9 A. Yes.

10 Q. Maybe we should wait till you get your

11 glasses.

12 A. Well, I think I should read that much.

13 Q. Okay.

14 A. If you want to highlight it for the

15 jury.

16 Q. Well, we can't do it until it's in

17 evidence.

18 A. So Microsoft Corporation nondisclosure

19 agreement is what it says at the top.

20 Q. And then it says prerelease product,

21 and you see where it says product name Chicago?

22 We'll wait for your glasses. I think

23 that will make things easier. And Ms. Conlin

24 is helping us all out.

25 MS. CONLIN: May I approach, Your � 10431

1 Honor?

2 THE COURT: You may.

3 A. Good.

4 So, again, this appears to be a

5 nondisclosure agreement that relates to a

6 prerelease version of Chicago.

7 Q. And the prerelease version, that

8 refers to the beta; correct?

9 A. Yes, in all likelihood.

10 Q. And if you look at the last page of

11 3628, you'll see a signature from Richard W.

12 King. Do you see that, sir?

13 A. Yes, I do.

14 Q. And he was a Novell employee?

15 A. Right. He was a vice president in our

16 Novell products group.

17 Q. And this was signed on or about

18 December 10, 1993; is that right?

19 A. Yes.

20 MR. TULCHIN: Microsoft offers

21 Defendant's Exhibit 3628.

22 MS. CONLIN: No objection.

23 THE COURT: It's admitted.

24 Q. Let's look briefly at 3627. We'll

25 come back to the other one. � 10432

1 But is this another contract for the

2 beta version of Chicago?

3 A. Again, it's a nondisclosure agreement,

4 as it says at the top, relating to -- and I'll,

5 you know, concede it's probably a prerelease or

6 beta version of Chicago.

7 So I don't know if it relates to a

8 product exchange or it relates to nondisclosure

9 associated thereto. I'd have to look through

10 the document.

11 Q. All right. And then if you'll look at

12 the third page, the last page of Exhibit 3627,

13 you'll see it was signed by someone named David

14 Moon, M-o-o-n, Moon of WordPerfect.

15 Do you see that, sir?

16 A. That's right. Dave was a vice

17 president within our WordPerfect division, and

18 this appears to have been signed May 1994. So

19 either shortly or just before Novell's

20 acquisition of WordPerfect.

21 Q. Okay.

22 MR. TULCHIN: We offer Exhibit 3627,

23 Your Honor.

24 MS. CONLIN: No objection, Your Honor.

25 THE COURT: Admitted. � 10433

1 Q. If we could look at 3628 first.

2 That's the 1993 nondisclosure agreement for

3 Chicago.

4 You're familiar with these sorts of

5 agreements or contracts, are you not, sir?

6 A. I'm familiar with nondisclosure

7 agreements, yeah.

8 Q. Okay. And you'll see in the paragraph

9 numbered one, it says, grant of license, and

10 then it says -- and I know there's a lot of

11 legal language here, but -- Microsoft grants

12 company -- and company refers to in this case

13 Novell; is that right?

14 A. Upon receipt, Microsoft, this

15 agreement signed and completed by the

16 individual organization indicated below

17 (company).

18 Okay, so if it's indicated below --

19 okay, yes.

20 Q. Okay. So Microsoft grants company or

21 Novell the right to use the product -- and the

22 product had been defined as Chicago; right?

23 A. Yes. Operating system and prerelease

24 development kit for that.

25 Q. Right. So that would include the beta � 10434

1 for Chicago or Windows 95; correct?

2 A. If these two are equivalent, yes.

3 Q. Okay.

4 A. It says PDK release. Product

5 development kit is what that refers to.

6 Q. Right. Prerelease development kit

7 maybe, PDK?

8 A. Yes.

9 Q. Okay. So Microsoft grants Novell the

10 right to use the -- we'll call it the beta

11 version of Chicago only for the purpose of

12 developing company's -- and then it has a list

13 of products; redirectors, transports, NetWare

14 directory services. I won't read them all,

15 Mr. Bradford, but it goes on.

16 -- to run on, connect to, or

17 interoperate with the product. That would be

18 Chicago; right?

19 A. Right.

20 Q. And testing such Novell products with

21 the beta version of Chicago for evaluating the

22 product for the sole purpose of providing

23 feedback to Microsoft.

24 Do you see that, sir?

25 A. Yes, I do. � 10435

1 Q. And then it talks about a biweekly

2 status report to Microsoft by Novell.

3 There's another sentence about the

4 feedback.

5 And then later on in this paragraph,

6 it says, provided that each such copy is used

7 only for the purposes stated above and used

8 only by the authorized individuals listed in

9 Section 4.

10 Do you see that, Mr. Bradford?

11 A. Can he highlight that? I'm sorry.

12 Q. Sure.

13 I don't want to -- if I'm going too

14 fast, I'll stop, because the sentence begins by

15 saying, Microsoft grants company, or Novell,

16 the nontransferrable right to make and use the

17 number of copies as described in Section 3,

18 provided that each such copy is used only for

19 the purposes stated above and used only by the

20 authorized individuals listed in Section 4.

21 Are you with me?

22 A. Yes.

23 Q. And then it goes on, the next

24 sentence -- actually, the one beyond that.

25 Company may not reverse engineer, � 10436

1 decompile or disassemble the product's

2 software. Company must cease use of the

3 product upon the earlier of either Microsoft's

4 public release of the commercial version or

5 upon request by Microsoft.

6 And then I want to turn to the --

7 well, let me ask this question.

8 These are common terms in these kind

9 of beta contracts, are they not?

10 A. Yes.

11 Q. All right. Let's go to the next page

12 -- maybe before we do, just noting Point 3 on

13 the first page, it says, copyright, the product

14 is owned by Microsoft.

15 And that's consistent with what we've

16 talked about before; correct, sir?

17 A. That's right.

18 Q. All right. And then if you go to the

19 second page, which is a continuation of

20 paragraph four, towards the top there is a

21 sentence that begins the names and product

22 development area of the attendees Microsoft may

23 send to a developer conference or identified in

24 Exhibit A.

25 And then it says this, until the � 10437

1 product is -- software is commercially released

2 by Microsoft, Novell agrees that the product

3 will not be made available, nor will Novell

4 assign any of the individuals identified in

5 Exhibit A, to the development teams of any

6 directly competing operating system product,

7 including personal NetWare, Novell DOS

8 development (DR-DOS), et cetera.

9 And I just want to stop there.

10 And again, sorry for all this legal

11 language, but what this contract provides is

12 that the beta version of Chicago may be used by

13 Novell for a number of purposes including

14 testing, but the development team for DR-DOS is

15 not authorized to get a copy of the beta

16 correct.

17 A. That's right. Under this agreement of

18 December 1993.

19 Q. All right. And again going back to

20 the document we looked at earlier this morning,

21 your notes of the meeting in San Francisco,

22 which was Exhibit 145, that's consistent with

23 what Mr. Gates and Mr. Noorda talked about at

24 that meeting?

25 A. In general, yeah. � 10438

1 MR. TULCHIN: So could we look at

2 Exhibit 3627?

3 Q. And I think we've already identified

4 this as another nondisclosure agreement for the

5 beta version of Chicago.

6 MR. TULCHIN: Let's just go to the

7 first page quickly. Look at the top.

8 Q. And as we discussed earlier, this is

9 from May of 1994 with WordPerfect?

10 A. That's right.

11 Q. And I want to -- well, the grant of

12 license, paragraph one, is substantially the

13 same as in the prior version. Does that look

14 right to you?

15 A. Okay. For purposes of our discussion

16 to move things along, yes.

17 Q. And paragraph three says, copyright,

18 the product is owned by Microsoft, as in the

19 other paragraph; correct?

20 A. Well, let's see. I don't want to be

21 too quick on that.

22 So if we look back on number one,

23 there's a grant of license, and as I just

24 perused I saw the term open doc in it.

25 Q. Right. It's not identical to the � 10439

1 paragraph one from the prior document, but

2 speaking lawyer to lawyer, the terms are

3 substantially the same, are they not?

4 And if you don't know, Mr. Bradford, I

5 don't want to spend a lot of time on that.

6 A. Right. For purposes of our discussion

7 today, without going into the details, let's

8 agree that it's substantially the same.

9 Q. Okay.

10 And then let's look at page 2 of

11 Exhibit 3627, the 1994 agreement with

12 WordPerfect.

13 And beginning three lines from the

14 top, you'll see a sentence which begins with

15 the word however.

16 And I just want to draw your attention

17 to that one sentence for the time being.

18 However, in no event shall company,

19 and in this case --

20 A. Can it get highlighted? I'm sorry.

21 Q. Yes.

22 MR. TULCHIN: Maybe we can, in fact,

23 make that a little larger for Mr. Bradford.

24 THE COURT: Can you see on your screen

25 there? � 10440

1 A. With all that language up there, it's

2 hard, unless it's highlighted in yellow.

3 That's great.

4 Q. You got it?

5 A. Yeah.

6 Q. So here the company refers to

7 WordPerfect, Mr. Bradford. Can we agree on

8 that?

9 A. Yes.

10 Q. Okay. And it says, however, in no

11 event shall company -- that is, WordPerfect --

12 disclose the product or related information to

13 the development teams of any operating system

14 products, including personal NetWare, Novell

15 DOS development (DR-DOS), et cetera.

16 And that's a clause that's similar to

17 the one we saw in 3628?

18 A. Yes.

19 Q. And again this is more or less

20 standard in these nondisclosure agreements

21 pertaining to betas, that one company that's

22 giving a beta to a competing company for

23 testing doesn't want that competing company to

24 actually provide the beta copy to the

25 development teams that are making products that � 10441

1 compete with the company that owns the beta;

2 fair enough?

3 A. As a very general proposition, I would

4 agree with that.

5 Q. All right.

6 MR. TULCHIN: May I approach, Your

7 Honor?


9 Q. I'm handing you Plaintiffs' Exhibit

10 2132. And this is meeting minutes from a

11 meeting of August 18, 1994.

12 MR. TULCHIN: We offer this,

13 Plaintiffs' Exhibit 2132.

14 MS. CONLIN: Your Honor, we have no

15 objection to the document. It's a duplicate.

16 It is our document so we like it. But the --

17 but there's no foundation for its use with this

18 witness.

19 THE COURT: It's admitted.

20 MR. TULCHIN: Thank you, Your Honor.

21 Q. Just one question about this,

22 Mr. Bradford.

23 MR. TULCHIN: And maybe we could show

24 the first page and -- up to Point Number 2.

25 Q. This is meeting minutes of a meeting � 10442

1 called by Dave Miller; correct?

2 A. It appears to be that.

3 Q. And it's dated August 18, '94, and it

4 shows that there was a meeting in Provo, Utah;

5 correct? And I guess Redmond too?

6 A. Looks like a conference call perhaps.

7 Q. Right.

8 A. So there's -- Walnut Creek is actually

9 in northern California.

10 Q. Oh, I see.

11 A. Provo, Utah. Redmond, Washington.

12 Q. Okay. And Item 2 says, the beta

13 agreement has been signed and copies for

14 everyone on the list will go out Fed Ex today.

15 Do you know which beta agreement this

16 refers to?

17 A. I don't.

18 Q. Do you know whether this was an

19 agreement for Novell to get a beta of Chicago?

20 Is that what is being referred to?

21 A. I don't know.

22 Q. Okay. And actually, I do want to ask

23 you one other question about this document.

24 MR. TULCHIN: If we could look at the

25 paragraph numbered six. � 10443

1 Q. Microsoft asked why they had not

2 received a beta copy of 4.1 since it began

3 shipping as of August 15, 1994.

4 Now, is it your understanding from

5 looking at this document, Mr. Bradford, that

6 4.1 refers to the NetWare product that Novell

7 was selling?

8 A. Yes, I think that's right.

9 Q. So Microsoft was asking why Microsoft

10 hadn't received a beta copy of NetWare 4.1;

11 correct?

12 A. Yes, that appears to be the question.

13 Q. And apparently, according to these

14 meeting minutes, it was explained that we are

15 not doing our mass beta ship until September

16 and that Microsoft will get a copy of the beta

17 then.

18 And then it says, and we will do about

19 an eight-week cycle.

20 Do you see that, sir?

21 A. Yes.

22 Q. Do you understand, Mr. Bradford, that

23 it's common that beta versions of various

24 software products are sent out to the

25 recipients on various cycles? And here it � 10444

1 refers to an eight-week cycle. Would that be

2 more or less common and acceptable?

3 A. Sure.

4 Q. Thank you.

5 MR. TULCHIN: May I approach the

6 witness, Your Honor?

7 THE COURT: You may.

8 Q. I want to hand you, Mr. Bradford,

9 Defendant's Exhibit 2494.

10 And we talked about Mr. Jones

11 yesterday. Mr. Richard Jones was a software

12 engineer, right, at Novell?

13 A. Correct.

14 Q. And this is at the top an E-mail from

15 him dated January 13, 1995.

16 MR. TULCHIN: We offer this document,

17 Your Honor.

18 MS. CONLIN: No objection.

19 THE COURT: 2494?

20 MR. TULCHIN: Yes, sir.

21 THE COURT: It's admitted.

22 Q. And if we look at this, Mr. Bradford,

23 at the very top the E-mail from Mr. Jones says,

24 yes, we discovered that.

25 And to put some context in this, maybe � 10445

1 we ought to show the whole thing.

2 Mr. Jones had sent an E-mail to Ben

3 Hendrick. He was at Novell; correct?

4 A. That's right.

5 Q. And then it goes on to say, Jonlu. Is

6 that Jon Ludwig at Microsoft?

7 A. Where do you see Jon -- oh, I see

8 Jonlu.

9 Q. Yeah, I'm looking at the E-mail of

10 January 12 now, towards the bottom.

11 A. Okay. So from Richard Jones to Ben

12 Hendrick, Jodyg, Jonlu. I do not know Jonlu,

13 Jon L-u.

14 Q. Do you see Bobkr? Do you think that's

15 Bob Kruger at Microsoft?

16 A. Yes, that would be my guess. He was

17 the Microsoft representative that worked with

18 the name that's next to his from Novell, Dave

19 Miller.

20 Q. Okay. And from this E-mail, can you

21 tell, sir, whether or not Novell had a beta

22 version of Chicago, Windows 95, on January 12,

23 1995?

24 A. John. So this is from Richard Jones

25 to John. � 10446

1 I received the Build 306 CD this

2 afternoon. Thanks. We'll put it up on our

3 server for our team to install tonight.

4 I did get asked if this build requires

5 a beta ID and password as with Build 224. If

6 so, could you please send us that info.

7 So I don't know if you would classify

8 this as a classic beta, but it appears that

9 some form of a program was exchanged.

10 Q. Okay. And then the E-mail at the top

11 says preliminary feedback from the team -- and

12 this is written by Mr. Jones, the software

13 engineer at Novell -- is that it is noticeably

14 more stable than 224. Good work.

15 Do you see that, sir?

16 A. Yes, I do.

17 Q. Does this appear to be an example of

18 Microsoft and Novell cooperating when it comes

19 to the beta versions of Windows 95?

20 A. In this particular instance, yes.

21 Q. Okay.

22 MR. TULCHIN: May I approach the

23 witness, Your Honor?

24 THE COURT: You may.

25 Q. I'm handing you Defendant's Exhibit � 10447

1 2508.

2 Now, this contains two E-mails, one

3 from Mr. Stanton at Microsoft and the other

4 from Dave Miller of Novell, to Mr. Stanton. Do

5 you see that, sir?

6 A. Yes.

7 MR. TULCHIN: We offer Exhibit 2508,

8 Your Honor.

9 MS. CONLIN: No objection.

10 THE COURT: It's admitted.

11 Q. Now, Mr. Bradford, just briefly.

12 This is a little later now in January.

13 The E-mails are dated January 24th and January

14 25th, and the prior E-mails were from the 12th

15 and 13th.

16 And the E-mail from Mr. Miller of

17 Novell to Mr. Stanton -- I won't read it all,

18 but he's asking for access to Microsoft's

19 CompuServe forum for Win 95.

20 Do you see that, sir?

21 A. Yes.

22 Q. And then at the bottom, he says, can

23 we do this for this particular case? I

24 understand your sensitivity to allowing

25 everyone access, Dave. � 10448

1 Do you see that, sir?

2 A. Yes.

3 Q. Do you understand this E-mail when it

4 talks about sensitivity to allowing everyone

5 access to be a reference to the provision in

6 the contracts, the type of provision in the

7 beta contracts that we looked at earlier where

8 Novell and WordPerfect had agreed that people

9 working on DR-DOS should not get a beta version

10 of Chicago?

11 A. No. I think that would be an

12 overstatement.

13 Q. All right. And then you see

14 Mr. Stanton's response to Mr. Miller at the

15 top, January 24th.

16 And I must say it's a little confusing

17 because normally we see E-mails with the first

18 one at the bottom and the second one at the

19 top, but here the dates don't quite match that,

20 and I just want to make sure I point that out

21 to you because I'm not sure which is first and

22 which is second. The one at the top has the

23 date of January 24th.

24 Mr. Stanton says to Mr. Miller, the

25 private E-mail support provided directly by our � 10449

1 Windows 95 development team is the highest

2 level of support available, and we will

3 continue to focus our support for your Windows

4 client development this way.

5 Now, when it talks about Windows

6 client development, do you have any

7 understanding as to what that refers to,

8 Mr. Bradford?

9 A. Let's see. So we're at the top now.

10 The private E-mail support provided

11 directly by our Windows 95 development team --

12 so that's the Microsoft team.

13 Q. Right.

14 A. -- is the highest level of support

15 available.

16 So this is Paul telling this to Dave

17 Miller.

18 And we will continue, says Paul, to

19 focus our support for your Windows client

20 development this way.

21 And so what that is talking about, to

22 the best of my knowledge sitting here today, is

23 Novell had a product called the NetWare

24 operating system and it built a client for a

25 user interface. And I think it was important � 10450

1 that that Novell client interoperate with the

2 Windows operating system.

3 Q. And Mr. Stanton is saying to Mr.

4 Miller, this is the highest level of support

5 available.

6 Is there any reason that you know of

7 to doubt that that was the highest level of

8 support available to a software developer like

9 Novell?

10 A. I have no reason to doubt Paul

11 Stanton's remarks. I don't know Paul, but --

12 Q. Okay.

13 MR. TULCHIN: May I approach the

14 witness, Your Honor?

15 THE COURT: You may.

16 Q. I'm handing you Plaintiffs' Exhibit

17 2274, and we're now into April 1995. Little

18 bit later in the year.

19 MR. TULCHIN: Your Honor, we offer

20 Plaintiffs' Exhibit 2274.

21 MS. CONLIN: I think, Your Honor, it's

22 already admitted.

23 MR. TULCHIN: Oh, it may be.

24 MS. CONLIN: But if not, we have no

25 objection. � 10451

1 THE COURT: Let me check.

2 Very well. It's admitted.

3 MR. TULCHIN: Thank you.

4 Q. Mr. Bradford, Exhibit 2274 is just one

5 page, and there are two E-mails from April

6 1995; correct?

7 A. Correct.

8 Q. And the bottom one from Ben Hendrick

9 at Novell goes to I guess you'd say an alias

10 called Novsup, N-o-v-s-u-p, at

11 Do you know what that referred to or

12 who the recipients were under that alias?

13 A. No, I have no idea.

14 Q. You'll see that Mr. Hendrick --

15 Mr. Hendrick, of course, was with Novell;

16 right?

17 A. Yes, he was.

18 Q. And now we're in April of '95, and the

19 subject is updated Windows 95 builds.

20 And he says, in the spirit of getting

21 regular updates as they become available, I

22 have talked to several Novell external

23 customers and ISVs who received Build 437

24 CD-ROMs and are anticipating Build 440.

25 And I'll skip a little bit. � 10452

1 And then he asks, is it possible to

2 have you send the latest build to Richard

3 Jones?

4 Now, there's more, but I want to

5 concentrate on the answer that he gets from Jon

6 Ludwig at Microsoft.

7 MR. TULCHIN: If we could show that.

8 Q. That's later the same day; correct?

9 April 7, 1995, at 10:18 a.m., less than two

10 hours later?

11 A. Okay.

12 Q. And Mr. Ludwig says, you should

13 understand a little about our processes.

14 We send out a lot of intermediate

15 builds in very small batches to address

16 specific bugs that people have raised. The

17 people that get these builds are the ones that

18 have raised the specific bugs. The process is

19 very automated.

20 I just want to stop here.

21 Was it your understanding with the

22 normal process of distributing beta versions of

23 software that not every so-called build went to

24 every beta tester?

25 A. That's probably right. I don't know. � 10453

1 You've asked me what's typical out there, and

2 I'm not a software engineer --

3 Q. I understand.

4 A. -- distributing betas back and forth,

5 so I really don't have a good answer for that.

6 Q. Well, let me be more specific then.

7 Do you know whether Novell itself when

8 it distributed beta versions, let's say of

9 Novell NetWare, sent every build to every

10 single beta tester?

11 A. I think what you do in general in the

12 software industry is you would send a beta out

13 to a small group of people initially. Maybe

14 that's the alpha release or the prebeta release

15 or the beta release. That these releases go

16 out to a small group of people.

17 And then as you get feedback from

18 those people, then you would send out another

19 release, perhaps to a broader set of people.

20 So that's in response, I hope, to your

21 question.

22 Q. Okay. But looking again at this first

23 paragraph of Mr. Ludwig, he goes on to say, we

24 don't broadly distribute these builds to the

25 entire beta program, so you will absolutely � 10454

1 hear about people getting builds more current

2 than yours.

3 The more active you are on bug filing,

4 though, the more frequently you will get a

5 build. Honestly, we haven't seen a lot of bug

6 filings from Novell.

7 Now, is this consistent with your

8 recollection of what was going on at the time

9 in April '95 when it comes to Microsoft sending

10 betas to Novell?

11 A. Well, my recollection is that what's

12 extraordinary about these is that these go over

13 a four- or five-year period that both companies

14 have hundreds of products, especially Microsoft

15 had hundreds of products. Novell had, you

16 know, let's say 50 products.

17 And I would think that there would be

18 a lot more of these beta agreements if, in

19 fact, the companies were exchanging lots of

20 betas.

21 So, you know, these are -- relate to

22 specific instances where there was cooperation.

23 Q. Okay. And this is an example of

24 cooperation, Plaintiffs' Exhibit 2274; is that

25 correct? � 10455

1 A. It appears to be, yeah.

2 Q. And then just one last point here.

3 We have Novell and a lot of other ISV

4 partners on about a biweekly regular

5 distribution schedule outside of the above

6 process.

7 Do you see that?

8 A. Yes.

9 Q. Was this your understanding that

10 people at Novell were getting betas for Windows

11 95 as did other ISV partners on about a

12 biweekly schedule?

13 A. Well, it looks like if you read the

14 next sentence, it says that we are on daily

15 builds at this point and have been for some

16 time. It doesn't surprise me that the last

17 build you had was 326. You were scheduled to

18 get 340 sent out probably today.

19 So it sounds like some people were

20 getting daily builds and others were getting

21 biweekly builds. That's the way I read that.

22 Q. Biweekly would be, let's say --

23 A. Every other week.

24 Q. Yeah, every 14 days, and 326 and 340

25 is 14. So if there's a build every single day, � 10456

1 if there is, then you'd get it each 14th build;

2 correct?

3 A. Unless you were on the schedule

4 getting one 327, 328, 329, 335. I don't know.

5 Q. Right. Well, I think what Mr. Ludwig

6 says in his E-mail is the people who file bug

7 reports get the specific builds that respond to

8 their bug reports; correct?

9 A. Yes.

10 Q. And what he also says is that Novell

11 and a lot of other ISV partners are on a

12 biweekly schedule; correct?

13 A. Yes, I see that.

14 Q. Do you have any reason to doubt that

15 that's what was going on in April of 1995?

16 A. No, not as it relates to this specific

17 E-mail and build for 326, whatever that is.

18 MR. TULCHIN: May I approach, Your

19 Honor?

20 THE COURT: Yes.

21 Q. Mr. Bradford, I hand you Defendant's

22 Exhibit 2499. This is now a little later in

23 April, April 27, 1995.

24 MR. TULCHIN: And we offer this

25 document, Your Honor. � 10457

1 MS. CONLIN: No objection.

2 THE COURT: It's admitted.

3 Q. Again, this is one page, and at the

4 top you'll see there's an E-mail from Richard

5 Jones to Dave Miller and Ben -- I think it's

6 Ben Hendrick. Does that seem right? Ben

7 H-e-n-d?

8 A. Yes, that looks like it would be Ben

9 Hendrick.

10 Q. Right. And just going down a little

11 bit, if we could, there's an E-mail in the

12 middle which says -- it looks like it's from

13 Yvesm, Y-v-e-s-m, at Microsoft -- you will

14 receive Build 450 within two days as well.

15 And then Mr. Hendrick right above that

16 says, E-mail I got from Microsoft. I did not

17 see you guys on the CC line.

18 And then just above that, again, is

19 the E-mail from Mr. Jones to Miller and

20 Hendrick April 27, 1995.

21 Do you recall having seen this before,

22 sir?

23 A. No.

24 Q. Well, Mr. Jones says, we got it a

25 couple of days ago. � 10458

1 And that appears to be a response to

2 Mr. Hendrick when he says I did not see you

3 guys on the CC line; right?

4 A. Okay. Maybe walk me through that

5 again, but --

6 Q. Well, just below that, Mr. Hendrick

7 had said, E-mail I got from Microsoft. That

8 referred to the E-mail from Yvesm on April 24,

9 saying you will receive Build 450 within two

10 days?

11 A. Can I take a second to just read the

12 whole E-mail correspondence so I --

13 Q. If I go too fast and you need time,

14 just let me know.

15 A. In this particular instance, you're

16 moving pretty quickly.

17 Q. Sorry.

18 A. Okay.

19 Okay, so this appears to be a series

20 of correspondence between Ben Hendrick and

21 someone by the name of Yves at Microsoft and

22 started April 21st, 1995. Ben sends an E-mail

23 to Yves.

24 Yves responds, you will receive the

25 Build 450 within two days. � 10459

1 And I'm going from bottom to top now.

2 And Ben does an FYI, I believe to

3 Richard Jones probably in engineering, said

4 hey, look at this E-mail I got from Microsoft.

5 I did not see you guys on the CC line. So he's

6 providing them the information.

7 Q. Right.

8 A. And then Richard responds to Ben, we

9 got it a couple of days ago.

10 So now this is Richard's

11 correspondence of April 27th. So probably on

12 or about the 24th or 25th they got something

13 from Microsoft.

14 Q. Yes. And then Richard Jones, the

15 engineer, says, once a week is plenty good

16 enough for us. We really don't want it more

17 often than that.

18 Do you see that?

19 A. I do.

20 Q. Is that consistent with your

21 understanding that the engineers at Novell

22 didn't want betas more than once a week?

23 A. Well, no. This relates to a very

24 specific product, and it could be product

25 specific. Maybe they want the Windows Chicago � 10460

1 beta every day. Maybe they want Build 330 that

2 we referenced earlier, you know, once a week,

3 and maybe they wanted some other things once

4 every two weeks. It would be dependent on the

5 circumstances and where both parties are at in

6 their respective product development.

7 Q. Okay. But in your last answer, you

8 were sort of making some assumptions or maybe

9 some guesses about what was going on? Because

10 I want to know whether you have any specific

11 recollection about this.

12 A. Of this document?

13 Q. Yes, and what was going on --

14 A. No.

15 Q. -- around April 27, 1995.

16 A. Let's see, that's a very general

17 question.

18 Do you mean do I know what was going

19 on between Novell and Microsoft?

20 Q. With respect to the provision by

21 Microsoft of Windows 95 betas to Novell, that's

22 the subject.

23 A. I don't have any specific recollection

24 of this E-mail exchange or in general of that

25 particular topic that you're addressing. � 10461

1 Your question to me said was once a

2 week enough, and I responded that sometimes

3 daily would be great, sometimes once a week

4 might be great, sometimes every two weeks might

5 be fine. It just depended on where the

6 respective parties were in their product

7 development.

8 Q. All right. Well, one last thing about

9 this document.

10 Mr. Jones concludes his E-mail to

11 Mr. Miller and Mr. Hendrick by saying, I need

12 to emphasize to you guys that from our

13 perspective, Microsoft has been very -- all

14 capital letters -- responsive and supportive

15 since January 1995.

16 Now, does this appear to be another

17 instance where Microsoft is cooperating with

18 Novell?

19 A. Yes. And I think what's most

20 interesting there is that very responsive and

21 supportive since January of 1995. In other

22 words, prior to January of 1995 there was

23 definitely a perception that they were not

24 being cooperative.

25 Q. Of course it doesn't say that, you're � 10462

1 adding that?

2 A. Yes, I am.

3 MR. TULCHIN: May I approach, Your

4 Honor?

5 THE COURT: You may.

6 Q. Let me hand you Defendant's Exhibit

7 2502. And this at the top -- this has several

8 pages. It's three pages, Mr. Bradford, but at

9 the top its an E-mail from David Thompson at

10 Microsoft to Mr. Hendrick and other people.

11 Do you see that, sir?

12 A. Yes, I do.

13 MR. TULCHIN: We offer this document,

14 Your Honor.

15 MS. CONLIN: May I voir dire the

16 witness, Your Honor?

17 THE COURT: You may.



20 Q. Mr. Bradford, you've been very patient

21 about this.

22 None of these documents that you have

23 been shown over the last some time have you as

24 either the person who wrote the E-mail or on

25 the list of those who received the E-mail; is � 10463

1 that correct?

2 A. That's correct.

3 Q. And these are E-mails going between

4 the engineering department or the development

5 department of one company to another company;

6 correct?

7 A. That's right.

8 Q. And would you in the ordinary course

9 of your business have anything whatsoever to do

10 with this kind of an exchange?

11 A. No.

12 Q. And would you in the ordinary course

13 of your duties to Novell even see this kind of

14 thing?

15 A. No, not typically.

16 MS. CONLIN: Your Honor, we do not

17 object to the exhibit, but we believe that

18 there is no foundation for the continued use of

19 documents of this sort with this witness who

20 has not seen them and who is not an engineer.

21 THE COURT: Objection is overruled.

22 It's admitted.



25 Q. Mr. Bradford, looking at Exhibit 2502, � 10464

1 and I want to focus your attention towards the

2 top.

3 The date of the first E-mail is

4 October 9, 1995. Now, by this time, Windows 95

5 has been released; right? Because we know it

6 was on your anniversary in 1995.

7 A. That's right.

8 Q. Okay. That was in August. Now we're

9 in October.

10 And just below that there's an E-mail

11 from Mr. Jones, the same Mr. Jones who is a

12 software engineer at Novell, to Jon Ludwig at

13 Microsoft and Yves Michali at Microsoft and

14 also to Mr. Hendrick and other people. And

15 it's dated Monday, October 9, 1995.

16 Do you see that?

17 A. Yes, I do.

18 Q. And he writes to Ben. That must be

19 Ben Hendrick; right?

20 A. Yes.

21 Q. And he says, I had asked Yves Michali

22 for a copy back in July and Jon Ludwig

23 responded and declined the request at that time

24 because they were working out some internal

25 details. I don't believe we have been � 10465

1 discriminated against.

2 Do you see that, sir?

3 A. I do.

4 Q. And then below it says, we just

5 haven't asked since July, I will ask again.

6 Right at the bottom.

7 A. Yes, I see that.

8 Q. Now, in connection, Mr. Bradford, with

9 your testimony on direct examination, that

10 Novell you say wasn't getting the betas as

11 frequently as some other companies, did you

12 have occasion to look at this E-mail from

13 Mr. Jones which says I don't believe we have

14 been discriminated against?

15 A. No, I have never seen this E-mail.

16 And, again, it relates to a specific point in

17 time to a specific beta.

18 MR. TULCHIN: May I approach the

19 witness, Your Honor?

20 THE COURT: You may.

21 Q. Mr. Bradford, I'm handing you

22 Defendant's Exhibit 814.

23 And the first page is a fax cover

24 sheet, or so it appears. And if you turn to

25 the second page, there's a memorandum from � 10466

1 Mr. Sobin at the law firm of Ablondi & Foster

2 to you of October 21, 1992; is that correct,

3 sir?

4 A. Yes.

5 Q. And you received this memorandum from

6 your lawyers on or about that time?

7 A. To the best of my recollection, yes.

8 Q. I just want to ask you one thing about

9 Exhibit 814, but before I do, let me ask you

10 the general question.

11 Do you recall in 1992 that Dick

12 Williams, who had been president of DRI -- and

13 remember, I think you testified that he left

14 Digital Research in or around April of '92, he

15 resigned?

16 A. That's right.

17 Q. Do you recall hearing that

18 Mr. Williams believed that at least some of the

19 problems that had caused the deteriorating

20 sales of DR-DOS were Novell's fault?

21 A. He may have said that that was a

22 factor. It's not particularly riveting in my

23 mind today, but Dick may have said something --

24 he was frustrated.

25 Again, during this time period Novell � 10467

1 was keeping kind of arm's length from this

2 company that we had purchased, and so Dick may

3 have had a perception that there was fault on

4 Novell's part without having access to all the

5 facts and information about what Novell was

6 doing and the discussions we were having at the

7 time with Microsoft.

8 Q. Well, if I could just ask you to look

9 briefly at the second page. It's the third

10 page of the document, the second page of the

11 memo from Mr. Sobin to you, and just -- I want

12 to see if this refreshes your recollection.

13 If you could just read to yourself the

14 paragraph that is the first full paragraph on

15 the second page. It starts there are obvious.

16 Do you see that?

17 A. Okay.

18 Q. And in particular, the sentence that

19 begins for example.

20 A. Yes.

21 Q. And my question to you, Mr. Bradford,

22 is whether this memorandum to you in October

23 1992 from Mr. Sobin refreshes your recollection

24 that at that time, Dick Williams, the former

25 president of Digital Research, had expressed � 10468

1 the belief that at least some of the problems

2 that led to Novell's deteriorating sales had

3 more to do with Novell than Microsoft?

4 A. It refreshes my recollection that Dick

5 thought that some of the problems with respect

6 to deteriorating sales related to Novell's

7 problem and not necessarily Microsoft's.

8 Q. Okay. Thank you.

9 MR. TULCHIN: May I approach the

10 witness, Your Honor?

11 THE COURT: You may.

12 Q. I hand you, sir, Defendant's Exhibit

13 2535 entitled Novell business applications

14 business plan.

15 Do you recall having seen this before,

16 sir?

17 A. No, not immediately it doesn't come to

18 mind, but I may have seen it before.

19 Q. Do you recognize this document as a

20 Novell business application business plan

21 written around April 3, 1995?

22 A. Yes, that's -- that appears to be

23 accurate.

24 It says 1996 to 1998 at the top, so

25 that confused me for a second. But it appears � 10469

1 to be someone's writing on April 3, 1995,

2 projecting into the future what we need to do

3 with respect to our applications division.

4 MR. TULCHIN: Your Honor, Microsoft

5 offers into evidence Defendant's Exhibit 2535.

6 MS. CONLIN: No objection.

7 THE COURT: It's admitted.

8 Q. I just want to look at the first page

9 very briefly, Mr. Bradford.

10 As I think you were just saying, this

11 is a business plan, and it does say draft on it

12 at the bottom, draft Novell confidential right

13 at the bottom.

14 A. Yes.

15 Q. But it appears to have been written

16 around April 3, '95, and it pertains to

17 Novell's applications products; correct?

18 A. It appears to be that.

19 Q. So the applications products would be

20 -- it's not DR-DOS. It's WordPerfect and

21 Quattro Pro and maybe suites as well, is that

22 what you would say?

23 A. Yes, uh-huh.

24 Q. All right. And were these kinds of

25 business plans -- you see right at the top it � 10470

1 says Novell business applications business

2 plan? Were these type of business plans

3 prepared at Novell from time to time?

4 A. Yes.

5 Q. And if you need time to look at

6 specific portions of this, Mr. Bradford, please

7 take it.

8 But I want to just go up a few pages

9 into this document, and you'll see Roman number

10 III, marketplace analysis, which begins on the

11 page that's numbered page 4.

12 Do you see that, marketplace analysis?

13 A. Yes, I see that.

14 Q. And it talks about customer market

15 analysis, and then if you go all the way into

16 page 8 -- I'm sorry, it's page 9, at the very

17 top, it says, company weaknesses that hinder

18 Novell business applications.

19 Do you see that, sir?

20 A. I do.

21 Q. And in that section, the author of

22 this business applications business plan sets

23 forth weaknesses that are Novell weaknesses.

24 When he says company, he or she, he

25 says company, that refers to Novell; correct? � 10471

1 A. That's correct.

2 Q. And then it has a list of Novell

3 weaknesses that hinder Novell business

4 applications. And again we're talking about

5 WordPerfect, we're talking about Quattro Pro,

6 and also suites of applications; is that right?

7 A. All right.

8 Q. And it says lack of ownership on the

9 desktop. Then it says weak development tools.

10 Were development tools important in

11 the success of business applications in

12 competing in the marketplace?

13 A. That's better -- I'm sure they were a

14 factor and important, but better ask a software

15 engineer.

16 Q. Okay. The third bullet point says

17 weak developers' program which has atrophied

18 over the last few years.

19 Do you recall at the time that the

20 developers' program had atrophied at Novell?

21 A. I don't recall that.

22 Q. And then the next point says, weak

23 vis-a-vis Microsoft in perception for corporate

24 strategy, vision, and ability to develop

25 software. � 10472

1 Do you see that?

2 A. Yes, I see that.

3 Q. In your role as a member of the

4 executive committee at Novell, was it your

5 understanding at the time in 1995 that there

6 was nothing more fundamental when it comes to

7 success in the software business than corporate

8 strategy, vision, and ability to develop

9 software?

10 A. That was important, certainly.

11 Q. And then it goes on a couple more

12 bullet points, lack of perception among

13 customers that Novell is a corporate strategic

14 partner like Microsoft.

15 Was it your understanding as a member

16 of the executive committee that that was

17 important too?

18 A. I recall it being an important factor,

19 but I don't recall that there was a perception

20 among customers that Novell is a -- was not as

21 good a corporate strategic partner as

22 Microsoft.

23 Q. Okay. Just going down two more --

24 A. I think it's -- well, we don't know

25 who wrote this or -- right? I don't know who � 10473

1 wrote this.

2 Q. Fair enough, Mr. Bradford.

3 A. Right, okay.

4 Keep going.

5 Q. Sure. I'm going to just go to a

6 couple more of these type of things.

7 But two more bullet points down, we

8 talked yesterday about the sales force at

9 WordPerfect, and you'll remember that you

10 mentioned on direct that a number of members of

11 the sales team from the WordPerfect

12 organization had been laid off at the time that

13 Novell bought WordPerfect; right?

14 A. Yes.

15 Q. And here the author of this memorandum

16 says, over 50 percent of sales force does not

17 understand applications, changing but slow.

18 Over 95 percent of sales force does not

19 understand Quattro Pro or electronic publishing

20 tools.

21 Now, that sounds pretty basic, does it

22 not, for a company trying to sell software that

23 your sales force understand the products?

24 A. That would be important.

25 Q. And then if we can look at the bottom � 10474

1 half of the page, the top half was a reference

2 to company weaknesses, and the bottom half

3 talks about division (group) weaknesses.

4 Do you see that?

5 A. Yes, I do.

6 Q. And the first bullet point says, third

7 to suite market. Microsoft has enormous

8 momentum.

9 Microsoft was the first to come out

10 with a suite; correct?

11 A. I'm not sure.

12 Q. Did you recall that --

13 A. I'm not sure. They were certainly one

14 or two. I don't know if someone came out with

15 a suite before Microsoft.

16 Q. Okay.

17 A. But this appears that this author,

18 whoever it is, says that we were third to suite

19 market.

20 Q. Right. And the next bullet point

21 says, still recovering from WordPerfect 6.0 for

22 Windows which was perceived as a slow and buggy

23 product.

24 Do you recall that, that the

25 WordPerfect 6.0 product was perceived in the � 10475

1 marketplace as slow and buggy?

2 A. No, but I'd have to think that if it

3 was, it related to some extent to the fact that

4 we couldn't get betas application programming

5 interfaces, et cetera, from Microsoft.

6 Q. And let's go down a little bit

7 further.

8 Weak development environment for

9 Perfect Office. Now, Perfect Office was the

10 Novell suite that was supposed to be competing

11 with Microsoft Office; correct?

12 A. That's correct.

13 Q. What is this a reference to, if you

14 know, sir, weak development environment?

15 A. I don't know sitting here today what

16 this author had in mind there.

17 Q. All right. Towards the bottom of the

18 page, it says, weak at localization compared to

19 Microsoft and Lotus.

20 And I just want to pause on this.

21 Is localization a reference to the

22 fact that in countries around the world,

23 software is written for the language that's

24 used in those particular countries?

25 A. That's right. � 10476

1 Q. So let's say in portions of South

2 America, your software product would actually

3 be in Spanish?

4 A. That's right.

5 Q. And localization just means you're

6 writing for the local language?

7 A. That's right.

8 Q. And was it your recollection around

9 1995 that Microsoft and Lotus both were much

10 better at putting their English version

11 software products in local languages than

12 Novell had been?

13 A. No, I don't have an understanding on

14 that.

15 Q. You don't have an understanding one

16 way or another?

17 A. That's right.

18 Q. Okay.

19 MR. TULCHIN: Your Honor, I don't know

20 if it's too early for the break, but this is a

21 good time for me if it suits the Court.

22 THE COURT: Sure. We'll take our

23 recess at this time.

24 Remember the admonition previously

25 given. We'll be in recess for ten minutes. � 10477

1 Leave your notebooks here. Thank you.

2 (A recess was taken from 9:50 a.m.

3 to 10:14 a.m.)

4 THE COURT: Everyone else may be

5 seated.

6 Mr. Bradford, you're still under oath.

7 MR. TULCHIN: May I approach the

8 witness, Your Honor?

9 THE COURT: You may.


11 Q. Mr. Bradford, I'm handing you what

12 we've marked as Defendant's Exhibit 6787A. And

13 these are pages from -- it's not the full

14 document, but certain pages from a Form 10-K

15 filed with the Securities and Exchange

16 Commission by Novell.

17 Do you recognize this, sir?

18 A. Yes, in general.

19 Q. Could you explain to the jury what a

20 Form 10-K is?

21 A. When there is a -- let's see, so the

22 10-Q -- so this is an annual report.

23 Q. Yes, sir.

24 A. An annual report to stockholders about

25 the company's work. � 10478

1 Q. And this particular one, Mr. Bradford,

2 was for the Novell's fiscal year ended October

3 29, 1994; correct?

4 A. I'm looking to find that date. I'm

5 sorry.

6 Q. Just on the first page under the words

7 Form 10-K, there's three lines, and the third

8 one says for the fiscal year ended October 29,

9 1994?

10 A. I'm looking above that, and this looks

11 like as of December 31, 1994.

12 Q. Well, let me back up one step.

13 Novell's fiscal year at the time ended

14 in late October; correct?

15 A. Yes, that's right.

16 Q. And I know there's a reference to the

17 number of outstanding shares as of December

18 31st --

19 A. Right.

20 Q. -- '94.

21 A. Okay.

22 Q. But this is for the fiscal year ended

23 late October, 1994; correct?

24 A. That's right, correct.

25 MR. TULCHIN: Your Honor, Microsoft � 10479

1 offers Defendant's Exhibit 6787A.

2 MS. CONLIN: No objection.

3 THE COURT: Admitted.

4 Q. And, Mr. Bradford, the Form 10-K is

5 prepared by Novell; is that right?

6 A. That's correct.

7 Q. And as the general counsel of Novell

8 at the time, would it have been part of your

9 duties and responsibilities to review at least

10 portions of the Form 10-K to make sure that

11 they were accurate and appropriate?

12 A. Yes.

13 Q. Did you review the portions of the

14 Form 10-K, the pages that make up Defendant's

15 Exhibit 6787A?

16 A. I don't know sitting here today if I

17 reviewed these particular ones, but typically,

18 I would peruse the entire 10-K.

19 Q. To make sure it was accurate before it

20 was filed; is that right?

21 A. That's right.

22 Q. What I want to do for the moment is to

23 -- well, let's look just at the first page for

24 a minute.

25 And at the top it says, Securities and � 10480

1 Exchange Commission, and that's a part of the

2 federal government in Washington; correct?

3 A. That's right.

4 Q. And then Form 10-K, and just under

5 that, there are those three lines I was

6 referring to, annual report -- there's an X

7 there -- annual report pursuant to Section 13

8 or 15D of the Securities Exchange Act of 1934,

9 for the fiscal year ended October 29, 1994.

10 And then I want to direct your

11 attention to page 9 of the document. It's the

12 fourth page of the exhibit, again, 6787A.

13 The first full paragraph starts, in

14 the market for Microsoft Windows word

15 processing applications.

16 Do you see that?

17 A. Yes, I do.

18 Q. I know this is a little -- the type --

19 the print face is very small, but this

20 particular paragraph talks about applications

21 products like suites and word processing

22 applications and spreadsheet applications;

23 correct?

24 A. Yes. And so this is under -- just to

25 get the document right, this looks like under � 10481

1 the competition section.

2 Q. Correct.

3 A. Okay.

4 Q. Yes, on page 8, the previous page, the

5 section is entitled competition.

6 A. Right.

7 Q. And I want to direct your attention in

8 this paragraph, about halfway down there's a

9 sentence that begins in addition.

10 In addition, the company's principal

11 competitors, including Microsoft, are combining

12 a number of application programs in a bundle or

13 suite for sale as one unit or arranging with

14 hardware manufacturers to preload application

15 programs on new computers.

16 Do you see that, sir?

17 A. Right.

18 Q. And at the time, of course, by the end

19 of -- sorry, I think we talked yesterday about

20 the fact that as of October '94, Novell had not

21 yet come out with its suite that competed in

22 this market; correct?

23 A. Yes, I think that's accurate.

24 Q. And then it goes on to say, the price

25 for a bundle or suite is typically � 10482

1 significantly less than the price for

2 separately purchased applications and many end

3 users are likely to prefer the bundle or suite

4 over a more expensive combination of other

5 individually purchased applications, even if

6 the latter applications offer superior

7 performance or features.

8 Do you see that, sir?

9 A. Yes.

10 Q. And is it your recollection of the way

11 your responsibilities worked at Novell at the

12 time that this is a sentence that you would

13 have reviewed and approved before Novell filed

14 the 10-K with the Securities and Exchange

15 Commission in Washington?

16 A. Well, if we had the full document

17 here, I think we would see that it's probably a

18 very lengthy one --

19 Q. It is. I have the full one if you

20 want it.

21 A. -- with all of the attachments and so

22 forth.

23 But to say I reviewed this particular

24 sentence on that particular day, I can't

25 testify to that today. � 10483

1 But typically, I would have, like I

2 said, perused the whole thing for accuracy.

3 Q. And is it, let's say, consistent with

4 your understanding today that as of 1994 the

5 statement that I just read about suites was

6 true and correct?

7 A. Yes, that's generally accurate. We

8 talked about that yesterday.

9 Q. Right. And then it says, Microsoft,

10 Lotus and the company offer bundles or suites

11 of their respective products at prices

12 significantly discounted from the prices of

13 stand-alone products.

14 Do you see that, sir?

15 A. Yes, I see that.

16 Q. And would you agree with me that

17 that's something that was good for consumers?

18 A. Yes, definitely.

19 If that were always the case, that was

20 definitely a positive for consumers.

21 Q. Okay. And looking at the last page of

22 Exhibit 6787A, would you agree that this Form

23 10-K was signed by Mr. Frankenberg, the CEO,

24 and also by the other members of the board of

25 directors of Novell? � 10484

1 A. Well, looking down, you've got Bob

2 Frankenberg, who was the CEO; Jim Tolonen, who

3 was the CFO, the chief financial officer; and

4 then you had Steve Wise, who was vice president

5 of finance at the time; and then, yes, the

6 other members that have signed this were

7 members of the Novell board of directors at the

8 time.

9 Q. Thank you, sir.

10 MR. TULCHIN: May I approach, Your

11 Honor?

12 THE COURT: You may.

13 Q. I'm handing you, Mr. Bradford,

14 Defendant's Exhibit 6790A.

15 And, again, this isn't the full

16 document, this is an excerpt. If you want the

17 full document, it's in the courtroom and we'll

18 show it to you.

19 But this is the -- these are pages

20 from Novell's 1997 annual report; correct, sir?

21 A. It appears to be that. Yes, annual

22 report to our stockholders, all right.

23 Q. Right. And is the annual report

24 typically mailed out to the stockholders of

25 record of Novell? � 10485

1 A. That's right.

2 Q. And that would be done once a year?

3 A. That's correct.

4 Q. Now, in this case -- oh, let me --

5 sorry.

6 MR. TULCHIN: Your Honor, Microsoft

7 offers Defendant's Exhibit 6790A.

8 MS. CONLIN: No objection.

9 THE COURT: It's admitted.

10 Q. The first page of the exhibit,

11 Mr. Bradford, is just the cover of the annual

12 report; correct?

13 A. That's right.

14 Q. And typically the chief executive

15 officer, the CEO of Novell, during the period

16 you were general counsel would write a letter

17 to stockholders that would be included as part

18 of the annual report; correct?

19 A. That's right.

20 Q. This 1997 annual report has a letter

21 to stockholders that was signed by Doctor Eric

22 Schmidt.

23 A. Right.

24 Q. Isn't that right?

25 A. Yes. � 10486

1 Q. And if we could look at the last page

2 of the document, that's Doctor Schmidt's

3 signature there, is it not?

4 A. Yes.

5 Q. And I think you testified on direct

6 that when you resigned in the year 2000, you

7 went into Doctor Schmidt's office and tendered

8 your resignation?

9 A. That's right.

10 Q. Doctor Schmidt was the man who took

11 over from Bob Frankenberg as the CEO?

12 A. Yes. There was an interim period

13 there where there was no CEO assigned, but,

14 yes.

15 Q. He was the next CEO after Mr.

16 Frankenberg?

17 A. Yes.

18 Q. Okay. And the letter that went out to

19 the stockholders as part of the annual report,

20 was this also something that you reviewed and

21 commented on before it was included and sent

22 out to the stockholders?

23 A. Yes, it was.

24 MR. TULCHIN: Could we look at the

25 second page of the document, the first page of � 10487

1 Doctor Schmidt's letter, which is entitled to

2 our shareholders.

3 Q. And right at the top, Doctor Schmidt

4 says -- there's a little bit of an arrow. And

5 this is how he starts out the 1997 letter to

6 stockholders. Clarity of direction and

7 strategy are essential for software companies

8 to sustain growth.

9 Now, let me just stop there,

10 Mr. Bradford.

11 I think you and I agreed you testified

12 that clarity of direction and strategy are

13 essential for software companies.

14 A. That's right.

15 Q. And then Doctor Schmidt goes on to

16 say, the Novell that I joined in April of 1997,

17 midway through the company's fiscal year, had

18 lost touch with this simple truth. In seven

19 months we have corrected that.

20 My question to you, Mr. Bradford, is

21 whether or not you agree that as of April

22 1977 --

23 THE COURT: '97?

24 MR. TULCHIN: What did I say, Your

25 Honor? � 10488

1 THE COURT: '77.

2 THE WITNESS: We're back in college.

3 MR. TULCHIN: I'm 20 years off, and I

4 apologize to all concerned.

5 Q. I'm going to ask my question again.

6 Do you agree, Mr. Bradford, with

7 Doctor Schmidt's statement here that as of

8 April 1997, Novell had lost touch with the

9 simple truth that clarity of direction and

10 strategy are essential for Novell to sustain

11 growth?

12 A. I think it was a bit of an

13 overstatement. He's trying to communicate

14 effectively with the stockholders. But in

15 general, certainly Doctor Eric Schmidt had a

16 concern on that issue.

17 Q. And it was correct, was it not, that

18 as of 1997, Novell had lost touch with the idea

19 that clarity of direction and strategy were

20 important for its growth?

21 A. Again, I think that's an

22 overstatement.

23 MR. TULCHIN: Thank you, Mr. Bradford.

24 Nothing more on cross, Your Honor.

25 THE COURT: Very well. Redirect. � 10489

1 MS. CONLIN: Thank you, Your Honor.



4 Q. Let's stay with this document for a

5 moment, if we could.

6 A. Okay.

7 Q. Doctor Eric Schmidt, for what period

8 of time was he Novell's CEO?

9 A. Approximately four years, five years,

10 perhaps.

11 Q. And came in '97, left in --

12 A. 2001 or 2002.

13 Q. What is his current position, do you

14 know?

15 A. Yes. He is lucky enough to be

16 chairman and CEO of Google.

17 Q. And I have a few questions -- I better

18 not say that. I have more than a few questions

19 for you.

20 A. Okay.

21 Q. We won't cover every topic, but there

22 are some that I think deserve attention.

23 First of all, let's begin with

24 Defendant's Exhibit 6770. Do you remember, the

25 document is the Arnold & Porter list of OEMs � 10490

1 who have --

2 MS. CONLIN: May I approach, Your

3 Honor?


5 Q. -- who have licensed the DR-DOS

6 product?

7 A. Yes, I see that.

8 Q. Do you know approximately, in this

9 time frame back in the early '90s,

10 approximately how many computer hardware

11 manufacturers there would have been in the

12 world?

13 A. Well, as I recall, we talked about 247

14 here. I would guess, and this is just an

15 estimate, 10,000.

16 Q. Do the top 20 or so of those 10,000

17 OEMs sell 80-plus percent of the computers that

18 are sold?

19 A. Yes, that's my understanding.

20 Q. So on that list, Mr. Bradford, are

21 there any of the top 20 that DRI has managed to

22 secure as customers?

23 A. I could look at it in detail, but I

24 really doubt it.

25 Q. All right. Don't look at it in � 10491

1 detail.

2 A. Okay.

3 Q. I want to talk with you also about

4 Mr. Noorda and his health and your concerns

5 about it.

6 Did you in 1993 -- 1992, 1993, 1994,

7 until April when he left the company, did you

8 feel that Mr. Noorda continued to be capable of

9 running Novell?

10 A. Certainly, yes.

11 Q. If a point had come before his

12 voluntarily leaving where you felt he was not,

13 what would your obligation have been?

14 A. Report it to the board of directors.

15 Q. Did you ever do that?

16 A. No.

17 Q. And would you have done that if, in

18 fact, you doubted his ability to proceed as

19 CEO?

20 A. Yes.

21 Q. And then he stepped down in April of

22 1994; correct?

23 A. That's right.

24 Q. After that and based on your

25 continuing contact with him, did his state of � 10492

1 mental health get better or worse?

2 A. It got worse.

3 Q. All right. You were also asked about

4 some questions with regard to the revenue of

5 Novell in the mid '90s.

6 Do you recall those questions?

7 A. Yes, in general.

8 Q. And I believe that Mr. Tulchin

9 provided to you a number of approximately $2

10 billion in sales revenue for Novell.

11 Do you recall that.

12 A. Yes, I do.

13 MS. CONLIN: If I may approach, Your

14 Honor?

15 THE COURT: You may.

16 MS. CONLIN: May I give the Court a

17 copy, as well?

18 THE COURT: Thank you.

19 Q. Do you recognize this, Mr. Bradford,

20 as an annual report that Novell provided to the

21 SEC? It's actually not the whole report. It

22 is only a tiny section of it.

23 A. I think what this is is a Microsoft --

24 Q. I'm sorry, Microsoft.

25 A. -- SEC filing. � 10493

1 Q. That would be correct; I'm sorry.

2 So Exhibit 4220, which is admitted, is

3 the annual report of Microsoft -- it's so hard

4 to see the dates on these -- for the fiscal

5 year ended June 30th, 1999?

6 A. Yes. Okay, I see that at the top.

7 Q. If you'll turn to the one page that I

8 have attached and look to the bottom table, the

9 year ended June 30th, and you will see a series

10 of numbers there in the billions.

11 A. Yes.

12 Q. All right. And so for the year 1995,

13 if Novell had $2 billion in sales, Microsoft

14 had about three times that many, 6 billion 75

15 million; correct?

16 A. That's right.

17 Q. And then for the year '96, 9 billion?

18 A. Right.

19 Q. For the year '97, 11 billion?

20 A. Yes, almost 12 billion.

21 Q. All right. And then for the year '98,

22 15 billion?

23 A. Yes.

24 Q. And for 1999, nearly 20 billion;

25 correct? � 10494

1 A. That's right.

2 Q. Mr. Tulchin also talked with you about

3 the merger talks that Novell had with Lotus.

4 Do you recall those conversations?

5 A. Yes, I do.

6 Q. And Mr. Tulchin insisted that they had

7 occurred in 1991. Do you recall that?

8 A. Yes.

9 Q. And your memory was that they occurred

10 in 1990?

11 A. That's right.

12 Q. And that they were long over before

13 any communications with Microsoft began with

14 that phone call from Bill Gates?

15 A. That's right.

16 Q. Let me show you Exhibit 10017.

17 MS. CONLIN: May I approach the

18 witness, Your Honor?

19 THE COURT: Yes.

20 MS. CONLIN: May I show the Court a

21 copy, as well?

22 THE COURT: Yes, thank you.

23 Q. What I've handed you, Mr. Bradford, is

24 an article from the Microsoft library. It is

25 an IDC PC software -- to IDC PC software � 10495

1 clients. And do you recall what IDC is?

2 A. Yes. It's an industry analyst group.

3 Q. All right. And this is dated April 6,

4 1990?

5 A. Correct.

6 Q. Not '91?

7 A. That's right.

8 Q. And the headline is Lotus and Novell

9 agree to merge. Do you see that?

10 A. Yes, I do.

11 MS. CONLIN: Your Honor, Plaintiffs

12 would offer Exhibit 10017, not for the truth of

13 the matter asserted, but as a document from the

14 Microsoft library that Microsoft was aware of,

15 and also for the purpose of establishing the

16 date of the public notice of these merger

17 discussions.

18 MR. TULCHIN: On that basis, Your

19 Honor, we have no objection.

20 THE COURT: It is admitted.

21 Q. And you can see that the headline is

22 Lotus and Novell agree to merge, and then if we

23 could look just at the first sentence, Lotus

24 Development Corporation and Novell announced --

25 today announced -- actually it says today � 10496

1 announced today an agreement to merge the two

2 companies.

3 Is that consistent with your

4 recollection?

5 A. Yes, it is.

6 Q. And the talks with Microsoft first

7 merger talks -- that very first thing that

8 started in November of 1989, that's over at

9 that point?

10 A. Right. That ended approximately

11 January of 1990, and then we started

12 discussions with Lotus after that, and those

13 began April 6 of 1990, and the discussions --

14 the merger -- a tentative agreement with Lotus

15 to merge stopped about a month later, sometime

16 in May of 1990.

17 Q. I have that too.

18 A. Okay, I'm sorry.

19 Q. But I think you may have misspoken.

20 You said the merger talks started on April 6,

21 and, in fact, that's when the letter of intent

22 was signed; correct?

23 A. That's correct.

24 Q. Right. And then let me show you, if I

25 may, Plaintiffs' Exhibit 10016. � 10497

1 MS. CONLIN: May I approach, Your

2 Honor?


4 Q. And this is an article from USA Today,

5 and the date is 5-21-91. And -- I beg your

6 pardon. It's '90. 5-21-90.

7 And is this article consistent with

8 your recollection of the date when the Lotus

9 and Novell merger talks collapsed?

10 MR. TULCHIN: Your Honor, mine says

11 '91. I don't know when this article was

12 published, but it -- I read this as '91.

13 MS. CONLIN: That is not correct. I

14 have a number of other articles, Your Honor.

15 If you will just give me a moment to find them

16 here in my --

17 THE COURT: Sure.

18 MS. CONLIN: I have no idea what

19 number, and I have only one copy of these.

20 Perhaps I could show these to

21 Mr. Tulchin for the purpose of establishing the

22 date.

23 May I do that, Your Honor?

24 THE COURT: Yes.

25 MS. CONLIN: It is a bit hard to read. � 10498

1 Can we stipulate the date the merger

2 collapsed was 5-21-90?

3 MR. TULCHIN: Your Honor, I don't know

4 one way or another. I see what's written in

5 hand on those documents. I don't know the

6 date.

7 MS. CONLIN: I will provide additional

8 information about this, Your Honor.

9 THE COURT: Okay.

10 MS. CONLIN: But I would at this point

11 offer into evidence Plaintiffs' Exhibit 10016

12 for the same purpose; that is, to show the date

13 on which the Lotus/Novell deal collapsed.

14 MR. TULCHIN: I have no objection to

15 the document, Your Honor.

16 THE COURT: It's admitted.

17 Q. I believe I already asked you this,

18 but 1990, that was your recollection then and

19 now?

20 A. Absolutely it was 1990 to be clear.

21 Q. And I believe the intent of the

22 questioning of you on that matter was for the

23 purpose of indicating that like Microsoft, if

24 these talks with Lotus had occurred in the time

25 frame that Mr. Tulchin provided to you, then � 10499

1 you, too, would have been involved in two

2 merger talks at the same time; correct?

3 A. That's right.

4 Q. But that was not the case?

5 A. That's correct.

6 Q. At the time that you and Novell were

7 discussing the possibility of merger, was that

8 the only merger that was under active

9 discussion at that time?

10 A. Yes. Of course, Microsoft knew about

11 the merger with Digital Research and so --

12 Q. That had --

13 A. That had already been announced and a

14 letter of intent had been signed, and Microsoft

15 knew about that.

16 MS. CONLIN: Could we put up the time

17 line again for the purpose of orienting

18 ourselves to the dates?

19 Can it go on this other one?

20 Q. I want to talk with you also about

21 Mr. Williams' departure from the company.

22 A. Sure.

23 Q. Can you explain why it was necessary

24 or why the people involved in those merger

25 discussions with Microsoft felt it was � 10500

1 necessary to keep Mr. Williams in the dark

2 about it?

3 A. Well, certainly.

4 Again, as we discussed the last couple

5 of days, you want to keep merger discussions to

6 as narrow a group as possible, and we wanted

7 Dick Williams' complete focus on running

8 Digital Research without being distracted by

9 other discussions that were ongoing with

10 Microsoft.

11 Q. And he was not among the group, the

12 very narrow group that was actually involved in

13 the negotiations?

14 A. Right, that's correct.

15 Q. I also want to revisit with you a

16 topic that Mr. Tulchin took some time with you,

17 and that is the issue of the payment by the

18 plaintiff class for your time.

19 Do you recall, Mr. Bradford, when we

20 first spoke whether you asked me to pay you or

21 whether I offered to make payment for your time

22 devoted to this matter?

23 A. You offered to pay for my time.

24 Q. And I offered to compensate you for

25 any losses sustained as a result of your taking � 10501

1 the time that you might otherwise be involved

2 in some other activity, perhaps even more

3 pleasant than this one?

4 MR. TULCHIN: Objection to leading,

5 Your Honor.

6 THE COURT: Sustained.

7 Q. If you were not here today, would you

8 be -- what would you be doing?

9 A. I would be running my new company and

10 spending time doing that, which would probably

11 be distinctly more pleasant than this.

12 Q. All right. Hard for me to believe

13 that.

14 Did the -- and I assume that you would

15 be -- would you state whether or not you would

16 be involved in income-generating activity on

17 your own behalf and on behalf of your company

18 if you were not here in Des Moines for four

19 days on the stand?

20 A. Yes, I would be.

21 Q. Did the --

22 A. I would also be spending time with my

23 grandkids when I get a chance.

24 Q. That is not income generating, is it?

25 A. Well, eventually I hope they support � 10502

1 and sustain me, but right now, no, my

2 eight-year-old grandson, my two-year-old

3 granddaughter's not income generating.

4 Q. Did the offer that we made to pay for

5 your time spent assisting in this case and

6 providing testimony influence your testimony in

7 any way?

8 A. Absolutely not.

9 Q. Did it make it possible for you to set

10 aside the other business matters and come here

11 and provide the information that you have to

12 this jury?

13 A. It assisted, certainly.

14 Q. Did it seem to you like a fair thing

15 to do?

16 A. Oh, yes.

17 Q. Let me also correct something that was

18 said I think yesterday.

19 When you bought -- this is back in

20 July of 1991.

21 When you and DRI entered into your

22 letter of intent and then in November when the

23 merger was completed, was a product produced by

24 Digital Research called Gem, G-e-m, on the

25 market? � 10503

1 A. I don't recall today if that was

2 actually on the market. It was certainly, as I

3 recall, under product development.

4 Q. Well, tell the jury what Gem was.

5 A. Gem was going to be or was a graphical

6 user interface to sit on top of the DRI

7 operating system, DR-DOS, as I recall.

8 MS. CONLIN: Now, I would like to move

9 to Defendant's Exhibit 814, which, Your Honor,

10 the Defendant did not offer, but we would.

11 THE COURT: Any objection?

12 MR. TULCHIN: I don't know what it is,

13 Your Honor. Sorry.

14 MS. CONLIN: It's the one you used,

15 David. It's right here.

16 MR. TULCHIN: No objection, Your

17 Honor.

18 THE COURT: That's 814?

19 MS. CONLIN: Yes, Your Honor,

20 Defendant's 814.

21 THE COURT: It's admitted.

22 Q. I don't have a copy for you, but we --

23 I think this is clear enough for us to look at

24 together.

25 This is the October 21, 1992 document � 10504

1 that Mr. Tulchin called your attention to in

2 connection with Mr. Williams' concerns that

3 Novell may have been responsible for some of

4 the problems in the third and fourth quarter.

5 Dated October 21, 1992.

6 So several months after Mr. Williams

7 left Novell; correct?

8 A. That's right.

9 Q. And down at the bottom -- this is

10 addressed to you, and down at the bottom

11 there's a paragraph: David, a note on

12 yesterday's meeting with Dick Williams. I

13 reviewed with Dick what the next few months may

14 look like for him as a witness in the FTC case.

15 It was apparent to Dick that he is going to

16 have a very prominent role and therefore will

17 be the target of a lot of litigation harassment

18 by Microsoft.

19 Do you know what that referred to?

20 A. Well, yes.

21 During this time period and others,

22 there was always a very general concern that if

23 someone were to testify against Microsoft in

24 court or in front of the Federal Trade

25 Commission, that Microsoft could take action to � 10505

1 harass or otherwise disturb the peace of those

2 providing such testimony.

3 Q. And I also want to review just briefly

4 with you another document you saw this morning,

5 which is Defendant's Exhibit 2535.

6 And what Mr. Tulchin focused on were

7 the -- in this draft report that we don't know

8 for sure who wrote.

9 MS. CONLIN: Perhaps we could show the

10 front page. It's 2535.

11 Do you have that, Darin?

12 MR. BUCHBINDER: Plaintiffs'?

13 MS. CONLIN: No, Defendant's.

14 Okay.

15 Q. Let's look at -- page 9 was the part

16 that you looked at before about the company's

17 weaknesses. So let's look at the page before

18 that, which provides a company's strengths and

19 opportunities. I just want to touch on a

20 couple.

21 MS. CONLIN: Yeah, that's good.

22 Q. Company strengths that assist Novell,

23 business applications included customer

24 support. Do you agree with that?

25 A. Certainly. � 10506

1 Q. And best network channel in the

2 industry. What does that mean?

3 A. We had a very strong distribution

4 channel for our products, one that was admired

5 throughout the industry.

6 Q. And the best infrastructure of

7 training and education resources in the

8 industry. What does that mean?

9 A. Well, we were innovators in customer

10 education, providing customer support in terms

11 of education and training manuals to assist

12 computer users with respect to their operation

13 of the network operating system, or in this

14 case I guess the applications.

15 Q. And then under B, division group

16 strengths -- I assume that's the applications

17 division?

18 A. Yes.

19 Q. And under that, it says, strong

20 expertise in word processing, spreadsheets,

21 presentation graphics and electronic publishing

22 tools.

23 Was that a correct assessment in your

24 view?

25 A. Certainly, yes, we had extraordinarily � 10507

1 good word processing spreadsheet products, et

2 cetera.

3 Q. And skipping down a couple to perfect

4 fit technology. Ideal platform for suites.

5 Way ahead of competition here.

6 Do you know what that meant?

7 A. Well, as I recall, the folks in the

8 application division felt like the suite of

9 products that they were putting together would

10 be eventually considered once it released to

11 those other competitive suites in the

12 marketplace.

13 Q. And then finally, on this -- no, I'm

14 sorry, not quite finally.

15 Next under that it says, support of

16 open architectures, ODBC, ODMA, open doc, and

17 OLE, PerfectLinks.

18 Tell the jury about the concept, if

19 you can, and if this is beyond your current

20 expertise, just tell me.

21 Can you tell the jury what this open

22 architecture means in a general way?

23 A. Yeah. In a very general way, when we

24 talk about openness in the computer industry

25 versus proprietary; in other words, some � 10508

1 companies would keep their information more

2 closed and more proprietary. Others were more

3 open in sharing their application programming

4 hooks and documentation. And so we had a more

5 open architecture, I think, than other people

6 in the industry.

7 Q. And now, finally, first to market with

8 focus on task automation.

9 Do you know what that refers to?

10 A. I don't recall that one.

11 Q. You also talked for some time about

12 the betas in the Chicago time frame with

13 Mr. Tulchin. Do you recall that?

14 A. Yes, I do.

15 Q. That was quite recent.

16 A couple of things that I wanted to

17 talk with you about in that connection.

18 One of the areas that you discussed

19 with Mr. Tulchin was the document that is

20 Defendant's Exhibit 6773.

21 MS. CONLIN: May I approach, Your

22 Honor?

23 THE COURT: You may.

24 Q. And this was introduced yesterday.

25 A. All right. � 10509

1 Q. And you commented on this as something

2 you did not recognize. In fact, you kind of

3 objected to foundation, as I recall.

4 A. Well, there was no Novell letterhead

5 on it and so forth, but I recognize Dave

6 Miller's name, but we couldn't figure out if

7 Dave wrote it or --

8 Q. Was the subject of it or -- let me ask

9 you this question.

10 Does this document look like any other

11 document you recall ever having seen at Novell?

12 A. No. This would be atypical of what we

13 would see.

14 Q. You mean not typical, atypical?

15 A. I'm sorry, yes, not typical.

16 Q. It has no author listed; correct?

17 A. That's correct.

18 Q. Let me ask, in a group of -- you had

19 about 10,000 employees at this time?

20 A. Oh, probably 8,000 or so after we

21 consolidated with WordPerfect. That would have

22 been October of '95, probably would have been

23 8,000 employees.

24 Q. Do you imagine that some substantial

25 number of those employees are named Dave? � 10510

1 A. Yes, that's a popular name. We have

2 at least three or four folks in the courtroom

3 by that name.

4 Q. Mr. Miller will be here, and he's

5 testified under oath before, and he says

6 unequivocally that he did not write this and

7 that if this Dave refers to him, he does not

8 agree with the content of that.

9 We will share his documents on this

10 issue with the jury when he comes, but let me

11 show you just a few of the ones that you were

12 not shown on your cross-examination.

13 MR. TULCHIN: Your Honor, I object to

14 the little statement to the jury about other

15 evidence.

16 THE COURT: Sustained.

17 MS. CONLIN: May I approach, Your

18 Honor?

19 THE COURT: You may.

20 Q. Let me show you 2180.

21 THE COURT: Is this Plaintiffs'?

22 MS. CONLIN: Yes, Your Honor. I'm

23 sorry.

24 Q. This is an E-mail to Mr. Miller from

25 Kevin Lewis. Does this indicate that Mr. Lewis � 10511

1 was a Novell employee, or can you tell?

2 A. I cannot tell.

3 Q. All right. And the subject is our,

4 quote, cooperative, end quote, relationship

5 with Microsoft. The date is November 16, 1994.

6 MS. CONLIN: Your Honor, at this time

7 the Plaintiffs would offer 2180.

8 MR. TULCHIN: No objection.

9 THE COURT: It's admitted.

10 A. As I have time to peruse the document,

11 it's clear that this was a Novell employee that

12 was working on the NFS client for the LAN

13 workplace.

14 Q. All right. And he addresses Mr.

15 Miller who he says, last I heard, you were

16 managing our relationship with Microsoft as far

17 as getting information and support from

18 Microsoft.

19 Could you fill me in on just what our

20 relationship with Microsoft consists of?

21 And he describes what he's doing.

22 And then the last paragraph says,

23 unfortunately, when you are implementing

24 software at the system level, some information

25 is not enough information. � 10512

1 Without source code for reference, the

2 specifications, sample source code, et cetera,

3 must be accurate and complete. I get the

4 feeling that the folks at Microsoft don't

5 understand this since they obviously have

6 source code to peruse.

7 Any suggestions on how I can get

8 information more readily out of Microsoft?

9 The problems that Mr. Lewis is having,

10 are those more typical of the problems you were

11 aware of in this time frame?

12 A. Yes, they are.

13 Q. Let's look at 2190.

14 MS. CONLIN: May I approach, Your

15 Honor?

16 THE COURT: Yes.

17 MS. CONLIN: I'm sorry, I have to give

18 you a marked copy. I don't seem to have enough

19 of the unmarked.

20 Q. This is a series of E-mails. And as

21 is the usual case, you start at the back on the

22 second page, and this E-mail is from Novsup at

23, and the subject is need Windows

24 95 TDI include files, and it's not -- the

25 heading is not quite complete because it's one � 10513

1 of those incorporated E-mails.

2 But it says -- and I think this is as

3 we go through this --

4 MS. CONLIN: Darin, can we start on

5 the first page? Because I believe that we've

6 got a whole long included string.

7 THE COURT: We're going to take a

8 break at this time, if that's okay.

9 MS. CONLIN: Yes, Your Honor, of

10 course.

11 THE COURT: We'll take our lunch

12 recess from now until 12.

13 Remember the admonition previously

14 given.

15 See you at 12.

16 (A recess was taken from 10:58 a.m

17 to 12:02 p.m.)

18 (The following record was made out of

19 the presence of the jury.)

20 THE COURT: Proceed.

21 MS. CONLIN: Your Honor, the Court

22 issued an order some time ago which precluded

23 either side from contacting class members

24 without the permission of the Court.

25 Plaintiffs have honored that order and � 10514

1 -- but now we request the Court's permission to

2 contact members of the Plaintiffs' class, all

3 of them.

4 We want to -- we want that

5 opportunity, Your Honor.

6 The Court may have seen the article

7 today, and we thought perhaps it would be time

8 for us to contact our own clients.

9 THE COURT: Response?

10 MR. TULCHIN: Your Honor, this is a

11 surprise to us. I didn't know this motion was

12 coming. I'd like an adequate opportunity to

13 respond some point next week.

14 THE COURT: Very well.

15 MR. TULCHIN: Thank you, Your Honor.

16 MS. CONLIN: Well, I thought it would

17 be noncontroversial, Your Honor. I was wrong.

18 MS. NELLES: Your Honor, if we're

19 taking a very quick moment, on housekeeping, I

20 wanted to alert the Court and Plaintiffs as

21 well, that with respect to Your Honor's order

22 this morning on motions to be heard on Monday,

23 and I understand the first in line is the --

24 relates to the prior deposition testimony of

25 Mr. Kempin, and that will be heard today at � 10515

1 three.

2 On the remaining, Microsoft can be

3 available for number 2, number 4, number 5, and

4 number 6.

5 Three has not been fully briefed, and

6 we'd like to go to our brief on that, and the

7 lawyer who will likely argue will not be

8 available on Monday.

9 But we can take care of 1, 2, 4, 5,

10 and 6 between I believe myself and

11 Mr. Tuggy.

12 THE COURT: Very well.

13 MR. GRALEWSKI: Your Honor, I didn't

14 have the order in front of me. What is number

15 3?

16 MS. NELLES: Our motion to -- our

17 meaning Microsoft's motion to preclude Stephen

18 McGeady from offering testimony regarding facts

19 subject to collateral estoppel.

20 MR. GRALEWSKI: You're proposing to do

21 that?

22 THE COURT: No. Every one but that.

23 MS. NELLES: No. Every one but that

24 one.

25 MR. GRALEWSKI: At a later time? � 10516

1 MS. NELLES: I'm not proposing any

2 time at the moment.

3 MR. GRALEWSKI: Not on Monday?

4 MS. NELLES: Not on Monday.

5 THE COURT: Thank you.

6 Thank you very much.

7 (An off-the-record discussion was

8 held.)

9 THE COURT: I've just been informed by

10 my court reporter, Janis, that [redacted] now

11 does not have to appear in trial because the

12 prosecutor or defense counsel?

13 THE CLERK: She didn't say.

14 THE COURT: One of the attorneys is

15 ill. However, at the same time, you report

16 what you heard, please, loudly for the Court.

17 THE CLERK: Patrice said she had then

18 made plans to go out of town for the weekend.

19 MS. CONLIN: That seems reasonable,

20 Your Honor. I think --

21 THE COURT: I'm not going to change

22 our plans in any way, shape, or form. Stands

23 as it is.

24 (The following record was made in the

25 presence of the jury at 12:08 p.m.) � 10517

1 THE COURT: Everyone else may be

2 seated.

3 You may proceed, Ms. Conlin.

4 MS. CONLIN: Thank you Your Honor.



7 Q. Before we go back to the topic we were

8 discussing, Mr. Bradford, let me show you

9 Plaintiffs' Exhibit 10032.

10 MS. CONLIN: May I approach, Your

11 Honor?

12 THE COURT: Yes.

13 MS. CONLIN: I provided a copy to

14 Mr. Tulchin.

15 Q. 10032, Plaintiffs' 10032 is an article

16 dated 5-21-90 from the New York Times, the

17 headline of which is software merger collapses.

18 Do you see that?

19 A. Yes, I do.

20 MS. CONLIN: Your Honor, at this time

21 the Plaintiffs would offer 10032 not for the

22 truth of the matter asserted, but rather to

23 establish the date and on notice.

24 MR. TULCHIN: No objection, Your

25 Honor. � 10518

1 THE COURT: It's admitted.

2 Q. And this article in the New York Times

3 on May 21st, 1990, indicates that the merger

4 between Novell and Lotus collapsed at that

5 time; correct?

6 A. That's correct.

7 Q. I believe you also testified that the

8 reason that you understood the merger to have

9 collapsed is because of a disagreement about

10 the number of people on the board; correct?

11 A. That's right.

12 Q. And what was Novell's desire in that

13 respect?

14 A. We wanted to have fair and equal

15 representation with Lotus Development

16 Corporation on that board of directors.

17 So the original concept is that they

18 would have four nominees for the board and we

19 would have four, and Jim Manzi, who was CEO of

20 Lotus at the time, wanted to have a majority of

21 Lotus folks on that board of directors. We

22 couldn't come to an agreement on that, and as a

23 result of that we stopped those merger

24 discussions.

25 Q. All right. So, in fact, all of this � 10519

1 happened in -- before May 21 of 1990; correct?

2 A. That's right.

3 Q. And that would be more than a year

4 before the talks with Microsoft began; is that

5 right, July 18th --

6 MS. CONLIN: Could we have the time

7 line?

8 A. Yes. We did not start the merger

9 discussions with Microsoft again the second

10 time until on or after July 19th of 1991.

11 Q. Let's return. We were talking about

12 the Win 95 beta cycle and whether or not Novell

13 was getting timely information from Microsoft,

14 and we were looking at Exhibit 2190, and we're

15 going to kind of -- this one is a little

16 difficult, but let's look at the one from

17 Kevinl to Johnl, TDI include files -- and this

18 is dated December 2, 1994.

19 And the letter begins, sorry to be a

20 pest. I looked on FTP in

21 something, for the Windows 95 TDI include files

22 this morning, but the files don't seem to be

23 there.

24 Am I looking in the wrong place?

25 And then he also says, I think that � 10520

1 the following is a copy of a previous request

2 that I sent on November 22, 1994.

3 The include files -- the include files

4 I think -- is include some software term for

5 some kind of file?

6 A. I don't know.

7 Q. Okay. The include files below are

8 referenced in the Microsoft TCP/IP VXD

9 interface specification, which was V 1.0

10 October 24th, 1994, which was sent to me

11 previously. I haven't been able to locate them

12 on the SDK or DDK for Windows 95.

13 SDK would be the software development

14 kit; right?

15 A. That's correct.

16 Q. DDK, any ideas?

17 A. I don't offhand.

18 Q. I need the Windows 95 specific files.

19 Okay, so the first request is made

20 November 22, 1994; correct?

21 A. That appears to be accurate.

22 Q. And then the second request is

23 December 2, 1994. So that would be a couple of

24 weeks.

25 Now, why would a couple of weeks � 10521

1 matter, do you know?

2 A. Well, I'm not a software engineer, but

3 seems like in any of these time frames, you're

4 having to drive and create software programs

5 that would be compatible with others in the

6 marketplace so they would achieve widespread

7 market acceptance, and so any delay would hurt

8 the company.

9 Q. Even a couple of days -- if a

10 competitor of WordPerfect got a Microsoft

11 Chicago beta a couple of days before

12 WordPerfect got it, would that permit -- what

13 would that mean for WordPerfect?

14 A. Well, that would mean that the company

15 other than WordPerfect would have a competitive

16 advantage in building their products.

17 Q. All right. He sends this second

18 request on December 2nd, and then the reply

19 comes December -- actually, December 2nd

20 Mr. Ludwig says Dave -- I believe this is Dave

21 Beaver at

22 Dave, are you going to get the files

23 up there or can you E-mail them to Kevin?

24 And then on December 6th, again from

25 Kevin, I checked the server FTP � 10522

1 this morning and the files do not appear to be

2 there. I haven't received -- and then there's

3 some software language. I haven't received any

4 mail containing the files either. If there is

5 something that you can do to expedite the

6 delivery, I'd sure appreciate it.

7 So this goes for more than a month

8 with him trying to get these files. Do you see

9 that?

10 A. Let's see. So he sent the original

11 letter. The following is a copy of a request I

12 sent on November 22nd.

13 Q. I'm sorry, not more than a month.

14 A. Right. A little under a month.

15 Q. November 22nd.

16 A. Right.

17 Q. So to December 6th, a couple of weeks?

18 A. That's right.

19 Q. That amount of time might matter under

20 some circumstances or under all circumstances?

21 A. I would say the majority of

22 circumstances that would have a substantive

23 effect.

24 Q. And is Exhibit -- Plaintiffs' Exhibit

25 2190 consistent with what you understood was � 10523

1 happening in receipt of Windows 95 Chicago

2 betas?

3 A. Yes.

4 Q. And that's in late '94.

5 Now, let's move to January of 1995.

6 MS. CONLIN: May I approach, Your

7 Honor?

8 THE COURT: You may.

9 Q. I am handing you Defendant's Exhibit

10 2507.

11 And this is -- the front page shows

12 E-mail to Provo PR V mail, Richard Jones and

13 Ben Hendrick, from Jon Ludwig at Microsoft, and

14 it's dated Wednesday, January 11th, 1995. But,

15 of course, that is not the first one.

16 MS. CONLIN: I'm uncertain, Your Honor

17 -- if it's not offered I do so.

18 MR. TULCHIN: No objection.

19 THE COURT: It's admitted.

20 MS. CONLIN: Thank you, Your Honor.

21 I'm sorry.

22 Darin, if we could go -- I think if we

23 could go to the very last line of the first

24 page because I think that's what begins this

25 chain, and it's from Prakash Rao, R-a-o. � 10524

1 Is that a name with which you're

2 familiar?

3 Are you reading, David?

4 A. Yes, I am. I'm sorry.

5 Q. That's all right. It is pretty

6 fascinating.

7 Prakash Rao, Rao, or I'm perhaps not

8 pronouncing it correctly. But do you see his

9 name at the bottom of page 1? Actually, it's

10 at the bottom of page 2.

11 A. Yes.

12 Q. Is that a name that you know?

13 A. Yes. I vaguely remember him as being

14 in the engineering group at Novell.

15 Q. He on 1-1-96, he writes Ben Hendrick,

16 and I'm not sure you've had an opportunity to

17 say anything about Mr. Hendrick, but can you

18 tell the jury what role he played in -- with

19 respect to the development of products during

20 this time frame?

21 A. Yes. Ben was in our engineering group

22 or consulting services group and had much to do

23 with creating, I think, compatibility between

24 the Microsoft products and the Novell products.

25 Q. Was he at this time a very prominent � 10525

1 person in the Novell family?

2 A. I would classify him as an important

3 midterm -- midtier employee. He wasn't a

4 senior vice president or vice president, but I

5 think he later became such.

6 Q. And he was a builder of software;

7 right?

8 A. Yes, among other things.

9 Q. This Mr. Prakash Rao writes to Ben on

10 January 6, 1995, saying, we are testing our

11 Client 32 against Build 224 October '94 of Win

12 95 beta. Even though our client seems to be

13 working great on this beta, we are finding Win

14 95 very unstable. We hear that later builds

15 post 224 resolve the issues we are seeing.

16 My understanding was that we are on

17 Microsoft's beta list for biweekly updates.

18 But my team has not received any version post

19 Build 224. Can we get the later beta builds

20 ASAP please? Help, this is a very critical

21 item.

22 And then if we go back to the front

23 page, we see that Ben writes to Mr. Ludwig on

24 January 9th, 1995, and says, Jon, is it

25 possible to make the biweekly builds available � 10526

1 to us, Novell, on your FTP site? I currently

2 have an account on this FTP location.

3 And then skipping down, currently we

4 are using and working with Build 224. Getting

5 the regular builds before Beta 3 is publicly

6 released will become critical in the coming

7 months to keep the Client 32 for Windows 95 on

8 schedule.

9 And he identifies Mr. Rao as the

10 Client 32 development manager.

11 So then let's move up to Mr. Ludwig's

12 response on January 11, 1995.

13 He says, we are not going to put

14 builds on

15 Skipping down to the next line, we

16 have not released any builds post 224 to any

17 development partners.

18 Skipping down to I agreed to get a

19 build to Richard Jones' group as a result of

20 our meeting yesterday. This was Fed Ex'd to

21 him today, Build 306.

22 Do you see that?

23 A. Yes, I do.

24 Q. In the way that builds are numbered,

25 each -- is it correct or do you know whether or � 10527

1 not each build of the beta is given a number in

2 sequence?

3 A. I don't know if they proceed 224, 225,

4 226. I thought we saw a document earlier that

5 seemed to indicate that. So I don't know if

6 there was a number 256, for example, between

7 224 and 306. I don't know how that was

8 accounted. Maybe at some point they jumped in

9 increments of 10, but I don't know.

10 Q. Would you assume with me that, in

11 fact, they're numbered consecutively?

12 And if that is so -- for the purposes

13 of this question, please assume that to be so

14 because I believe there may be testimony to

15 that effect.

16 That would be about 79 builds between

17 224 and the Build 306 that was Fed Ex'd to

18 Novell on January 11, 1995?

19 MR. TULCHIN: Your Honor, I object to

20 Ms. Conlin's testimony on the subject.

21 THE COURT: Overruled regarding that

22 objection.

23 Go ahead.

24 MS. CONLIN: Thank you, Your Honor.

25 Q. My question was, did I do the numbers � 10528

1 right?

2 A. I think it was more like 81 or

3 something between 306 and 224 if my math is

4 right.

5 Q. We'll rely on yours.

6 And it looks also like the time

7 between the betas for Novell was October 1994

8 and then the one that was supposed to be Fed

9 Ex'd today on January 11, 1995.

10 Do you see that?

11 A. Yes, I do.

12 Q. And that would be about, well, three

13 months or more between releases provided to

14 Novell?

15 A. Roughly. I think it's closer to two

16 months.

17 Q. All right. So Mr. Jones' view that

18 you are getting timely betas would seem to

19 indicate that every three months was -- or

20 every two months was what he perceived to be

21 timely. Would you agree with that?

22 A. Mr. Jones' view?

23 Q. Yes. Mr. Jones -- remember -- you may

24 not recall this, Mr. Bradford, you've seen a

25 number of documents, but one of the documents � 10529

1 you saw, which I may have in my stack here, was

2 one in which Mr. Jones suggested that

3 everything was quite fine with respect to what

4 Microsoft was doing in terms of betas.

5 Do you recall that at all?

6 A. Vaguely.

7 Q. All right. And so if there's two or

8 three months between and 81 builds, based on

9 your limited knowledge of the beta process,

10 would that be satisfactory or unsatisfactory to

11 Novell?

12 MR. TULCHIN: Object, Your Honor.

13 This calls for speculation.

14 THE COURT: Sustained.

15 Q. Do you have enough information to tell

16 us whether this would be a satisfactory or

17 unsatisfactory delivery of betas?

18 A. It doesn't seem like a timely delivery

19 of betas, but better ask an engineer in terms

20 of those precise numbers.

21 Q. All right. Let's return to 2274.

22 This was a document offered, and I

23 don't have another copy for you, but hopefully

24 you will be able to see it on the screen.

25 This was one shown to you and offered � 10530

1 by the Defendant, and I wanted to go back to

2 it.

3 This is now -- we're moving up to

4 April 7th. So we're three months beyond, and

5 maybe four, beyond the one exhibit that we just

6 looked at, exhibit -- Defendant's Exhibit 2507.

7 And this is Mr. Hendrick again to the

8 Novell sup at Microsoft copying Mr. Miller and

9 Mr. Jones. The subject is updated Windows 95

10 builds.

11 And Mr. Hendrick says, in the spirit

12 of getting regular updates as they become

13 available, I have talked to several Novell

14 external customers.

15 Can you tell me if you know what that

16 means? External customers would be what kind

17 of folks?

18 A. Typically those would be end user

19 customers.

20 Q. All right. And ISVs who received

21 Build 437 CD-ROMs and are anticipating 440. We

22 understand there is a memory management patch

23 that was made in Build 436 that addresses some

24 issues that could affect our client.

25 Is it possible to have you send the � 10531

1 latest build to Richard Jones?

2 And the last build we officially

3 received is Build 426, and that would mean,

4 assuming that the builds are numbered

5 consecutively, that between -- I'm not going to

6 do these numbers.

7 What is the -- let's see, you take 440

8 and subtract 426?

9 A. 14.

10 Q. All right. And I don't think this has

11 a date in it, but I believe that this is -- I

12 mean a date for the receipt by Novell of the

13 Build 426 that they were working off of.

14 And then this is the one from

15 Mr. Ludwig that explains that we send out a lot

16 of intermediate builds in very small batches to

17 address specific bugs.

18 And it goes on to say, we don't

19 broadly distribute these builds to the entire

20 beta program.

21 But he also tells people at Novell

22 that we have Novell and a lot of other ISV

23 partners -- ISV, independent software vendor.

24 Novell was such an independent software vendor;

25 correct? � 10532

1 A. Yes.

2 Q. -- on about a biweekly regular

3 distribution schedule outside of the above

4 process.

5 So that is Mr. Ludwig's response to

6 that.

7 I also wanted to show you Exhibit 2306

8 which has been preadmitted.

9 MS. CONLIN: May I approach, Your

10 Honor?

11 THE COURT: You may.

12 Q. This is about -- this is 5-22-95, and

13 it is a letter to David Curtis at Microsoft

14 from Ryan Richards, associate general counsel,

15 and he was a man who worked for you as an

16 attorney; correct?

17 A. Ryan Richards was, yes, that's

18 correct.

19 Q. And this has to do with prerelease

20 ODBC and Windows 95 beta?

21 A. Correct.

22 Q. He says to Dave Curtis of Microsoft,

23 some of our international developers have been

24 experiencing long delays in getting prerelease

25 software under the beta agreements with � 10533

1 Microsoft.

2 And then if you go down to the Windows

3 -- the paragraph headed Windows 95 beta

4 software, he says, we've been trying for many

5 weeks to get copies of the Eastern -- and he

6 names the countries then -- and Middle Eastern

7 language versions of the Windows 95 beta

8 software.

9 He names the contact in Redmond.

10 She refused to send the software

11 because she and other beta administration

12 people have claimed not to have the necessary

13 beta agreements in their files.

14 On two occasions I have produced

15 copies of those agreements. We were then

16 denied the software because the specific names

17 of the developers who would have access to the

18 software had not been submitted and approved.

19 In response, I provided Jodene with

20 copies of correspondence from Bill Pope waiving

21 the requirement that the developers be approved

22 by name. I was told that Bill did not have the

23 authority to grant such a waiver.

24 MR. TULCHIN: Your Honor, I'm sorry to

25 interrupt. I do apologize. � 10534

1 I don't believe this is in evidence,

2 and as a result I don't think it should be on

3 the screen or read to the jury, at least until

4 it is.

5 MS. CONLIN: Your Honor, I would offer

6 Exhibit 2306 if it's not already a part --

7 THE COURT: Any objection?

8 MR. TULCHIN: Can I have a moment,

9 Your Honor?

10 THE COURT: Sure.

11 MR. TULCHIN: Just want to make sure

12 we're doing this right.

13 I have no objections.

14 THE COURT: 2306 is admitted.

15 MS. CONLIN: Thank you, Your Honor.

16 Q. In response -- I guess I better go

17 back.

18 On two occasions, I have produced

19 copies of those agreements, meaning the beta

20 agreements that Microsoft said they did not

21 have.

22 Then he goes on to say, we were then

23 denied the software because the specific names

24 of the developers who would have access to the

25 software had not been submitted and approved. � 10535

1 In response, I provided Jodene with

2 copies of correspondence from Bill Pope waiving

3 the requirement that the developers be approved

4 by name. I was told that Bill did not have the

5 authority to grant such a waiver and

6 name-by-name approval would be required.

7 So, we submitted the names and were

8 told a couple of weeks ago that they were

9 approved and the software was on its way.

10 Since then, we have received two of

11 the six or seven language versions we

12 requested. We have been told that all of them

13 have been mailed. We were given a tracking

14 number which we determined applied to the

15 package containing one of the two language

16 versions we already received.

17 We were then given a second tracking

18 number, and after further investigation, we

19 determined it applied to the package containing

20 the second language we had already received.

21 Jodene had no other numbers for us and told us

22 she would resend the software.

23 The delays in getting the software are

24 resulting in setbacks in our development

25 schedules for our application programs in those � 10536

1 languages.

2 And do you know in Novell development

3 whether the language -- Novell tries to release

4 foreign language applications in about the same

5 time frame or shortly thereafter it releases

6 the English language versions?

7 A. Sure. Localization of products were

8 important.

9 Q. And he goes on to say, ODBC, we've had

10 similar difficulties getting prerelease ODBC

11 SDKs, software development kits.

12 Then turning the page he talks about

13 some of the early things.

14 And then he says, so Novell KK

15 registered as a beta site and asked again for

16 the software. We were then told that the time

17 period for the last beta version had expired

18 and the next one was not yet available. We

19 were told it would be available sometime in

20 March. It never came.

21 We were then promised it would come in

22 April, but again we received nothing.

23 We were then told it would be this

24 month. Just a few days ago we were told that

25 there never has been a beta program for ODBC � 10537

1 2.0 and there won't be until sometime next

2 month.

3 And I'm skipping down.

4 In the meantime, we're aware that

5 Microsoft Access, which released earlier this

6 year, has ODBC 2.0 support.

7 And Mr. Ryan asks for assistance in

8 that connection.

9 Do you know whether or not you would

10 have seen this letter in the ordinary course of

11 events?

12 A. Yes, I likely would have seen this

13 letter.

14 Q. And, again, is this typical or not

15 typical of what you understood the relationship

16 between Novell and Microsoft to be with respect

17 to the Chicago betas?

18 A. It was typical, certainly, and, you

19 know, the frustrating part is that this has to

20 wind up in legal.

21 You're always hoping that the software

22 engineers among the two companies could just

23 work out this stuff by themselves without

24 having to resort to, you know, all of this

25 legalese and effort on the company's part to � 10538

1 get what seemed to be fairly simple

2 information.

3 Q. Did you draft a couple of letters from

4 Mr. Frankenberg, the CEO of Novell, directly to

5 Bill Gates in connection with a number of

6 matters, one of which was the issue of the

7 repair of bugs in software, in the Microsoft

8 software that was causing problems for

9 WordPerfect and running on Windows?

10 A. Yes. I certainly assisted in the

11 preparation of those letters.

12 Q. All right.

13 MS. CONLIN: Your Honor, the first

14 letter is Plaintiffs' Exhibit 2336 dated

15 June 23, 1995. It is, as I said, to Mr. Gates

16 from Mr. Frankenberg.

17 Plaintiffs propose to read only a

18 sentence or two on the second page under number

19 II, Roman numeral II.

20 The part I proposed to read to the

21 jury, Your Honor, begins with this point is

22 further illustrated and ends with to reveal

23 them.

24 MR. TULCHIN: Your Honor, this has

25 been ruled inadmissible, this document, in � 10539

1 prior rulings. So we object.

2 MS. CONLIN: Perhaps we should

3 approach, Your Honor.

4 THE COURT: Very well.

5 (The following record was made out of

6 the presence of the jury at 12:36 p.m.)

7 MS. CONLIN: Your Honor, here is my

8 rationale for offering these at this point.

9 The ruling -- I believe that they have

10 gone through the Special Master process, but I

11 don't have -- usually I have a sheet on top

12 that tells me things, but whatever that says,

13 at this point on redirect, Your Honor, I

14 believe that I am entitled to show the jury

15 that the situation that Mr. Tulchin has caused

16 the jury to believe was really not serious.

17 Mr. Jones just loved everything Microsoft was

18 doing.

19 This problem of getting these bugs

20 fixed was so serious that it was a subject of

21 two letters from Mr. Frankenberg to Mr. Gates.

22 All I propose to read and what I would

23 also say, Your Honor, is it may be entirely

24 appropriate to redact every part of the letter

25 except for that -- do you see where I'm � 10540

1 looking, Your Honor?

2 THE COURT: What part do you want to

3 read?

4 MS. CONLIN: The part I want to read

5 of --

6 THE COURT: It's not marked on here.

7 MS. CONLIN: -- of 23 --

8 THE COURT: -- 2336.

9 MS. CONLIN: Yes. 2336, Your Honor,

10 is on the second page, and it's right under

11 Roman Numeral II.

12 This point is further illustrated by

13 Microsoft's refusal to fix certain bugs in

14 Windows 95.

15 It is my understanding that these bugs

16 caused Novell applications to be incompatible

17 with Windows 95 but allow Microsoft's

18 applications to run unaffected.

19 Microsoft's OS interfaces constitute a

20 resource access to which is required in order

21 to be able to compete in the market.

22 Novell cannot duplicate these

23 interfaces. Microsoft has denied them to

24 Novell when it would be simple to reveal them.

25 And we believe that directly addresses � 10541

1 a matter that Mr. Tulchin spent quite a bit of

2 time discussing with this man who was a totally

3 inappropriate witness except his connection

4 would be these letters which he assisted in

5 drafting.

6 The point I wish for the jury to

7 understand is that whatever Mr. Jones or other

8 low-level software people may have thought

9 about the situation, they were wrong.

10 And what was true was what

11 Mr. Frankenberg, CEO, said to Mr. Gates, CEO of

12 Microsoft.

13 First, Your Honor, he said it on

14 June 23, 1995 before the release of Windows,

15 and then he said it again August 21, 1995,

16 three days before the release of Windows.

17 And at that point, Your Honor, if you

18 look at 2391, third paragraph that begins with

19 the word further, fourth line down, there are

20 still five or six bugs that Microsoft has

21 refused to fix which would allow WordPerfect to

22 run smoothly with Windows 95. We will have

23 Dave Miller send a specific list to Bob Kruger.

24 The result of lack of equal access cost Novell

25 and others months to release products that are � 10542

1 Windows 95 compatible. These are issues that

2 need to be a major topic of discussion in our

3 meeting.

4 THE COURT: Where did you just read

5 from? This exhibit or another one?

6 MS. CONLIN: I'm sorry.

7 THE COURT: You gave me one, 2336.

8 You've got another one? Oh, okay. Has this

9 been admitted?

10 MS. CONLIN: I believe that it is

11 subject to the same category, Your Honor.

12 MR. TULCHIN: It's in the same

13 category.

14 MS. CONLIN: I do see what happened

15 here because they wrote it in a different way.

16 Pending objections. Hearsay. Unduly

17 prejudicial. Hearsay. Objections sustained.

18 Plaintiffs appeal. Appeal denied. Limitation:

19 Exhibit will not be offered for its truth.

20 I think both of them are exactly the

21 same. Hearsay objection sustained on 2391.

22 Exhibit will not be offered for the truth.

23 I think, however at this time, Your

24 Honor, these are statements of fact, not

25 opinion. These are -- the witness can provide � 10543

1 foundation, and there's nothing about these

2 factual statements that is in any way -- that

3 should be in any way precluded from evidence in

4 this matter.

5 MR. TULCHIN: Your Honor, if I may.

6 THE COURT: Sure.

7 MR. TULCHIN: A few little things.

8 One, Ms. Conlin is correct that I

9 showed the witness e-mails and memos written by

10 software engineers at Novell that indicate that

11 the people actually building Novell products

12 were satisfied with what Microsoft was given.

13 That was admissible evidence. There wasn't any

14 question about it. The evidence was all

15 admitted for the most part, I think, without

16 objection.

17 These two documents are not

18 admissible, and they're not admissible

19 precisely because in the memorandum that we

20 handed the Court, I believe, on Monday of this

21 week we covered this point. Precisely because

22 this is argument and posturing in the course of

23 trying to extract a settlement from Microsoft

24 from one CEO to another. These are not

25 business records. These are mere opinions by � 10544

1 people, I must say, similar to Mr. Bradford who

2 were not in a position to understand whether or

3 not the betas, indeed, are sufficient for

4 Novell to go ahead and make their products or

5 whether the bugs are sufficient problems or

6 they're not.

7 And the reason we went through the

8 Special Master process, our objections were

9 sustained, the plaintiffs appealed, Your Honor

10 ruled against them.

11 It would be one thing, Your Honor, to

12 ask this witness if he has any recollection

13 that Mr. Frankenberg complained to Mr. Gates

14 about these subjects. It's an entirely

15 different thing to read from these documents,

16 which are not in evidence and they've been

17 ruled against, and merely to give the jury the

18 impression that somehow there is some evidence

19 here of wrongdoing when, again, the reason

20 these were excluded is this is pure argument,

21 opinion and posturing in the hope of getting,

22 as Mr. Frankenberg says -- let me find the

23 reference -- last line of Exhibit 2336, Your

24 Honor. That's the June letter.

25 Mr. Frankenberg says: We are hopeful � 10545

1 that Microsoft will want to work towards a

2 settlement of these issues.

3 The issues, all of these issues, were

4 posturing in the hope that Microsoft would pay

5 Novell for what Novell asserted to be these

6 legal claims, including attempts to monopolize

7 the software applications market.

8 There was no claim made by -- Novell

9 at the time didn't bring a lawsuit, as

10 Mr. Bradford testified, and Microsoft said no

11 to the idea that it should pay Novell at the

12 time for any of these claims.

13 So I think the rulings that the Court

14 has made were proper and these documents ought

15 not to be used or read to the jury.

16 MS. CONLIN: The Special Master, Your

17 Honor, said repeatedly in the process that

18 objections could be cured. We're also on

19 redirect. The door has been opened. I have a

20 right to go through it and provide to the jury

21 information which is of substantial importance.

22 On the second point that Mr. Tulchin

23 made, I would be so surprised if Mr. Tulchin

24 has evidence that what they were trying to do

25 was extract money. � 10546

1 What they were trying to do was

2 settle -- look at these issues, Your Honor.

3 They're business issues. Novell has never

4 filed a lawsuit against Microsoft until quite

5 recently, and these are issues of business.

6 I'm not going to go to those anyway,

7 Your Honor. All I want is the factual

8 statement in a business record to respond

9 appropriately to Mr. Tulchin's assertions by

10 way of questioning of an inappropriate witness

11 that everything was hunky-dory in terms of

12 Microsoft's provision of Chicago betas to

13 Novell.

14 THE COURT: All right. Anything else?

15 MR. TULCHIN: No, Your Honor. I think

16 that covers it.

17 THE COURT: Objection is sustained.

18 (The following record was made in the

19 presence of the jury at 12:40 p.m.)

20 THE COURT: Sorry, ladies and

21 gentlemen of the jury.

22 Back on the record.


24 Q. Mr. Bradford, you indicated that two

25 letters were sent to Mr. Gates from Mr. � 10547

1 Frankenberg; correct?

2 A. Yes.

3 Q. Do you recall the dates of those

4 letters?

5 A. Gosh, they seem like August time

6 frame, '94, '95.

7 MS. CONLIN: Your Honor, may I

8 approach the witness for the purpose of

9 refreshing his recollection?

10 THE COURT: Yes, you may.

11 MS. CONLIN: Thank you.

12 A. Okay.

13 Q. Does that refresh your recollection?

14 A. It does.

15 Q. All right. Tell the jury, please,

16 when these two letters were sent.

17 A. One was sent in June of 1995, and the

18 next letter was sent in August of 1995.

19 Q. Do you recall whether or not those

20 letters each contained a reference to the five

21 key bugs that were present in the Chicago beta?

22 A. Yes.

23 Q. And give the jury, if you can, an

24 explanation of why Mr. Frankenberg himself

25 would be contacting the head of Microsoft for � 10548

1 that reason, among others.

2 MR. TULCHIN: Objection, Your Honor,

3 unless he knows.

4 THE COURT: You may answer if you

5 know.

6 A. Sure.

7 Bob Frankenberg was CEO of Novell, and

8 we thought that the best way to help resolve

9 all of the frustrations that many Novell

10 employees were feeling about lack of timely

11 receipt of betas and so forth and lack of

12 finally -- timely fixing of computer bugs in

13 Windows 95 and their interoperability with

14 Novell products, the best way to get that

15 resolved was to have the CEO of the company

16 write to their CEO at a high level so that he

17 could drive down whatever commands that he

18 would within Microsoft to make sure that the

19 job got done.

20 Q. All right. And the first letter was

21 in June. The next letter was in August. And

22 during that time frame apparently, what is the

23 fact with respect to the fixing of those bugs?

24 A. I don't think they ever got resolved.

25 Q. And so in June, the release of Windows � 10549

1 95 is a couple months away.

2 On August 21st, when the second letter

3 was sent, we're three days away from the

4 release of Windows 95.

5 A. Right. From the broad base consumer

6 release of Windows 95.

7 Q. When we're looking over there, I think

8 -- do you recall the line of testimony that

9 Mr. Tulchin asked you about in terms of whether

10 or not it was Novell's lack of integrating

11 WordPerfect into -- you know, into its company

12 after the merger that caused Windows 95

13 versions of Perfect Office not to be timely

14 released? Do you recall that?

15 A. Yes, I recall that line of

16 questioning.

17 Q. Let's look at the time line and see

18 how many versions of WordPerfect Novell was

19 able to release in this time frame.

20 Do you see September 1994? That was

21 after the merger; correct?

22 A. Yes.

23 Q. And WordPerfect for the Macintosh is

24 released, and then the next month, October

25 1994, WordPerfect 3.0 is released, and then in � 10550

1 November 1994 WordPerfect 6.1 for Windows is

2 released, but that would, of course, be Windows

3 3.1 because Windows 95 wasn't out yet; right?

4 A. That's right. It was an earlier

5 version of the Windows operating.

6 Q. All right. And then January 1995,

7 Perfect Office 3.0 -- I'm doing that again.

8 Yes, I am. I'm repeating myself.

9 And then August 24, 1995, Windows 95

10 is released, and January '96 you sold the

11 company to Corel.

12 So, in fact, the product you're not

13 able to get out is a compatible suite with

14 Windows 95; would that be correct?

15 A. That's correct.

16 Q. All these other versions, no problem?

17 A. Right.

18 I wouldn't say that there were

19 problems, but -- you know, they all got out.

20 Q. I'm sure there were. I didn't --

21 little broad statement.

22 Also, you spent quite a bit of time

23 yesterday talking about how important customer

24 demand is, and certainly you agreed with

25 Mr. Tulchin that customer demand was a very � 10551

1 important factor; correct?

2 A. Yes, I do.

3 Q. And do you feel you could share with

4 the jury based on your own knowledge what

5 Novell -- what Novell's approach to increasing

6 customer demand for the products that it was

7 producing would be?

8 And I'm thinking specifically about

9 the products that are competitive with the

10 products at issue in this case, and that would

11 be your DR-DOS product and your WordPerfect

12 product and your Borland product.

13 A. Okay. That was a long one.

14 So can you repeat the question?

15 Q. Really not. Let me break it down a

16 little bit.

17 A. Okay.

18 Q. First of all, do you have the

19 knowledge necessary to talk about customer

20 demand and Novell's approach to increasing

21 customer demand for those products that

22 competed?

23 A. Sure.

24 Q. Okay, good.

25 Would you please tell the jury what � 10552

1 Novell's approach was to increasing customer

2 demand for these products that you had?

3 A. Well, first of all, we're always

4 focused on technological innovation, and that's

5 so important to have the latest products, the

6 latest technology so that the end user customer

7 has access to the top technologies in the

8 world.

9 And so first and foremost, the

10 creation of new and superior technologies was a

11 driving factor for what we were trying to do.

12 Another factor would be compatibility.

13 You have to be compatible with the dominant

14 operating system that was out there.

15 And certainly at the time, and up to

16 this day, it's that Windows operating system

17 from Microsoft which was the dominant world

18 supplier for operating systems.

19 So assuring interoperability between

20 your applications and that operating system is

21 critical to your success.

22 So those are two factors, large

23 factors.

24 Q. And the idea was if you were

25 technologically advanced and compatible, then � 10553

1 customer demand would fall?

2 MR. TULCHIN: Objection. Leading.

3 THE COURT: Sustained.

4 MS. CONLIN: I'm sorry, Your Honor.

5 Q. What was the result you expected from

6 technological innovations and compatibility?

7 A. That customer demand would increase.

8 Q. Mr. Tulchin also quoted to you from

9 Mr. Frankenberg. In fact, I believe that the

10 deposition -- part of the deposition that was

11 taken of Mr. Frankenberg was shown to the jury.

12 And let me remind you what Mr.

13 Frankenberg said that you were quoted.

14 Question: Can you describe for me the

15 steps that an OEM takes in evaluating an

16 operating system to determine whether or not it

17 ought to be included in its product offerings?

18 Answer: Well, the very first question

19 is what -- what level of demand is there in the

20 marketplace for that operating system.

21 He goes on and explains what he means

22 by that and adds in additional things.

23 Do you know what Mr. Frankenberg

24 thought the very most important issue was with

25 respect to the top OEMs' failure to license � 10554


2 A. I'm certain that he would say things

3 like compatibility issues were big. I'm sure

4 he would say Microsoft's licensing practices

5 were a big barrier to entry. Those

6 exclusionary contracts, et cetera.

7 So those would have been two of the

8 things that I'm sure Bob would have cited.

9 Q. When you say compatibility issues, do

10 you mean compatibility issues in the DR-DOS

11 product or compatibility issues in the

12 Microsoft product, intentional or

13 unintentional, that prevented DR-DOS from

14 running properly?

15 A. Well, what I'm talking about

16 specifically is the things that Microsoft was

17 building the error messages that they were

18 building into their operating system that would

19 say error, you know, trying to load Digital

20 Research DOS, incompatible, warning, warning,

21 warning. That sort of thing. And that became

22 a big problem for people that would see that

23 because then they would be scared that the two

24 would be incompatible.

25 Q. Do you know that Mr. Frankenberg gave � 10555

1 a declaration, a signed under oath declaration

2 to the FTC on December 1st, 1992?

3 A. That Bob Frankenberg --

4 Q. Yes.

5 A. Then he would have been an HP employee

6 when he would have given that testimony before

7 the Federal Trade Commission.

8 Q. Do you know how long a term HP had

9 given Microsoft for HP's licensing of Microsoft

10 products?

11 Let me start again, please.

12 How long a term was HP's contract with

13 Microsoft for the operating system?

14 A. My recollection was four years.

15 Q. In the software industry generally,

16 insofar as you know as former general counsel

17 and senior VP, what would be the standard

18 length of a software contract?

19 A. Very typical one year.

20 Q. And is there -- are there any reasons

21 for keeping the contract to a year?

22 A. Well, yes. Both parties -- you know,

23 business interests may change. They may no

24 longer want to carry the product. We may no

25 longer ship that product, et cetera. � 10556

1 So to provide flexibility for both

2 sides, typically one year was the target for

3 most of those contracts.

4 Q. And in the software industry, how fast

5 is the pace of innovation and change?

6 A. Oh, it's very fast.

7 Q. Do you know whether or not typically

8 contracts contain confidentiality agreements?

9 Like a contract between HP and

10 Microsoft, would that be a publicly available

11 document or would that be held under

12 confidentiality?

13 A. There may have been some

14 confidentiality provisions in those contracts,

15 but to the extent that -- typically a

16 confidentiality clause includes language that

17 says if we need to make the document available

18 to a government agency under -- for whatever

19 reason, then you know the confidentiality

20 clause does no longer apply.

21 Q. What I'm getting at, Mr. Bradford, is

22 you were asked some questions yesterday

23 indicating that you should have conducted an

24 investigation yourself, and would you be able

25 to require any OEM to give you contracts for � 10557

1 their contracts with Microsoft?

2 A. Oh, no. You know, that again was a

3 big problem. They would not willingly share

4 with us in general the contracts they'd sign

5 with Microsoft because typically there was a

6 confidentiality clause between Microsoft and

7 the OEM.

8 And even beyond that, you know, the

9 intimidation factor that OEMs were afraid to

10 share with other parties what they'd entered

11 into for fear of retribution of Microsoft.

12 MR. TULCHIN: Objection to the last

13 part, Your Honor. No basis or foundation.

14 THE COURT: Sustained.

15 Q. What was Microsoft's reputation in the

16 industry in terms of its business practices?

17 MR. TULCHIN: Same objection.

18 THE COURT: Overruled.

19 A. Particularly in this area, the

20 reputation was that they would take action to

21 withhold betas or some other activity that

22 could possibly hurt the original equipment

23 manufacturer, and so they became very reluctant

24 to share with other people information that

25 might assist people like Novell, for example. � 10558

1 Q. If you wanted -- and could you,

2 Novell, make people talk to you if they didn't

3 want to?

4 A. No. In general, no, wouldn't be able

5 to.

6 Q. Novell didn't have any subpoena power?

7 A. No.

8 Q. And so what you would do if you got

9 information indicating some practice that was

10 -- that you felt was anticompetitive in order

11 to investigate it, what would you do?

12 A. In that respect, we would typically

13 turn it over to the government authorities,

14 particularly beginning of June of 1992, so the

15 government authorities who had subpoena power

16 and influence over original equipment

17 manufacturers so that they had an opportunity

18 to investigate us.

19 We'd hear from -- we'd see an E-mail

20 or we'd get information, et cetera. It would

21 be difficult for us to go back to, say, Compaq

22 or Dell or another hardware manufacturer and

23 get that information.

24 So we would submit the information to

25 the U.S. government or the European Commission � 10559

1 or the Korean Fair Trading Commission or

2 whoever might be investigating the situation,

3 and then they would follow up, I guess, with

4 the hardware manufacturer.

5 Q. Let me show you a license that

6 Mr. Tulchin shared with you yesterday. It is

7 Defendant's Exhibit 34.

8 MS. CONLIN: May I approach, Your

9 Honor?

10 THE COURT: You may.

11 Q. The DRI license, and it is -- the

12 front page doesn't tell us too much except

13 Digital Research California, Inc., DRI and

14 I.F.C. Computer Company Limited.

15 And then turning to the next page, it

16 does, in fact, say as you suspected, that it

17 was -- or maybe you called this to the jury's

18 attention. It was a Taiwanese corporation;

19 correct?

20 A. Yes.

21 Q. And do you know how large a company

22 this was?

23 A. No, I don't recall ever having heard

24 of them, so I don't think they were very big.

25 Q. Turn, if you would, to page 8, and � 10560

1 let's look at number 11.2.

2 You can see there that the period of

3 the license -- and what was that?

4 A. 12 months.

5 Q. And in examining this earlier, did you

6 see any minimum commitment in this contract?

7 A. No, not -- my examination revealed no

8 minimum commitments required in this particular

9 contract.

10 Q. Any -- do you know whether or not this

11 is a contract that would be called a per system

12 contract or a per processor contract?

13 A. I don't know that for certain.

14 Q. All right. At this point in time,

15 which I believe was -- so many attachments to

16 these.

17 All right. June 19th, 1991. And that

18 is -- that's before the merger of the two

19 companies; correct?

20 A. That's right.

21 Q. Do you know, however, during this time

22 frame about what market share DRI would have

23 and what market share Microsoft would have in

24 1991? Rough estimate, please.

25 A. Again, rough estimate, probably 98 to � 10561

1 2, 95 to 5.

2 Q. Let's now turn to some documents that

3 may help in this area of the per processor

4 licenses and the other matters that were

5 discussed with you yesterday.

6 This is Plaintiffs' Exhibit 353.

7 MS. CONLIN: May I approach, Your

8 Honor?

9 THE COURT: You may.

10 Q. We're just going to look at one page

11 of this.

12 Do you recall yesterday that you and

13 Mr. Tulchin discussed, among other things, a

14 company called Printaform, a Mexican company?

15 A. Yes, we discussed Printaform

16 yesterday.

17 Q. Turn, please, to page numbered at the

18 bottom 13, and you'll see -- I'm sorry, let's

19 go back to the front and establish what that

20 is.

21 A. Right.

22 Q. This is a Microsoft interoffice memo,

23 international OEM sales August 1990 monthly

24 report to Joachim Kempin from Ron Hosogi with

25 various copies. � 10562

1 Now we'll turn to page 13. And this

2 is, I believe, a year or more before the

3 document that Mr. Tulchin shared with you.

4 This is 1990 and my recollection is it was

5 about 1992 or so, maybe '91.

6 Printaform. Felipe Ro and Gary

7 visited Printaform in Hermosillia, Mexico, to

8 meet with George Espinosa --

9 MR. TULCHIN: Your Honor, again this

10 document is not in evidence. I don't know what

11 it is. I haven't seen a copy of it. But I

12 object to Ms. Conlin reading from a document

13 that's not in evidence.

14 THE COURT: Sustained.

15 MS. CONLIN: Your Honor, I would offer

16 it -- Your Honor, we would offer Exhibit 353.

17 MR. TULCHIN: If I could just have a

18 minute, Your Honor, to look through it.

19 No objection.

20 THE COURT: It's admitted.

21 Q. Page 13 under Printaform. Under

22 customer activities, Printaform -- I'll try to

23 go back to where I was.

24 I met with George Espinosa, VP, to

25 negotiate DOS royalties for the second year of � 10563

1 their contract.

2 They did very well in the first year

3 finishing at 120 percent of their M/C and

4 wanted to renegotiate -- the M/C, do you know

5 what that means?

6 A. I assume it's some sort of Microsoft

7 quota.

8 Q. Finishing at 120 percent of their M/C

9 and wanted to renegotiate the license to

10 reflect higher volume.

11 Their current pricing is $15 and $25

12 on 8088/286s respectively.

13 Can you tell the jury what 8088 and

14 286 refers to?

15 A. Yes. Those were chip numbers that

16 Intel would have. So they had the Intel 8088

17 chip and then they had the Intel 286 chip. And

18 then a hardware manufacturer such as Printaform

19 or other ones listed on this document would

20 take those computer chips from Intel and build

21 them into their hardware to sell to end user

22 customers.

23 Q. All right.

24 So 15 and $25 per unit on the two

25 different kinds of chips? � 10564

1 A. That's right.

2 Q. The new deal is effective 10-1 for DOS

3 4.01/5.0 and Windows 3.0 on all 286, 386, and

4 future 486 systems.

5 Again, those are Intel processor

6 numbers?

7 A. Yes.

8 Q. They will license DOS 3.3 on the

9 8088's. The new contract is for a three-year

10 term so that we don't have to worry about

11 low-end competition. This will be the first

12 OEM in Mexico bundling Windows 3.0 on its

13 systems and we eliminated DRI's chances with

14 Printaform for at least three years.

15 I'm aware that you haven't seen this

16 document before, but -- and I have a few more

17 with respect to Printaform because it was the

18 subject of some questioning of you yesterday.

19 I would show you Plaintiffs' Exhibit

20 1020.

21 MS. CONLIN: May I approach, Your

22 Honor?

23 THE COURT: Yes.

24 Q. This is a letter to Mr. Kempin from

25 Jorge Espinosa M Zasati, vice president on � 10565

1 Printaform letterhead bearing date November 7,

2 1990, and Bates stamped MSC 00054408 to 54410.

3 MS. CONLIN: And we would offer it at

4 this time, Your Honor, as a business record.

5 MR. TULCHIN: No objection.

6 THE COURT: It's admitted.

7 Q. Let's turn to the second page.

8 Mr. Kempin is the vice president of

9 worldwide OEM sales and product support

10 services for Microsoft and --

11 MS. CONLIN: I'm sorry, Darin, could

12 we go back to the first page, please?

13 Kind of set the stage, okay.

14 Q. You've got the date and the addressee,

15 and then in the middle it says, Microsoft made

16 a proposal to Printaform on April 25, 1989, in

17 which the pricing of the licensing agreement

18 was -- and he sets out the pricing.

19 And then if we could turn to the next

20 page.

21 And that next graph is one where

22 Printaform and Microsoft reach an agreement.

23 And then the text says, the minimum

24 commitment was reduced to 505,000 dlls. Do you

25 know what that means? � 10566

1 A. The minimum commitment was reduced to

2 five hundred and five --

3 Q. I think that's --

4 A. -- thousand dollars. Dollars.

5 Q. Oh, I thought it was some kind of

6 dynamic library.

7 A. There are DLLs out there, but I don't

8 think this is one of them.

9 Q. All right, thank you.

10 The minimum commitment was reduced to

11 $505,000, but the unit price per operating

12 system was increased substantially.

13 Therefore, at the time of the

14 signature, both parties verbally agreed to sit

15 down for an evaluation of the first-year

16 performance and review the pricing for the

17 second year. The idea was to be able to have

18 the pricing proposed by Microsoft on April 25,

19 1989.

20 Our new strategies of promoting the

21 products with a lot of advertising and lower

22 pricing enabled us to exceed the minimum

23 commitment by 19 percent, but when we sat down

24 to review the pricing issue for the second

25 year, we found very unpleasant surprises. � 10567

1 One, new contract with minimum

2 commitment for three years, $600,000 per year.

3 Two, the price reduction of the

4 operating system for our XT now was conditioned

5 to the acceptance of bundling Windows with our

6 AT class computers as follows.

7 And he sets out MS-DOS 3.3, first year

8 pricing $15, second year pricing 9.5, and the

9 conditions he lists are accepting to bundle

10 Windows 3.0 with AT computers for three years.

11 Is this one of the things that you had

12 received reports about; that is to say, the

13 bundling of the Windows GUI with the Microsoft

14 dominant operating system?

15 A. Yes.

16 Q. I know that you've not seen this

17 before, but does this appear to be what you

18 were complaining about or concerned about?

19 A. Yes, I think Jorge described it pretty

20 effectively.

21 Q. All right. Turning to the next page,

22 Printaform's objections were two; (A) the

23 minimum commitment of $600 is a commitment of

24 $1.8 million.

25 And (B) there was not a formula in the � 10568

1 contract to reduce pricing if market demanded

2 lower prices.

3 Since our objections were not properly

4 considered and we had a negative answer to

5 include in the contract a royalty pricing

6 formula based as a percent of the retail price,

7 we have decided that we will introduce

8 low-priced models for schools without MS-DOS.

9 And then we'll move to the next in

10 order piece of correspondence, which is

11 Plaintiffs' Exhibit 10022.

12 MS. CONLIN: May I approach, Your

13 Honor?

14 THE COURT: You may.

15 Q. This document is dated January 7,

16 1991. It is from Mr. Kempin to Mr. Jorge

17 Espinosa Mireles on Microsoft letterhead.

18 MS. CONLIN: And we would at this time

19 offer Plaintiffs' Exhibit 10022.

20 MR. TULCHIN: No objection.

21 THE COURT: Admitted.

22 (An off-the-record discussion was

23 held.)

24 THE COURT: No objection to 10022?

25 MR. TULCHIN: Yes, sir. � 10569

1 THE COURT: It's admitted. Sorry for

2 the interruption.

3 MS. CONLIN: No problem, Your Honor.

4 Q. Mr. Espinosa is addressed by Mr.

5 Kempin as follows: I am in receipt of your fax

6 letter dated November 7, 1990. I apologize for

7 the long delay as this has just now come to my

8 attention.

9 And the November 7th -- January 7th is

10 the date of the reply.

11 In the middle of the next paragraph,

12 he says, you are the industry leader for PCs in

13 Mexico and Microsoft is the industry leader for

14 operating systems on the desktop. Our truthful

15 -- our mutual customers deserve the best

16 quality hardware and software available.

17 I am now confused about what has

18 happened to our relationship. I understand

19 that you have licensed or have plans to license

20 the DOS product from DRI. While I can

21 empathize with your being upset with our late

22 response, I am unclear as to why you would risk

23 a strategic and long-term relationship for what

24 appears to be a short-term cost gain.

25 And the response from Mr. Espinosa, � 10570

1 too late came this letter dated January 8,

2 1991.

3 And I have a few more documents about

4 Printaform.

5 MR. TULCHIN: Your Honor, is there a

6 question? Because the reading of these

7 exhibits without a question seems to me to be,

8 let's say, pointless.

9 MS. CONLIN: Well, Your Honor, I could

10 ask the question as Mr. Tulchin did.

11 Q. Do you see that?

12 A. Yes, I do.

13 Q. Okay. Let's move on to Exhibit 533.

14 MS. CONLIN: May I approach, Your

15 Honor?

16 THE COURT: Yes.

17 Q. This is a document that is an E-mail

18 string, the first one of which is from Ronh,

19 January 23, 1991, to Bradc and Sergiop.

20 MS. CONLIN: We would offer Exhibit

21 533.

22 THE COURT: Any objection?

23 MR. TULCHIN: Your Honor, I think we

24 do object on grounds of relevance and

25 prejudice, and I think we've lodged that � 10571

1 objection to the material in the middle of the

2 first page.

3 THE COURT: Just a moment.

4 MS. CONLIN: If it's helpful to the

5 Court, Your Honor, all I wish to call the

6 jury's attention to is on the second page

7 having to do with Printaform.

8 MR. TULCHIN: We have no objection to

9 the second page, Your Honor.

10 THE COURT: Very well. It's admitted.

11 MS. CONLIN: Thank you, Your Honor.

12 Q. Second page from Garype, Monday,

13 January 14th, 1991, to Bradc. And I believe

14 that would be Brad Cole. Subject: Printaform

15 and DRI.

16 Mr. Garyp says, the deal is done. We

17 tried to resolve it, but it was too late. All

18 of this happened over COMDEX. The main problem

19 was that DRI offered great pricing (commit for

20 a one year per system) -- not per processor,

21 per system, and they had 5.0 and we didn't, all

22 caps, three exclamation points.

23 Our plan will be to work with

24 Printaform's competitors and really push MS-DOS

25 5.0 and Windows, but the fact remains that � 10572

1 Printaform is market leader with 30 percent of

2 market share.

3 And with this -- let's see, January

4 12th, 1991, when the salesperson is going to

5 push MS-DOS 5.0, and let's see, MS-DOS 5.0 --

6 do you see where that -- when that's released?

7 Surely I put it on there.

8 Does it seem about right to you that

9 MS-DOS 5.0 was released -- not released until

10 perhaps early or mid 1992?

11 A. I'm sorry. Ask the question again.

12 Q. I will. Let me just be sure I know

13 what I'm talking about here.

14 Let's see, we've got 6.0 released in

15 '93, yes.

16 Would it comport with your

17 recollection that Microsoft released MS-DOS 5.0

18 in I think mid maybe March or thereabouts of

19 1992?

20 A. I don't have a specific recollection

21 of that.

22 Q. All right.

23 A. I think these documents relate to the

24 1990 time frame.

25 Q. Now, this was 1991, early, January � 10573

1 1991.

2 A. Okay, we've entered now 1991. So it's

3 just a little while before the Novell/DRI

4 merger.

5 Q. Right.

6 A. And, yes.

7 Q. All right. And finally on this series

8 -- and do you see that?

9 A. Yes, I definitely see the part where

10 it says and we didn't.

11 Q. So that would indicate that

12 Microsoft's MS-DOS 5.0 at that point is not in

13 the market; correct?

14 A. Right. We always felt like we had the

15 superior technological features and

16 functionalities in Novell/DRI DOS over and

17 above that of Microsoft.

18 MS. CONLIN: May I approach, Your

19 Honor?

20 THE COURT: You may.

21 MS. CONLIN: Thank you.

22 Q. Here is Exhibit 10025.

23 And this is a document that's a mail

24 string that begins with one from Joachim

25 Kempin, January 30, 1991, re DRI and is Bates � 10574

1 number MSC 00638091 to 8093.

2 MS. CONLIN: And, Your Honor, at this

3 time we would offer Exhibit 10025 as a business

4 record of Microsoft.

5 THE COURT: It's 10025?

6 MS. CONLIN: What did I say?

7 THE COURT: Any objection?

8 MR. TULCHIN: I just need a minute,

9 Your Honor, to look at this. I'm seeing it for

10 the first time.

11 THE COURT: No problem.

12 MR. TULCHIN: No objection, Your

13 Honor.

14 THE COURT: It's admitted.

15 MS. CONLIN: Thank you, Your Honor.

16 Q. And let's look first -- let's start

17 with the second page and incorporate an E-mail

18 from Daven to Chrism. Subject: DRI, January

19 28th -- 29th, 1991, and just right at the

20 bottom it says, I had Phil W. looking into this

21 from his end because he's new to the office and

22 is objective.

23 We just spoke, and he says the reason

24 we lost was a number of factors, some clear and

25 simple and others relationships. The top mostf � 10575

1 clear one was our not coming down in price.

2 This he said, the president of Printaform,

3 reconsider the pricing -- tried to make clear

4 to -- I'm sorry -- tried to make clear to

5 Joachim in a letter he sent to him asking him

6 to reconsider the pricing or he would talk with

7 DRI.

8 And we've seen the letter from

9 Mr. Espinosa to Mr. Kempin dated November 7,

10 1990, Exhibit 10020; correct?

11 A. That's correct.

12 Q. And then -- the jury will have this

13 whole document. I just want to look at the

14 front one from Daven to Chrism, subject: DRI.

15 I guess it's a duplicate of one that

16 we looked at and it talks about the top most

17 clear one was not coming down in price.

18 This he said, the president of

19 Printaform tried to make clear to Joachim in a

20 letter he sent to him asking him to reconsider

21 the pricing or he would talk with DRI.

22 Evidently, Joachim never responded to

23 the president's letter which really insulted

24 him.

25 And then skipping down to all of this � 10576

1 happened.

2 And then the president of Printaform

3 went to COMDEX where he saw a buddy of his who

4 had started working at DRI.

5 Low price, no commitments, and working

6 with his friend was all it took for him to sign

7 on the spot.

8 He said Felipe is an excellent sales

9 guy and has great customer skills and

10 relationships. He -- and I believe if you

11 look, you will see that the he is the Phil W.

12 who is looking into the loss of Printaform.

13 Do you see that?

14 A. All right, yes.

15 Q. He faults Felipe, who he learned was a

16 salesperson, for not being more forceful in

17 demanding lower prices for corp. and

18 campling -- probably camping -- out in Redmond

19 to get them.

20 Quote, he should have camped out on

21 Ron H's doorstep till -- until senior

22 management in OEM agreed to lower prices was

23 his comment.

24 Can you indicate what you think this

25 says about what competition from DRI may have � 10577

1 done in terms of Microsoft's pricing of its

2 competing products?

3 MR. TULCHIN: Objection. Calls for

4 speculation.

5 THE COURT: You may answer, if you

6 know.

7 Q. Do you understand what I'm asking?

8 A. Well, I think it -- yes. The answer

9 would be no, I guess, so the objection was not

10 sustained. So you're going to reask the

11 question. Help me.

12 Q. Sure.

13 Does this tell you anything about the

14 effect on Microsoft's prices of competition

15 from DRI?

16 A. Yes, it does.

17 Q. What does it tell us?

18 A. It would cause them to go down to be

19 more competitive.

20 Q. That's all I have on the Printaform

21 situation I'm thinking.

22 THE COURT: We'll take a recess at

23 this time.

24 Remember the admonition previously

25 given. Be in recess for ten minutes. � 10578

1 (The following record was made out of

2 the presence of the jury at 1:29 p.m.)

3 MS. CONLIN: Your Honor, I know there

4 is an exhibit coming up that may cause some

5 controversy. I wonder if we could take it up

6 for a moment.

7 Let me first give it to Mr. Tulchin

8 and give him an opportunity to look at it.

9 THE COURT: Okay.

10 (A recess was taken from 1:30 p.m. to

11 1:40 p.m.)

12 (The following record was made out of

13 the presence of the jury.)

14 THE COURT: What's the record you want

15 to make?

16 MS. CONLIN: Your Honor, with respect

17 to two issues.

18 We would offer Plaintiffs' Exhibit

19 5534, Your Honor, which is a lengthy document.

20 May I approach, Your Honor?

21 THE COURT: Yes.

22 Any objection?

23 MR. TULCHIN: Yes, sir.

24 This is a legal brief, Your Honor,

25 written by Novell's lawyers, Ablondi & Foster, � 10579

1 and as you'll see, this is a draft of their

2 brief, I believe, to be submitted to the

3 Federal Trade Commission.

4 This falls in the same category of the

5 other documents that we addressed in the

6 memorandum we submitted to the Court on Monday,

7 and it may even be one of them that we

8 mentioned in the brief, though I don't remember

9 specifically.

10 We also made objections to this during

11 the Special Master process for the same reason

12 as we made objections to the other documents.

13 And when we made those objections, the

14 Plaintiffs withdrew this document. So the

15 Special Master never ruled because they simple

16 withdrew it.

17 But this is just a legal brief, Your

18 Honor. It's not evidence of anything and it's

19 not of evidentiary quality at all.

20 THE COURT: Anything else?

21 MS. CONLIN: Your Honor, I don't wish

22 to argue it at this point. I just simply

23 wanted to seek the Court's ruling and have a

24 record -- a complete record.

25 I will say that we believe that � 10580

1 Mr. Tulchin opened the door wide and that we

2 should be permitted to discuss with Mr.

3 Bradford this document in which he participated

4 in the drafting, which establishes almost

5 without question that Microsoft's per processor

6 licenses do not prevent piracy.

7 THE COURT: Objection is sustained.

8 It's denied.

9 Anything else for the record?

10 MS. CONLIN: Yes, Your Honor.

11 As we were discussing this off the

12 record, and I do want to just say on the record

13 that Mr. Tulchin took a good deal longer with

14 this witness on his cross than I took on direct

15 and spending quite a bit of time on documents

16 and materials which were, in my opinion,

17 without foundation, which I then had to respond

18 to, and now indicates that he is not certain

19 that if I stop at 2:30, even if I'm not done,

20 and I think I will not be done, that he cannot

21 guarantee that he will be able to complete his

22 work before 3.

23 I'm concerned about not only my -- a

24 fair redirect for me and for the witness, but

25 also about the jurors' convenience, and most of � 10581

1 all, Mr. Bradford's convenience. He's come

2 from a long distance and stayed an extra day,

3 and I think it's unreasonable to even hint that

4 he will not be done today.

5 THE COURT: Anything else?

6 MR. TULCHIN: No, Your Honor, except I

7 just want to say if Ms. Conlin's done at 2:30,

8 I've said it two or three times now, I will do

9 my best to be finished by 3, and I expect I'll

10 be able to do so.

11 MS. CONLIN: One other thing, Your

12 Honor, with respect to that.

13 I would then have an opportunity, you

14 know, to ask a couple of questions, perhaps,

15 and the thing that we're perhaps overlooking,

16 though I suspect given our experience that the

17 jurors would be asking their questions right

18 along as we went, but we do need to leave at

19 least a little bit of time for that purpose as

20 well.

21 THE COURT: Very well.

22 Please get the jury.

23 MS. CONLIN: I assume, Your Honor,

24 that I'll be able to question Mr. Gates however

25 many weeks I wish to as well. � 10582

1 THE COURT: I don't put limits on it.

2 MS. CONLIN: I know.

3 (The following record was made in the

4 presence of the jury at 1:47 p.m.)

5 THE COURT: Everyone else may be

6 seated.

7 You're still under oath, sir.

8 THE WITNESS: All right.


10 Q. I first want to address an issue that

11 Mr. Tulchin took up with you yesterday, and

12 that was the issue of piracy.

13 A. Sure.

14 Q. In the course of your responsibilities

15 to Novell, as well as were you the chairperson

16 of the Business Software Alliance?

17 A. For a period, yes.

18 Q. And that group was formed in part to

19 address the issues of piracy; correct?

20 A. That's correct.

21 Q. Just tell me from your observation,

22 Mr. Bradford, is a per processor license in any

23 way, does it prevent piracy?

24 A. No.

25 Q. Let's move now to FUD. � 10583

1 Have you heard that term?

2 A. Yes.

3 Q. And what does it signify?

4 A. Confusing marketing messages.

5 Q. I'm going to talk for a moment about

6 Sears.

7 Do you remember the Sears deal, the

8 Lapheld, with the federal government?

9 A. Yes, I do.

10 Q. And that was in the 1991 time frame,

11 1991. December of 1991 is when the contract

12 was confirmed by Sears for DR-DOS, and by May

13 Sears had moved to MS-DOS.

14 Do you recall that series of events?

15 A. Yes.

16 Q. Mr. Tulchin spoke with you about it,

17 and in speaking with you, he showed you

18 Plaintiffs' Exhibit 5466. I believe that he

19 offered it at that time.

20 Let me show it to you.

21 My records indicate that it was

22 offered.

23 MS. CONLIN: May I proceed?

24 THE COURT: Yes.

25 MS. CONLIN: Thank you, Your Honor. � 10584

1 Q. And he called your attention to a --

2 this document, Exhibit 5466 dated April 14,

3 1992, and I just want to look at the bottom of

4 the second from the last paragraph, and it

5 says, if we are unsuccessful in resolving

6 compatibility issues between DR-DOS and MS-DOS

7 and Windows, I believe that the government may

8 mandate the replacement of DR-DOS with MS-DOS

9 on the contract.

10 During this time frame, do you recall

11 whether or not Microsoft was engaged in a FUD

12 campaign against DR-DOS?

13 A. Certainly.

14 Q. And I believe that you talked with

15 Mr. Tulchin quite a bit about Mr. Edwards.

16 Mr. Edwards -- remind us, please, who was

17 Mr. Edwards?

18 A. John Edwards was an executive with

19 Novell. He was a vice president in our

20 marketing organization. And after Dick

21 Williams left Digital Research, John Edwards

22 took over as head of that product division,

23 Digital Research for Novell.

24 Q. All right. So he would have been in

25 place as the head of the DR-DOS division at the � 10585

1 time that this contract was lost; correct?

2 A. That's right.

3 Q. And he was a part of the

4 decision-making with respect to whether or not

5 to agree to guarantee that future versions of

6 Windows would not break DR-DOS?

7 A. Right. He would have been involved in

8 that decision-making.

9 MS. CONLIN: All right. If we could

10 turn, Darin, to the Edwards deposition, and I

11 will be asking you to play lines 4 through 18

12 of page 128.

13 And before you begin, let me see

14 whether or not Mr. Tulchin has any objections

15 to that.

16 MR. TULCHIN: I do. I'm not sure if

17 this is to refresh recollection, Your Honor. I

18 don't think any needs to be refreshed.

19 Otherwise I do object.

20 MS. CONLIN: Your Honor, let me show

21 you what I'm proposing to do.

22 May I approach, Your Honor?

23 THE COURT: Yes, please. Thank you.

24 MS. CONLIN: This is from the

25 deposition, the videotape deposition of John � 10586

1 Edwards in the case of Caldera versus Microsoft

2 taken on June 30, 1998.

3 THE COURT: Anything else?

4 MS. CONLIN: No, Your Honor.

5 And, of course, we offer this to

6 respond to Mr. Tulchin's suggestions during his

7 cross-examination.

8 THE COURT: Objection is overruled.

9 Please play it.

10 MS. CONLIN: Thank you, Your Honor.

11 Before you play, though, this may seem

12 a bit odd because the questioner is reading

13 from a document that Mr. Edwards had signed and

14 sworn to, that's the question.

15 (Whereupon, the following video was

16 played to the jury.)

17 Question: Even though we were

18 eventually able to satisfy Sears and the Navy

19 that DR-DOS 6.0 ran well with Windows 3.1, the

20 fear created was so serious that Sears

21 eventually rescinded its award to Novell

22 because we could not agree to a clause that

23 would have contractually obligated Novell to

24 guarantee future compatibility with future

25 Windows products with significant financial � 10587

1 penalties if we were not able to satisfy any

2 future compatibility problems.

3 Answer: I agree with that.

4 Question: Okay. Was that sentence

5 meant to summarize the terms offered you by

6 Sears in Exhibit 833?

7 Answer: That sentence was meant to

8 summarize my understanding of the situation of

9 which this probably would have been one of many

10 pieces of information I would have looked at in

11 concluding this.

12 (Whereupon, playing of video

13 concluded.)

14 Q. Do you agree with that?

15 A. Yes.

16 Q. Let me show you Exhibit 851, an

17 internal Microsoft document, which I would

18 offer at this time in case it's already not in

19 the record, I believe that it is --

20 THE COURT: Plaintiffs' Exhibit 851?

21 MS. CONLIN: Yes, Your Honor.

22 THE COURT: Any objection?

23 MR. TULCHIN: I don't have it, Your

24 Honor. I'll be right with you.

25 No objection. � 10588

1 THE COURT: It's admitted.

2 MS. CONLIN: May I approach, Your

3 Honor?


5 Q. 851 is an internal Microsoft document

6 dated -- E-mail string from Brad Silverberg.

7 Do you know who Brad Silverberg was?

8 A. He was an executive at Microsoft.

9 What his exact title was, I don't know.

10 Q. In charge of MS-DOS, I think the

11 record reflects. Does that comport with your

12 recollection?

13 A. That could be, right.

14 Q. All right. He is writing to Mr.

15 Gates. I suddenly can't remember who Jonl is.

16 Mike Hall -- Hallenan, I think, or Halleran.

17 He was then the CEO or the president, and Paul

18 Maritz and Rob Glaser and Steve Ballmer, with

19 copies to Mr. Cole and Mr. Lennon. Subject:

20 DOS dated July 22nd.

21 And I just want you to look at the

22 second from the bottom paragraph.

23 Keeping in mind the date of July 22nd,

24 1991, let's look at what Mr. Silverberg says

25 Microsoft is doing. � 10589

1 He says, we are engaged in a FUD

2 campaign to let the press know about some of

3 the bugs. We'll provide info a few bugs at a

4 time to stretch it out.

5 I know you've not seen this document

6 before, but you've -- have you seen it now?

7 A. I have seen it now.

8 Q. And, in fact, did you experience this?

9 After you and DRI merged, were you conscious of

10 this FUD campaign to let the press know about

11 some of the bugs a few at a time to stretch it

12 out?

13 A. Sure.

14 Q. Let's look at Plaintiffs' Exhibit 942

15 -- let's skip that one. Keeping an eye on the

16 clock.

17 I'm going to show you Exhibit 5401.

18 MS. CONLIN: May I approach, Your

19 Honor?

20 THE COURT: You may.

21 Q. This is an E-mail string which my

22 records show was admitted with the testimony of

23 Mr. Alepin on 1-16-07. Unless I've made a

24 mistake, we'll go forward.

25 And I want to call your attention to � 10590

1 the third page -- I beg your pardon -- the

2 second page in the incorporated E-mail, second

3 from the bottom, from Brad Silverberg again,

4 dated October 24, 1991, and this is right

5 before the merger is consummated; correct?

6 A. That's right.

7 Q. And he says -- and this is -- the

8 subject is Re: DR-DOS. Will they, won't they

9 buy?

10 And Mr. Silverberg says, this is a

11 very important point. We need to create the

12 reputation for problems and incompatibilities

13 to undermine confidence in DR-DOS 6. So people

14 will make judgments against it without knowing

15 details or fats. And we believe that means

16 facts.

17 Again, were you experiencing this as

18 you acquired Novell?

19 A. Yes, I guess the startling thing since

20 I've never seen these documents before is the

21 fact that they would be so explicit in their

22 internal E-mails about what they were doing.

23 Q. And I think that you told us that you

24 did not as a legal department feel that Novell

25 could accept the risk of future � 10591

1 incompatibilities with Windows and that's why

2 you vetoed the Sears contract; right?

3 A. That's right.

4 There was a sizable financial penalty

5 if we were unable to ensure compatibility in

6 that particular instance.

7 Q. Well, let me look at Plaintiffs'

8 Exhibit 978 admitted 1-16-07.

9 MS. CONLIN: May I approach, Your

10 Honor?

11 THE COURT: You may.

12 Q. We'll start with the E-mail that -- on

13 the second page from Mr. Silverberg again,

14 dated September 27, 1991, to a whole slew of

15 people, including Mr. Allchin and Mr. Maritz

16 and Mr. Ballmer. Subject: DRI, Novell, IBM.

17 And I just want to look at the bottom

18 sentence beginning DR-DOS.

19 MS. CONLIN: Do I see it?

20 I may have directed you to either the

21 wrong exhibit or the wrong page.

22 I think I said second page.

23 Yes, yes. Right there.

24 Q. DR-DOS has problems running Windows

25 today and I assume will have more problems in � 10592

1 the future.

2 And then if we go to the first page,

3 we can see who responds to this.

4 It's Mr. Allchin who responds right --

5 MS. CONLIN: Actually, right at the

6 bottom, Darin. Just that very bottom.

7 Q. Mr. Allchin from Jim Allchin,

8 September 27, 1991.

9 He responds to Mr. Silverberg's

10 statements that DR-DOS has problems running

11 Windows today and I assume will have more

12 problems in the future with this sentence:

13 You should make sure it has problems

14 in the future.

15 Do you see that?

16 A. Yes, I do. Unbelievable,

17 unbelievable.

18 Q. All right. Let's look at whether or

19 not, in fact, there were incompatibilities

20 between DR-DOS and Windows.

21 This is an internal E-mail admitted

22 into evidence on 1-16-07. It is Plaintiffs'

23 Exhibit 682.

24 MS. CONLIN: May I approach, Your

25 Honor? � 10593

1 THE COURT: You may.

2 Q. And this is on the first page from

3 Percyt to Phil Barrett dated Monday, April 15,

4 1991.

5 And the record reflects that

6 Mr. Barrett was the -- I think the product --

7 high-level executive in MS-DOS development,

8 also Windows, I think.

9 Mr. Percy T. says, last Thursday you

10 asked me for a user's view of DR-DOS 5.0. When

11 I worked for David Weiss's brother Ira, I used

12 DR-DOS 5.0 with a huge number of apps. I found

13 it incredibly, all caps, superior to MS-DOS

14 3.31 and IBM-DOS 4.01.

15 Number one, DOS compatibility. The

16 most important reason to use any version of DOS

17 is to run apps. DR-DOS runs every DOS app I

18 know.

19 Skipping down to the next paragraph.

20 DR-DOS 5.0 works successfully with

21 Windows 2.1, Win 386, 2.11 and Windows 3.0 and

22 3.0A, which I believe that the record will

23 reflect -- and maybe it is even on the time

24 line -- was the released May 22nd, 1990, and

25 was the then current version of Windows on the � 10594

1 market.

2 At the bottom of that he lists a

3 number of other applications with which DR-DOS

4 5.0 works successfully and then concludes in

5 that paragraph, we could not find an

6 application that wouldn't run.

7 Do you see that?

8 A. Yes, I do.

9 Q. Under utilities -- I'll skip that and

10 go to the second paragraph under number two.

11 DR-DOS has a user friendly shell

12 called ViewMax. Not as good as MS-DOS 5.0 DOS

13 shell, but is much better than PC DOS 4.01 DOS

14 shell.

15 I'm skipping some of the middle stuff.

16 And he says, in the next paragraph,

17 the setup program is truly great.

18 He goes on about the setup program on

19 the next page. DR-DOS setup program makes --

20 I'm sorry.

21 DR-DOS's setup program makes setting

22 up any memory option extremely easy. MS-DOS

23 5.0 requires the user to read UMB.TXT or the

24 manual.

25 Now, Mr. Bradford, this may be one of � 10595

1 the few documents that you can agree with. Do

2 you agree with Mr. Percy T.?

3 A. Yes, I do.

4 Q. Microsoft also hired NSTL to test

5 DR-DOS with a variety of applications. Were

6 you aware of that?

7 A. Who hired whom?

8 Q. Microsoft hired -- do you know what

9 NSTL is?

10 A. N --

11 Q. Testing labs?

12 A. Not offhand.

13 Q. Did I not give it to you?

14 A. No.

15 Q. I'm so sorry.

16 A. It was an independent third-party

17 testing lab.

18 MS. CONLIN: May I approach, Your

19 Honor?

20 I apologize to the Court and to Tammy.

21 I seem to have only one copy of this document.

22 THE COURT: That's all right.

23 Q. This is -- it is Plaintiffs' Exhibit

24 5306 and Defendant's Exhibit 742. So I would

25 offer it into evidence as Plaintiffs' Exhibit � 10596

1 5306.

2 MR. TULCHIN: No objection.

3 THE COURT: It's admitted.

4 MS. CONLIN: Thank you, Your Honor.

5 Q. This document is headed NSTL final

6 report. Microsoft Corporation, DR-DOS 5.0

7 compatibility testing on networks, June 28th,

8 1991.

9 Then we'll turn to the long list of

10 applications tested, which is Attachment B. At

11 the bottom it is Bates number 2343.

12 And at the very top it says, Windows,

13 and it says there's -- when it says yes, it

14 says --

15 MS. CONLIN: I don't even look. I

16 just assume you're right there. There you are.

17 Q. At the bottom it says, yes, the

18 application is compatible with DR-DOS 5.0.

19 And then at the very top it lists

20 Windows, and it says, yes, compatible with

21 DR-DOS 5.0.

22 Do you see that?

23 A. Yes, I do.

24 Q. Was that your understanding of the

25 compatibility between your product and Windows? � 10597

1 A. At certain moments in time it

2 certainly was, but as time progressed and code

3 was built into Windows to make it not

4 compatible with, then problems resulted.

5 MS. CONLIN: May I approach, Your

6 Honor?

7 THE COURT: You may.

8 MS. CONLIN: Let me show you what has

9 been marked as Plaintiffs' Exhibit 9986.

10 Your Honor, this is a news wire that

11 bears Microsoft's Bates stamp Monday, March 15,

12 1993, and the subject is Novell to launch

13 operating system -- I beg your pardon. Novell

14 to launch operating software to rival

15 Microsoft.

16 We would offer at this time

17 Plaintiffs' Exhibit 9986 not for the truth of

18 the matter asserted, Your Honor, but rather to

19 show notice to the industry as to Microsoft's

20 future plans and intentions.

21 MR. TULCHIN: Objection on grounds of

22 hearsay, Your Honor.

23 MS. CONLIN: What I'm going to use,

24 Your Honor, is down at the very bottom of the

25 page, and it goes over just one sentence at the � 10598

1 very top.

2 MR. TULCHIN: Same objection. It's

3 hearsay.

4 THE COURT: Sustained.

5 Q. Do you recall, Mr. Bradford, ever

6 reading anything in trade press in which

7 Microsoft indicated that it would virtually

8 guarantee that DR-DOS would not run on future

9 Windows -- would not run future Windows

10 versions?

11 MR. TULCHIN: Objection, Your Honor.

12 THE COURT: Overruled.

13 A. Yes, I remember that.

14 Q. Did that occur with some frequency?

15 A. Yes, I remember one specific instance

16 where an executive vice president of Microsoft,

17 Mike Maples, made that public statement to the

18 world that they would ensure the

19 incompatibility of Novell DOS or DR-DOS with

20 their Windows product. Mike Maples.

21 Q. Moving now to a somewhat different

22 subject matter.

23 You spoke with Mr. Tulchin yesterday

24 about Plaintiffs' Exhibit 5473.

25 MS. CONLIN: And if I may approach, � 10599

1 Your Honor, I will provide that to the witness

2 and to Mr. Tulchin.

3 THE COURT: You may.

4 MS. CONLIN: What you're holding,

5 Mr. Tulchin, is actually 5473A, and here is

6 5473 which I'm going to give you. 5473 --

7 Here is 5473 and here is 5473A.

8 MR. TULCHIN: There was a ruling, Your

9 Honor, against these two pages. They were

10 excluded.

11 MS. CONLIN: Let me hand it to the

12 Court.

13 Here's 5473. Here's 5473A. Here's

14 for the Court. I'll have to get you one.

15 MR. TULCHIN: According to our

16 records, Your Honor, this has already been

17 ruled on.

18 MS. CONLIN: And, Your Honor, my -- I

19 believe that this is a fair response to

20 Mr. Tulchin's comments yesterday on page 10279

21 with respect to the first two pages that were

22 admitted.

23 He asks Mr. Bradford about this very

24 document, and he in doing so suggests that

25 Lindsey's gathering efforts were only able to � 10600

1 come up with that one page.

2 That would be pages 10279 and -80.

3 THE COURT: 5473 has been ruled on?

4 MS. CONLIN: Yes, Your Honor. 54 --

5 MR. TULCHIN: 5473A, Your Honor.

6 5473A, the two pages have been excluded. 5473

7 is in evidence.

8 MS. CONLIN: 5473 we offer in response

9 to Mr. Tulchin's questioning on 5473.

10 MR. TULCHIN: Same objection, Your

11 Honor.

12 THE COURT: Let me look at it.

13 MS. CONLIN: Would the transcript be

14 helpful, Your Honor?

15 THE COURT: Yes, if you have it.

16 MS. CONLIN: I do. I'm handing a copy

17 to Mr. Tulchin.

18 I'm going to provide you, if I may,

19 Your Honor -- may I approach?

20 THE COURT: Yes.

21 MS. CONLIN: -- with the marked -- the

22 highlighted portion I believe opens the door to

23 these -- to this exhibit.

24 THE COURT: And 5473A was previously

25 presented to the Court for ruling? � 10601

1 MR. TULCHIN: Yes, Your Honor, as part

2 of 5473, and the ruling was that only the first

3 two pages can come in.

4 These two pages that now are 5473A

5 were part of 5473. They've just been

6 renumbered as a new exhibit, but they were

7 ruled on.

8 THE COURT: I've got you.

9 Anything else on this?

10 MS. CONLIN: Your Honor, we offer them

11 for the purpose of showing that the two pages

12 are not the only thing that Lindsey was able to

13 gather in her gathering efforts.

14 THE COURT: Objection is sustained.

15 Q. Another thing that you discussed

16 yesterday with Mr. Tulchin was the -- well, let

17 me show you what he showed you, and this is --

18 MS. CONLIN: May I approach, Your

19 Honor?

20 THE COURT: You may.

21 Q. This is Defendant's Exhibit 6775.

22 And what he called your attention to

23 in connection with 6775, which is a letter to

24 you from Linnet Harlan dated February 27, 1992,

25 he called your attention to the first � 10602

1 paragraph, which says, in anticipation of the

2 possibility of litigation by Microsoft, you

3 asked that I draft a memo outlining how DRI

4 acquired the Microsoft code that is currently

5 included in DR-DOS 6.0.

6 Then she goes on to explain that.

7 And asked you questions about the

8 proprietary nature of source code.

9 Did you understand Mr. Tulchin's

10 questioning to be intended to imply that DRI

11 had done something wrong in incorporating

12 Microsoft's source code in its VXD driver?

13 MR. TULCHIN: Objection, Your Honor.

14 My question was what it was. There was no such

15 implication.

16 THE COURT: Overruled. He may answer

17 if he knows.

18 A. Yeah, I inferred from what he said

19 that that's exactly what he was implying.

20 Q. Here is Plaintiffs' Exhibit 5159.

21 MS. CONLIN: May I approach, Your

22 Honor?

23 THE COURT: Yes. Has this been

24 previously admitted?

25 MS. CONLIN: I'm not sure, Your Honor. � 10603

1 THE COURT: I'll look. Go ahead with

2 your question.

3 Q. This is a letter of September 4, 1990,

4 on Digital Research stationery from Mr. Abel --

5 I beg your pardon -- to Rich Abel of Microsoft

6 signed by Mr. Ewald, who identifies himself as

7 the OEM product marketing manager of Digital

8 Research for the America's region.

9 MS. CONLIN: And we would offer

10 Plaintiffs' Exhibit 5159.

11 There's embedded hearsay, Your Honor,

12 in the top, which we do not offer for the

13 truth, but which we offer to show to what

14 Mr. Ewald was responding.

15 MR. TULCHIN: We have no objection to

16 5159.

17 THE COURT: It's admitted.

18 Q. Mr. Bradford, please look at the top

19 paragraph.

20 Did you know Mr. Ewald?

21 A. Yes.

22 Q. And the top paragraph, he writes to

23 Rich Abel of Microsoft, I read with great

24 interest the article which appeared on page 31

25 of PC Week dated August 20, 1990. � 10604

1 The article indicates that Microsoft

2 is willing to supply virtual device driver code

3 to companies that provide memory management

4 programs.

5 Virtual device driver code, would that

6 indicate to you that that is source code for

7 the virtual device driver?

8 A. I couldn't say whether it was source

9 or object code.

10 Q. All right. To companies that provide

11 memory management programs.

12 Based on the article, my understanding

13 is that this will allow these products to

14 relocate other device drivers and TSRs into

15 upper memory under Windows 3.0.

16 Skipping down, he says, Digital

17 Research would like to formally request that

18 this driver be provided for incorporation into

19 our memory management program, Memory Max.

20 Do you see that?

21 A. Yes, I do.

22 Q. Did you become aware of the

23 possibility or the fear that Microsoft might

24 sue you over this through Linnet's letter?

25 A. Well, yes. � 10605

1 Q. Okay. And then, if I may provide to

2 you Plaintiffs' Exhibit 1020.

3 MS. CONLIN: May I approach, Your

4 Honor?

5 THE COURT: You may.

6 MS. CONLIN: And, Your Honor, the

7 document in question is to Ms. Harlan from Greg

8 Ewald dated October 9, 1991. Subject: VXD

9 driver acquisition.

10 And I would say to the Court --

11 First I would offer Exhibit 1020 for a

12 nonhearsay purpose and part of which is to

13 respond to Mr. Tulchin's implications and to

14 show what subsequent action was taken.

15 MR. TULCHIN: Your Honor, I object to

16 the little speech about my implications.

17 I have no objection to the document

18 being admitted into evidence, and I don't

19 believe it is hearsay.

20 THE COURT: It's admitted.

21 MS. CONLIN: Thank you.

22 Q. Look, if you will, at the first page

23 and specifically -- and then that second

24 paragraph, please.

25 Mr. Ewald of Digital Research says, � 10606

1 beginning in June of 1990, shortly after the

2 release of Windows 3.0, articles began

3 appearing in the industry trade publications

4 regarding the subject.

5 The articles indicated that Microsoft

6 was providing to third-party memory management

7 developers code that Microsoft developed which

8 facilitated the uses of upper memory area

9 during Windows sessions.

10 Skipping down, after reading these

11 articles, I wrote a letter to Mr. Rich Abel at

12 Microsoft, which we've seen.

13 This letter requested the release of

14 the subject code to us for incorporation in our

15 memory management software trade marked as

16 Memory Max.

17 As we discussed, this letter was

18 reviewed with counsel prior to posting.

19 And he goes on to say, approximately

20 two weeks later I received in a floppy mailer

21 one diskette with no other documentation from

22 Microsoft.

23 I attempted to read this diskette on

24 my PC and found that the diskette was blank.

25 Turning to the second page, first full � 10607

1 paragraph. I immediately called Mr. Abel and

2 left him a voice mail message regarding the

3 fact that the diskette was blank.

4 About two weeks later I received a

5 call back from Lori Sill in Mr. Abel's office

6 apologizing for the mix-up. She indicated that

7 another diskette would be forthcoming.

8 Another week or so passed before the

9 corrected diskette was received, again with a

10 handwritten label and no documentation.

11 The diskette was verified and the code

12 was placed on the EDCBBS for the engineers to

13 work with.

14 After reviewing this matter, were you

15 satisfied that Novell and its predecessor DRI

16 had done nothing -- tell me this, Mr. Bradford,

17 after reviewing all of the information

18 available, did you conclude that Novell was or

19 was not in violation of any agreement or lack

20 thereof in connection with Microsoft?

21 MR. TULCHIN: Objection. Leading.

22 THE COURT: Overruled.

23 Please answer.

24 A. I conclude from all of the

25 documentation that I've seen that everything � 10608

1 was in order at Novell's end and our actions

2 were appropriate.

3 Q. Moving on.

4 The last subject matter I want to deal

5 with, do you recall the first -- that the

6 discussion yesterday with Mr. Tulchin in

7 connection with exhibit -- Defendant's Exhibit

8 2491?

9 Are you tired, Mr. --

10 A. Well, I'm sorry, I yawned.

11 But 2491 -- I'm energized. We're

12 going to get this finished.

13 Q. Yes, we are.

14 A. 2491, I don't recall what this exhibit

15 was in reference to.

16 MS. CONLIN: May I approach, Your

17 Honor?

18 THE COURT: Yes.

19 MS. CONLIN: I gave away all my

20 copies.

21 Q. This was on April 22, 1994 letter from

22 Mr. Neukom to Mr. Thompson.

23 Do you recall that -- Mr. Tulchin

24 called your attention specifically to the last

25 paragraph, which is -- it says, although you � 10609

1 raised -- I'm sorry, I'm going to need to say a

2 little more about what's on this letter.

3 This is about a letter to Mr. -- from

4 Mr. Thompson to Mr. Neukom about the proposed

5 nondisclosure agreement provided to

6 WordPerfect?

7 A. It's a letter from Mr. Neukom the

8 general counsel of Microsoft, to Duff Thompson

9 who was the general counsel of WordPerfect.

10 Q. Okay. And he's responding to a letter

11 from Mr. Thompson to Mr. Neukom about the

12 Windows beta?

13 A. Yes.

14 Q. Chicago beta?

15 A. Yes.

16 Q. And he calls your attention to the

17 last paragraph. Although you raised no

18 objection to the period during which

19 individuals who have access to the prerelease

20 Chicago product may not work on a product or

21 technology that competes with Chicago, we have

22 reduced that period to extend only through the

23 commercial release of Chicago.

24 Do you recall being questioned about

25 that? � 10610

1 A. Yes.

2 Q. And I believe that the questions were

3 to the effect that Microsoft voluntarily and

4 out of the goodness of its corporate heart had

5 made these changes in connection with the

6 Chicago beta.

7 Do you recall that line of

8 questioning?

9 A. Yes, I do.

10 Q. And let's also look at -- just, I

11 promise, a couple more.

12 Here is the agreement. It is

13 Plaintiffs' Exhibit 5652A. And the agreement

14 is contained as a part of a letter to

15 Mr. Neukom from Felipe Kohn of Borland.

16 MS. CONLIN: May I approach the

17 witness, Your Honor?

18 THE COURT: You may.

19 Q. I just want to call your attention to

20 the agreement itself, the exhibit --

21 MS. CONLIN: Let me offer Plaintiffs'

22 Exhibit 5652A.

23 MR. TULCHIN: No objection, Your

24 Honor.

25 THE COURT: It's admitted. � 10611

1 Q. And let's turn to the page that's

2 numbered Kohn Exhibit 00011 -- I'm sorry, let's

3 skip that one and go instead to Kohn 14.

4 And the letter from Mr. Kohn indicates

5 that this is the beta agreement to which he

6 objects.

7 And we're not going to go through the

8 letter, but I do want the jury to see the

9 section to which Mr. Kohn expressed -- with

10 which Mr. Kohn expresses disagreement on page

11 15.

12 And it begins --

13 MS. CONLIN: You see where it says

14 consideration, Darin? It says in

15 consideration.

16 Maybe you could blow that up a bit.

17 Q. In consideration of the license

18 granted herein for a period of three years,

19 company agrees -- the company would be the

20 person signing the beta; correct?

21 A. Right. The one to be the recipient of

22 the beta.

23 Q. -- the company agrees to prohibit any

24 authorized individuals who have had access to

25 the product from participating in the design � 10612

1 and/or development, feedback, or guidance of a

2 company product or technology that is

3 competitive with the product.

4 And then it lists a number of products

5 that Microsoft at that time considered to be

6 competitive.

7 Three years after the beta was made

8 available to a company, could that be even

9 after the product was released to the market?

10 A. Oh, it would likely be after.

11 Q. Do you know whether or not this

12 particular clause was covered by the Department

13 of Justice consent decree, which is Plaintiffs'

14 Exhibit 5664 which is a part of the record?

15 A. My recollection is that it was.

16 Q. All right. I want to show you an

17 excerpt from the last exhibit that I will be

18 touching on, and it is 3096. I'm providing

19 only those sections --

20 MS. CONLIN: We have the whole

21 document in court, Your Honor, if necessary.

22 Our records indicate that this has

23 been --

24 May I approach, Your Honor?

25 THE COURT: Yes. � 10613

1 Q. Exhibit 3096 is an E-mail from James

2 Plamondon, Tuesday, January 11, 2000 -- James

3 Plamondon, Tuesday, January 11, 2000, to Peter

4 Plamondon, forwarding Windows evangelism.

5 MS. CONLIN: And, Darin, if you would

6 just look at those attachments that Mr.

7 Plamondon sends to Mr. Plamondon.

8 Q. And the attachments are effective

9 evangelism, evangelism is war, generalized

10 evangelism time line, power evangelism, and

11 then I can't read the last one.

12 Let's turn to page ending 147 in the

13 document, and it says, these are a series of

14 slides that I believe the record reflects

15 Mr. Plamondon presented to other evangelists.

16 Effective evangelism.

17 And then the next page is 49. We're

18 just here to help developers.

19 And the next page is one of those --

20 next page is 50. Kind of a stop sign.

21 And then the next page, which is 51,

22 says, we are here to help Microsoft.

23 And the next page --

24 MS. CONLIN: Which I hope you have,

25 Darin. � 10614

1 Q. -- it says, so we're just here to help

2 developers; right?

3 MS. CONLIN: Okay. Good, you found it

4 before I did.

5 Q. And the next page is we're here to

6 help Microsoft.

7 Microsoft pays our wages, provides our

8 stock options, pays our expenses. We're here

9 to help Microsoft by helping those developers

10 that can best help Microsoft achieve

11 Microsoft's objectives. Did anyone miss the

12 point here?

13 Now, Novell was an ISV; correct?

14 A. Yes, we were a third-party developer.

15 Q. The next one is titled too many to

16 help.

17 A. That I have here.

18 Q. Some of these are not numbered. That

19 makes the process a bit more difficult, which I

20 didn't notice until right this very minute.

21 70. We've taken a long time to turn

22 all those pages.

23 Too many to help. Can't help them

24 all. This refers to the ISVs. We help those

25 who can help us. If they can't or won't help � 10615

1 us, screw 'em. Help their competitors instead.

2 A. Yes, I see that.

3 Q. Finally, the next page 71, we're here

4 to help Microsoft by helping those ISVs that

5 can help Microsoft achieve its objectives.

6 Was that a philosophy that Novell

7 shared?

8 A. Not the screw 'em part.

9 Q. Did you feel that Mr. Plamondon's

10 evangelism was something that Microsoft had

11 experienced? By that I mean the -- his ideas

12 about what evangelists and Microsoft were

13 supposed to do?

14 A. Right. That seemed to be the

15 prevailing view within Microsoft in terms of

16 helping themselves first and foremost.

17 And the last people that they cared

18 about were those people that had products that

19 could have been competitive with them and, you

20 know, became very discouraging to us over the

21 years having to deal with Microsoft on that

22 basis.

23 It felt like when they own the

24 operating system that -- I guess if you were to

25 create an analogy with a basketball game, and � 10616

1 you had the University of Washington against

2 the University of Iowa, for example, and

3 they're playing basketball and every time

4 University of Washington shoots a shot, it's

5 worth ten points. There's a 3-point line but

6 now it's worth ten points.

7 And the other side, the University of

8 Iowa, every time they make a shot, it only

9 counts for two points.

10 And so it just felt like, you know, in

11 that kind of environment where they own the

12 operating system, then continued to create

13 actions to secure their monopoly on that

14 desktop, that it became impossible in many,

15 many instances to compete, compete fairly.

16 MS. CONLIN: Iowa would win anyway.

17 Perhaps.

18 I have no further questions, Your

19 Honor.

20 THE COURT: Cross?

21 MR. TULCHIN: I have a few, Your

22 Honor, if I may.

23 THE COURT: Yes.

24 MR. TULCHIN: Thank you.



2 Q. Mr. Bradford, good afternoon again.

3 I want to look, if we could, at

4 Plaintiffs' Exhibit 3406, which is one of the

5 documents that Ms. Conlin showed you on her

6 reexamination.

7 Maybe we can put it up on the screen

8 so you don't have to search in your pile.

9 A. Sure.

10 Q. This is Plaintiffs' Exhibit 3406, and

11 the re line says prerelease ODBC and Windows 95

12 beta.

13 Do you see that?

14 A. Yes.

15 Q. And then in the body of the first

16 page, there are two headings. One says Windows

17 95 beta software and the other one -- I just

18 want to see the heading. And the other one

19 says ODBC 2.0.

20 A. Yes.

21 Q. Now, you testified on redirect about

22 ODBC 2.0, did you not?

23 A. I may have said something about it,

24 yes.

25 Q. Well, didn't you say that ODBC 2.0 was � 10618

1 part of the Windows 95 beta?

2 A. No, it looks like it's a separate and

3 distinct --

4 THE COURT: Just a minute.

5 A. -- product.

6 Q. I'm asking you what you said on

7 redirect in response to questions from

8 Ms. Conlin.

9 MS. CONLIN: And I'm going to object

10 to the question because it misstates the

11 record.

12 THE COURT: He can answer if he knows.

13 Overruled.

14 A. I don't recall saying that ODBC 2.0

15 was part of the Windows 95 beta software. If I

16 said, I misspoke.

17 Q. Well, don't you recall discussing the

18 material that is contained underneath that

19 heading on pages 1 to 2 on redirect?

20 A. Yes, in general.

21 Q. And what is ODBC 2.0?

22 A. That refers to some form of object

23 oriented, I believe, database that Microsoft

24 had.

25 I think the DB in that particular � 10619

1 instance relates to database.

2 Q. Do you know whether or not the ODBC

3 SDKs, which is what's referred to just under

4 the heading in the first line, software

5 development kits, were ever part of the Windows

6 95 beta?

7 A. I don't know if they were part of that

8 or if it was a separate and distinct product.

9 Q. That's what I'm asking because -- and

10 perhaps I'm mistaken, but I thought I

11 understood your testimony on redirect to be

12 that the problems that are set forth here by

13 Mr. Richards, the lawyer who worked for you;

14 correct?

15 A. Yes, uh-huh.

16 Q. Mr. Richards was in your office; he

17 was a Novell lawyer, and he worked for you?

18 A. Right.

19 Q. And he's writing a letter to someone

20 at Microsoft contending that there's certain

21 problems with ODBC, and I just want to make

22 sure that I understand whether your testimony

23 is that that's part of the Windows 95 beta

24 problem that you say existed.

25 A. No. My testimony is that those are � 10620

1 separate and distinct issues that we were

2 having problems with Microsoft.

3 Q. And, again, I want to make sure we all

4 understand it.

5 Does this have anything to do with the

6 Windows 95 beta or with some effort to make

7 DR-DOS compatible with Windows or any

8 application at Novell compatible with Windows?

9 A. With the Windows operating system, no,

10 I think this is a separate issue from making

11 Windows compatible. It certainly relates to

12 making ODBC compatible with Novell

13 applications.

14 Q. And, again, how does ODBC relate to

15 any of the complaints that you've told the jury

16 about?

17 A. It's another example of withholding of

18 information from Novell.

19 Q. It has nothing to do with the

20 applications that run on Windows 95, does it?

21 A. I think if we read that, I think

22 that's what it's telling us.

23 In other words, Ryan Richards was an

24 attorney that worked for the applications

25 division primarily. � 10621

1 He's writing to David Curtis, who, by

2 the way, was an attorney in the Microsoft legal

3 department, outlining a series of complaints

4 that he had.

5 So I assume they all relate to the

6 applications division.

7 Q. Okay. I understand that you assume

8 that, but these are lawyers writing to lawyers,

9 not software engineers; correct?

10 A. You're right.

11 Q. And I just want to make sure that it's

12 your testimony that you don't know exactly what

13 ODBC is; correct?

14 A. Not exactly.

15 Q. All right. Then let's look at

16 Plaintiffs' Exhibit 1020, 1-0-2-0, and you were

17 asked some questions on redirect about this

18 document.

19 It's dated in October of 1991, and if

20 we could look at the next two pages just very

21 quickly so I can refresh your recollection as

22 to what this is about.

23 This is about the VXD driver; correct?

24 A. Yes.

25 Q. And what happened is that someone � 10622

1 named Greg Ewald at Digital Research requested

2 from Microsoft code -- we don't know what kind

3 of code -- for the VXD driver; right?

4 A. Yes.

5 Q. And the VXD driver was something that

6 Microsoft had developed; correct?

7 A. Yes, it appears from that context.

8 Q. And what happened was that someone at

9 Microsoft, namely Mr. Abel, voluntarily sent

10 the code for VXD driver to Digital Research?

11 A. Yes. I think to be accurate, though,

12 whatever he sent showed up blank the first

13 time, and then there was another floppy mailer

14 -- there was a series of mailings, but

15 eventually, it appears that Greg received

16 something.

17 Q. Without charge to Novell; correct?

18 A. Yeah, I don't know if there was a

19 charge associated with this or not.

20 Q. You don't know.

21 In any event, isn't this an example of

22 Microsoft cooperating with Digital Research?

23 A. It appears it took a while, but in

24 this particular instance, Greg eventually got

25 something that DRI could incorporate into its � 10623

1 products.

2 Q. Now, during redirect examination,

3 Ms. Conlin mentioned in a question to you the

4 phrase Bates numbers.

5 Do you remember that?

6 A. Yes.

7 Q. And you're familiar with that phrase

8 as lawyers use it, Bates numbers?

9 A. Yes.

10 Q. The phrase refers to numbers that are

11 stamped on the bottom of a page that's being

12 produced in a lawsuit pursuant to a document

13 request or to a subpoena; correct?

14 A. Yes.

15 Q. And this is something that lawyers and

16 paralegals commonly do, they use a device that

17 stamps what are called Bates numbers on a

18 document?

19 A. Yes, that's right.

20 Q. All right. Can we look at Defendant's

21 Exhibit 6773?

22 And I asked you about this on cross.

23 Ms. Conlin asked you about it a couple of days

24 ago on direct.

25 MR. TULCHIN: Let's bring up the text � 10624

1 for just a moment.

2 Q. This is this memo --

3 MS. CONLIN: I'm sure you don't mean

4 to misstate this. I never asked him about it.

5 It's your exhibit.

6 MR. TULCHIN: I don't want to argue

7 about it.

8 MS. CONLIN: Okay.

9 Q. In any event, you saw this during your

10 examination?

11 A. I did.

12 Q. And it's 10-16-95. It says five big

13 bugs now.

14 What I want to point out at the

15 bottom, and this is the document that says Dave

16 doesn't think the bugs are any big deal. DRB,

17 referring to you wrote a letter and so on.

18 I don't know if you want to see that

19 again.

20 A. Okay.

21 MR. TULCHIN: Let's bring that up,

22 Chris, if we could at the top.

23 Q. It says Dave Miller, 10-16-95, five

24 big bugs.

25 Dave thinks the August 21 letter went � 10625

1 out from DRB. And you said that probably

2 refers to you. Those are your initials; right?

3 A. That's correct.

4 Q. DRB and others believe that this bug

5 deal is a big deal, but the apps people do not.

6 Dave thinks it's mostly our fault, et cetera.

7 And we talked about this, and there

8 was some question of whether Dave meant Dave

9 Miller, whose name is here, or whether it might

10 be other Daves because it's a common name at

11 Novell and it's a name you and I share, so we

12 both like the name.

13 A. Yes.

14 Q. Now, during your testimony, I believe

15 you expressed some uncertainty as to what this

16 document was. You said it didn't look like

17 something that you would ordinarily see at

18 Novell; is that right?

19 A. That's correct.

20 Q. Okay. And I want to now point out for

21 you the Bates numbers at the bottom of this

22 page. There are two sets of numbers here,

23 correct, NL2 0000389?

24 A. Okay.

25 Q. And then NOV-25-0003888. � 10626

1 Do you see that, sir?

2 A. Yes, I do.

3 Q. And that would be what we would think

4 of as Bates numbers; correct?

5 A. I assume so. I'm not a litigator,

6 but, you know I'll take your word for it.

7 MR. TULCHIN: All right. Well, I

8 wonder if we could put on the right screen --

9 if it's possible, for example, to put up there

10 Plaintiffs' Exhibit 2132.

11 Q. And this was a document that you were

12 shown during your examination. It's meeting

13 minutes called by Dave Miller. You remember

14 this Microsoft conference call?

15 A. Yes, I do.

16 Q. And this certainly looks to you like a

17 Novell document, does it not?

18 A. Yeah, it's a little more formed,

19 right.

20 Q. Well, let's look at the Bates numbers

21 on this exhibit. NL2 0003953. It looks like

22 someone is using the same kind of production

23 numbers on Plaintiffs' Exhibit 2132 as on

24 Defendant's Exhibit 6773; isn't that right?

25 A. Yes. � 10627

1 Q. And then there's a second set of

2 numbers on the Plaintiffs' Exhibit

3 NOV-25-003955.

4 Do you see that, sir?

5 A. I do.

6 Q. And that certainly looks very similar

7 to the production numbers, the Bates numbers on

8 Defendant's Exhibit 6773; correct?

9 A. Yeah, it looks similar.

10 Q. Now, wouldn't it be reasonable to

11 conclude, sir, that the same company that had

12 produced Plaintiffs' Exhibit 2132 and used

13 these Bates numbers had also produced from its

14 files in litigation Defendant's Exhibit 6773?

15 A. Yeah.

16 Q. All right. Well, let's just look at

17 one more.

18 Let's look at Defendant's Exhibit 2507

19 on the right.

20 MS. CONLIN: Your Honor, we'd be happy

21 to stipulate to this.

22 MR. TULCHIN: If the Plaintiffs are

23 stipulating that Novell produced from its files

24 in Provo, Utah, Defendant's Exhibit 6773, then

25 there's no further need to go through any more, � 10628

1 Your Honor. If that's clear.

2 THE COURT: So stipulated?

3 MS. CONLIN: Absolutely, Your Honor.

4 We never contested it.

5 THE COURT: Very well. The

6 stipulation is made.

7 Q. Well, then let's just look at 6773 for

8 just a moment, and let's look at the text.

9 This is the document that you said

10 didn't quite look like a Novell document.

11 A. That's right.

12 Q. Now that you heard the Plaintiffs'

13 lawyer say that this is a document that was

14 produced from Novell's files in litigation,

15 does that help you conclude that this indeed

16 probably is a Novell document that came from

17 the files maintained in Provo, Utah?

18 A. Well, first Dave Miller wasn't in

19 Provo, Utah, and so Dave was in northern

20 California. But again, it doesn't look like a

21 Novell document. It could well have been a

22 Novell document, but I can't testify that it

23 was a Novell document.

24 Q. Let me ask you a slightly different

25 question. � 10629

1 A. Sure.

2 Q. And I probably shouldn't have said

3 Provo --

4 A. Okay.

5 Q. -- in my question.

6 A. Okay.

7 Q. Now that you've heard the Plaintiffs'

8 lawyer agree that this is a Novell document

9 produced from Novell's files, does that give

10 you a little more comfort or assurance that

11 indeed this is a document written at Novell?

12 A. It could well have been.

13 MR. TULCHIN: Your Honor, during my

14 cross-examination, I neglected to offer two

15 exhibits into evidence at the time. One is

16 Defendant's Exhibit 117 and the other is

17 Defendant's Exhibit 170, and I'd like to offer

18 them both now.

19 THE COURT: Any objection?

20 MS. CONLIN: No, Your Honor, no

21 objection.

22 THE COURT: They're admitted.

23 MR. TULCHIN: No further questions on

24 recross, Your Honor.

25 THE COURT: Thank you. Any � 10630

1 reredirect?

2 MS. CONLIN: Yes.



5 Q. I'd like to take a look at 2306,

6 Plaintiffs' Exhibit 2306.

7 That is the letter that you talked

8 about earlier and that Mr. Tulchin talked with

9 you as well.

10 And you see that the top -- if you

11 could go back to the very top thing, and we

12 won't have to bother with it much any longer.

13 It talks about a prerelease ODBC and a

14 Windows 95 beta. And prerelease means beta;

15 correct?

16 A. In many instances it did, that's

17 correct.

18 Q. And so there's a prerelease ODBC and a

19 Windows 95 beta, and they're separately dealt

20 with in the body of the document as well.

21 Do you recall that?

22 A. Yes, I do.

23 Q. Did you ever suggest to your knowledge

24 in your testimony anything but the fact that

25 these were two separate documents? And the � 10631

1 jury could also see that, of course.

2 A. I didn't think so.

3 Q. Let's look at 1020, Plaintiffs'

4 Exhibit 1020.

5 And that is the Linnet Harlan --

6 MS. CONLIN: Let me see, could you

7 turn to the Greg Ewald and blow that up, if you

8 would just a bit.

9 Q. That's the Ewald, October 9, 1991 VXD

10 driver acquisition, and that's the question of

11 whether or not you had some --

12 THE COURT: Ms. Conlin, could you turn

13 the microphone? When you move, the jury has

14 trouble hearing you sometimes.

15 MS. CONLIN: I'm sorry.

16 All right. Can you blow up the body

17 of the document, please?

18 Thank you.

19 Q. This is Mr. Ewald's recounting of the

20 events leading to our acquisition of the VXD

21 driver functions directive from Microsoft.

22 And what Mr. Tulchin asked you is was

23 this an example of Microsoft's cooperation with

24 Novell. And you said yes, it could be;

25 correct? � 10632

1 A. Yes. On a limited basis, that's

2 right.

3 Q. Well, let us take a look at

4 Plaintiffs' Exhibit 487, which was offered and

5 admitted on 1-16-07. And let me show it to you

6 and provide copies to all concerned.

7 MS. CONLIN: May I approach, Your

8 Honor?


10 Q. Okay. This is kind of confusing. It

11 sort of goes back and forth.

12 MS. CONLIN: Darin, if you'd turn to

13 the page that starts with -- at the top with

14 from Bradsi. That I believe is the first in

15 order. It's dated December 11, 1990, and it

16 ends with Bates 13.

17 There we go.

18 Q. All right. This is Mr. Silverberg

19 again. December 11th, 1990, which you will

20 recall was right around the time that Mr. Abel

21 -- Mr. Abel's letter was in September of 1990

22 and got the VXD shortly or sometime thereafter,

23 and this is Mr. Silverberg's response to that.

24 He sends to Mr. Cole, Mr. Barrett, and

25 Mr. Abel. � 10633

1 I have a few questions, he says. When

2 the VXD was sent out to the 20 or so companies,

3 did we get licenses from every one of them? If

4 not, which ones did we not and why not?

5 I want to ensure that in the future

6 when we make sure kind of software available,

7 we get licenses before we send out the

8 software.

9 Do we have a license for DRI? If not,

10 did we just send it out because they called? I

11 think that's supposed to be called.

12 And then we can turn to two. The

13 second, I think, in order, which is also from

14 Mr. Silverberg Wednesday, December 12th to

15 Mr. Cole, Mr. Barrett, and Mr. Abel, re, memory

16 manager VXD.

17 And he says, there is a step I'm

18 missing here. We send them the disk, but don't

19 have a license from them. How do they know

20 they can't ship it? They could certainly say

21 we didn't tell them that they need a license.

22 And then if you skip down to the last

23 paragraph there, it says, I want to make sure

24 that in the future DRI gets nothing from us.

25 No Windows betas, no DOS betas, no help. � 10634

1 Is that the kind of cooperation that

2 you usually got from Microsoft?

3 A. That's correct.

4 MS. CONLIN: I have nothing further,

5 Your Honor.

6 MR. TULCHIN: Nothing, Your Honor.

7 THE COURT: Very well.

8 At this time, ladies and gentlemen,

9 we're going to recess until Tuesday at 8:30

10 a.m.

11 THE WITNESS: See you folks.

12 THE COURT: Before you leave, I'm

13 going to read to you the admonition.

14 Under your oath as jurors in this case

15 you are admonished that it is your duty not to

16 permit any person to speak with you on any

17 subject connected with the trial of this case.

18 You are not to talk with any of the

19 parties, their attorneys, or witnesses during

20 the trial, even upon matters wholly unrelated

21 to this trial.

22 Should anyone try to discuss this case

23 with you or in your presence, you should not

24 listen to such conversation. You should

25 immediately walk away. If a person should � 10635

1 persist in talking to you, try to find out

2 their name and report it immediately to the

3 Court.

4 You also are admonished not to

5 converse among yourselves or with anyone,

6 including family members, on any subject

7 connected with the trial of this case.

8 You should not form or express an

9 opinion on this case and you should keep an

10 open mind until you have heard all of the

11 evidence, the statements and arguments of

12 counsel, the instructions of the Court and the

13 case is finally submitted to you and you have

14 retired to your jury room to deliberate.

15 Not only must your conduct as jurors

16 be above reproach, but you must avoid the

17 appearance of any improper conduct.

18 You must avoid reading and listening

19 to or watching news accounts of this trial, if

20 there should be any. You should also avoid

21 looking at any Internet or websites on your

22 computer or computers you may have concerning

23 anything about this case.

24 Sometimes such accounts are based upon

25 incomplete information or contain matters which � 10636

1 would not be admissible in Court. They can

2 unduly influence your ultimate decision.

3 As a jury, you are the Judge of the

4 facts, while the Court is the Judge of the law.

5 During the course of this trial, I

6 will be required to decide legal questions, and

7 before you leave to deliberate this case, the

8 Court will instruct you in the law you are to

9 follow in reaching your verdict.

10 You should give careful attention to

11 all of the testimony as it is presented to you,

12 for you will only hear it once and you must

13 depend upon your recollection of the testimony

14 when deliberating in your jury room. As I

15 stated before, do not form an opinion and keep

16 an open mind until all of the evidence has been

17 received.

18 From time to time during the trial the

19 Court will be required to confer with the

20 attorneys upon points of law which require only

21 the consideration of the Court. These

22 conferences will be conducted outside the

23 presence of the jury. It is impossible to

24 predict when these conferences will be required

25 or how long they may last. However, these � 10637

1 conferences will be conducted so as to consume

2 as little of your time as possible while still

3 being consistent with the orderly progress of

4 the trial.

5 Also, from time to time during the

6 trial the Court will be required to rule on

7 objections or motions of the lawyers. You

8 should not infer anything by reason of the

9 objection, nor may you infer anything from the

10 rulings on the objections or that the Court has

11 any opinion one way or the other concerning the

12 merits of the case.

13 If an objection to a question of a

14 witness is made and the objection is sustained

15 and the witness is not permitted to answer, you

16 should not speculate as to what the answer may

17 have been nor may you draw any inference from

18 the question itself.

19 Additionally, in your jury room you

20 must not refer to or give consideration to any

21 testimony which may have been given but then

22 was stricken from the record by the Court.

23 Also, the lawyers in this case are

24 under an obligation not to talk with you. Do

25 not consider them to be aloof if they do not � 10638

1 greet you outside of the courtroom. They are

2 merely abiding by their own rules of ethics and

3 the rules of this Court.

4 MS. CONLIN: Your Honor, I'm terribly

5 sorry. I have a housekeeping matter. I need

6 to offer some of the exhibits that I didn't

7 offer as I went.

8 THE COURT: Very well.

9 MS. CONLIN: Plaintiffs' Exhibits

10 9982, 5305, 5473, 9052, 1797, 2270, 2399A,

11 1793, and 2266. At this time, Your Honor,

12 Plaintiffs offer those exhibits.

13 MS. NELLES: Your Honor, if I may.

14 As we were going along, I knew what

15 was in and what was not in, but I no longer

16 have each one, and if I could simply have over

17 the weekend to check the status on each of

18 these, and if we can address it first thing

19 Tuesday morning?

20 THE COURT: You may.

21 MS. NELLES: Thank you.

22 THE COURT: Drive careful. Leave your

23 notebooks here.

24 (A recess was taken from 2:59 p.m.

25 to 3:12 p.m.) � 10639

1 (The following record was made out of

2 the presence of the jury.)

3 THE COURT: Ready to proceed on -- is

4 it Joachim?

5 MR. GRALEWSKI: Joachim.

6 THE COURT: Joachim.

7 MR. GRALEWSKI: Good afternoon, Your

8 Honor.

9 THE COURT: Good afternoon.

10 MR. GRALEWSKI: As you just indicated,

11 we're here to handle objections concerning the

12 Joachim Kempin transcripts.

13 All of the issues that will be

14 presented to Your Honor today have not been

15 presented to the Special Master.

16 They are all issues stemming from

17 either collateral estoppel or recent orders of

18 the Court concerning the consent decree order

19 that the Court recently entered I believe it

20 was last Saturday.

21 THE COURT: Okay.

22 MR. GRALEWSKI: And the motion in

23 limine order regarding foreign antitrust

24 proceedings.

25 And if I may hand up a rulings chart � 10640

1 and the transcripts, Your Honor.

2 THE COURT: You may.

3 Thank you.

4 MR. GRALEWSKI: You're welcome.

5 Your Honor, I will be addressing the

6 objections that Microsoft has asserted

7 concerning the consent decree and the foreign

8 antitrust proceedings, and Mr. Cashman will

9 then address the collateral estoppel issues.

10 THE COURT: Great. Please begin.

11 MR. GRALEWSKI: As Your Honor will

12 notice from the rulings chart, there are three

13 designations, the first one, the second one,

14 and the last one that are consent decree

15 related objections.

16 The parties have spent a considerable

17 amount of time and have narrowed the objections

18 quite a bit.

19 THE COURT: Good.

20 MR. GRALEWSKI: What we are left with

21 is a -- I think a disagreement that applies

22 equally to all three of these, which I'd like

23 to address globally, and then we can look at

24 each designation individually.

25 The position that I believe Microsoft � 10641

1 will take as we've discussed during our meet

2 and confers is that these lines of testimony

3 will create the impression in the jury's mind

4 that the consent decree was not a voluntarily

5 entered into agreement.

6 The reason that Microsoft is taking

7 this position is because the testimony talks

8 about what the consent decree requires

9 Microsoft to do.

10 There's a very important distinction.

11 The testimony does not suggest that the

12 entering into of the agreement was anything

13 other than voluntary.

14 So essentially what we have, Your

15 Honor, is -- and this is applicable across the

16 board with all types of agreements, and

17 certainly all consent decrees.

18 You can voluntarily enter into an

19 agreement, but once you enter into the

20 agreement, you are required to comply with it.

21 Otherwise, there would be no sense in having an

22 agreement in the first place.

23 So it is Plaintiffs' position that in

24 each of these instances, all that's occurring

25 is testimony concerning what the requirements � 10642

1 are of the agreement once the consent decree is

2 entered into.

3 I should note that even if this was an

4 issue, which it shouldn't be because of the

5 reasons I just indicated, there is an

6 instruction that the Court has finalized. And

7 I frankly don't know whether it's been given to

8 the jury or not, but there is an instruction

9 that makes crystal clear -- there's an

10 instruction that makes crystal clear that

11 Microsoft entered into the decree voluntarily.

12 So with that preliminary global

13 argument, we can look at each individual

14 designation.

15 The first one is -- this is from the

16 Caldera transcript -- 84, 5, to 85, 8.

17 And Mr. Kempin is being asked about

18 Microsoft's -- changes in Microsoft's practices

19 as a result of the agreement.

20 And the question is: And there were

21 changes in the licensing policy and practices

22 that were required by the consent decree;

23 correct?

24 Answer: That is true.

25 Consistent with what I just said, this � 10643

1 does not suggest that Microsoft did not

2 voluntarily enter into the agreement, but it

3 certainly does suggest that once entering into

4 the agreement, they're required to comply with

5 it.

6 I'm happy to quickly do the next two

7 or we can look at each one individually.

8 They're all very similar issues.

9 THE COURT: Ms. Bradley?

10 MS. BRADLEY: We're happy to deal with

11 them all as a group.

12 MR. GRALEWSKI: Thank you.

13 THE COURT: Individually or all

14 together?

15 MS. BRADLEY: All as a group. Go on

16 ahead.

17 MR. GRALEWSKI: I should proceed.

18 The next designation at issue, Your

19 Honor, also from the Caldera transcript is on

20 page 89, lines 4 and 5.

21 And really, to be most clear, only a

22 phrase that starts with the which at the end of

23 line 4 and then the entire line 5. So all

24 that's at issue is the phrase which contained

25 the terms that were prohibited. � 10644

1 Again, this isn't testimony that

2 suggests or states in any way that Microsoft

3 was forced into the agreement. Simply that

4 Microsoft was required to comply with the

5 agreement, and it indicates what the agreement

6 was about and what it prohibited, which was the

7 substance of the agreement, the per processor

8 contracts.

9 And lastly, the third and final

10 consent decree type objection is from

11 Mr. Kempin's March 18, '98 DOJ/CID transcripts.

12 And for the record -- I know it's on

13 your rulings chart -- it's again just two lines

14 108, 2 to 3. And specifically the phrase since

15 the consent decree prohibitions on per

16 processor licenses became effective.

17 Again, this simply discusses and asks

18 Mr. Kempin about what the requirements of the

19 consent decree were and not that Microsoft did

20 not enter into the consent decree voluntarily.

21 I will note, Your Honor, that this is

22 testimony at this point that's highly probative

23 with the defense that Microsoft asserts, which

24 is that per processor contracts -- the purpose

25 of them was to prevent piracy, and this � 10645

1 testimony is offered to directly debunk that

2 assertion.

3 Mr. Kempin testifies that after they

4 stopped using the per processor agreements, he

5 did not see any increase in OEM shipments of

6 PCs without operating systems going to an issue

7 related to the piracy issue.

8 Thank you, Your Honor.

9 THE COURT: Thank you.

10 Ms. Bradley?

11 MS. BRADLEY: Your Honor, Microsoft,

12 as you can see, has objected in an extremely

13 narrowly tailored way to just the testimony

14 from Mr. Kempin that runs an extreme risk of

15 confusing the jury as to your instruction

16 regarding the consent decree.

17 If I may hand that up so that we can

18 all have it in front of us.

19 THE COURT: Thank you.

20 MS. BRADLEY: Your Honor instructed

21 that the consent decree was a voluntary

22 agreement and that type of language, the

23 voluntariness of the consent decree pervades

24 the instruction.

25 And Microsoft has objected to, as � 10646

1 you've heard, three very narrow portions of

2 testimony that seem to either contradict this

3 or run the risk of confusing the jury as to the

4 voluntariness of Microsoft's participation or

5 entry into the consent decree.

6 Plaintiffs' argument that the

7 testimony at issue is highly probative doesn't

8 go to the narrowly tailored objected-to

9 testimony but rather to the larger designations

10 which Microsoft concedes should be presented to

11 the jury.

12 The testimony that Mr. Gralewski just

13 referred to from the DOJ/CID transcript, the

14 piracy rationale testimony still comes in, and

15 only the line in the questioning attorney's

16 statement that these were prohibitions

17 indicating some sort of involuntariness is

18 objected to here.

19 The same is true in the Caldera

20 transcript at 84 -- at lines -- pages 84 and

21 89.

22 At page 84, Microsoft objects to the

23 questioning attorney's statement or question

24 that the policies and practices were required

25 by the consent decree. And as with the other � 10647

1 designations, bears the risk of confusing the

2 jury as to the voluntariness of the agreement.

3 Extricating those four lines of

4 testimony doesn't detract at all from the

5 probativeness of the remainder of the line of

6 questioning and could easily be done without

7 harm to the probativeness of the remainder of

8 the testimony.

9 The same is true at page 89 where the

10 questioning attorney's attempt to put a gloss

11 on the consent decree, which contained the

12 terms that were prohibited, would be a simple

13 way to remove a potentially very confusing

14 portion of the question from being presented to

15 the jury that runs the risk of contradicting

16 your instruction that the agreement was

17 voluntary.

18 So for that reason, we ask that Your

19 Honor sustain Microsoft's relevance and

20 prejudice -- really it's a prejudice argument,

21 prejudice objection to these three very

22 narrowly tailored portions of testimony.

23 THE COURT: Anything else on these

24 three?

25 MR. GRALEWSKI: Just one issue, Your � 10648

1 Honor, and that is I just noticed in looking at

2 the instruction again that it mimics actually

3 the exact language from at least one of the

4 questions.

5 If Your Honor would refer to the

6 Caldera testimony at page 89, the question

7 talks about prohibited terms, and I would note

8 that the instruction that the parties have

9 agreed to uses those same exact terms about

10 right in the middle of the instruction.

11 THE COURT: Yeah, but that's referring

12 to what the -- contains provisions by their

13 terms -- that by their terms prohibit or

14 restrict -- that's what the agreements did.

15 MR. GRALEWSKI: That's right. And

16 what the instruction --

17 THE COURT: She's talking about what

18 the consent decree did, isn't she?

19 MR. GRALEWSKI: No, perhaps I'm --

20 perhaps I didn't begin my rebuttal argument

21 correctly.

22 THE COURT: Maybe I'm reading it

23 wrong. Go ahead. I'm sorry. I shouldn't have

24 interrupted you. Go ahead.

25 MR. GRALEWSKI: Not at all, Your � 10649

1 Honor.

2 The instruction in the middle of the

3 page is explaining what the consent decree

4 provides for.

5 THE COURT: Right.

6 MR. GRALEWSKI: And one of the things

7 the instruction says is that -- you have to go

8 back up a little bit to the start of the

9 sentence, Microsoft also agreed not to enter

10 into any license agreements with OEMs for

11 operating systems software that, and then skip

12 down to contains provisions that by their terms

13 prohibit or restrict an OEM's licensing of

14 non-Microsoft operating systems.

15 So in the instruction itself that the

16 parties have agreed to, the jury is going to be

17 told that Microsoft, even though they entered

18 into something voluntarily, they're still

19 prohibited by the agreement from doing

20 something, and that's the essence -- that's the

21 essence of the argument.

22 THE COURT: I understand what you're

23 saying now.

24 MS. BRADLEY: But, Your Honor, I have

25 to say that I think that your initial reading � 10650

1 of this was exactly right, which is that this

2 -- the consent decree, the agreement governed

3 what Microsoft could do. Among those things

4 was that the OEMs could not be prohibited from

5 doing something.

6 So just to clarify on that.

7 And, Your Honor, the questioning

8 attorney's statements in the -- in the

9 testimony to which we've objected does not

10 contain any such context that implies the

11 voluntariness of such prohibitions.

12 MR. GRALEWSKI: I'm sorry, just -- I

13 think I need to state this for the record that

14 the instruction nor -- neither the instruction

15 nor the consent decree attempt to control OEMs'

16 ability to do things or not do things.

17 What the consent decree did and what

18 this instruction makes clear to the jury is

19 that by the consent decree, Microsoft was

20 prohibited -- to use that word again -- from in

21 their OEM license agreements putting provisions

22 in there that prevented OEMs from licensing

23 non-Microsoft software.

24 So it's not a situation where you're

25 attempting to control the actions of the OEM. � 10651

1 It is again identifying something that

2 Microsoft was prohibited from doing, and which

3 is entirely consistent with these three

4 designations we've just talked about.

5 THE COURT: Are these -- you guys went

6 through all these?

7 You guys did a good job if you

8 narrowed it down to just these. There's a lot

9 of testimony here.

10 MR. GRALEWSKI: Thank you, Your Honor.

11 THE COURT: Thank you.

12 MR. GRALEWSKI: Eight hours of

13 testimony.

14 THE COURT: Excellent job.

15 MS. BRADLEY: Although I will say,

16 Your Honor, that we have maintained quite a few

17 collateral estoppel objections, which --

18 MR. CASHMAN: Your optimism may be a

19 little bit premature.

20 MS. BRADLEY: I didn't want you to get

21 too excited.

22 MR. GRALEWSKI: But eight hours of

23 testimony and no hearsay issues to present to

24 the Judge and other issues.

25 THE COURT: 231 now? � 10652

1 MR. GRALEWSKI: Yes, Your Honor.

2 This is from the Caldera transcript.

3 THE COURT: I'm there.

4 MR. GRALEWSKI: 231, 14 through 24,

5 and then there's an objection interposed, and

6 then there's a couple lines thereafter that's

7 the same issue, 232, 2 to 5.

8 THE COURT: Okay.

9 MR. GRALEWSKI: And I believe we've

10 agreed that these can be not only addressed

11 together now, but also your ruling should -- I

12 suppose be the same for each of them. I guess

13 they could have been put on the rulings chart

14 together.

15 What is going on here, Your Honor, is

16 Mr. Kempin is being examined about one of his

17 own documents that he wrote. It's an

18 admissible Microsoft business record and

19 admission -- the testimony starts, if you go

20 back just a couple -- or actually just one

21 page, page 230, line 18, the document is

22 introduced and as his compilation of OEM sales

23 reports, there's -- they discuss what the date

24 is.

25 And then at the bottom of 230. � 10653

1 Question: And on the second page of

2 this you have a discussion of DRI?

3 And he says, yeah, I see that.

4 And then there's some questions about

5 DRI, and then we get to the objected to

6 testimony, which starts at line 14.

7 Despite the fact that this is not true

8 generates a bad atmosphere.

9 Again, this is quoting from Mr.

10 Kempin's own document.

11 These are Mr. Kempin's own words.

12 Continues we, meaning Microsoft, have

13 some indications that the Korean government is

14 trying to challenge our per processor contracts

15 under Korean trade law.

16 And then the question comes: And

17 that, in fact, it happened, did it not?

18 That is true.

19 And then there are -- then there's a

20 question about -- not unlike the consent decree

21 that we've been arguing, the question basically

22 talks about well, what was the effect of the

23 investigation.

24 And Mr. Kempin states a fact, which is

25 they stopped using per processor agreements in � 10654

1 Korea.

2 And then it goes on, you were involved

3 in deciding how to respond to the Korean

4 government's investigation? Yes, I was.

5 That's the totality of the issue here.

6 Again, the objection is prejudice.

7 I need to remind the Court that

8 Defendant brought a motion in limine to exclude

9 on a global basis all references to foreign

10 antitrust proceedings, and the Court denied

11 that motion.

12 The Court said -- the Court had

13 considered the motion and finds that it should

14 be and is denied. The Defendant's motion is

15 very broad.

16 And then Your Honor went on to state

17 that issues concerning foreign antitrust

18 proceedings should be dealt with on a

19 case-by-case basis.

20 I would think to recognize the fact

21 that certain testimony may not cross the line

22 while other testimony could be inflammatory,

23 unsubstantiated or the like.

24 Here, I would submit that these are

25 just facts. Indeed, it's Mr. Kempin's own � 10655

1 words, and he actually testifies that he was

2 involved in this, it was correct.

3 And all he does is say as a result of

4 the investigation, we stopped using per

5 processor contracts in Korea.

6 It's highly probative to an issue in

7 the case and it doesn't seem to cross that line

8 into, you know, undue prejudice that is what

9 the objection is to this testimony.

10 Thank you, Your Honor.

11 MS. BRADLEY: Your Honor, I will say

12 first that the document itself, which I wish I

13 had brought a copy with me to hand up today,

14 but doesn't reference the Korean FTC's actions

15 in any way, and so that argument is inapposite

16 here.

17 THE COURT: What's he reading from in

18 line 14 to 17? Is he reading from something?

19 MS. BRADLEY: Not reading. He's

20 describing the situation in which he was

21 involved with respect to the Korean --

22 THE COURT: So the questioner when he

23 says on line 14, page 231, despite the fact

24 that this is not true, it generates a bad

25 atmosphere, that's part of the question there? � 10656

1 Do we have some indication?

2 MS. BRADLEY: That portion is the

3 document.

4 THE COURT: So he is reading part of

5 the document?

6 MS. BRADLEY: That portion, yes, Your

7 Honor.

8 MR. GRALEWSKI: And the next sentence,

9 Your Honor. Sorry to interrupt.

10 THE COURT: All right. So we have

11 some indication.

12 MS. BRADLEY: But it doesn't tell us

13 any action the Korean government took with

14 respect to, for instance, banning per processor

15 agreements in Korea. And, in fact, that's one

16 of the problems with this whole line of

17 testimony is we do not know, nor do Plaintiffs

18 know, nor is it described anywhere in all of

19 this pile of Mr. Kempin's testimony or

20 elsewhere exactly what the Korean government

21 did, what actions they took.

22 We have some indication that what

23 happened with the Korean FTC was that Microsoft

24 entered into something akin to a consent

25 decree; that there were perhaps some letters � 10657

1 exchanged.

2 But we have no substantiated evidence

3 that there was any -- ever any order that

4 Microsoft cease using per processor licenses in

5 Korea, and the suggestion here is otherwise.

6 And that, Your Honor, is highly prejudicial to

7 Microsoft's case, especially considering all of

8 the other evidence that shows that at least in

9 the United States, and as far as we can tell

10 everywhere in the world, nobody's found per

11 processor licenses to be per se illegal.

12 I will hand up --

13 THE COURT: It seems like when he's

14 reading this, he's reading from Mr. Kempin's

15 own document; is that right?

16 MS. BRADLEY: That portion, yes, Your

17 Honor.

18 THE COURT: And he says we have some

19 indications that the Korean government is

20 trying to challenge our per processor contracts

21 under Korean trade law. That's the end of the

22 reading there; right?

23 MS. BRADLEY: Yes, Your Honor.

24 THE COURT: Then the questioner says,

25 and that, in fact, did happen, did it not? And � 10658

1 the answer is that is true.

2 MS. BRADLEY: Your Honor, Microsoft

3 doesn't dispute that the -- that Microsoft was

4 challenged by the Korean FTC on its practices

5 in Korea.

6 And to give a little bit of context

7 for what was happening here, it was a highly

8 politically charged issue for the Korean

9 government, and the issue is -- and if we look

10 at the testimony up above, it gives a little of

11 this, but not quite the full flavor of it, and

12 that is that the Korean OEMs were concerned

13 that Microsoft was giving better prices to

14 Taiwanese OEMs than it was to Korean OEMs, and

15 so there was a certain amount of national pride

16 or conflict that was implicated here that sort

17 of pervades this whole issue of the Korean FTC

18 instigated an investigation into Microsoft's

19 activities in Korea.

20 That issue is irrelevant and has

21 virtually no probative value in this case, this

22 case, which is about whether Iowa consumers

23 were overcharged for their software.

24 It's just -- I've never heard

25 Plaintiffs be able to make a link from the � 10659

1 Korean FTC's investigation of Microsoft's

2 practices in Korea that were as far as we can

3 tell a result of a sort of nationalistic

4 conflict and for which we have no real

5 understanding of the outcome of that

6 investigation. For instance, whether Microsoft

7 entered voluntarily into an agreement to cease

8 such practices in Korea or whether it was

9 ordered to do so.

10 It's just difficult to conceive of the

11 potential probativeness of that testimony being

12 shown in this courtroom to this jury and bears

13 the risk of substantial prejudicial effect

14 because the -- because the jury runs the risk

15 of coming to the conclusion that these per

16 processor licenses were similarly impermissible

17 in the United States.

18 Now, if I may hand up Microsoft's

19 motion in limine on foreign antitrust

20 proceedings.

21 THE COURT: This is what I already

22 ruled on?

23 MS. BRADLEY: Yeah, you've already

24 ruled on this.

25 And this -- to this motion in limine, � 10660

1 Microsoft attached and I've attached here a

2 declaration from a Korean attorney stating that

3 Korean antitrust law and American antitrust law

4 are very different.

5 And so the risk that the jury will

6 conclude that because it appears -- it may

7 appear from this testimony that the Korean

8 government had challenged Microsoft's use of

9 per processor licenses and perhaps found them

10 to be unlawful in Korea, that the jury would

11 make the leap to finding that per processor

12 licenses were somehow unlawful in America,

13 which has never been found, is just too severe.

14 THE COURT: This is the affidavit of

15 Mr. Ahn.

16 MS. BRADLEY: Yes, Your Honor.

17 THE COURT: Isn't it true that --

18 MS. BRADLEY: And I'll point you --

19 THE COURT: I'm sorry, go ahead.

20 MS. BRADLEY: It's at paragraph two

21 you'll see that he states that the K FTC's

22 procedures bear little or no resemblance to the

23 procedures applicable in U.S. courts and --

24 THE COURT: That has to do with

25 procedures, not whether it's in violation of a � 10661

1 particular act, isn't it?

2 MS. BRADLEY: Well, Your Honor, the

3 issue being and the point of this being that

4 because Your Honor and we all understand that

5 Korean antitrust law is distinct and that the

6 Korean procedures are distinct, that to somehow

7 draw the link, which the -- it seems that

8 Plaintiffs are attempting to do through their

9 designation of this testimony that because

10 Korean trade commissioners found a practice to

11 be unlawful in Korea that they're somehow

12 improper here is a highly improper conclusion

13 to draw and one that we -- that we're sort of

14 tempted to reach from just hearing this

15 testimony.

16 THE COURT: Is paragraph three in this

17 declaration by Mr. Ahn supposed to be all

18 inclusive of what Microsoft is alleged to have

19 violated in the Korean Fair Trade Law?

20 MS. BRADLEY: There were actually a

21 few different -- as far as I understand it,

22 there were a few different issues that came up

23 with respect to the Korean FTC, and this

24 declaration refers specifically to a different

25 issue, and that is the streaming media. � 10662

1 THE COURT: And instant messaging?

2 MS. BRADLEY: Instant messaging.

3 As Your Honor recalls, when the Court

4 ruled on this motion in limine on foreign

5 antitrust proceedings, it found that foreign --

6 evidence related to foreign antitrust

7 proceedings would be evaluated on a

8 case-by-case basis and that evidence would be

9 permitted if it were found to be relevant and

10 excluded if it were found to be irrelevant.

11 We would submit that this evidence at

12 issue here falls clearly on the irrelevant side

13 of that line, and particularly in light of the

14 danger of prejudice of submitting such

15 testimony before the jury that suggests to them

16 and to the rest of us that there's some

17 impropriety or illegality involved in this type

18 of behavior.

19 THE COURT: Mr. Gralewski?

20 MR. GRALEWSKI: Yes, Your Honor.

21 Thank you.

22 It seems that particularly a few

23 moments ago when Ms. Bradley was making

24 Microsoft's argument that really Microsoft is

25 attempting to reargue their global objection, � 10663

1 and it seems like -- it seems like what they

2 want, despite Ms. Bradley referencing at the

3 end that you need to look at things on a

4 case-by-case basis, it seems really what they

5 want is for the Court to hold that nothing

6 having to do with foreign antitrust proceedings

7 could be relevant to the case.

8 You do say in your order the Defendant

9 must make specific objections when the exhibits

10 in evidence are offered and they do that here

11 so that the Court can rule on their

12 admissibility in the context that they are

13 presented.

14 So I do think based on the argument we

15 have to go back a little bit, and I will

16 attempt to demonstrate to you this is highly

17 relevant and highly probative in the context

18 that this is presented. And of course, the

19 Court is well aware of all the testimony that's

20 been in the record about DRI.

21 And that's actually what's going on

22 here.

23 At the top of 231, the examining

24 attorney points out a portion of Mr. Kempin's

25 own document where Mr. Kempin says basically � 10664

1 that we aren't getting MS-DOS 5.0 out there and

2 as a result, DRI is gaining momentum. And

3 basically what he's saying is, you know, we're

4 in trouble.

5 He finishes by saying, I need some

6 help here.

7 And then the question is what kind of

8 help did you need?

9 He says -- you know, he says we got to

10 get to the MS-DOS product out.

11 And then the examining attorney goes

12 back to the document.

13 Mr. Kempin himself says, their

14 aggressiveness -- again continuing the DRI

15 conversation. Their aggressiveness is causing

16 us pain in Korea.

17 So Mr. Kempin -- to demonstrate the

18 relevance of this testimony, Mr. Kempin

19 acknowledges and admits that DRI and their

20 product and the way they're selling the product

21 is causing difficulties to Microsoft.

22 And he says what Mr. Williams is --

23 manner in which Mr. Williams is competing.

24 So this is all tied into competition

25 with DRI, and I would submit, Your Honor, that � 10665

1 competition with DRI is one of the

2 fundamentally relevant things of the case.

3 THE COURT: Very well.

4 Anything else on this issue?

5 MS. BRADLEY: If I may just respond

6 for one moment, Your Honor.

7 The testimony about Microsoft's

8 competition with DRI in Korea is not objected

9 to and is -- will come in with Mr. Kempin's

10 testimony.

11 That's -- the Korean FTC's

12 investigation of Microsoft's practices does not

13 bear on that and is improper.

14 And again I will ask and I will note

15 that Plaintiffs have as of yet failed to

16 provide any link between the Korean FTC's

17 investigation of Microsoft and the price Iowa

18 consumers paid for their products. It's just

19 not relevant here and it's prejudicial and

20 inadmissible, and we'd ask that Your Honor

21 sustain Microsoft's objections to this line of

22 testimony.

23 THE COURT: Anything else?

24 MR. GRALEWSKI: No, Your Honor. Thank

25 you. � 10666

1 THE COURT: Collateral estoppel then.

2 MR. CASHMAN: Your Honor, good

3 afternoon.

4 THE COURT: Good afternoon.

5 MR. CASHMAN: I'm going to hand up to

6 the Court -- I'm not sure if Mr. Gralewski,

7 what he handed up included the rulings chart on

8 collateral estoppel.

9 MR. GRALEWSKI: It did not.

10 MR. CASHMAN: So I will hand a copy of

11 that up to the Court.

12 THE COURT: Thank you.

13 MR. CASHMAN: And I'm also going to

14 hand to the Court a copy of the transcript from

15 December 7, 2006, page 3433 and 3434 where the

16 Court made its oral ruling, its last

17 pronouncement on collateral estoppel issues

18 just for the Court's reference.

19 THE COURT: Okay.

20 MR. CASHMAN: I want to start by first

21 pointing out for the Court that what we're

22 talking about here are designations from four

23 -- pardon me -- five different transcripts, and

24 I want to identify those for the Court and for

25 the record. � 10667

1 The first are designations from a

2 transcript -- a deposition taken on October 2,

3 1997, in the DOJ/CID investigative demand.

4 Those designations are on page 1 and

5 part of page 2 of your rulings chart, Your

6 Honor.

7 THE COURT: Okay.

8 MR. CASHMAN: The next transcript is

9 from the Caldera case, a deposition transcript

10 from the Caldera case, and that was taken on

11 December 18, 1997.

12 Those designations are reflected on

13 your rulings chart starting on page 2 and

14 continuing on to page 3.

15 THE COURT: Okay.

16 MR. CASHMAN: Next, there are

17 designations from a deposition transcript from

18 a DOJ civil investigative demand. That was by

19 the Department of Justice and by the Texas

20 Department of Justice, State of Texas attorney

21 general. That deposition is March 18, 1998.

22 THE COURT: Okay.

23 MR. CASHMAN: That's on your rulings

24 chart starting on page 3 and continuing to page

25 4. � 10668

1 THE COURT: Nope. Doesn't go to page

2 4.

3 MR. CASHMAN: Pardon me?

4 THE COURT: Doesn't continue on to 4.

5 MR. CASHMAN: It might end on page 3.

6 THE COURT: Yeah.

7 MR. CASHMAN: And then on page 4,

8 continuing through most of the page 7 is a

9 deposition taken of Mr. Kempin on October 1,

10 1998.

11 THE COURT: Got it, yeah.

12 MR. CASHMAN: In the government case.

13 And then lastly, there's a deposition

14 transcript from which designations have been

15 made and collateral estoppel objections

16 asserted by Microsoft to the JCCP proceeding in

17 California, and that deposition was taken on

18 January 24, 2002. That's on page 7, I think

19 the last entry.

20 THE COURT: All right.

21 MR. CASHMAN: The Plaintiffs are going

22 to ask the Court to overrule all of these

23 collateral estoppel objections and make that

24 ruling before we determine whether or not we

25 need to address these collateral estoppel � 10669

1 objections on a line-by-line basis.

2 And I'd like to explain the reason

3 why Plaintiffs think that is the appropriate

4 way to proceed, and if it's necessary to

5 address line by line, Plaintiffs submit that it

6 would be appropriate to do that only after the

7 Court makes its ruling. And we could do that

8 on Monday, if necessary, but Plaintiffs would

9 like to explain why they think this is the

10 appropriate way to proceed.

11 First of all, the Court in its ruling

12 on December 7, 2006, has already ruled from the

13 plain language of what the Court has stated on

14 the transcript that Plaintiffs are entitled to

15 use any evidence from the Department of Justice

16 case that relates to facts or issues which have

17 not been collaterally estopped.

18 I think it's also clear that the Court

19 has ruled, and this was in connection with its

20 rulings on the collateral estoppel objections

21 for Mr. Gates' deposition, that issues which

22 have not been collaterally estopped include at

23 a minimum, include causation, harm to Iowa

24 consumers, credibility and demeanor, willful or

25 flagrant conduct, anticompetitive conduct � 10670

1 affecting the applications market,

2 anticompetitive conduct affecting the operating

3 systems market either before or after the

4 period of time at issue in the government case,

5 exemplary damages, contracts or combinations

6 which unreasonably restrain trade, and

7 Plaintiffs believe that the Court has said

8 these are all issues upon which there's no

9 collateral estoppel.

10 When the Court issued its ruling on

11 the Gates deposition, it denied all of the

12 objections globally for Mr. Gates and stated

13 for the reasons stated by Plaintiffs in their

14 memo relating to Mr. Gates.

15 And in our memo and in the argument

16 that we had with the Court, you may recall that

17 all of the issues which I just mentioned were

18 issues that are new in this case and on which

19 there's no collateral estoppel.

20 So the only evidence potentially

21 subject to collateral estoppel would be

22 evidence actually considered by Judge Jackson

23 in the Department of Justice case in

24 formulating his findings.

25 Of course, Plaintiffs are not going to � 10671

1 be -- they're not proving that same case that

2 we -- that was at issue in the government case

3 so because Plaintiffs are not here attempting

4 to prove liability in the operating systems

5 market for 1994 through 1998, the evidence that

6 we're offering from the Department of Justice

7 case for these other purposes could not be

8 solely for the purposes of bolstering what

9 happened in the Department of Justice case.

10 So collateral estoppel simply would

11 not apply under the Court's order of December

12 7th.

13 There is not a single piece of

14 testimony in the designations by Mr. Kempin

15 that are being offered to prove operating

16 system viability for 1994 to 1998 since that's

17 not what the Plaintiffs are proving here.

18 Rather, everything in Mr. Kempin's

19 testimony is being offered for other purposes.

20 Now, to back up for just a moment,

21 Your Honor, I'd like to point out just how far

22 afield Microsoft is in asserting these

23 collateral estoppel objections that they have

24 asserted.

25 The fact that their collateral � 10672

1 estoppel objections are unfounded is further

2 demonstrated by the fact that the evidence to

3 which Microsoft is now objecting, specifically

4 these Kempin designations, Microsoft has failed

5 to prove even as an initial matter that any of

6 this testimony was considered by Judge Jackson

7 in issuing these findings.

8 Mr. Kempin testified as a witness in

9 the Department of Justice trial.

10 That was the evidence from Mr. Kempin

11 that Judge Jackson had available to him when he

12 made his findings.

13 Here, by contrast, and this is some

14 examples, Microsoft is asserting collateral

15 estoppel objections to testimony given in a

16 deposition by Mr. Kempin in the Caldera case.

17 Well, the Caldera case was an entirely

18 different case than what was involved in the

19 Department of Justice government case.

20 As the Court has heard testimony

21 already and argument concerning what happened

22 in the Caldera case, that's all about DRI, per

23 processor licenses, et cetera, et cetera, and

24 that wasn't what the government case was about.

25 So on its face, any of their � 10673

1 objections to Caldera are just blatantly

2 improper. Any of the designations to Caldera

3 are blatantly improper.

4 Furthermore, Microsoft even as it

5 relates to the Department of Justice

6 depositions in the CID proceedings or in the

7 Department of Justice deposition itself, that's

8 not the evidence upon which Judge Jackson

9 relied and Microsoft has failed to present any

10 evidence to suggest otherwise.

11 So Microsoft has even -- has

12 essentially failed to show that any of the

13 evidence is the same evidence.

14 So given your December -- the Court's

15 December 7th order, the fact that the

16 Plaintiffs are submitting the testimony for

17 Mr. Kempin on multiple other issues where

18 there's no collateral estoppel, Microsoft's

19 basic failure to establish that any of the

20 testimony was even considered by Judge Jackson

21 or available to be considered by Judge Jackson

22 and given the fact that the Plaintiffs are not

23 -- not using any of this testimony solely to

24 bolster collaterally estopped facts in terms of

25 proving liability for the operating system for � 10674

1 1994 to 1998, Plaintiffs think that it is

2 appropriate to overrule all of these collateral

3 estoppel objections without the necessity of

4 going line by line.

5 And that is again underscored by what

6 we did with Mr. Gates and the tremendous amount

7 of time that is going to be required -- would

8 otherwise be required to do line-by-line

9 argument on issues where the Plaintiffs have

10 multiple other reasons for submitting this

11 testimony.

12 There is just no -- really, there's no

13 way that Microsoft can carry its burden to

14 establish a collateral estoppel objection for

15 any designated testimony from Mr. Kempin.

16 So Plaintiffs would request, Your

17 Honor, that the collateral estoppel objections

18 be denied and that before we determine whether

19 line-by-line argument is appropriate or

20 necessary, that the parties take guidance from

21 whatever ruling you issue on this request.

22 THE COURT: Any response?

23 MS. BRADLEY: Your Honor, as a

24 preliminary matter, it seems that the

25 Plaintiffs have the standard that this Court � 10675

1 has set out for what evidence may be presented

2 on collaterally estopped facts all wrong.

3 Nowhere in any of Your Honor's rulings

4 or orders have I seen anything that says that

5 the Court will preclude only evidence that was

6 considered by Judge Jackson in formulating his

7 findings of fact.

8 The issue is, the facts of

9 collaterally estopped findings of fact are

10 already in evidence. They've been read to the

11 jury by Your Honor. The jurors have them in

12 their notebooks. Plaintiffs continue to read

13 them throughout their case in chief. And for

14 Plaintiffs to attempt to put in evidence, that

15 goes to those exact same facts, in fact mirrors

16 those facts, is simply improper.

17 Plaintiffs noted for Your Honor that

18 this process of walking through the testimony

19 line by line will take a tremendous amount of

20 time, and I have to agree.

21 But I have to say, that that's a

22 result of Plaintiffs' failure to provide a

23 single alternate purpose for a single line of

24 testimony that they've designated regarding

25 these collaterally estopped facts. � 10676

1 Microsoft took the time and marched

2 through all of Plaintiffs' eight hours of

3 designations from this stack of prior testimony

4 from Mr. Kempin and linked the testimony

5 directly to collaterally estopped findings of

6 fact.

7 Microsoft then requested of Plaintiffs

8 that Plaintiffs either provide some argument as

9 to why the facts stated in the Kempin testimony

10 are somehow distinct from the facts as

11 collaterally estopped in the findings or to

12 provide some alternate purpose or use for that

13 testimony.

14 Plaintiffs have failed to do so, and

15 Microsoft wishes to and plans to take the Court

16 through each of these designations and to

17 demonstrate that the facts stated in the

18 testimony are collaterally estopped and that

19 there is no conceivable alternative purpose and

20 that Plaintiffs have as of yet failed to

21 provide a single alternative purpose for any of

22 these designations.

23 And if we may just turn to the first

24 designation on the list, DOJ/CID, October 2 --

25 MR. CASHMAN: May I respond to the � 10677

1 general argument before we go on a specific --

2 THE COURT: Sure.

3 MR. CASHMAN: First of all, Ms.

4 Jackson -- pardon me, Ms. --

5 THE COURT: Bradley.

6 MR. CASHMAN: Bradley, pardon me. I

7 was going to say Bradford, and I knew that

8 wasn't right.

9 I just want to touch on a couple of

10 the issues.

11 First of all, the fact that evidence

12 would have to have been considered by Judge

13 Jackson is obviously fundamental, and Ms.

14 Bradley has clearly forgotten about all of the

15 way that Mr. Holley and Mr. Tulchin postured

16 this when we argued collateral estoppel before

17 when they kept referring to the underlying

18 evidence for the findings of fact.

19 And the underlying evidence for the

20 findings of fact issued by Judge Jackson

21 necessarily means that evidence that he

22 considered in issuing his findings of fact.

23 So as of -- as I would say as a matter

24 of law, but at the very least as a matter of

25 logic, the 2002 testimony from the JCCP � 10678

1 deposition clearly could not have been

2 underlying evidence for the Department of

3 Justice action.

4 The testimony in the Caldera case,

5 because it's a wholly different case with

6 wholly different subjects, clearly could not

7 have been underlying evidence for the findings

8 of fact issued by Judge Jackson.

9 Now, we get a little bit closer when

10 we're talking about depositions taken in the

11 DOJ discovery, but there is no, no proof in the

12 record here, Your Honor, that the evidence in

13 those transcripts was considered by Judge

14 Jackson. What he looked at, what Judge Jackson

15 looked at was the testimony that Mr. Kempin

16 gave in court.

17 That's what was the basis for his

18 findings.

19 So I think it's clear -- absolutely

20 clear that the collateral estoppel objections

21 for Caldera and the JCCP case need to be

22 dismissed summarily.

23 I think that it's also true as it

24 relates to the DOJ deposition and the DOJ/CID

25 depositions, but even more importantly, given � 10679

1 the Court's December 7th ruling, which is the

2 right ruling, that if it goes to any other

3 purpose, it's appropriate.

4 And the Plaintiffs, contrary to

5 Ms. Bradley's assertions, have provided

6 multiple reasons in the briefing associated

7 with Mr. Gates and repeated here why the

8 testimony that we have designated for

9 Mr. Kempin is going to go to other issues

10 besides proving liability for operating systems

11 market from 1994 to 1995.

12 And just so the record is clear,

13 demeanor, credibility, causation, harm to Iowa

14 consumers, anticompetitive conduct affecting

15 the applications market, contracts or

16 combinations that unreasonably restrain trade,

17 willful or flagrant conduct, exemplary damages,

18 and last but not least, and not to make this an

19 exhaustive list either, but anticompetitive

20 conduct in the operating systems market for

21 time not at issue in the government action.

22 And I want to focus on that particular

23 criteria for just a moment.

24 Let's take that as the most extreme

25 example of getting, if you will, closest to the � 10680

1 line on what might be collateral estoppel.

2 Because let's say Mr. Kempin is giving

3 testimony that is -- let's say he gave

4 testimony in his testimony at trial before

5 Judge Jackson in which he testified about some

6 operating system issue that was the basis for a

7 finding by Judge Jackson on liability for

8 operating systems market between '94 and '98.

9 That evidence would be subject to use

10 by the Plaintiffs for other purposes,

11 specifically the operating systems --

12 anticompetitive conduct in the operating

13 systems market before or after that government

14 time period.

15 So even in the -- what you might

16 characterize as the closest example, the

17 collateral estoppel objection would be

18 inadequate, and that's why Plaintiffs submit

19 here that all of these objections can be denied

20 in global just as they were in Mr. Gates

21 because these -- the evidence at issue here

22 goes to multiple other issues in the case and

23 in no way are Plaintiffs going to be proving

24 liability for the operating systems market from

25 1994 to 1998. � 10681

1 So Plaintiffs submit that the best way

2 to proceed would be to rule on the -- our

3 request to deny these in global, and depending

4 on how the Court rules, if necessary, we can

5 take up the specifics on Monday.

6 And to make use of the Court's time

7 till 4:30, that's another reason why Mr.

8 Williams is here, is because we're ready to

9 fill the available time by arguing the Laurence

10 matter also and give the Court time to consider

11 our request for a global ruling on the Kempin

12 collateral estoppel objections.

13 Thank you.

14 THE COURT: Anything else?

15 MS. BRADLEY: Your Honor, if I may

16 just turn to the first designation on the

17 rulings chart just to give a single example of

18 why this testimony must be excluded.

19 Microsoft would appreciate the

20 opportunity to at minimum do that.

21 THE COURT: Okay, go ahead.

22 MS. BRADLEY: I've prepared -- if I

23 may approach, I have a set of the collaterally

24 estopped findings as issued to the jury.

25 I'm sure you're very familiar with � 10682

1 them, but just for our reference during the

2 argument.

3 And let's turn to the October 2nd,

4 1997, DOJ/CID transcript, which should be in

5 your pile somewhere, and to the first

6 designation on the list, and that's at pages

7 15, line 3 to 16, line 23.

8 And here Mr. Kempin is asked about

9 whether versions 1.0, 2.0, and 3.0 of Internet

10 Explorer were required by Microsoft to be

11 loaded with Windows 95 by OEMs.

12 The related finding of fact, if I may

13 turn to it, we've given a range here, Your

14 Honor, but if you'll just look to Finding of

15 Fact 158, it becomes very clear that the fact

16 about which Mr. Kempin testifies is precisely

17 the fact that is collaterally estopped by

18 Finding 158.

19 In Finding 158, Judge Jackson writes,

20 and the jury has before them, that Microsoft

21 did manage to bundle Internet Explorer 1.0 with

22 the first version of Windows 95 licensed to

23 OEMs in July 1995.

24 It also included a term in its OEM

25 licenses that prohibited OEMs modifying or � 10683

1 deleting any part of Windows 95, including

2 Internet Explorer, prior to shipment.

3 The OEMs accepted this restriction

4 despite their interest in meeting consumer

5 demand for PC operating systems without

6 Internet Explorer.

7 After all, Microsoft made the

8 restriction a nonnegotiable term in its Windows

9 95 license.

10 If you'll look at the testimony,

11 that's exactly what Mr. Kempin is asked about

12 and what he testifies to.

13 The questioner asked about Internet

14 Explorer 1.0 through 3.0 and whether Microsoft

15 required that OEMs preload the Internet

16 Explorer as well as the rest of Windows 95.

17 Mr. Kempin answers in the affirmative,

18 and asks -- the questioner goes on to ask about

19 the contract mechanisms or license mechanisms

20 that require that OEMs preload Internet

21 Explorer with Windows 95, and the testimony

22 goes on like that.

23 Plaintiffs have never suggested an

24 alternative purpose for these facts to which

25 Mr. Kempin testifies, which are precisely the � 10684

1 facts that are laid out in Finding of Fact 158.

2 MR. CASHMAN: Your Honor, Finding of

3 Fact 158 -- you know, it's got a lot of words

4 there that Ms. Bradley read, but boiled to its

5 essence, 158 stands for the proposition that

6 Microsoft used OEM licenses that prohibited

7 OEMs from removing Internet Explorer.

8 That's what it boils down to in

9 essence.

10 In the testimony in 1997 in the CID

11 deposition, Mr. Kempin tells the DOJ that IE is

12 a part of Windows and OEMs are contractually

13 obligated to preinstall it and that they don't

14 have a choice under the standard Windows 95

15 license agreement.

16 Preinstalling is different than being

17 precluded from removing it.

18 However, I'm going to move on and just

19 highlight for the Court a couple of easily

20 identifiable reasons why there's other purposes

21 for this.

22 The first and most obvious kind of

23 example would be the general example that I

24 gave to the Court earlier about when the

25 closest to the line you could ever get on � 10685

1 collateral -- the collateral estoppel kind of

2 objections that Microsoft is asserting.

3 And even if you took everything as

4 Ms. -- if Ms. Bradley said is true, it still

5 would only apply to 1994 to 1998, and there's

6 other periods of class time involved here, as

7 the Court knows.

8 However, there's other more -- even

9 more substantive issues to which this testimony

10 relates.

11 As the Court will recall, Count II of

12 our petition, of Plaintiffs' petition alleges

13 that Microsoft entered into contracts,

14 combinations, or conspiracies in restraint of

15 trade.

16 Plaintiffs have the burden of proving

17 that Microsoft entered into contracts or

18 combinations that unreasonably restrained

19 trade, and we're, obviously, entitled to

20 introduce relevant evidence indicating that the

21 contracts or combinations described in the

22 findings unreasonably restrained trade.

23 These designations right here that

24 Ms. Bradley cited are relevant to whether

25 Microsoft's contracts unreasonably restrained � 10686

1 trade.

2 And it's highly probative of that

3 issue that Mr. Kempin concedes that the way

4 Microsoft writes the license agreements for

5 Windows 95 gives OEMs no choice in that these

6 are strict rules.

7 So that testimony right there goes to

8 another issue in the case, highly important

9 probative issue.

10 Furthermore, we've got this civil

11 investigative demand, which began, obviously,

12 before the suit was filed and while the DOJ was

13 still determining whether it would bring a

14 government enforcement action against

15 Microsoft.

16 The testimony designated here and

17 throughout Mr. Kempin's deposition showing how

18 Mr. Kempin, a senior vice president, was lying

19 or about whether -- about whether IE was really

20 part of Windows 95 to the DOJ during its

21 investigation in an effort to lead enforcement

22 authorities astray and not to pursue any

23 litigation is extremely probative of whether

24 Microsoft's conduct was willful or flagrant.

25 So Microsoft's prelitigation efforts � 10687

1 to mislead the authorities indicate an

2 awareness of the illegality of Microsoft's

3 actions, that's another purpose for this

4 testimony.

5 THE COURT: You're going to introduce

6 evidence which shows that this portion or parts

7 of it were made -- are you going to impeach the

8 credibility of the witness here somehow?

9 MR. CASHMAN: I don't know that I can

10 answer that question, Your Honor, but this

11 testimony is part of the case to show willful

12 or flagrant conduct; that Microsoft was not

13 being forthcoming during the investigative

14 stages of the DOJ proceedings.

15 Again, because Mr. Kempin is a senior

16 executive for Microsoft, all of this testimony

17 will go to willful or flagrant conduct.

18 So there's multiple reasons why

19 Microsoft is wrong. And just to -- I tried to

20 come up with a couple of demonstratives that

21 really illustrate the point here, Your Honor,

22 and again why I think you can decide these

23 things globally, and with your permission, I'll

24 hand them up.

25 I'm giving a copy of these to � 10688

1 Microsoft and one to the Court.

2 The first of these two demonstratives

3 I have titled the DOJ case, and the second one

4 is titled the Comes case.

5 And the first one, what I've tried to

6 convey is, obviously, what happened in the DOJ

7 case. And the left box where we have DOJ

8 facts, exhibits, and testimony, I used the

9 hypothetical one through five facts, and those

10 would be the facts that Judge Jackson

11 considered, and then he issues his findings

12 over in the box on the left.

13 That would be -- that's the government

14 case boiled down to a simple picture.

15 And now if we turn to the

16 demonstrative which I provided to the Court for

17 the Comes case, up at the top I still have the

18 DOJ situation, and then below that, of course,

19 we have new facts, exhibits, and testimony.

20 And then along the bottom, the

21 multiple examples of additional types of issues

22 that arise in this case.

23 And what I've tried to indicate here

24 is in proving those various issues, Plaintiffs

25 are entitled under the Court's order from � 10689

1 December 7th to use any combination of evidence

2 from the DOJ case or new evidence to assist in

3 proving those new matters.

4 And that's all that's going on here

5 with the testimony of Mr. Kempin. It's going

6 to be used to prove a multitude of the

7 additional claims that the Plaintiffs have in

8 this case.

9 And we believe it's -- it should be a

10 straightforward matter that all of these

11 objections should be overruled without taking

12 the time, which really isn't necessary in

13 Plaintiffs' view, to address them on a

14 line-by-line basis.

15 THE COURT: Anything else?

16 MS. BRADLEY: Your Honor, just to say

17 I have yet to hear anything from Plaintiffs

18 about this line of testimony that we're

19 discussing now that's not bolstering, sheer

20 bolstering.

21 Plaintiffs argue that somehow

22 Mr. Kempin's testimony establishes that

23 Microsoft forced OEMs to -- that OEMs felt they

24 had no choice in taking Microsoft's deal.

25 The finding of fact establishes that � 10690

1 the contracts were nonnegotiable and that OEMs

2 were required to preload Internet Explorer with

3 Windows, and so on and so forth.

4 If that's bolstering and it's

5 inadmissible, Microsoft's happy to over the

6 weekend and moving forward before we come back

7 to you, Your Honor, again to meet and confer

8 with Plaintiffs further on this, provided that

9 Plaintiffs will agree to provide Microsoft with

10 genuine bona fide alternative purposes for each

11 of the designations to which Microsoft objects

12 and to which Microsoft has linked a

13 collaterally estopped finding of fact.

14 THE COURT: All right. We'll take

15 this matter up on Monday at 8:30. And I'll

16 think about what you said over the weekend and

17 I'll decide on the weekend how we're going to

18 proceed, so be ready to go --

19 MR. CASHMAN: Thank you, Your Honor.

20 THE COURT: -- at 8:30.

21 (Proceedings adjourned at 4:27 p.m.)




25 � 10691


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 25th

19 day of January, 2007.



22 ______________________________ Certified Shorthand Reporter(s) 23