Comes request access to class members

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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


               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.
          20          HUNEY-VAUGHN COURT REPORTERS, LTD.
          21             Suite 307, 604 Locust Street
          22               Des Moines, Iowa 50309
          23                   (515)288-4910


           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
                               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


           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
                               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
                               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


           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


           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


           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.


           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


           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.


           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


           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


           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.


           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


           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.


           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


           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


           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


           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


           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.


           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.
          22                   DAVID BRADFORD,
          23   recalled as a witness, having been previously
          24   duly sworn, testified as follows:
          25               CROSS-EXAMINATION (CONT'D)


           1   BY MR. TULCHIN:
           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


           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 --


           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


           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


           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


           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.


           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


           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.


           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.


           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


           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


           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.


           1            MS. CONLIN:  Do you want me to get
           2   them for you?
           3            THE WITNESS:  Sure.
           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


           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.


           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.


           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


           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.


           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,


           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


           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.


           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


           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?


           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


           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?
           8            THE COURT:  Yes.
           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


           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.


           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


           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


           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.


           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


           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.


           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


           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


           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.


           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.


           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.


           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


           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?


           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,


           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.


           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.


           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.


           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


           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.


           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


           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.
          18               VOIR DIRE EXAMINATION
          19   BY MS. CONLIN:
          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


           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.
          23               CROSS-EXAMINATION (CONT'D)
          24   BY MR. TULCHIN:
          25       Q.   Mr. Bradford, looking at Exhibit 2502,


           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


           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


           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


           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


           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


           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


           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?


           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.


           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


           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


           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


           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.


           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.


           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.
          10   BY MR. TULCHIN:
          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.


           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


           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


           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


           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


           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.


           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?


           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?


           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.


           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


           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?


           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.


           1            MS. CONLIN:  Thank you, Your Honor.
           2               REDIRECT EXAMINATION
           3   BY MS. CONLIN:
           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


           1   who have --
           2            MS. CONLIN:  May I approach, Your
           3   Honor?
           4            THE COURT:  Yes.
           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


           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


           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.


           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?


           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


           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


           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.


           1            MS. CONLIN:  May I approach, Your
           2   Honor?
           3            THE COURT:  Yes.
           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.


           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


           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


           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


           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


           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?


           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


           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


           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.


           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


           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


           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.


           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?


           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


           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.


           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


           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


           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


           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?


           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.)


           1            THE COURT:  Everyone else may be
           2   seated.
           3            You may proceed, Ms. Conlin.
           4            MS. CONLIN:  Thank you Your Honor.
           5            REDIRECT EXAMINATION (CONT'D)
           6   BY MS. CONLIN:
           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.


           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


           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


           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


           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


           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


           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.


           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


           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


           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


           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


           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


           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


           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


           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?


           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


           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.


           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.


           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


           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


           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


           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


           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


           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


           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


           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


           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


           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


           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.


           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.
          23   BY MS. CONLIN:
          24       Q.   Mr. Bradford, you indicated that two
          25   letters were sent to Mr. Gates from Mr.


           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


           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


           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


           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


           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


           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


           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


           1   DR-DOS?
           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


           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.


           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


           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.


           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


           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


           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


           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.


           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


           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?


           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


           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?


           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.


           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


           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.


           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,


           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


           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


           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


           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


           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


           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


           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


           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.


           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,


           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


           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


           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.


           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.
           9   BY MS. CONLIN:
          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.


           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.


           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


           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


           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


           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.


           1            THE COURT:  It's admitted.
           2            MS. CONLIN:  May I approach, Your
           3   Honor?
           4            THE COURT:  Yes.
           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.


           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


           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


           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


           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?


           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


           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


           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


           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?


           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


           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,


           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


           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?


           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


           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.


           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.


           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.


           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,


           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


           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


           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


           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?


           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.


           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


           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.


           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.


           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


           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


           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.
          25                   RECROSS-EXAMINATION


           1   BY MR. TULCHIN:
           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


           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


           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


           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.


           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


           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


           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


           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


           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.


           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.


           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,


           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.


           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


           1   reredirect?
           2            MS. CONLIN:  Yes.
           3               REDIRECT EXAMINATION
           4   BY MS. CONLIN:
           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


           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?


           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?
           9            THE COURT:  Yes.
          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.


           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.


           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


           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


           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


           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


           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.)


           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


           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


           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


           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


           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.


           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


           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


           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


           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


           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


           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


           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.


           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?


           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.


           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


           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


           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?


           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


           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


           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


           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,


           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


           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.


           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,


           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


           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


           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.


           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.


           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.


           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


           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


           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


           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


           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


           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


           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


           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.


           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


           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


           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


           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


           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.


           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


           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


           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


           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


           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


           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


           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


           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


           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


           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.)


           1              CERTIFICATE TO TRANSCRIPT
           2            The undersigned, Official Court
           3   Reporters in and for the Fifth Judicial
           4   District of Iowa, which embraces the County of
           5   Polk, hereby certifies:
           6            That she acted as such reporter in the
           7   above-entitled cause in the District Court of
           8   Iowa, for Polk County, before the Judge stated
           9   in the title page attached to this transcript,
          10   and took down in shorthand the proceedings had
          11   at said time and place.
          12            That the foregoing pages of typed
          13   written matter is a full, true and complete
          14   transcript of said shorthand notes so taken by
          15   her in said cause, and that said transcript
          16   contains all of the proceedings had at the
          17   times therein shown.
          18            Dated at Des Moines, Iowa, this 25th
          19   day of January, 2007.
          22                   ______________________________
                               Certified Shorthand Reporter(s)
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