5912 1 IN THE IOWA DISTRICT COURT FOR POLK COUNTY ----------------------------------------------- 2 JOE COMES; RILEY PAINT, ) 3 INC., an Iowa Corporation;) SKEFFINGTON'S FORMAL ) 4 WEAR OF IOWA, INC., an ) NO. CL82311 Iowa Corporation; and ) 5 PATRICIA ANNE LARSEN; ) ) TRANSCRIPT OF 6 Plaintiffs, ) PROCEEDINGS ) VOLUME XXII 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation, ) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 8:30 a.m., 14 December 20, 2006, in Room 302 of the Polk 15 County Courthouse, Des Moines, Iowa. 16 17 18 19 20 HUNEY-VAUGHN COURT REPORTERS, LTD. 21 Suite 307, 604 Locust Street 22 Des Moines, Iowa 50309 23 (515)288-4910 24 25 5913 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 LINDSEY A. DAVIS 7 Attorney at Law Zelle, Hofmann, Voelbel, 8 Mason & Gette, LLP 500 Washington Avenue South 9 Suite 4000 Minneapolis, MN 55415 10 (612) 339-2020 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5914 1 Defendant by: DAVID B. TULCHIN 2 SHARON L. NELLES Attorneys at Law 3 Sullivan & Cromwell, LLP 125 Broad Street 4 New York, NY 10004-2498 (212) 558-3749 5 STEPHEN A. TUGGY 6 Attorney at Law Heller Ehrman, LLP 7 333 South Hope Street Suite 3900 8 Los Angeles, CA 90071-3043 (213) 689-0200 9 BRENT B. GREEN 10 Attorney at Law Duncan, Green, Brown & 11 Langeness, PC Suite 380 12 400 Locust Street Des Moines, IA 50309 13 (515) 288-6440 14 15 16 17 18 19 20 21 22 23 24 25 5915 1 (The following record was made out 2 of the presence of the jury at 8:29 a.m.) 3 THE COURT: Before we bring the Jury 4 in, I got a letter from Mr. Tulchin regarding 5 my ruling yesterday and it says -- 6 MS. CONLIN: We have no problem with 7 that at all, Your Honor. 8 THE COURT: Yeah, I didn't think so. 9 So it's granted. 10 MR. TULCHIN: Thank you, Your Honor. 11 I appreciate it. 12 THE COURT: Also, do you mind if I 13 tell the Jury what the spring break schedule 14 is? 15 MS. CONLIN: No. That would be great, 16 Your Honor. 17 THE COURT: I have -- someone gave me 18 this -- March 19th through March 23rd. 19 MS. CONLIN: I'm the one who gave that 20 to you, Your Honor. And that's what I 21 understand -- 22 THE COURT: It's only four days? 23 MR. GREEN: It's five. 24 MS. CONLIN: Yeah, those are the 25 working days, not the -- 5916 1 MR. GREEN: Yeah, the five -- yeah, 2 that's right. 3 MS. CONLIN: Now, the one person that 4 I recall that has young children is [Juror Name]. 5 Let me think -- 6 THE COURT: Spring break is only -- 7 MS. CONLIN: Maybe [Juror Name]. No, 8 [Juror Name] doesn't have children. 9 THE COURT: I think it's longer than 10 that. I don't think it's four days. 11 MR. TULCHIN: You were hoping it was. 12 MR. GREEN: No, that's five days, Your 13 Honor. 14 MS. CONLIN: Yeah, it's five. 15 MR. GREEN: 19th through the 23rd is 16 five. 17 MR. TULCHIN: The 16th would be the 18 last day of court? 19 THE COURT: Yeah. 20 MS. CONLIN: And, Your Honor, after 21 court today, I wonder if we could discuss the 22 schedule a little bit. 23 THE COURT: Sure. 24 MS. CONLIN: I'm getting concerned 25 about our very short days. 5917 1 And then I'd like to revisit the whole 2 exhibit issue at least very, very briefly. 3 That might be all that we have, but 4 then when we tell you that -- first of all, 5 we're worried that they'll assign you new 6 cases, you know, for all this extra time that 7 you have, and I just don't know for sure. 8 But those are things that -- 9 THE COURT: And before the day is 10 over, I'll give you my final ruling on your 11 proposed instruction on deposition testimony. 12 MS. CONLIN: Oh, good, yes. Thank 13 you, Judge. 14 THE COURT: I've been working on it. 15 All right. So I can tell them they 16 are off that time period? 17 MR. GREEN: Actually, Friday would be 18 the 16th. 19 MS. CONLIN: Yeah. 20 MR. GREEN: So it's going to be -- 21 THE COURT: Are they off the 16th too? 22 MS. CONLIN: No. 23 MR. GREEN: No. 24 MS. CONLIN: They're not, Your Honor. 25 THE COURT: So it would be -- 5918 1 MR. GREEN: So it would be the 17th 2 through what -- 3 MS. CONLIN: The 23rd. 4 THE COURT: I'll just tell them that 5 week. Those are the working days. 6 MR. GREEN: Those are the working days 7 we are off. 8 THE COURT: I got confused there. 9 And after court today you want to talk 10 about scheduling. Is that it? 11 You wanted to talk today sometime 12 about the trial schedule? 13 MS. CONLIN: The daily schedule. 14 THE COURT: Okay. 15 MS. CONLIN: The short -- the 16 four-hour days that we are having. 17 Here's my concern, and we can do this 18 afterwards. My concern is that live witnesses 19 who are coming -- like I've got Constant coming 20 from England and stuff like that. 21 THE COURT: Oh, we can adjust it 22 somehow. 23 MS. CONLIN: Yeah, but I think we 24 should give them plenty of warning otherwise, 25 you know, they are going to write us notes. 5919 1 THE COURT: All right. Well, we'll 2 talk about it later. 3 MS. CONLIN: Okay. Thanks, Your 4 Honor. 5 THE COURT: I'd like -- you know, once 6 I've told them we quit at 2:30, I'd like to 7 keep to that. 8 MS. CONLIN: Yes. But maybe there's 9 some other way to adjust it. 10 THE COURT: All right. We'll figure 11 it out. Okay. 12 She's going to peek in the door in a 13 minute and let me know -- I'm supposed to let 14 her know. 15 MS. CONLIN: Your Honor, do you want 16 to tell them that we are going to go through 17 the day with Gates and maybe a little bit into 18 tomorrow? 19 THE COURT: Okay. Is that all right? 20 MS. NELLES: That's fine. 21 MS. CONLIN: They like to know where 22 we are and what we are going to be doing next. 23 We've got about a little less than five hours 24 left. 25 MS. NELLES: Count down is four hours 5920 1 and 40 minutes. 2 THE COURT: Or thereabouts. 3 MS. NELLES: Or thereabouts. 4 THE COURT: Could you be more 5 accurate? 6 MS. NELLES: And 32 seconds. 7 THE COURT: Okay. 8 THE CLERK: All rise. 9 (The following record was made in the 10 presence of the jury at 8:35 a.m.) 11 THE COURT: Ladies and gentlemen, just 12 to let you know, the Gates deposition should go 13 through today and a little bit of tomorrow. 14 And I was told there's about four 15 hours and 40 minutes left, so just to let you 16 know. 17 Also, in case you are wondering, I 18 checked with the attorneys and also my court 19 reporters. They're well aware of the spring 20 break in March, okay. And I know some of you 21 have children, want to know. 22 The days we will not meet will be 23 March 19th through the 23rd. That's a Monday 24 through Friday because that coincides with most 25 school spring breaks as far as I know. If 5921 1 that's different, please let me know. 2 Those five days we'll be off. 3 Okay. You may proceed. 4 MS. CONLIN: Thank you, Your Honor. 5 (Whereupon, the following video was 6 played to the jury.) 7 Question: Mr. Gates, you're familiar 8 with a company called RealNetworks, are you 9 not? 10 Answer: Yes. 11 Question: Did you ever have any 12 discussions with any representative of 13 RealNetworks concerning what products 14 RealNetworks should or should not offer or 15 distribute? 16 Answer: No. 17 Question: Microsoft signed two 18 contracts with RealNetworks, did it not, sir? 19 Answer: I have no idea. I thought it 20 was one. 21 Question: RealNetworks was previously 22 called Progressive Networks; correct, sir? 23 Answer: Right. 24 Question: In the contract or 25 contracts, if there was more than one, between 5922 1 Microsoft and RealNetworks, was there any 2 restriction on what services RealNetworks could 3 provide to competitors of Microsoft? 4 Answer: I've never looked at those 5 contracts. 6 Question: Did you participate at all 7 in those contracts, either the negotiation of 8 those contracts or discussions concerning those 9 contracts prior to the time they were entered 10 into? 11 Answer: I knew that Muglia and Maritz 12 were talking with Progressive about some kind 13 of deal, but I didn't know what was in the 14 deal. 15 Question: Did you know anything about 16 what was in the deal? 17 Answer: I knew there was an 18 investment piece. I knew there was some code 19 licensing in it. That's about all. 20 Question: At the time that Microsoft 21 was negotiating the contract or contracts with 22 RealNetworks -- and I'll refer to it as 23 RealNetworks even though at the time it was 24 referred to as Progressive Networks -- did you 25 consider that company to be a competitor of 5923 1 Microsoft? 2 Answer: Not -- I think I was confused 3 about what RealNetworks -- what their plans 4 were, and I wasn't sure if they were a 5 competitor or not. 6 Question: Was there a time when you 7 did become convinced that they were a 8 competitor? 9 Answer: Yes. 10 Question: When was that? 11 Answer: When Rob Glaser appeared in 12 Washington, D.C. 13 Question: To testify before a 14 congressional committee? 15 Answer: Senate, yes. 16 Question: What led you to conclude 17 from Mr. Glaser's testimony that RealNetworks 18 was a competitor of Microsoft? 19 Answer: It was nothing in his 20 testimony. 21 Question: Why did you become 22 convinced at the time of his testimony that 23 RealNetworks was a competitor of Microsoft? 24 Answer: Well, because he went out of 25 his way to lie about us, I sort of thought, 5924 1 hum, he must be a competitor. 2 Question: When you say he went out of 3 his way to lie about you, when was that? 4 Answer: That was at the press 5 interview surrounding the testimony -- maybe 6 the testimony itself, I'm not sure. I've never 7 seen a transcript. 8 Question: Did you ever personally 9 have a conversation with Mr. Glaser about his 10 business? 11 Answer: A long, long time ago when 12 Rob was just getting started, I think there was 13 one meeting that I had with Rob. I haven't met 14 with him since then. 15 Question: Was that meeting before or 16 after the contract between RealNetworks and 17 Microsoft that you say that you know about? 18 Answer: If you mean the contract 19 where we invested in Progressive, it was years 20 before it and not at all related to it. 21 Question: When was the contract in 22 which you invested in Progressive Networks or 23 RealNetworks? 24 Answer: I'm not sure. I'd guess it's 25 about a year ago. 5925 1 Question: Did you have a conversation 2 with Mr. Glaser a few days after that agreement 3 was signed? 4 Answer: Now that you ask me that, 5 maybe I did. 6 Maybe I did. I think we may have had 7 a short meeting. 8 Question: And did you in that meeting 9 tell Mr. Glaser in words or in substance how 10 you thought he should limit his business? 11 Answer: Absolutely not. 12 Question: Not in any way, sir? 13 Answer: Not in any way. 14 Question: Did you tell him he ought 15 to get out of the base streaming media platform 16 business? 17 Answer: No. 18 Question: Did anyone ever tell you 19 that Mr. Glaser had said he would get out of 20 the base streaming media platform business? 21 Answer: No. 22 Question: Did Mr. Maritz ever tell 23 you that Mr. Glaser's stated plan was that he 24 would get out of the base streaming media 25 platform business? 5926 1 Answer: As far as I know, we didn't 2 know what Rob's plans were. 3 Question: Did you ever try to find 4 out what those plans were, sir? 5 Answer: No. 6 Question: Were those plans important 7 to you? 8 Answer: To me personally? No. 9 Question: Were they important to 10 Microsoft? 11 Answer: On a relative basis, I'd say 12 no. 13 Question: Well, I suppose on a 14 relative basis, a business as big as Microsoft, 15 I don't know what would be important, but -- 16 Answer: I can tell you. 17 Question: -- but on a nonrelative 18 basis? 19 Answer: I can tell -- 20 Question: Yes. Tell me what would be 21 important to Microsoft on a relative basis. 22 Answer: Improvements in Windows, 23 improvements in Office, breakthroughs in 24 research, breakthroughs in Back Office. 25 Question: How about browsers? 5927 1 On a relative basis, would that be 2 important -- was that important to Microsoft? 3 Answer: To a degree it relates to 4 Windows, yes. 5 Question: What about Java or Java 6 runtime? Was that on a relative basis 7 important to Microsoft? 8 Answer: To the degree it related to 9 Windows, yes. 10 Question: Let me ask you to look at a 11 document that we have marked Government Exhibit 12 379. 13 This purports to be an e-mail from 14 Paul Maritz. You are not shown on this as 15 receiving a copy. 16 The portion I'm particularly 17 interested in is the last full paragraph that 18 says, quote, Rob's stated plan is that he will 19 get out of the base streaming media platform 20 business, and focus on higher level solutions, 21 hosting, and content aggregation, and says that 22 his goal is now to get us to get his base 23 technology as widespread as possible, close 24 quote. 25 Do you see that? 5928 1 Answer: Uh-huh. 2 Question: Did anyone ever tell you, 3 as Mr. Maritz writes here, that Mr. Glaser had 4 said that his stated plan was that he would get 5 out of the base streaming media platform 6 business? 7 Answer: No. 8 Question: Did you or, to your 9 knowledge, anyone from Microsoft ever tell 10 Mr. Glaser that he should get out of the base 11 streaming media platform business? 12 Answer: No. 13 Question: Okay. 14 You are aware, are you not, sir, that 15 one of the issues in this case is the extent to 16 which operating systems and browsers are or are 17 not separate products? 18 Answer: I'm not a lawyer, so I think 19 it's very strange for me to opine on what's an 20 issue in the case. 21 As far as I know, the issues in the 22 case are not -- are something that you decide, 23 and I don't claim to have any expertise at all. 24 Question: And if you don't know, 25 that's okay. 5929 1 But one of the things that I want to 2 understand from you is whether your 3 understanding, which is important to my next 4 line of questions, is that the issue of whether 5 or not browsers are or are not a separate 6 product from the operating system is in this 7 case. 8 Mr. Gates, do you understand that the 9 issue of whether or not browsers are a separate 10 product or are not a separate product from the 11 operating system is an issue in this case? 12 Answer: I don't consider myself 13 someone who could say if that's an issue in 14 this case or not. 15 Question: Have you participated in 16 any way in trying to get Microsoft personnel to 17 use language that would suggest that browsers 18 and operating systems are not separate 19 products? 20 Answer: I have no idea what you mean 21 by that. 22 Question: Well, have you seen e-mails 23 that urge people within Microsoft not to talk 24 about browsers as if they were separate from 25 the operating system? 5930 1 Answer: I don't recall seeing any 2 such e-mail. 3 Question: Are you aware of anybody 4 within Microsoft who has asserted, either in an 5 e-mail or otherwise, that people ought to not 6 talk about browsers as if they were separate 7 from the operating system? 8 Answer: I don't remember any such 9 e-mail. 10 Question: Has Microsoft tried to get 11 companies to agree to statements that Internet 12 Explorer comprises part of the operating system 13 of Windows 95 and Windows 98? 14 Answer: I know it's a true statement, 15 but I'm not aware of us doing anything to try 16 to get anyone else to endorse the statement. 17 Question: You're not aware of any 18 effort by Microsoft to get non-Microsoft 19 companies to endorse the statement that 20 Internet Explorer comprises part of the 21 operating system of Windows. 22 Is that what you're saying? 23 Answer: I'm not aware of such 24 efforts. 25 Question: Do you know whether 5931 1 Microsoft has made any efforts to include 2 language like that in any of its license 3 agreements? 4 Answer: No, I don't. 5 Question: Do you know why Microsoft 6 might do that? 7 Answer: I'm not sure. 8 Question: Do you recognize that OEMs 9 have a need to acquire the Windows operating 10 system that Microsoft licenses? 11 Answer: What do you mean by OEM? Is 12 it a tautology because of the way you're 13 defining it? 14 Question: Well, if you take IBM and 15 Compaq and Dell, Gateway and some other 16 companies, those are commonly referred to as 17 OEMs or PC manufacturers; correct, sir? 18 Answer: No. The term OEM would be 19 quite a bit broader than that. OEMs used means 20 original equipment manufacturer. 21 Question: I see. 22 And does OEM have a specialized 23 meaning in your business to refer to people 24 that supply personal computers? 25 Answer: No. It usually means our 5932 1 licensees. 2 Question: And do your licensees, in 3 part, supply personal computers, sir? 4 Answer: Some of our licensees. 5 Question: The licensees to whom you 6 license Windows are suppliers of personal 7 computers, are they not, sir? 8 Answer: If you exclude Windows CE and 9 depending on how you talk about workstations 10 and servers. 11 Question: So that if we can get on 12 common ground, the licensees for Windows 95 and 13 Windows 98 would be companies that you would 14 recognize as personal computer manufacturers; 15 is that correct? 16 Answer: Yeah. Almost all of the 17 licensees of Windows 95 and Windows 98 are 18 personal computer manufacturers. 19 Some are not, but the overwhelming 20 majority are. 21 Question: And when you price Windows 22 98 or when you priced Windows 98, what 23 competitive products, if any, did you take into 24 account in setting the price of Windows 98? 25 Answer: Well, we take into account a 5933 1 lot of factors, not just other products. 2 Question: I'm sure that that is so, 3 Mr. Gates. 4 What I'm asking you is what prices of 5 what products, if any, did you take into 6 account in pricing Windows 98? I'm not saying 7 that's the only thing you took into account. 8 I'm just trying to find out whether 9 there were other product prices that you took 10 into account, and if there were, what they 11 were. 12 Answer: We consider all the elements 13 of competition, whether it's the -- the 14 durability of the product, the changes in 15 users' demands, the things going on with 16 computing moving to the server, the things 17 going on with middleware, the things going on 18 with clones, the things going on with other 19 operating systems. 20 There's a great number of factors. At 21 the end of the day, it's not very scientific. 22 We take all those factors and come up with our 23 best judgment. 24 Question: What I'm now asking you is 25 whether there are any products whose prices you 5934 1 took into account in pricing Windows 98. 2 And if the answer to that is yes, I'm 3 going to ask you what products and what their 4 prices were. 5 But, as a preliminary matter, I'm just 6 asking you whether there were such products. 7 Answer: Well, we'd look at all of the 8 other operating systems out there, all of the 9 middleware products that are out there, the 10 general start-up activities out there, the 11 breakthroughs we expect. 12 Some of those aren't, you know, 13 products that are on the market today. Some of 14 them are products that are on the market today. 15 Question: What product did you 16 consider to be your primary or the most 17 important competitive product in pricing 18 Windows 98? 19 Answer: I think it's a silly question 20 because there isn't one single product that 21 stands out above others. 22 And it's not products as much as it is 23 the general nature of competition. 24 Question: Well, can you identify for 25 me either the most important or the most 5935 1 important three products that you took into 2 account in pricing Windows 98? 3 Answer: Well, I guess you could say 4 in a sense, because I decided that the price of 5 Windows 98 would be the same as the price of 6 Windows 95, that that was the product whose 7 pricing had the most influence on the pricing 8 of Windows 98. 9 Question: What was the product other 10 than a Microsoft product, or what were the two 11 or three products other than Microsoft products 12 that most influenced the pricing of Windows 98? 13 Answer: I wouldn't single any one 14 out. I could, you know, talk about several 15 different ones. 16 Question: What I'd like is your best 17 judgment as to what you think, either the most 18 important or the most important three or four 19 or five products were, non-Microsoft products, 20 in pricing Windows 98. Your best present 21 judgment as to what the most important such 22 products were? 23 Answer: Well, I'd say the -- if you 24 look at all the other factors we have to 25 consider, this is just one of many. 5936 1 But certainly we'd look at -- 2 Question: I want the most important. 3 I want what you tell me are the most important. 4 I know you tell me there are many others, these 5 are not the only ones. 6 What I want is your best judgment of 7 what you think the most important ones are. 8 That's all I'm asking for now. 9 Answer: I would look at Linux, Mac 10 OS, Java OS, the whole idea of network 11 computing and of running the applications and 12 the server, which means that you have to think 13 about pricing of server-type operating systems 14 because of the way that the terminal approach 15 can work there so you get intake. 16 You know, server operating systems 17 sort of divide up how many users it can serve. 18 So you divide its cost down and look at that. 19 So you get things like Solaris, AIX and various 20 things that people are doing there. 21 But it's particularly important to 22 think of new products that aren't on the market 23 yet and that we don't know the pricing of. 24 Question: What I'm asking is what you 25 took into account for Windows 98. And I take 5937 1 it the most important ones that at least occur 2 to you right now are what you told me. 3 Is that fair? 4 Answer: Yeah. I've said that that 5 wasn't the major component in how that decision 6 was made. But those are -- those were factors 7 in the decision. 8 Question: Okay. 9 (Whereupon, playing of video 10 concluded.) 11 MS. CONLIN: Your Honor, the next is 12 the deposition of Bill Gates, Volume III, 13 September 2nd, 1998. And we believe that runs 14 about four hours and 12 minutes. 15 THE COURT: Okay. 16 (Whereupon, the following video was 17 played to the jury.) 18 Question: Let me turn to the subject 19 of pricing. 20 Does Microsoft price its Windows 21 operating system the same to each of the OEMs 22 that it licenses? 23 Answer: We negotiate agreements 24 individually with the OEMs and the various 25 terms and prices that are agreed to end up 5938 1 being different for different OEMs. 2 Question: Do some OEMs have more 3 favorable prices and terms than others? 4 Answer: Well, given that they're 5 different, somebody could evaluate, and 6 depending on what criteria they use, decide 7 what they thought of the various ones. 8 It's not easy to do a direct 9 comparison because you have pricing terms and 10 other terms as well. 11 Question: Do some OEMs have prices, 12 terms and conditions that you, Bill Gates, 13 believe are more favorable than the prices, 14 terms and conditions of other OEMs? 15 Answer: Well, it's typical that 16 somebody with larger volume asks for and gets 17 somewhat lower pricing than somebody who 18 doesn't have high volume. There's not a 19 perfect correlation to volume, but there is a 20 correlation there. 21 Question: Other than whatever 22 correlation there is between volume and prices, 23 terms and conditions, are there any OEMs that 24 you believe have more favorable prices, terms 25 and conditions than other OEMs? 5939 1 Answer: I don't know enough about the 2 specific agreements. There are some things in 3 terms of the relationship and marketing that I 4 think IBM has been reluctant to do, so it may 5 be that because of their view of those terms 6 and their decisions on that, IBM may have a 7 somewhat higher price than people with a 8 similar volume, although, you know, their 9 volume is -- nobody has the same volume. 10 Question: What marketing things did 11 IBM decline to do that led to these price 12 differentials? 13 Answer: I'm forgetting the name of 14 the program, but there's -- on a typically 15 yearly basis, there's a program that we talk to 16 OEMs about which weighs into their discount. I 17 don't remember the name of it. 18 Question: What is the marketing 19 program that you're referring to designed to 20 do? 21 Answer: To help us sell more copies 22 of Windows. 23 Question: How? 24 Answer: We'd have to get into the 25 specific elements. You can have OEMs do a 5940 1 better job of marketing the benefits in 2 Windows. You can have them do a better job 3 testing their machine and how it works with 4 Windows. They can make machines that show off 5 particular advantages of Windows. 6 If you want to ask me about a specific 7 aspect of the program, I can go into it, but 8 it's all aimed at advancing the sales of 9 Windows. 10 Question: Perhaps my question wasn't 11 clear, Mr. Gates. 12 What I'm trying to find out is what 13 was it that IBM refused to do that resulted in 14 IBM paying somewhat higher prices for Windows? 15 Answer: I'm not sure specifically, 16 but I know that there's some of the Windows 17 promotional things that I think they didn't 18 sign up for and that other people did decide 19 were good for them. And I think that resulted 20 in IBM not getting a discount where some of the 21 others would have been able to negotiate a 22 discount. 23 Question: Do you know what 24 promotional things IBM declined to do? 25 Answer: I don't remember which ones. 5941 1 And I wasn't involved in that negotiation. 2 Question: Did any of these 3 promotional things that IBM declined to do have 4 anything to do with the browser, Mr. Gates? 5 Answer: Well, they all related to 6 Windows. 7 Question: Is that the best answer you 8 can give me to my question, Mr. Gates? 9 Answer: It's the answer -- I'm not 10 sure what distinction you're making. 11 I mean, to the degree they relate to 12 Windows, they relate to all the features in 13 Windows, including the browser. 14 Question: Well, sir, the term browser 15 is a term that is widely used within Microsoft, 16 or at least was until this year; correct, sir? 17 Answer: We use the term browser, yes. 18 Question: And you personally used the 19 term browser, did you not, sir? 20 Answer: Yes, that term is used in 21 quite a variety of ways. 22 Question: Including by you; correct, 23 sir? 24 Answer: Yes. 25 Question: You've written e-mails 5942 1 about browsers; correct, sir? 2 Answer: I've written e-mails where 3 the term browser was used. I wouldn't say it 4 was necessarily an e-mail about browsers. 5 Question: Have you ever written an 6 e-mail that you considered to be about 7 browsers, sir? 8 Answer: I'll bet there's e-mail where 9 the primary subject relates to browsers. 10 I don't remember a specific piece of 11 e-mail. 12 Question: And when you wrote e-mails 13 using the term browsers, you believed that 14 people would understand what you meant by 15 browsers; correct, sir? 16 Answer: I'm sure there was enough 17 context in the e-mail that I felt I could 18 communicate something of meaning. 19 Question: And you've used the term 20 browser in dealing with people outside of 21 Microsoft, have you not, sir? 22 Answer: Yes. It's a term that I've 23 used both internally and externally. 24 Question: And there are a lot of 25 people outside Microsoft that have written 5943 1 articles about browsers; correct, sir? 2 Answer: There's been articles about 3 browsing and the technology people use for 4 browsing and comparing the different -- how 5 different companies do that. And they used the 6 term browser. 7 Question: Yes. The industry and 8 Microsoft tracks what is referred to as browser 9 market share; correct, sir? 10 Answer: No. 11 Question: No? Does Microsoft track 12 browser market share? 13 Answer: I've seen usage share. 14 Question: You've seen usage share? 15 Answer: Uh-huh. But not -- market 16 share usually refers to something related to -- 17 not in usage. 18 And with browsers, I've seen mostly 19 usage. 20 Now, some people might refer to that 21 as a market share, but it's not a market share. 22 Question: What is a market share? 23 Answer: Well, when I think of a 24 market share, I think of where you're comparing 25 the revenue of one company to the revenue of 5944 1 another company. 2 Question: The total revenue of a 3 company? 4 Answer: No, the revenue related to 5 one company's product to the revenue of another 6 company's product. 7 Question: And that's what you think 8 of when you use the term market share. 9 Is that your testimony? 10 Answer: Usually. 11 Question: Are you aware of documents 12 within Microsoft that describe browser share as 13 the company's number one goal? 14 Answer: No. I'm aware of documents 15 within Paul Maritz's group that may have stated 16 that. 17 Question: Is Paul Maritz's group 18 within Microsoft? 19 Answer: Yes, but his -- he doesn't 20 set the company-wide goals. 21 Question: Mr. Maritz you identified 22 last week as being a group vice president; is 23 that correct? 24 Answer: Uh-huh. Several times. 25 Question: And he is the group vice 5945 1 president with responsibility for Windows; is 2 that correct? 3 Answer: That's among his 4 responsibilities. 5 Question: And included in his 6 responsibilities was Internet Explorer; is that 7 correct? 8 Answer: Our browsing technology was 9 part of that group. 10 Question: Was Internet Explorer part 11 of that group? 12 Answer: Yes. 13 Question: Now, did you ever tell 14 Mr. Maritz that browser share was not the 15 company's number one goal? 16 Answer: No. 17 Question: You knew Mr. Maritz was 18 telling people that browser share was the 19 company's number one goal, did you not, sir? 20 Answer: I knew that Mr. Maritz was 21 saying to people that the -- that a top goal 22 and perhaps number one goal for his group was 23 browser usage share. 24 Question: Now, you've put in the 25 words usage share there. 5946 1 When Mr. Maritz was telling people 2 that browser share was the number one goal, was 3 Mr. Maritz saying browser usage share or just 4 browser share, sir? 5 Answer: You'd have to ask him. I 6 think he meant usage share. 7 Question: I'm not asking what he 8 meant. 9 And perhaps my question was unclear. 10 I'm asking what he said or wrote. 11 Do you understand the question? 12 Answer: What writings are we talking 13 about? 14 Question: Let me ask you the 15 question, Mr. Gates, since you're the witness. 16 Are you aware of any time that 17 Mr. Maritz wrote in an e-mail or said or 18 otherwise communicated to people that browser 19 share was the number one goal? 20 Answer: The number one goal for what? 21 Question: Just the number one goal 22 for the company, let's start with that. 23 Are you aware of any time when 24 Mr. Maritz said that? 25 Answer: Where he said it was the 5947 1 number one goal for the whole company? 2 Question: I didn't say the whole 3 company. I didn't put in the word whole, 4 Mr. Gates. 5 And I know that you're very precise in 6 the way you use words, so I want to make sure 7 the questions and answers meet. 8 The question is, are you aware of any 9 instance in which Mr. Maritz, in words or in 10 substance, communicated that browser share was 11 the number one goal for the company? And by 12 the company, I mean Microsoft. 13 Answer: I don't remember any such 14 case. 15 Question: Are you aware of any 16 instance in which Mr. Maritz communicated in 17 words or in substance that browser share was 18 the number one goal for his group? 19 Answer: I think there was a point 20 where he did that. I don't remember the 21 document, but I think there was a point. 22 Question: Do you know why Mr. Maritz 23 came to the view that browser share was the 24 number one goal? 25 Answer: For his group? 5948 1 Question: Did he say for his group in 2 the communications -- 3 Answer: Well -- 4 Question: -- that you're talking 5 about? 6 Answer: It's not his position to set 7 goals for the entire company, so when he says 8 something that's a goal, it's certainly implied 9 it's a goal for his group. 10 Question: Interpreting what 11 Mr. Maritz has communicated in light of that, 12 do you know how Mr. Maritz came to the view 13 that browser share was the number one goal? 14 Answer: Well, I think he was aware of 15 the increasing popularity of the Internet and 16 the growing usage of the Internet and felt that 17 all the many, many innovations we were doing in 18 Windows, that a particular focus had to be 19 doing the best job on the Internet and Internet 20 browsing features of the operating system and 21 seeing if we could innovate enough to make 22 people prefer to use that technology from us. 23 Question: Mr. Gates, isn't it the 24 case that you told Mr. Maritz that browser 25 share was a very, very important goal and 5949 1 that's why he believed it? 2 Answer: I guess now we're delving 3 into the inner workings of Paul Maritz's mind 4 and how he comes to conclusions? 5 Question: Well, let me try to ask you 6 a question that won't inquire you to delve into 7 anybody else's mind. 8 Did you tell Mr. Maritz that browser 9 share was a very, very important goal? 10 Answer: I know we talked about 11 browser share being important. 12 Question: I'm not asking you what he 13 said to you. I'm not asking what topic you 14 talked about. I'm asking you whether you told 15 Mr. Maritz that browser share was a very, very 16 important goal? 17 Answer: I remember that we agreed 18 that it was an important goal. I'm not sure 19 which one of us reached that feeling before the 20 other. 21 Question: Have you communicated to 22 people other than Mr. Maritz within Microsoft 23 that browser share was a very, very important 24 goal? 25 Answer: Well, you've used several 5950 1 times the very, very. And I don't know if 2 you're asking me specifically about sometime 3 where I used the words very, very, is that the 4 question? 5 Question: Let me begin with that 6 question. 7 Have you communicated to people within 8 Microsoft, other than Mr. Maritz, that browser 9 share was a very, very important goal, using 10 those words? 11 Answer: I don't remember using those 12 words. 13 Question: Have you communicated the 14 substance of that to people within Microsoft? 15 Answer: Help me understand. If you 16 communicate to people that something is 17 important, is the substance of that identical 18 to communicating to them it's very, very 19 important? 20 Question: Would it be, in your view, 21 Mr. Gates, if you were using those terms, would 22 important be the same as very, very important? 23 Answer: Not identical. 24 Question: What would be the 25 difference? 5951 1 Answer: The two very's. 2 Question: And what significance in 3 terms of substance would those two very's have? 4 Answer: A speaker's tendency towards 5 hyperbole. 6 Question: Other than your tendency, 7 if you have one, to a hyperbole, would there be 8 anything different that you would be 9 communicating to people if you were to say 10 browser share is an important goal or browser 11 share is a very, very important goal? 12 Answer: You'd have to look at the 13 context to see. 14 Question: As you sit here now, what 15 you've told me is that you recall communicating 16 that browser share was an important goal, but 17 not a very, very important goal. 18 And all I'm trying to do is find out 19 whether you draw a distinction in terms of the 20 substance of those communications. 21 Answer: And I said, it would depend 22 on the context. 23 Question: Let me ask you to look at 24 at least one context, and that would be Exhibit 25 358 that we marked during your deposition last 5952 1 week. And it is in the stack of exhibits that 2 you have in front of you. 3 Did you write Exhibit 358, Mr. Gates, 4 on or about January 5, 1996? 5 Answer: I don't remember doing so 6 specifically, but it appears that I did. 7 Question: And the first line of this 8 is, winning Internet browser share is a very, 9 very important goal for us. 10 Do you see that? 11 Answer: I do. 12 Question: Do you remember writing 13 that, sir? 14 Answer: Not specifically. 15 Question: Now, when you were 16 referring there to Internet browser share, what 17 were the companies who were included in that? 18 Answer: There's no companies included 19 in that. 20 Question: Well, if you're winning 21 browser share, that must mean that some other 22 company is producing browsers and you're 23 comparing your share of browsers with somebody 24 else's share of browsers. 25 Is that not so, sir? 5953 1 Answer: You asked me if there are any 2 companies included in that and now -- I'm very 3 confused about what you're asking. 4 Question: All right, sir. Let me see 5 if I can try to clarify it. 6 You say here, quote, winning Internet 7 browser share is a very, very important goal 8 for us, close quote. 9 What companies were supplying browsers 10 whose share you were talking about? 11 Answer: It doesn't appear that I'm 12 talking about any other companies in that 13 sentence. 14 Question: Well, sir, is a market 15 share something that is compiled only for one 16 company? 17 I understand if a company has a 18 monopoly, that may be so, but in a usual 19 situation where a company does not have a 20 monopoly, share ordinarily implies comparing 21 how much of a product one company has with how 22 much of a product another company has; correct? 23 Answer: Yes. 24 Question: Now, when you were talking 25 about Internet browser share here, what 5954 1 companies were you talking about? 2 Answer: You're trying -- you seem to 3 be suggesting that just because share involves 4 comparing multiple companies, that when I wrote 5 that sentence, I was talking about other 6 companies. 7 It doesn't appear that I'm talking 8 about other companies in that sentence. I've 9 really read it very carefully, and I don't 10 notice any other companies in there. 11 Question: Oh, you mean you don't see 12 any other company mentioned in that sentence. 13 Is that what you're saying? 14 Answer: The sentence doesn't appear 15 to directly or indirectly refer to any other 16 companies. 17 Question: When you refer to an 18 Internet browser share here, sir, what is the 19 share of? 20 Answer: Browser usage. 21 Question: Of course, you don't say 22 browser usage here, do you, sir? 23 Answer: No, it says share. 24 Question: Now, let's say that you 25 meant browser usage because that's what your 5955 1 testimony is. 2 What browser usage were you talking 3 about in terms of what your share of browser 4 usage was? What browsers? 5 Answer: I'm not getting your 6 question. 7 Are you trying to ask what I was 8 thinking when I wrote this sentence? 9 Question: Let me begin with that. 10 What were you thinking when you -- 11 Answer: I don't remember specifically 12 writing this sentence. 13 Question: Does that mean you can't 14 answer what you were thinking when you wrote 15 the sentence? 16 Answer: That's correct. 17 Question: So since you don't have an 18 answer to that question, let me put a different 19 question. 20 Answer: I have an answer. The answer 21 is I don't remember. 22 Question: Okay. You don't remember 23 what you meant. 24 Let me try to ask you -- 25 Answer: I don't remember what I was 5956 1 thinking. 2 Question: Is there a difference 3 between remembering what you were thinking and 4 remembering what you meant? 5 Answer: If the question is what I 6 meant when I wrote it, no. 7 Question: Okay. So you don't 8 remember what you were thinking when you wrote 9 it and you don't remember what you meant when 10 you wrote it. Is that fair? 11 Answer: As well as not remember 12 writing it. 13 Question: Okay. Now, let me go on to 14 another paragraph and see whether you remember 15 writing that or not. 16 And that is the second paragraph, 17 which reads, quote, apparently a lot of OEMs 18 are bundling non-Microsoft browsers and coming 19 up with offerings together with Internet 20 service providers that get displayed on their 21 machines in a FAR -- and you've capitalized 22 each of the letters in far -- more prominent 23 way than MSN or our Internet browser, close 24 quote. 25 Do you see that? 5957 1 Answer: Uh-huh. 2 Question: Did you write that 3 sentence, Mr. Gates? 4 Answer: I don't remember, but I have 5 no reason to doubt that I did. 6 Question: Do you remember what you 7 were thinking when you wrote that sentence or 8 what you meant when you wrote that sentence? 9 Answer: No. 10 Question: Do you remember that in 11 January, 1996, a lot of OEMs were bundling 12 non-Microsoft browsers? 13 Answer: I'm not sure. 14 Question: What were the non-Microsoft 15 browsers that you were concerned about in 16 January of 1996? 17 Answer: What's the question? You're 18 trying to get me to recall what other browsers 19 I was thinking about when I wrote that 20 sentence? 21 Question: No, because you've told me 22 that you don't know what you were thinking 23 about when you wrote that sentence. 24 Answer: Right. 25 Question: What I'm trying to do is 5958 1 get you to tell me what non-Microsoft browsers 2 you were concerned about in January of 1996. 3 Answer: If it had been only one, I 4 probably would have used the name of it. 5 Instead, I seem to be using the term 6 non-Microsoft browsers. 7 Question: My question is, what 8 non-Microsoft browsers were you concerned about 9 in January of 1996? 10 Answer: I'm sure -- what's the 11 question? Is it -- are you asking me about 12 when I wrote this e-mail or what are you asking 13 me about? 14 Question: I'm asking you about 15 January of 1996. 16 Answer: That month? 17 Question: Yes, sir. 18 Answer: And what about it? 19 Question: What non-Microsoft browsers 20 were you concerned about in January of 1996? 21 Answer: I don't know what you mean 22 concerned. 23 Question: What is it about the word 24 concerned that you don't understand? 25 Answer: I'm not sure what you mean by 5959 1 it. 2 Question: Is -- 3 Answer: Is there a document where I 4 used that term? 5 Question: Is the term concerned a 6 term that you're familiar with in the English 7 language? 8 Answer: Yes. 9 Question: Does it have a meaning that 10 you're familiar with? 11 Answer: Yes. 12 Question: Using the word concerned 13 consistent with the normal meaning that it has 14 in the English language, what Microsoft -- or 15 what non-Microsoft browsers were you concerned 16 about in January of 1996? 17 Answer: Well, I think I would have 18 been concerned about Internet Explorer, what 19 was going on with it. We would have been 20 looking at other browsers that were in use at 21 the time. 22 Certainly, Navigator was one of those. 23 And I don't know which browser AOL was using at 24 the time, but it was another browser. 25 Question: What I'm asking, Mr. Gates, 5960 1 is what other browsers or what non-Microsoft 2 browsers were you concerned about in January of 3 1996? 4 I'm not asking what you were looking 5 at, although that may be part of the answer, 6 and I don't mean to exclude it, but what 7 non-Microsoft browsers were you concerned about 8 in January of 1996? 9 Answer: Well, our concern was to 10 provide the best Internet support, among other 11 things, in Windows. 12 And in dealing with that concern, I'm 13 sure we looked at competitive products, 14 including the ones I mentioned. 15 Question: Let me try to use your 16 words and see if we can move this along. 17 What competitive products did you look 18 at in January of 1996 in terms of browsers? 19 Answer: I don't remember looking at 20 any specific products during that month. 21 Question: Were there specific 22 competitive products that in January of 1996 23 you wanted to increase Microsoft's share with 24 respect to those products? 25 Do you understand the question, 5961 1 Mr. Gates? 2 Answer: I'm pausing to see if I can 3 understand it. 4 Question: If you don't understand it, 5 I'd be happy to rephrase it. 6 Answer: Go ahead and rephrase it. 7 I probably could have understood it if 8 I thought about it, but go ahead. 9 Question: In January, 1996, you were 10 aware that there were non-Microsoft browsers 11 that were being marketed; is that correct? 12 Answer: I can't really confine it to 13 that month, but I'm sure in that time period I 14 was aware of other browsers being out. 15 Question: And were those 16 non-Microsoft browsers, or at least some of 17 them, being marketed in competition with 18 Microsoft's browser? 19 Answer: Users were making choices 20 about which browser to select. 21 Question: Is the term competition a 22 term that you're familiar with, Mr. Gates? 23 Answer: Yes. 24 Question: And does it have a meaning 25 in the English language that you're familiar 5962 1 with? 2 Answer: Any lack of understanding of 3 the question doesn't stem from the use of that 4 word. 5 Question: And you understand what is 6 meant by non-Microsoft browsers, do you not, 7 sir? 8 Answer: No. 9 Question: You don't? Is that what 10 you're telling me? You don't understand what 11 that means? 12 Answer: You'll have to be more 13 specific. 14 What -- 15 Question: Do you understand what is 16 meant by non-Microsoft browsers? 17 Answer: In the right context, I'd 18 understand that. 19 Question: Is the term non-Microsoft 20 browser a term that you think has a reasonably 21 common and understandable meaning in the 22 industry? 23 Answer: Yes. It's only the scope of 24 what you'd include in it that would vary 25 according to the context. 5963 1 Question: Okay. That is, in some 2 context you'd include more and in some context 3 you'd include less? 4 Answer: That's right. 5 Question: When you refer to 6 non-Microsoft browsers generally, are there 7 particular browsers that you have in mind? 8 Answer: There are many that I would 9 include in that. And as I said, it would be 10 broader depending on the context. 11 Question: Do all of the non-Microsoft 12 browsers that you're aware of compete with 13 Internet Explorer? 14 Answer: In the sense that users 15 select which browsers they want to use, yes. 16 Question: Let's focus on January of 17 1996. 18 What were the non-Microsoft browsers 19 that, in your view, were competing with 20 Internet Explorer in January of 1996? 21 Answer: Well, users could choose from 22 a number of browsers, including the original 23 Mosaic browser, the Netscape Navigator, and I 24 don't know what version they had out at the 25 time. The AOL browser. And some others that 5964 1 were in the market. 2 Question: And using the term as you 3 used the term, were all of those three browsers 4 competing with Internet Explorer in January of 5 1996? 6 Answer: In the sense that users could 7 choose to use them or use Internet Explorer, 8 yes. 9 Question: I want to use it the way 10 you use it, not the way somebody else might use 11 it, Mr. Gates. 12 What I want to know is in January, 13 1996, did you consider Mosaic, Navigator and 14 AOL's browser as all competing with Internet 15 Explorer? 16 Answer: In the sense that users could 17 select one of those others to choose, yes. 18 Question: Is that the only sense that 19 you use the term competition? 20 Answer: No. 21 Question: What I want to do is I want 22 to focus on competition the way you use it in 23 the ordinary operation of your business. 24 Answer: And one of the senses is 25 whether people choose to use our way of 5965 1 providing a feature or if they choose to get 2 additional software to provide them with that 3 feature. 4 Question: And was that the choice 5 that users were making between Internet 6 Explorer and the AOL browser in January of 7 1996, Mr. Gates? 8 Answer: Users can choose between 9 those two. 10 Question: Were they making that 11 choice, Mr. Gates, so far as you're aware? 12 Answer: Some were, yes. 13 Question: And some were choosing the 14 AOL browser instead of Internet Explorer. 15 That's your testimony? 16 Answer: Well, people can switch at 17 any time and they can intermix their usage. 18 Some people choose to primarily use the AOL 19 browser. 20 Question: Instead of Internet 21 Explorer is your testimony? 22 Answer: When I say primarily, that 23 means it got most of their usage share and that 24 means nothing else does. 25 Let's take somebody who exclusively 5966 1 would have used the AOL browser. I can't name 2 anybody like that, but I'm sure there were 3 people like that. That would mean they weren't 4 using the Internet Explorer technologies in 5 Windows. 6 Question: And because of that, as you 7 use the term competition, you would consider 8 that a competitive alternative? That's what 9 you said; is that correct? 10 Answer: In terms of competing for 11 usage share, yes. 12 Question: And what you've testified 13 is that when you use browser share, you meant 14 usage share; correct? 15 Answer: That's right. 16 Question: So that as you use the term 17 browser share, it is your testimony that in 18 January of 1996 Microsoft was competing for 19 browser share with Mosaic, Navigator, and AOL's 20 browser; correct? 21 Answer: In the sense that users would 22 choose to use one of those in varying degrees, 23 yes. 24 Question: But in terms of what you 25 meant by browser share, that was what you 5967 1 considered to be competition in January of 2 1996; correct? 3 Answer: That we were competing to see 4 who could make the better browser that users 5 would choose to take advantage of, yes. 6 Question: And you were competing with 7 the supplier of Mosaic and the supplier of 8 Navigator and the supplier of AOL's browser to 9 do that; is that your testimony? 10 Answer: I know we were interested in 11 making our browser attractive so that we'd gain 12 higher usage share. 13 Question: Higher usage share compared 14 to -- 15 Answer: All the other browsers, 16 including particularly those browsers. 17 Question: Okay. Now, in January of 18 1996, did you consider any one of those three 19 browsers to be a stronger or more important 20 competitor than any of the others? 21 Answer: It's hard for me to pin it 22 down to January, 1996. 23 At some point we definitely thought of 24 the Netscape browser as the number one in terms 25 of how our Windows browsing would be compared 5968 1 by users and which they would select. 2 Question: Have you finished your 3 answer? 4 Answer: Uh-huh. 5 Question: When did you first consider 6 Netscape's browser to be your primary or most 7 important non-Microsoft browser with which 8 Internet Explorer was competing? 9 Answer: I think by late 1995 we 10 thought of Navigator as competing both with -- 11 well, competing with Windows broadly, including 12 the Internet capabilities of Windows. 13 Question: Prior to late 1995, did you 14 think of the Netscape browser as competing 15 either broadly with Windows or with Internet 16 Explorer? 17 Answer: No. I think prior to that, 18 we were unclear about whether that was the 19 case. 20 THE COURT: Take a break at this time. 21 Remember the admonition previously 22 given. 23 We'll be in recess for approximately 24 10, 15 minutes. 25 You can leave your notebooks here. 5969 1 (A recess was taken from 9:47 a.m 2 to 10:09 a.m.) 3 THE CLERK: All rise. 4 THE COURT: [Juror Name], you will let us 5 know if there's anything we need to do. 6 [Juror Name]: I'll let you know. 7 THE COURT: You have our condolences. 8 [Juror Name]: Thank you. 9 (Whereupon, the following video 10 resumed playing to the jury.) 11 Question: Let me try to go back now 12 to the first sentence in your memo of January 13 5, 1996, that has been marked as Exhibit 358 14 where it says, winning Internet browser share 15 is a very, very important goal for us. 16 Does the prior discussion that we've 17 just had refresh your recollection that you 18 would have been referring primarily there to 19 the goal of gaining market share versus 20 Netscape? 21 Answer: You keep trying to read 22 Netscape into that sentence, and I don't see 23 how you can do that. 24 Question: I just really want to get 25 your testimony, Mr. Gates. 5970 1 Answer: Okay. 2 Question: And that is, when you 3 wrote, winning Internet browser share is a 4 very, very important goal for us, in January, 5 1996, were you referring primarily to gaining 6 market share compared to Netscape? 7 Answer: I've testified I don't 8 remember what I was thinking when I wrote that 9 sentence. 10 Question: If you can't remember what 11 you meant when you wrote that sentence, do you 12 at least remember that in January, 1996, 13 winning Internet browser share was an important 14 goal for Microsoft? 15 Answer: Yes. 16 Question: And with respect to the 17 goal of winning Internet browser share in 1996, 18 was that goal primarily to gain share compared 19 to Netscape? 20 Answer: Not necessarily. 21 Question: When you talk about winning 22 browser share, not necessarily just in this 23 document, but, generally, you're referring to 24 gaining market share compared to other 25 competitors; correct? 5971 1 Answer: Or any new products that come 2 along. 3 Question: That are competitive; 4 correct? 5 Answer: That people use for that 6 function. 7 Question: In January of 1996, was it 8 the case that the most important competitive 9 product to Internet Explorer was Netscape's 10 browser? 11 Answer: I think by this time the 12 browser that had the highest usage share was 13 Netscape's Navigator. 14 MR. BOIES: Would you read the 15 question back, please? 16 (Requested portion of the record 17 was read.) 18 Question: Can you answer that 19 question, sir? 20 Answer: In terms of users picking 21 browsers, the product that was on the market 22 that competed for usage the most in this time 23 period was probably Netscape's Navigator. 24 Question: Okay. Was the fact that 25 you've just described a fact that caused you 5972 1 and Microsoft to want to study Netscape and 2 determine how you could reduce Netscape's 3 ability to compete? 4 Answer: I don't know what you mean by 5 that. 6 Question: In or about January of 1996 7 or thereafter, did Microsoft try to study 8 Netscape to determine how you could reduce 9 Netscape's ability to compete? 10 Answer: I don't know what you mean by 11 that. 12 Question: Let me try to break it up 13 into as small a pieces as I can. 14 In or about January, 1996, or 15 thereafter, did Microsoft, to your knowledge, 16 undertake to try to study Netscape as a 17 company, including where its revenues came 18 from, what its dependencies were, what it 19 needed to remain viable? 20 Answer: I'm sure we looked at their 21 revenue. And I'm sure we looked at their 22 products and their organizational structure. 23 Question: Was that in whole or in 24 part a result of an attempt to find out what 25 their vulnerabilities were, Mr. Gates? 5973 1 Answer: Did you end the question? 2 Question: Both your counsel and I 3 thought so. 4 Answer: Okay. 5 Question: But if you don't understand 6 it, I'll rephrase it. 7 Answer: We were interested in 8 learning what users liked about their products 9 and what kind of response customers had. 10 Question: For my present question, 11 I'm not asking about learning about their 12 products just for the sake of learning about 13 their products. 14 What I'm asking about is whether you 15 were trying to figure out where Netscape's 16 dependencies were so that you could attack 17 Netscape and render Netscape a less effective 18 competitor? 19 Answer: We were interested in 20 building a product that users would prefer over 21 them. 22 Question: My question, sir, is 23 whether in addition to whatever you did to 24 improve your product, were you also attempting 25 to ascertain what Netscape's dependencies were 5974 1 so that you could attempt to render Netscape 2 less viable, less able to compete with 3 Microsoft? 4 Answer: We gathered information about 5 Netscape like we do a number of companies we 6 compete with, including IBM, Sun, Novell and 7 many others. 8 Question: Have you finished your 9 answer? 10 Answer: I have. 11 Question: I'm now asking you about 12 Netscape in particular, and I'm asking you 13 whether you gathered information about Netscape 14 for the purpose, in whole or in part, to 15 determine what Netscape's dependencies were so 16 that you could then try to attack those 17 dependencies and render Netscape a less viable 18 competitor? 19 Answer: It's the compoundness of the 20 question that makes it so confusing. 21 Question: Okay. Is the question so 22 confusing that you really think you can't 23 answer it? 24 Answer: It's the compoundness that 25 makes it so confusing that I don't think I can 5975 1 give you a good answer. 2 Question: All right. You gathered 3 information about Netscape; correct? 4 Answer: People in the company did. I 5 didn't personally. 6 Question: Well, you asked them to 7 gather information about Netscape; correct, 8 sir? 9 Answer: I didn't initiate any 10 particular gathering of information. I may 11 have asked questions once I was presented some 12 information. 13 Question: You told people that you 14 wanted them to gather information concerning 15 such things as Netscape's revenues and head 16 count and how much revenues they got from 17 various sources, things like that, did you not, 18 sir? 19 Answer: No. I already -- we already 20 talked about the fact that there was a normal 21 competitive review done of a number of 22 companies, and I didn't initiate that 23 particular review. 24 MR. BOIES: Let me mark as the next 25 exhibit, which will be Government Exhibit 380, 5976 1 a document that I will give you a copy of and 2 give your counsel copies of. 3 Question: The first page of Exhibit 4 380 contains what purports to be a message from 5 you dated December 1, 1996. 6 Do you see that, sir? 7 Answer: Yes. 8 Question: Did you write that message? 9 Answer: We've already discussed this 10 particular message. 11 As I said when we discussed it before, 12 I don't remember specifically sending that 13 message, but I don't have any reason to doubt 14 that I did. 15 Question: Do you see the first 16 paragraph of this message that says, what kind 17 of data do we have about how much software 18 companies pay Netscape? 19 Answer: It's weird that you're 20 repeating this exhibit without the enclosures 21 to the e-mail. I think it's very misleading to 22 have the version of the document -- 23 You had the real exhibit earlier. Did 24 you lose it? 25 Question: Now, first of all, let's 5977 1 see if we can reach some agreement. 2 Is Exhibit 353 the other exhibit that 3 you were referring to? 4 Answer: Yes. 5 Question: All right. And Exhibit 6 353, the e-mail from you, is the same as the 7 e-mail on Exhibit 380, but Exhibit 353 has an 8 additional e-mail; is that correct? 9 Answer: No. 10 Question: Okay. Let me try to go 11 through Exhibit 353. 12 The first e-mail on Exhibit 353 is an 13 e-mail from Mr. Ballmer to you and others; 14 correct? 15 Answer: Right. 16 Question: The second e-mail is an 17 e-mail from you dated December 1, 1996, at 9:24 18 p.m.; correct? 19 Answer: Yes. 20 Question: And there is a third e-mail 21 from Mr. Nehru dated November 27, 1996, at 22 11:54 a.m.; correct? 23 Answer: Well, it's not a separate 24 e-mail. It's part of my e-mail. 25 Question: Well, sir, let me try to 5978 1 see if we can get this straight. 2 And we'll read this whole thing into 3 the record if we have to. 4 Answer: I can explain what you're 5 confused about. 6 Question: I'm not confused, 7 Mr. Gates. Indeed, I think I stated it 8 accurately, if you want to start talking about 9 what I think. 10 But my function is to ask you 11 questions and your function is to give me 12 answers to the questions. And neither of our 13 functions are to debate the other at this 14 point. 15 Exhibit 353 starts with an e-mail 16 dated December 1, 1996, from Mr. Ballmer to 17 you; correct? 18 Answer: There's only one e-mail in 19 here, which is the one from Steve, which has 20 two e-mails enclosed in it. 21 Question: Well, what is enclosed here 22 are two additional e-mails; correct, sir? 23 Answer: They're part of Steve's 24 e-mail. 25 Question: That is, Steve -- and by 5979 1 Steve you mean Mr. Ballmer; correct? 2 Answer: Yes. 3 Question: -- is sending around with 4 his e-mail two earlier e-mails; correct? 5 Answer: They're part of his e-mail. 6 Question: When you say they're part 7 of his e-mail, he didn't write them, did he, 8 sir? 9 Answer: No, but they're part of his 10 e-mail. 11 Question: That is, he is sending them 12 around? 13 That's what I said three times. He is 14 sending them around with his e-mail. He wrote 15 something and in addition to what he wrote, he 16 is sending around what two other people wrote 17 earlier; correct, sir? 18 Answer: It's part of his 19 communication. It's not separate. 20 Question: I don't know what you mean 21 by part or separate and neither one of those 22 were in my question, Mr. Gates. 23 My question is, Mr. Ballmer wrote an 24 e-mail that he sent around and with that e-mail 25 he sent around two earlier e-mails. 5980 1 That's clearly what's going on here; 2 right, sir? 3 Answer: He only sent one thing. 4 Question: All right, sir. 5 The first line on Exhibit 353 says 6 Leslie Halverson (LCA); correct, Mr. Gates? 7 Answer: Yes. 8 Question: Okay. The next line says 9 from Steve Ballmer. The next line says sent, 10 Sunday, December 1, 1996, 9:25 p.m. and then 11 to: Bill Gates, Amar Nehru. 12 Answer: Does yours say 9:25? 13 Question: Well, on 353, it looks like 14 9:26. 15 Answer: Right. And you said 9:25. 16 Question: Okay, then I misspoke. 17 With that amendment, it is correct, 18 though; correct? 19 Answer: That's right. 20 Question: Okay. And it then goes 21 down six more lines, and then there is a line 22 that says original message; correct? 23 Answer: Right. 24 Question: And that says from Bill 25 Gates; correct? 5981 1 Answer: That's right. 2 Question: And it says you sent it 3 Sunday, December 1, 1996, at 9:24 p.m.; 4 correct? 5 Answer: That's right. 6 Question: And then it goes down one, 7 two, three, four, five, six, seven, eight, 8 nine, ten lines and then there is another line 9 that says original message; correct, sir? 10 Answer: That's right. 11 Question: And that says it is from 12 Mr. Nehru; correct? 13 Answer: Yes. 14 Question: And it says it was sent on 15 Wednesday, November 27, 1996, at 11:54 a.m.; 16 correct, sir? 17 Answer: Right. 18 Question: Now, the portion that 19 follows your line that says, I don't think this 20 analysis needed to be sent to so many people, 21 that's the last line before the line that says 22 original message from Mr. Nehru; correct? 23 Answer: That's right. 24 Question: Everything after your line 25 saying I don't think this analysis needed to be 5982 1 sent to so many people has been blocked out on 2 Exhibit 380; correct, and replaced with a stamp 3 that says privileged material redacted? 4 Answer: Do I still have 380? 5 Question: Unless you have eaten it. 6 It was the one we just marked a few 7 moments ago, a few minutes ago. 8 In any event, your counsel has in 9 front of him another copy of it. 10 Answer: Yes. 11 Question: And we'll use that copy. 12 Answer: Yeah. It looks like they're 13 the same except that they deleted the part of 14 my message where I enclosed the information 15 from Amar. 16 Question: When you say you enclosed 17 the information from Amar, you mean where you 18 enclosed Mr. Amar's e-mail? 19 Answer: As part of my e-mail. 20 Question: Word for word? 21 Answer: Yes. It appears to be his 22 e-mail word for word. 23 Question: Okay. I was just trying to 24 make sure the record is clear. 25 The November 27, 1996 Nehru e-mail 5983 1 that you sent around is headed Netscape 2 revenues; correct, sir? 3 And it is a discussion of an analysis 4 of Netscape's revenues? 5 Answer: I didn't send it around. 6 Amar sent it around. I enclosed it. 7 Question: I thought we established 8 that you then sent it around. 9 Answer: I enclosed it, yes. 10 Question: When you say you enclosed 11 it, that means it's enclosed with what you have 12 written so that it goes around to everybody 13 that your e-mail is directed to; correct? 14 Answer: Well, Amar had already sent 15 it to quite a large superset of the people I 16 copied on my e-mail, so he sent it to them. 17 Question: He sent it to them and then 18 you sent it to everybody that is on the 19 addressee or copy list of your e-mail; correct? 20 Answer: I enclosed it to those people 21 who had already all gotten it from Amar. 22 Question: And by enclosing it means 23 you sent it around? 24 Answer: That's not the word I would 25 use, but it was enclosed in the e-mail I sent 5984 1 to those people who had already received it 2 directly from Amar. 3 Question: So when people got your 4 e-mail -- all I'm trying to do is -- I don't 5 think this is obscure. 6 All I'm trying to do is establish that 7 when you sent your e-mail to the five people 8 that you sent it to, with your e-mail they got 9 Mr. Nehru's e-mail? 10 Answer: Which they had already 11 gotten. 12 Question: And they got it again? 13 Answer: As an enclosure, yes. 14 Question: As an enclosure to your 15 e-mail? 16 Answer: Right. 17 Question: And that e-mail from 18 Mr. Nehru that you enclosed with your e-mail is 19 a discussion of Netscape's revenues; correct, 20 sir? 21 Answer: That's the subject line of 22 his e-mail. 23 Question: Not only is it the subject 24 line. That's what the substance of the e-mail 25 is? 5985 1 Answer: Do you want me to look at it? 2 Question: If you need to to answer 3 the question. 4 Answer: It appears to be a discussion 5 of Netscape's revenue, or what he was able to 6 find out about it at a 70 percent confidence. 7 Question: And the first line of your 8 memo that you send to the five people indicated 9 here, including Mr. Maritz and Mr. Ballmer, is 10 what kind of data do we have on how much 11 software companies pay Netscape; correct, sir? 12 Answer: Yes. 13 Question: And did they furnish you 14 with that information? 15 Answer: I don't think so. 16 Question: You say in the next line, 17 in particular, I am curious about their deals 18 with Corel, Lotus, and Intuit. 19 Do you see that? 20 Answer: Uh-huh. 21 Question: You've got to say yes or no 22 for the -- 23 Answer: Yes. 24 Question: Did you ever receive 25 information about what revenues Netscape was 5986 1 getting from any of those companies? 2 Answer: I'm quite sure I didn't. 3 Question: Netscape was getting 4 revenues from Intuit. You knew that in 5 December of '96; correct, sir? 6 Answer: I still don't know that. 7 Question: You still don't know that? 8 You tried to find that out in December 9 of 1996; correct? 10 Answer: I did not myself try to find 11 that out. 12 Question: You tried to find it out by 13 raising it with people who worked for 14 Microsoft, didn't you? 15 That's what this message is. 16 Answer: It says I'm curious about it. 17 Question: Well, the first line says, 18 what kind of data do we have about how much 19 software companies pay Netscape? In 20 particular, I am curious about their deals with 21 Corel, Lotus, and Intuit. That's what you 22 wrote to Mr. Nehru, Mr. Silverberg, Mr. Chase, 23 Mr. Ballmer, and Mr. Maritz; correct, sir? 24 Answer: Right, because Amar's mail 25 didn't seem to have any data about that. 5987 1 Question: And is it your testimony 2 that you never got any data about that? 3 Answer: That's right. I don't 4 remember getting any data. I'm quite sure that 5 I didn't. 6 Question: Did you follow up to try to 7 get an answer to those questions? 8 Answer: No. 9 Question: After December of 1996, 10 Microsoft entered into an agreement with Intuit 11 that would limit how much money Intuit paid 12 Netscape; correct, sir? 13 Answer: I'm not aware of that. 14 Question: Are you aware of an 15 agreement that Intuit entered into with 16 Microsoft? 17 Answer: I know there was some kind of 18 an agreement. I wasn't part of negotiating it, 19 nor do I know what was in it. 20 Question: Do you know anything that 21 was in the Intuit agreement? 22 Answer: I'm quite sure that Intuit 23 had a plan to use our componentized browser. 24 And I think in the agreement they agreed to 25 make that their default browser. 5988 1 Question: Do you know anything else 2 about the Intuit agreement? 3 Answer: Well, Mr. Houck, when he -- 4 Question: Do you know anything else 5 about the Intuit agreement? 6 Answer: I was going to answer. 7 Question: Well, okay. I just want to 8 be clear that what I'm asking about has nothing 9 to do with what Mr. Houck knows or what 10 Mr. Houck suggested. It's what you know as you 11 sit here now. 12 Now, if Mr. Houck refreshed your 13 recollection about it, that's fine. 14 Answer: Let me just say the sentence 15 and then we'll see what you say. 16 Question: Okay. 17 Answer: Mr. Houck showed me an e-mail 18 which appeared to be written by Will Poole 19 talking about his discussions with Intuit, and 20 I could tell you what I remember from that 21 e-mail that Mr. Houck showed me. 22 Question: No, because that's in the 23 record already. 24 What I need to know is whether, based 25 on anything that Mr. Houck did or that I did -- 5989 1 I think I actually may have showed you the 2 e-mail you're talking about. 3 But whether it was Mr. Houck or me, 4 based on whatever happened before, do you now 5 have a recollection of the Intuit agreement 6 other than about the default browser? 7 Answer: I'm confused. 8 Question: Okay. Let me distinguish 9 two things. 10 I'm not asking you to try to remember 11 the e-mail that you were shown before. What 12 I'm asking is whether, as you sit here now, you 13 have a memory or recollection of the Intuit 14 deal other than that it made IE the default 15 browser? 16 Answer: No. 17 Question: Now, let me go back to 18 where I was before we entered into our 19 discussion of Mr. Nehru's e-mail. 20 Other than the e-mail that you sent on 21 December 1, 1996, do you recall any other 22 instances in which you were personally asking 23 for data about Netscape? 24 Answer: I think I was in a meeting, a 25 normal review-type meeting, where some data on 5990 1 Netscape was presented by Amar. And it's 2 likely that I asked at least one question 3 during the meeting. 4 Question: Any other instances? 5 Answer: I think there was e-mail 6 about a specific deal that Netscape did with 7 Citicorp in the last couple months where I was 8 curious about how much Citicorp had paid. 9 Either that or the mail just included 10 that information. 11 Question: Any other instance in which 12 you personally asked for information concerning 13 Netscape's revenues, head count, business, 14 plans or dependencies? 15 Answer: I remember once saying to 16 Brad Silverberg how many developers does 17 Netscape have, and being curious about that. 18 Question: Any other instances? 19 Answer: I think when we did 20 geographic reviews one time, I asked someone if 21 Netscape had an office in their country. 22 I think once when I was in Japan -- 23 this is another instance -- I asked what the 24 the browser usage share was in Japan, in 25 particular what Netscape's usage share was. 5991 1 Question: Have you completed your 2 answer? 3 Answer: Yes. 4 Question: Have you now given me all 5 of the instances that you can recall in which 6 you have personally asked for information 7 concerning Netscape's revenues or head count or 8 dependencies? 9 Answer: Yes. 10 Question: Let me ask you to look at a 11 document that we will mark as Exhibit 381. 12 The third item on the first page is an 13 e-mail from Paul Maritz to you dated January 14 16, 1996. It is to you and a number of other 15 people, but you are the first name there. 16 Do you see that? 17 Answer: Yes. 18 Question: Did you receive this e-mail 19 in January, 1996? 20 Answer: I don't remember receiving 21 it, but I have no reason to doubt that I did. 22 Question: The second sentence of 23 Mr. Maritz's e-mail to you says, quote, we need 24 to look carefully at any significant 25 opportunity to gain share versus Netscape. 5992 1 Do you see that? 2 Answer: That's part of the sentence 3 that I see. 4 Question: The rest of the sentence 5 says, and think carefully before AOL goes off 6 and partners with Netscape. 7 Do you see that? 8 Answer: Yes. 9 Question: That's the rest of the 10 sentence; right? 11 Answer: Right. 12 Question: Even though you don't 13 recall receiving this particular e-mail, do you 14 recall Mr. Maritz telling you in or about 15 January of 1996 that he believed that Microsoft 16 had to look carefully at any significant 17 opportunity to gain share versus Netscape? 18 Answer: No. 19 Question: Do you recall Mr. Maritz 20 telling you in or about January of 1996 that 21 there was a possibility that AOL was going to 22 go off and partner with Netscape? 23 Answer: I don't know the time frame, 24 but I know there was -- there came a time where 25 AOL was considering whether to keep doing their 5993 1 own browser technology or work with someone 2 else on that. 3 Question: And is that your 4 understanding of what Mr. Maritz was referring 5 to when he talks about AOL going off and 6 partnering with Netscape? 7 Answer: It appears to be a mail about 8 -- let me take a look at it. 9 It appears to be a mail about OEMs 10 prominently featuring the AOL client in such a 11 strong way that anything we would do for AOL in 12 that regard would be of no impact, and, 13 therefore, that maybe we should work with AOL 14 on the browser. 15 MR. BOIES: Could I have that answer 16 read back? 17 (Requested portion of the record 18 was read.) 19 MR. BOIES: And would you read my 20 question back, please? 21 (Requested portion of the record 22 was read.) 23 Answer: Well, having read the mail, 24 my best guess is that he is talking about the 25 browser, but it's just a guess reading the 5994 1 e-mail. 2 Question: Well, when you say that 3 your best guess is he is talking about the 4 browser, you mean in his e-mail that this is 5 about a browser? 6 Answer: About working with AOL on 7 browsing technology. 8 Question: Well, do you have any doubt 9 that this is related to browsers, sir? 10 Answer: It's certainly part of what 11 it's about. 12 Question: When Mr. Maritz says, we 13 need to look carefully at any significant 14 opportunity to gain share versus Netscape, he 15 is talking about browser share, is he not? 16 Answer: Almost certainly. 17 Question: Okay. And as you've 18 previously pointed out, part of the same 19 sentence is that he says that it's important to 20 think carefully before AOL goes off and 21 partners with Netscape. Do you see that? 22 Answer: I see it. 23 Question: And when he is talking 24 about going off and partnering with Netscape, 25 he is talking about AOL partnering with 5995 1 Netscape relating to browsers; correct? 2 Answer: As I said, I'm not certain 3 what he means, but from reading the e-mail, 4 certainly browsers is part of what he is 5 talking about, it appears. 6 Question: And in response to this 7 issue, did Microsoft go off and partner with 8 AOL with respect to browsers? 9 Answer: In response to what? 10 Question: In response to the thing 11 that Mr. Maritz writes to you in January of 12 1996, that he wants to look carefully at any 13 significant opportunity to gain share versus 14 Netscape and AOL is thinking about going off 15 and partnering with Netscape. 16 Answer: The reason we did enter into 17 some partnership activities with AOL is in 18 order to let them take advantage of some of the 19 innovations we'd done in browsers and get 20 broader exposure of the work that we'd done 21 there. 22 Question: And did you enter into 23 partnership relationships with AOL concerning 24 browsers? 25 Answer: We entered into a 5996 1 partnership, a primary element of which was 2 working together to make the Windows browsing 3 technology meet AOL's needs. 4 Question: And was one of the reasons 5 that you did that to try to gain share versus 6 Netscape? 7 Answer: Our goal was certainly to 8 improve the exposure of our innovation and, 9 therefore, the usage share of IE. 10 Question: Now, when Mr. Maritz writes 11 to you, he is not writing about gaining 12 exposure for your innovations. He is writing 13 about gaining share versus Netscape; correct, 14 sir? 15 Answer: Are we back to focusing on 16 this piece of e-mail here? 17 Question: I don't know what you mean 18 by back to, but in January of 1996, Mr. Maritz 19 writes to you about pursuing any significant 20 opportunity, quote, to gain share versus 21 Netscape. 22 Do you see that, sir? 23 You said you didn't have any doubt 24 that you'd received this; correct? 25 Answer: I have no reason to doubt 5997 1 that I received it. 2 Question: Do you doubt that you 3 received it? 4 Answer: No. 5 Question: Okay. So you accept you 6 received this e-mail? 7 Answer: I said I had no reason to 8 doubt that I received it. 9 Question: And you also said you don't 10 doubt it? 11 Answer: I don't know for sure that I 12 received it because I don't remember 13 specifically receiving it. 14 Question: Let me put it this way. 15 As you sit here now, you believe you 16 received it, don't you, Mr. Gates? 17 Answer: I believe it's more likely 18 than not that I received this e-mail. 19 Question: As you've described 20 previously in the deposition, can you give me 21 any probability greater than that? 22 Answer: I think it's very likely. 23 Question: Okay. Now, in this e-mail 24 that it is very likely that you received in 25 January of 1996, Mr. Maritz writes that you 5998 1 need to look carefully at any significant 2 opportunity to gain share versus Netscape and 3 you need to think carefully before AOL goes off 4 and partners with Netscape. 5 Was the desire to gain share versus 6 Netscape part of what led Microsoft to itself 7 partner with AOL with respect to browsers? 8 Answer: Our goal was to raise the 9 usage share of our Internet Explorer 10 technologies in Windows and that's the reason 11 we did the agreement with AOL. 12 Question: Now, when you refer to 13 gaining things in Windows, the documents that 14 talk about browser share don't talk about 15 gaining share for Windows, do they, sir? 16 Answer: They talk about gaining share 17 for the IE part of Windows. 18 Question: Well, they don't even talk 19 about gaining share for the IE part of Windows. 20 Have you seen any documents that talk 21 about gaining share for the IE part of Windows? 22 Answer: Well, certainly if you're 23 talking about e-mail within Microsoft, we all 24 know that IE is a part of Windows. And so we 25 don't bother, for any feature that we're 5999 1 studying usage of to restate and that feature 2 is a part of Windows. We simply refer to the 3 feature. 4 Question: IE is distributed other 5 than as part of Windows, is it not, sir? It's 6 distributed separately? 7 Answer: It's a different thing we do, 8 which is we create an IE for Macintosh that 9 shares some of the same code as the IE 10 capabilities that are in Windows. 11 MR. BOIES: Would you read back the 12 question, please? 13 (Requested portion of the record 14 was read.) 15 Question: Can you answer that 16 question, sir? 17 Answer: We take a subset of the IE 18 technologies that are in Windows and create 19 something independent, which is the IE for 20 Macintosh, although there is a lot of unique 21 code that is written for that work. And we 22 also create it for Unix as well. 23 Question: When you look at your 24 browser share, do you include in your browser 25 share the usage of IE browsers that are used on 6000 1 Macintosh? 2 Answer: Sometimes yes and sometimes 3 no. 4 You can add those numbers together, 5 and sometimes we do that. You can track the 6 numbers separately, and we've certainly done 7 that as well. 8 Question: When you talk about your IE 9 browser share without further elaboration, is 10 that including your IE usage on Macintosh or 11 not? 12 Answer: Highly ambiguous. 13 Question: When you receive discussion 14 of Microsoft's browser share without further 15 elaboration, how do you understand those 16 references? 17 Do you understand those references to 18 include your usage on Macintosh or not to 19 include IE's Macintosh usage? 20 Answer: I'd have to look at the 21 reference. 22 If they say Windows, then they don't 23 include Macintosh. 24 If they just say it without mentioning 25 Windows, it's not clear whether they're 6001 1 including the Macintosh usage or not. 2 Question: Have you ever asked someone 3 who wrote you just talking about browser share 4 whether they were talking about browser share 5 including Macintosh or not? 6 Answer: Yes, I believe I have. 7 Question: Who did you ask that of? 8 Answer: I'm sure I sent mail and 9 probably included Brad Chase as one of the 10 people I would have, in responding to something 11 like that, included. 12 Question: What was the response? 13 Answer: I'm sure they clarified which 14 numbers referred to the IE usage from within 15 Windows 95 and which referred to the IE 16 offering we make on the Macintosh. 17 Question: And with respect to Exhibit 18 381, the January, 1996 message from Mr. Maritz 19 to you where he is talking about gaining share 20 versus Netscape, does that include usage share 21 on Macintosh or not? 22 Answer: It's not clear at all. 23 Question: Do you have any 24 understanding as to what he meant by that? 25 Answer: Whether he included the 6002 1 Macintosh share or not, is that the question? 2 Question: Yes. 3 Answer: No, I don't know. 4 MS. CONLIN: This is a good time, Your 5 Honor. 6 THE COURT: Very well. Ladies and 7 gentlemen of the jury, please remember the 8 admonition. 9 We'll take our lunch break now. Leave 10 your notebooks here. 11 See you at 12 noon. 12 (A recess was taken from 11 a.m. to 13 12:02 p.m.) 14 THE CLERK: All rise. 15 MS. CONLIN: Continuing with the 16 deposition of Mr. Gates, September 2nd, 1998. 17 THE COURT: Let's wait until Carrie 18 gets the lights. 19 All right. 20 (Whereupon, the following video 21 resumed playing to the jury.) 22 Question: When IE share is discussed 23 within Microsoft, that share is discussed as a 24 share of browsers, is it not, sir? Those are 25 the words that are used? 6003 1 Whatever they may mean, whatever you 2 say they may mean, that's the words that are 3 used; is that correct, sir? 4 Answer: We have data about the usage 5 levels of various browsers and we look at 6 those. 7 MR. BOIES: Could I have the question 8 read back, please? 9 (Requested portion of the record 10 was read.) 11 Answer: I've never heard anyone say 12 it's discussed as a share of browsers. What 13 the heck would that mean? 14 Question: Well, if your answer is 15 that you have never heard of that, that's your 16 answer, Mr. Gates. 17 Answer: I don't know what you mean as 18 a share of browsers. I've never heard of 19 anybody use the phrase as a share of browsers. 20 I don't know what it would mean. 21 Question: So it's your testimony as 22 you sit here under oath that if somebody asked 23 you that question or said something like that 24 within the course of your business, you just 25 wouldn't have any idea what it meant? That's 6004 1 your testimony? 2 Answer: I would certainly seek 3 clarification of what they were trying to say. 4 I'd have an idea they were referring 5 to something to do with the Internet, something 6 to do with browsers. So I'd certainly have 7 some idea, but I'd seek clarification before I 8 could communicate effectively with them. 9 Question: Have you ever sought 10 clarification from anyone on that? 11 Answer: I told you I've never heard 12 that term used in my recollection. 13 Question: When you said in the 14 exhibit we were talking about that browser 15 share was a very, very important goal -- do you 16 remember that document? 17 Answer: Which exhibit are you 18 referring to? Is there a number? 19 Question: I'm sure we can find a 20 number, but since I know you have very good 21 memory about these exhibits since you 22 remembered Exhibit 353 from several days ago, 23 do you remember the document that we were 24 talking about this morning? 25 Answer: I remember many documents 6005 1 that we were talking about this morning. 2 Question: Do you remember a 3 particular document in which you were writing 4 that browser share is a very, very important 5 goal for Microsoft? 6 Answer: Yes. 7 Question: Okay. Let me see if I can 8 get you to look at Exhibit 358. 9 Now, when you personally were talking 10 about winning Internet browser share, 11 Mr. Gates, what were you talking about there? 12 Answer: I'm not sure. If I had to 13 guess, I'd say this e-mail appears to be in the 14 context of Windows. 15 Question: So what you're saying is 16 that in this context you were including only 17 usage share on Windows. Is that what you're 18 saying? 19 Answer: Well, it's interesting 20 because I say here, I would like to understand 21 what we need to do to convince OEMs to focus on 22 our browser. Is our problem proving our 23 technology and its capability? Is our problem 24 that they are getting bounty fees by having 25 Internet service providers pay them a sum or a 6006 1 royalty on the business they get? Is a 3.1 2 browser a key issue for them? 3 So except for that sentence, I would 4 have thought it was mainly Windows 95 share of 5 browser usage, but when I say is a 3.1 browser 6 a key issue for them, I'm talking about 7 something else. 8 Question: So is it your testimony 9 you're just, as you sit here now, confused as 10 to what you were talking about? 11 Answer: I think it's likely I was 12 referring to usage on Windows 95, but that one 13 sentence throws me off. 14 Question: Prior to the time that 15 Windows 98 -- not Windows 95 -- Windows 98 came 16 out, what was it called internally within 17 Microsoft? 18 Answer: Most commonly it was called 19 Memphis. 20 Question: Was there also a period of 21 time where it was referred to as Win 97? 22 Answer: It's possible. It's also 23 possible it would have been called Win 96 at 24 some point, but the primary term, the one I 25 remember being used, was Memphis. 6007 1 Question: When you talked about in 2 January of 1996 that winning Internet browser 3 share is a very, very important goal for us, 4 are you saying it was limited to Windows 95 and 5 perhaps earlier Windows operating systems, that 6 it did not include Memphis or Windows 98? 7 Answer: Now, you're trying to get me 8 to indicate whether I was talking about feature 9 products in this mail? 10 Question: Well, what you talk about 11 is winning Internet browser share. And as I 12 understood what you said was that you thought 13 that you were probably talking about share of 14 usage on Windows 95. 15 Did I understand you correctly? 16 Answer: I think you're making a good 17 point that the future products that -- 18 innovations that we were doing in the IE thing, 19 depending on the time frame you look at, are 20 key in -- I don't think I'm referring to future 21 products here. 22 Do you think I am? 23 Question: I don't have a view on 24 that, Mr. Gates. 25 Answer: Okay. 6008 1 Question: I'm not entitled to at this 2 stage. 3 Let me approach it a little more 4 generally. 5 In a number of questions I've asked 6 you about whether Microsoft wanted to gain 7 browser share, and you have said, well, we want 8 to have more exposure for our innovations. 9 Are you aware of any effort within 10 Microsoft, for purposes of this litigation, to 11 sort of change the way you and others use 12 terms? 13 Answer: No. 14 Question: None at all, sir? 15 Answer: Changing the way I use terms? 16 No. 17 Question: How about changing the way 18 others in Microsoft use terms? 19 Answer: I'm not aware of that, no. 20 Question: Are you aware of any 21 discussions within Microsoft about changing the 22 way terms are used in order to advance your 23 interests in the litigation? 24 Answer: No. 25 Question: In your answers, you refer 6009 1 often to browser technologies or browsing 2 technologies as opposed to answering a question 3 simply about browsers. 4 Is that related at all to avoid using 5 a term that you think connotes a separate 6 product? 7 Answer: It's all done with the goal 8 of making sure you're not confused about what 9 I'm referring to. 10 Question: Well, is it part of the 11 goal to try to advance a particular point of 12 view in this litigation? Is that part of why 13 you don't want to use in this deposition words 14 like browser that are throughout the documents 15 of the Microsoft Corporation? 16 Answer: I'm glad to use the term 17 browser and I've used the term many times in 18 this deposition and in many other cases. 19 Question: And when you use the term 20 browser, you know what it means, do you not, 21 sir? 22 Answer: When I use terms in general, 23 I do it in a context where it's clear what they 24 mean. 25 In the case of browser, as we've 6010 1 discussed, sometimes it might include what 2 we're doing on Macintosh. Sometimes it might 3 include one version of Windows. Sometimes it 4 might include other people's products that 5 include those capabilities. 6 Isolated by itself, are you saying 7 does the word browser without any context mean 8 something that is evident to me? No, but in a 9 specific context, I freely use the word without 10 any difficulty. 11 Question: And, for example, in 12 writing to your top officers in January of 13 1996, you talk about winning Internet browser 14 share and you believed you were being 15 understood; correct, sir? 16 Answer: Are you referring to an 17 e-mail to a single person, to Joachim Kempin? 18 Question: The one I have in front of 19 me is addressed to Mr. Kempin with copies to 20 Mr. Silverberg, Mr. Chase, Mr. Ludwig, 21 Mr. Ballmer, and a number of other people. 22 Answer: But I think in terms of 23 understanding the context of the message, the 24 fact that it is directed to Joachim Kempin and 25 talks about OEMs helps establish what I 6011 1 probably meant when I talked about browser 2 share here and browsers. 3 Question: Let me just be clear. 4 When you sent a copy -- I don't want 5 to go through all the names here, but two of 6 the people you sent copies to were Mr. Ballmer 7 and Mr. Maritz; is that fair? 8 Answer: Yes. 9 Question: And they were two of the 10 very top officers of Microsoft; correct? 11 Answer: Yes. 12 Question: Now, let me go back to what 13 I was pursuing before. 14 Is there an effort at all on your part 15 or insofar as you are aware on other people's 16 parts, to change the way words are used so as 17 to, from your standpoint, clarify what is meant 18 for purposes of this litigation? 19 Answer: I've told you I'm not aware 20 of an effort to change the use of terminology 21 related to the purposes of this litigation. 22 Question: Let me ask you to look at a 23 document that has been marked as Government 24 Exhibit 393. 25 The first e-mail here -- and there's 6012 1 an e-mail from you later on, but the first 2 e-mail here is an e-mail to you and others 3 dated February 15, 1998; is that correct? 4 Answer: To me? 5 Question: Yes. 6 Answer: Yes. 7 Question: And the subject is re: 8 Browser in the OS. 9 Do you see that subject of the 10 February 15, 1998 e-mail to you? 11 Answer: Yes. 12 Question: And is it fair to say that 13 that e-mail is a response to an e-mail from you 14 dated February 14, 1998, at 10:42 a.m.? 15 Answer: It appears to be. 16 Question: And the subject of your 17 e-mail was, quote, browser in the OS; is that 18 correct? 19 Answer: Yes. 20 Question: Now, the next to last 21 paragraph on the first page of the memo to you 22 -- and this memo goes to you and to a large 23 number of other people; is that correct? 24 Answer: I'm sorry? I just wasn't 25 listening carefully. 6013 1 Question: Sure. 2 The February 15th, 1998 memo that is 3 addressed to you also goes to four other 4 addressees and a large number of additional 5 copies; correct? 6 Answer: 13, yes. 7 Question: And this includes, together 8 with yourself, the top executives of the 9 company; correct? 10 Answer: Not all the top executives, 11 no. 12 Question: Well, it includes 13 Mr. Ballmer? 14 Answer: It includes some of the top 15 executives. 16 Question: And it includes Mr. Maritz; 17 correct? 18 Answer: Yes. 19 Question: And it includes yourself; 20 correct? 21 Answer: Yes, in the to line. 22 Question: And it says in the next to 23 the last paragraph saying, quote, put the 24 browser in the OS, close quote, is already a 25 statement that is prejudicial to us. 6014 1 Answer: Where are you looking? I 2 thought you said the next to the last 3 paragraph. 4 Question: Next to the last paragraph 5 on the first page. 6 Answer: Oh, okay. 7 Question: It says -- and this is a 8 quotation from the memo to you and the others, 9 saying, quote put the browser in the OS, quote, 10 is already a statement that is prejudicial to 11 us. The name, quote, browser, close quote, 12 suggests a separate thing. 13 Do you remember being told that in or 14 about February of 1998? 15 Answer: No. 16 Question: Do you remember receiving 17 this e-mail? 18 Answer: I don't remember receiving 19 it, but I have no reason to doubt that it was a 20 piece of e-mail that was sent. 21 Question: Does this in any way 22 refresh your recollection that within Microsoft 23 there were discussions as to what words should 24 or should not be used? 25 Answer: I don't know what you mean 6015 1 refresh my recollection. 2 Question: That is, having seen this, 3 does this make you remember something that you 4 didn't remember before? 5 Answer: No. 6 Question: In the last three years, 7 are you aware of any documents that have been 8 destroyed or disposed of that relate to the 9 issue of Microsoft's conduct with respect to 10 competitors or agreements that Microsoft has 11 entered into with customers or others that 12 restrict the ability of those customers or 13 others to deal with competitors of Microsoft? 14 Answer: No. 15 Question: Microsoft has a public 16 relations firm; correct? Maybe more than one? 17 Answer: Yes. 18 Question: Does it have a main public 19 relations firm? 20 Answer: Yes. 21 Question: What is that firm? 22 Answer: Weggener Edstrom is the name 23 they go by, I think. 24 Question: Are you aware of any 25 document destruction by or involving Weggener 6016 1 Edstrom in the last three years? 2 Answer: No. 3 Question: Are you aware of any 4 destruction or disposal of documents relating 5 to DR-DOS? 6 Answer: It's possible somebody once 7 upon a time sent an e-mail message to somebody 8 else that DR-DOS was part of the subject of 9 that e-mail and then the person deleted that 10 message. 11 Question: When you say it's possible 12 that someone did that, were you involved in 13 that, Mr. Gates? 14 Answer: I doubt that every e-mail 15 message I ever received that had the word 16 DR-DOS in it, that I choose to preserve forever 17 after. 18 Question: You said it's possible that 19 once upon a time somebody sent an e-mail, part 20 of the subject of which was DR-DOS, and then 21 this someone unidentified deleted the e-mail. 22 Was that you, sir? Was this someone 23 that you're referring to you? 24 Answer: I think it's true in general 25 that not every message that everyone here ever 6017 1 received about DR-DOS would have necessarily 2 been preserved by them because most people here 3 delete most of the e-mail they receive every 4 day. 5 In terms of me in particular, it's 6 possible that sometime in history -- I'd say 7 it's even likely -- I received a message about 8 DR-DOS that I didn't choose to keep. I don't 9 keep most e-mail I receive. 10 Question: Is there a message relating 11 to DR-DOS that not only did you choose to 12 delete, but did you ask somebody else to 13 delete? 14 Answer: No. 15 Question: Is there any message 16 relating to DR-DOS that you recall deleting? 17 Answer: Well, since I delete 98 18 percent of my e-mails, I think it's likely that 19 once there was a message about DR-DOS that I 20 deleted, but I don't recall any specific 21 message. 22 Question: That's what I'm asking. 23 I'm not asking what was likely. I'm asking 24 whether there was any message, in whole or in 25 part, relating to DR-DOS that as you sit here 6018 1 now under oath you can tell me that you 2 remember deleting or causing to be deleted? 3 Answer: No. 4 Question: When was the last time you 5 think it is likely that you deleted a message 6 relating to DR-DOS? 7 Answer: Well, I don't think I've 8 gotten a message that related to DR-DOS in the 9 last five years. 10 Question: Have you deleted messages 11 not only that you have received with respect to 12 DR-DOS, but also messages that you have sent? 13 Answer: I don't preserve messages 14 that I send, so there's no -- 15 Question: You never preserve messages 16 that you send? 17 Answer: I don't preserve them. 18 There is the extremely rare case, 19 which I've done almost never, where you copy 20 yourself on the e-mail. 21 Question: And you don't either copy 22 yourself or copy some file or something like 23 that? 24 Answer: No. 25 Question: Okay. I just want to be 6019 1 sure of your testimony. 2 Your testimony is you have never asked 3 somebody to delete a message that you have sent 4 them relating to DR-DOS? 5 Answer: That's right. 6 Question: And that although you 7 believe that you have deleted messages related 8 to DR-DOS that you have received, you can't 9 remember actually having done that and you 10 don't remember any specific message or type of 11 message; is that correct? 12 Answer: That's right. 13 Question: When was the last time that 14 you deleted e-mail messages concerning 15 Netscape? 16 Answer: I'm not sure. 17 Question: Approximately. 18 Answer: I think there was a press 19 article about Netscape that I got a message on 20 recently that I deleted. 21 Question: How recently? 22 Answer: In the last few months. 23 Question: Who was the message from? 24 Answer: The New York Times syndicate. 25 Question: Other than that instance, 6020 1 can you recall any instance in which you 2 deleted e-mail messages relating to Netscape in 3 the last year? 4 Answer: No. 5 Question: Do you believe that there 6 have been such instances or there have not been 7 such instances or you simply don't know? 8 Answer: Are you including the 9 attorney-client privileged e-mail? 10 Question: I will for purposes of this 11 question, yes. 12 Answer: I don't think I've deleted, 13 other than press articles, e-mail messages 14 related to Netscape during the last year. 15 Question: Okay. Are you aware of 16 anyone else within Microsoft who has deleted 17 e-mail messages relating to Netscape in the 18 last year? 19 Answer: No. 20 Question: Have you ever had any 21 discussions with anyone concerning whether or 22 not any e-mail messages relating in any way to 23 Netscape have been deleted in the last year? 24 Answer: No. 25 Question: Did Microsoft, insofar as 6021 1 you are aware, make an effort to go back and 2 research its e-mails in order to find 3 particular e-mails that might be useful to it 4 in this litigation? 5 Answer: I'm not aware of what might 6 or might not have been done in that connection. 7 I know people have come in and looked 8 at my e-mail. And whether that's just for a 9 request from the government or also things that 10 they're looking for, I'm not sure. 11 Question: Other than conversations 12 that you've had solely with your attorneys, 13 have you ever had any discussions with anyone 14 or have you ever received any communications 15 that indicated that there had been any effort 16 to go back and search e-mail messages or files 17 for purposes of this litigation? 18 Answer: No. 19 Question: Good afternoon, Mr. Gates. 20 Let me show you Government Exhibit 21 382, and I would ask you if that is a document 22 that you've ever seen before? 23 Answer: No. 24 Question: There is a reference in 25 this document to fiscal year 1998 WWSMM 6022 1 attendees. 2 Do you see that? 3 Answer: Yes. 4 Question: Do you know what that is? 5 Answer: Yes. 6 Question: What is it? 7 Answer: World-wide sales and 8 marketing meeting, otherwise known as the 9 WWSMM. 10 Question: Did you attend the fiscal 11 year 1998 WWSMM? 12 Answer: No, I don't attend that. I 13 come in and speak usually at the end of it, but 14 I don't attend it. 15 Question: The subject matter of this 16 is the fiscal year 1998 planning memo, quote, 17 preserving the desktop paradise, close quote. 18 Are you familiar with that? 19 Answer: I don't know what you mean am 20 I familiar with that. I know fiscal year '98. 21 Question: Have you ever seen the 22 fiscal year 1998 planning memo? 23 Answer: The one from Brad Chase? No. 24 Question: Have you seen a fiscal year 25 1998 planning memo from somebody else? 6023 1 Answer: There's a lot of these. Each 2 group writes planning memos. I'm not copied on 3 most of them. 4 Question: Are there planning memos 5 from some of the groups that you recall 6 receiving for fiscal year 1998? 7 Answer: I think there's a memo Steve 8 wrote that was probably sent to me. 9 Question: And by Steve you're 10 referring to Mr. Ballmer? 11 Answer: Yes. 12 Question: In the third paragraph of 13 this memo on the first page it says, quote, our 14 competitors are still hard at work trying to 15 obsolete Windows. More people than ever now 16 believe they will. Netscape and Sun endeavor 17 to commoditize the OS. 18 Do you know what is meant by 19 commoditize the OS in this context? 20 Answer: In the context of this memo? 21 Question: Yes. 22 Answer: I'd need to read the memo. 23 Question: Have you ever heard anybody 24 say that Netscape or Sun threatened to 25 commoditize the operating system? 6024 1 Answer: Yes. 2 Question: Have you ever said that? 3 Answer: Those words? 4 Question: Yes. 5 Answer: I don't think so. 6 Question: When other people have said 7 those words, what have you understood them to 8 mean? 9 Answer: I think the first time I 10 heard that was from Marc Andreessen. And I 11 never had a chance to ask him what he meant. 12 Question: Have you heard those words 13 from people within Microsoft? 14 Answer: Subsequently to Andreessen 15 using those words, I know they were repeated 16 inside the company quite a bit. 17 Question: Did you understand that 18 some people within Microsoft were saying that 19 they believed that Netscape or Sun were 20 threatening to commoditize the operating 21 system? 22 Answer: I don't know of anybody using 23 that terminology before Andreessen did. I 24 don't think it was used before he used it. 25 Question: My question is not whether 6025 1 it was used before or after Mr. Andreessen's 2 statement. 3 My question is whether people within 4 Microsoft communicated with you that they 5 believed that Netscape or Sun threatened to 6 commoditize the operating system? 7 Answer: It says endeavor here. And 8 you're switching? 9 Question: I was asking a question 10 that was not necessarily tied to the document. 11 My question is whether anyone within 12 Microsoft told you that they believed that 13 Netscape or Sun threatened to commoditize the 14 operating system? 15 Answer: Those specific words? 16 Question: Yes. The same words we've 17 been using in the last previous series of 18 questions, Mr. Gates. Those words. 19 Answer: I think that most of the time 20 when people use those words, they were 21 repeating what Andreessen had said. 22 Question: My question is not what 23 they meant most of the time or what they were 24 doing most of the time. 25 My question is whether people within 6026 1 Microsoft ever communicated to you that they 2 believed that Netscape or Sun were threatening 3 to commoditize the operating system? 4 Answer: Well, they certainly 5 communicated to me that Netscape was 6 communicating that they were on a path to, in 7 Netscape's words, commoditize the operating 8 system. 9 Question: Have you finished your 10 answer? 11 Answer: Yes. 12 Question: Now, my question is whether 13 anyone within Microsoft ever communicated to 14 you that they believed that either Netscape or 15 Sun were threatening to commoditize the 16 operating system? 17 Answer: I think after Andreessen said 18 it, some people suggested they agreed with 19 Andreessen's sentiment that Netscape was trying 20 to reduce Windows sales. 21 Question: When people used the word 22 with you commoditize as in the statement that 23 Netscape was threatening or endeavoring to 24 commoditize the operating system, what did you 25 understand commoditize to mean? 6027 1 Answer: That they were creating a 2 product that would either reduce the value or 3 eliminate demand for the Windows operating 4 system if they continued to improve it and we 5 didn't keep improving our product. 6 Question: Did you have any other 7 understanding of the term commoditize in that 8 context? 9 Answer: Well, it was a word that was 10 used to refer to Andreessen's comment. 11 Question: Other than that, did you 12 have any understanding of the meaning of the 13 term commoditize in that context? 14 Answer: Other than those two things? 15 Question: Yes. 16 Answer: No. 17 Question: Let me show you next a 18 document that has been marked as Exhibit 383. 19 This purports to be an e-mail from 20 Mr. Maritz to you and others with charts 21 attached to it. 22 First, have you seen this e-mail 23 before? 24 Answer: I think Mr. Houck showed it 25 to me. 6028 1 Question: You may be right in a 2 sense, Mr. Gates, in the sense that I think 3 that your counsel has produced to us various 4 versions of documents. 5 I do not believe that this particular 6 version, which was produced to us stapled this 7 way, was shown to you by Mr. Houck. 8 Answer: When you ask me whether I'd 9 ever seen the e-mail before, I wasn't referring 10 to the way it was stapled. 11 Question: This happens to have 12 various charts attached to it. Have you ever 13 seen this e-mail with these charts attached to 14 it? 15 Answer: Can I look back through the 16 old exhibits? 17 Question: What I'd like -- yes, you 18 can. You can do whatever you want to answer 19 the question, but what I'd like you to do is 20 I'd like to get an answer to this question with 21 respect to Exhibit 383. 22 If you need to look back at the other 23 exhibits to answer this question, then you can 24 do whatever you need to to answer the question. 25 Answer: Well, I certainly do. You've 6029 1 asked me if I've ever seen something before, 2 and I'm thinking maybe a previous exhibit had 3 some or part of this. 4 And, therefore, to answer your 5 question, I need to look at the exhibits to see 6 if that's the case or not. 7 Question: Let me see if I can move 8 things along. 9 Did you receive this e-mail in or 10 about January, 1997, this e-mail being a 11 message from Paul Maritz to you and others 12 dated January 5, 1997? 13 Answer: I don't remember receiving 14 it, but I don't have any reason to doubt that 15 it was sent. 16 Question: Did you see this e-mail at 17 any time prior to the commencement of your 18 deposition last week? 19 Answer: I don't remember seeing it. 20 Question: The subject of this e-mail 21 is, quote, overview slides for Bill Gates/NC 22 and Java session with 14 pluses on Monday. 23 Do you see that? 24 Answer: Yes. 25 Question: And I think you identified 6030 1 the 14 pluses as the -- some group of 2 executives; is that correct? 3 Answer: No. 4 Question: What is the 14 pluses? 5 Answer: It's people above a certain 6 level, primarily engineers. Also executives, 7 but mostly engineers. 8 Question: It's all the people in the 9 company above a certain level, the 14 level? 10 Answer: Which are mostly engineers 11 and not executives. 12 Question: How many people are there 13 in the 14 pluses group? 14 Answer: It's a good question. I 15 think around 200 to 300. 16 Question: And these would be the 17 people in the 200 or 300 top rated jobs in the 18 company; is that correct? 19 Answer: If top means the best 20 compensation, yes. 21 Question: Okay. Now, do you recall 22 the slides that are attached to this e-mail? 23 Answer: I remember when I testified 24 earlier seeing these and saying that I was 25 pretty sure that I never presented these 6031 1 slides. 2 Question: Do you recall whether 3 someone else presented these slides in January 4 of 1997? 5 Answer: I'm not sure. I remember 6 looking at the slides and thinking probably 7 not. 8 Question: Let me ask you to look at 9 the third page of the exhibit, which is headed 10 key platform challenge. 11 It is page 2 of the charts and page 3 12 of Exhibit 383, in which it says NC and Java 13 are platform challenges. 14 Do you see that? 15 Answer: Uh-huh. 16 Question: Did you believe in January 17 of 1997 that Java was a platform challenge? 18 Answer: Not Java the language, but 19 some of the Java runtime APIs that were being 20 promoted to ISPs in the way that Sun and others 21 were talking about enhancing them were platform 22 challenges. 23 Question: When reference is made here 24 to Java, do you understand that to refer to 25 what you refer to as Java runtime APIs? 6032 1 Answer: I'm not sure. 2 Question: Are you aware of people 3 asserting that Java runtime APIs were a 4 platform challenge in or about January of 1997? 5 Answer: I just told you that we 6 looked at what was going on in terms of the 7 plans of Sun and other people with Java runtime 8 APIs as being a platform challenge. 9 Question: Are you aware of any other 10 platform challenge represented by Java other 11 than Java runtime APIs? 12 Answer: No. 13 Question: So would it be fair to say 14 that you believe that when reference is made 15 here to Java, the reference means Java runtime 16 APIs since it asserts here that Java is a 17 platform challenge? 18 Answer: It's the best way to make 19 sense of a document that I hadn't seen until my 20 deposition, as far as I know. 21 Question: Okay. Let me show you a 22 document that has been marked as Exhibit 397. 23 This purports to be a message to you 24 and others from Brad Chase dated March 13, 25 1997. 6033 1 Did you receive this message in or 2 about March of 1997? 3 Answer: I don't remember receiving 4 it. In fact, it's very strange that the e-mail 5 names aren't expanded. 6 But I probably received it. 7 Question: Let me go down to the third 8 paragraph of the document and the fifth 9 sentence that says, quote, browser share needs 10 to remain a key priority for our field and 11 marketing efforts, close quote. 12 Do you see that? 13 Answer: In the third paragraph? 14 Question: Yes. 15 Answer: Okay, the third sentence, the 16 third paragraph. Yeah. 17 Question: Were you told in or about 18 March of 1997 that people within Microsoft 19 believed that browser share needed to remain a 20 key priority for your field and marketing 21 efforts? 22 Answer: I don't remember being told 23 that, but I wouldn't be surprised to hear that 24 people were saying that. 25 Question: Immediately before that 6034 1 sentence, there is a statement that Microsoft 2 needs to continue its jihad next year. 3 Do you see that? 4 Answer: No. 5 Question: The sentence that says 6 browser share needs to remain a key priority 7 for our field and marketing efforts, the 8 sentence right before that says, we need to 9 continue our jihad next year. That's the way 10 it ends. 11 Do you see that? 12 Answer: Now, I see -- it doesn't say 13 Microsoft. 14 Question: Well, when it says we 15 there, do you understand that means something 16 other than Microsoft, sir? 17 Answer: It could mean Brad Chase's 18 group. 19 Question: Well, this is a message 20 from Brad Chase to you, Brad Silverberg, Paul 21 Maritz and Steve Ballmer; correct? 22 Answer: As I say, it's strange that 23 this -- if this was a normal piece of e-mail, 24 it wouldn't print like this. I'm not aware of 25 any way -- maybe there is some way -- that 6035 1 e-mail ends up looking like this when you print 2 it out. 3 Question: I wasn't the one that was 4 asserting it was an e-mail. I don't know 5 whether it is an e-mail or memo or what it is. 6 All I know is it was produced to us by 7 Microsoft. 8 And the first line of it says to, and 9 the first name there is Bradsi. Do you see 10 that? 11 Answer: Uh-huh. 12 Question: Does that refer to Brad 13 Silverberg? 14 Answer: Usually you can use that 15 shorthand in typing in someone's name, but when 16 you print out e-mail, it doesn't come out that 17 way. 18 Question: Do you believe that the 19 reference here to Bradsi is a reference to Brad 20 Silverberg, sir? 21 Answer: Yes. 22 Question: The next addressee is 23 Paulma. 24 Do you believe that that is Paul 25 Maritz? 6036 1 Answer: Yes. 2 Question: The next addressee is 3 Steveb. 4 Do you believe that that is Steve 5 Ballmer? 6 Answer: Yes. 7 Question: The next addressee is 8 Billg. 9 And do you believe that that is 10 yourself? 11 Answer: Yes. 12 Question: And it says it's from 13 Bradc. 14 And do you believe that that is Brad 15 Chase? 16 Answer: Yes. 17 Question: Now, when Brad Chase writes 18 to you and the others we need to continue our 19 jihad next year, do you understand that he is 20 referring to Microsoft when he uses the word 21 we? 22 Answer: No. 23 Question: What do you think he means 24 when he uses the word we? 25 Answer: I'm not sure. 6037 1 Question: Do you know what he means 2 by jihad? 3 Answer: I think he is referring to 4 our vigorous efforts to make a superior product 5 and to market that product. 6 Question: Now, what he says in the 7 next sentence is, browser share needs to remain 8 a key priority for our field and marketing 9 efforts; is that correct? 10 Answer: Yes. 11 Question: The field and marketing 12 efforts were not involved in product design or 13 making an improved browser, were they, sir? 14 Answer: No. 15 Question: Let me show you next a 16 document that has been marked as Exhibit 384. 17 I want you to look at the second 18 message that is on this exhibit. 19 In the middle of the first page is a 20 message from Steven Sinofsky. 21 Do you see that? 22 Answer: Uh-huh. 23 Question: And it is dated June 10, 24 1994. 25 There is one name that it's hard to 6038 1 read on the copy that we were produced, but I 2 don't believe that you were shown as receiving 3 a copy of this exhibit, at least back in 1994. 4 Have you seen this message before, 5 sir? 6 Answer: Not before this lawsuit. 7 Question: When did you first see it? 8 Answer: I think sometime during the 9 course of the lawsuit. 10 Question: That is, sometime in the 11 last six months? 12 Answer: That's right. 13 Question: Have you discussed this 14 with anyone in Microsoft, other than your 15 counsel? 16 Answer: Yeah. I think I had a short 17 conversation with Mitch Matthews on the general 18 topic, not on this specific message. 19 Question: What was the general topic 20 that you refer to? 21 Answer: The history of our decision 22 to put browsing functionality into Windows. 23 Question: There is a reference here 24 to Chicago. Is that a reference to Windows? 25 Answer: It's a code name that was 6039 1 used for what became Windows 95. 2 Question: The third paragraph of this 3 e-mail says, quote, we do not currently plan on 4 any other client software, especially something 5 like Mosaic or Cello. 6 Do you see that? 7 Answer: I see it. 8 Question: You've identified Mosaic as 9 a browser; correct, sir? 10 Answer: Yes. 11 Question: Do you know what Cello is? 12 Answer: No. 13 Question: Were you informed in or 14 about June of 1994 that people within Microsoft 15 did not currently plan on including something 16 like Mosaic or Cello in Windows 95? 17 Answer: Quite the opposite. 18 Question: So it's your testimony that 19 this is just not accurate, is that what you're 20 saying? 21 Answer: What are you referring to? 22 Question: Well, I'm referring to this 23 document. 24 And what this document says is, quote, 25 we do not currently plan on any other client 6040 1 software, especially something like Mosaic or 2 Cello. 3 And you understand this to mean that 4 you're not currently planning on including 5 something like Mosaic or Cello in Chicago; 6 correct, sir? 7 Answer: I guess I'd read the whole 8 e-mail message if I was really interested. And 9 I've gone ahead and done that. 10 So you're trying to take that sentence 11 just out by itself or you're trying to get me 12 to talk about what the e-mail itself is saying? 13 Question: What I'm trying to do is to 14 get you to tell me whether, as you understand 15 it, Mr. Sinofsky is writing here on June 10, 16 1994, that at least insofar as he is concerned, 17 there is not a plan to include something like 18 Mosaic or Cello in Chicago? 19 Is that what he is saying here? 20 Answer: No. 21 Question: That's not what he is 22 saying. 23 Let's go to the previous paragraph. 24 He says, I think it is really 25 important that we stick to the basic facts of 6041 1 the situation and not overcommit Chicago or 2 Microsoft in any way. 3 The Chicago message is all the 4 plumbing you need to connect to the Internet, 5 which translates to TCP/IP stacks, SLIP and 6 PPP, and the basic FTP and TELNET clients. Our 7 built-in client (and our NT server) will also 8 support Internet protocols such as SMTP and 9 MIME. 10 He then continues in the very next 11 sentence, we do not currently plan on any other 12 client software, especially something like 13 Mosaic or Cello. 14 Are any of the things that 15 Mr. Sinofsky indicates here are going to be 16 included in Chicago software that you would 17 consider to be browser software? 18 Answer: The e-mail I'm looking at 19 talks about the Chicago message. And this is 20 -- he seems to be talking about what we're 21 saying externally about the Chicago project. 22 This e-mail doesn't include anyone who 23 is involved in deciding what's in Chicago, and 24 so he is talking about the Chicago message 25 here. 6042 1 Question: Mr. Gates, my question is 2 whether any of the software that Mr. Sinofsky 3 identifies here as being included in Chicago is 4 software that you considered to be browser 5 software? 6 Answer: Where do you see the phrase 7 included in Chicago? 8 Question: Well, sir, when he says the 9 Chicago message is all the plumbing you need to 10 connect to the Internet, which translates to 11 TCP/IP stacks, SLIP and PPP and the basic FTP 12 and TELNET clients. Our built-in mail client 13 (and our NT server) will also support Internet 14 protocols such as SMTP and MIME, when he says 15 those things, do you believe he is saying that 16 those are going to be included in Chicago? 17 Answer: No. He is saying the Chicago 18 message is. 19 Question: So what you're saying is 20 that when he says the Chicago message is that, 21 he doesn't mean that you're going to include in 22 Chicago what he then lists. Is that what 23 you're saying? 24 Answer: He is saying that the Chicago 25 message may imply that. 6043 1 Question: But that's what I'm asking 2 you. 3 What I'm asking you is whether you 4 read this document as saying that TCP/IP 5 stacks, SLIP and PPP and the basic FTP and 6 TELNET clients are going to be included in 7 Chicago. Do you read it that way? 8 Answer: No. 9 Question: Okay. And when he says our 10 built-in mail client and our NT server will 11 also support Internet protocols such as SMPT 12 and MIME, do you believe that he is saying that 13 your built-in mail client and your NT server 14 are going to come out with Chicago? 15 Answer: Certainly not. 16 Question: And when he says, we do not 17 currently plan on any other client software, 18 especially something like Mosaic or Cello, and 19 then in the next sentence says, Chicago is 20 investigating possibilities, but nothing at all 21 is public and DRG should not be talking to 22 anyone with the thought of including them in 23 the box or resource kit -- that is purely for 24 Chicago/NT to deal with -- though any 25 interesting packages should, of course, be 6044 1 brought to everyone's attention. Our plans for 2 offering any sort of connection to the Internet 3 are highly confidential and merely speculative. 4 Do you think when he talks about 5 Mosaic and Cello he is talking about something 6 for Chicago? 7 Answer: He is talking about the 8 Chicago message. The definition of what would 9 and wouldn't be in Chicago wasn't finally known 10 until Chicago shipped. 11 Certainly at this time we had made the 12 decision to do our best to include the browsing 13 functionality if we could. We weren't saying 14 that as part of the Chicago message. 15 Question: Mr. Gates, you've testified 16 that you never saw this until the last six 17 months; correct? 18 Answer: That's right. 19 Question: Who showed you this? 20 Answer: I'm not sure. I think maybe 21 the government cited it. I'm not sure. 22 Question: Well, who showed it to you? 23 Answer: I'm not sure anyone showed it 24 to me. I think the government cited it in 25 something. 6045 1 Question: Well, the government cited 2 it. 3 Do you read through the government's 4 papers and just pick out cites and go find them 5 for yourself? 6 Answer: No. 7 Question: Didn't think so. 8 So somebody had to go pick this out 9 and show it to you; correct, sir? 10 Answer: I'm not sure, other than 11 attorney-client meetings, when I've seen the 12 entire mail message. 13 Question: Okay. Let me show you a 14 document that has been marked as Exhibit 386. 15 The second item here purports to be a 16 message from you to a number of people dated 17 April 6, 1995. 18 Do you see that? 19 Answer: Yes. 20 Question: Did you send this message 21 on or about April 6, 1995? 22 Answer: I don't remember sending it, 23 but I don't have any reason to doubt that I 24 did. 25 Question: Now, attached to this 6046 1 message, as it was produced to us, I believe, 2 by Microsoft, is a two-page document headed 3 Netscape as NetWare. 4 Do you see that? 5 Answer: I see a three-page document, 6 yes. 7 Question: Yes, three pages. Pages 8 3558 through 3560. 9 Have you seen this before? 10 Answer: I don't remember seeing it 11 before. 12 Question: Now, the title of this 13 three-page attachment is Netscape as NetWare, 14 and there is a footnote that says, the analogy 15 here is that the major sin that Microsoft made 16 with NetWare was to let Novell offer a better 17 (actually smaller and faster with simpler 18 protocol) client for networking. They got to 19 critical mass and can now evolve both client 20 and server together. 21 Do you see that? 22 Answer: Uh-huh. Yes. 23 Question: In or about April of 1995, 24 was Microsoft concerned with Netscape getting 25 to what is referred to here as critical mass? 6047 1 Answer: I don't know what Paul meant 2 in using that word. 3 Question: Do you have any 4 understanding at all about what Mr. Maritz 5 meant when he referred to a competitor getting, 6 quote, to critical mass, close quote? 7 Answer: He seems to be using that 8 phrase with respect to NetWare or Novell, but 9 I'm not sure what he means by it. 10 Question: He is also using it with 11 respect to Netscape by the analogy. That's in 12 fact what he says, is that not so, sir? 13 Answer: No, it's not clear that the 14 term critical mass is part of the analogy, is 15 it? It's not to me. 16 Question: Okay. This document is 17 about Netscape, it's not about Novell; correct, 18 sir? 19 Answer: I didn't write the document. 20 The document appears to refer to Netscape as 21 NetWare as its title, yes. 22 And so Novell is talked about in this 23 document and a lot of things seem to be talked 24 about here. 25 Do you want me to read it? 6048 1 Question: If you have to to answer 2 any of my questions. 3 NetWare is something from Novell; 4 correct, sir? 5 Answer: Fact. 6 Question: What? 7 Answer: Fact. 8 Question: Does that mean yes? 9 Answer: Yes. 10 Question: And what Mr. Maritz here is 11 doing is analogizing Netscape to Netware; 12 correct? 13 Answer: It's kind of confusing 14 because Netscape is the name of a company and 15 NetWare is the name of a product. And so I'm 16 not sure what he is doing. 17 Usually you think of analogizing two 18 products to each other or two companies to each 19 other, but he appears to be analogizing a 20 company to a product, which is a very strange 21 thing. 22 Question: Well, sir, in April of 23 1995, in so far as Microsoft was concerned, was 24 Netscape primarily a browser company? 25 Answer: No. 6049 1 Question: It was not? 2 Answer: No. 3 Question: All right, sir. 4 In this document, do you understand 5 what Mr. Maritz is saying is that Microsoft 6 should not make the same mistake with 7 Netscape's browser as it did with Novell's 8 NetWare? 9 Answer: I'd have to read the 10 document. 11 Do you want me to? 12 Question: If you need to read the 13 document to answer that question, Mr. Gates, go 14 ahead and do so. 15 And when you've finished, if you have 16 the question in mind, please answer it. If you 17 don't have the question in mind, we'll read it 18 back. 19 And the question is, do you understand 20 that what this document is saying is that 21 Microsoft should not make the same mistake with 22 Netscape's browser as it did with Novell's 23 Netware? 24 And you can read any portion that you 25 want, but I am particularly interested the 6050 1 heading which says, quote, Netscape as NetWare 2 and the footnote right off that heading that 3 says, quote, the analogy here is that the major 4 sin that Microsoft made with NetWare was to let 5 Novell offer a better (actually smaller and 6 faster, with simpler protocol) client for 7 networking. They got to critical mass and can 8 now evolve both client and server together. 9 Answer: Are you asking me a question 10 about the whole document? 11 Question: No, I didn't think I was. 12 I thought it was possible for you to 13 answer my question by looking at the title and 14 that first footnote. 15 Answer: I thought you were asking me 16 what the document is about. 17 Question: I think it's possible to 18 answer the question by looking at the heading 19 and that footnote. 20 My question is whether, as you 21 understand it, what Mr. Maritz is saying here 22 is that Microsoft should not make the same 23 mistake with Netscape's browser as it did with 24 Novell's NetWare? 25 Answer: Does it say mistake 6051 1 somewhere? 2 Question: All I'm asking you is 3 whether you interpret this that way? 4 Answer: Does it say mistake 5 somewhere? 6 Question: Mr. Gates, we have had a 7 conversation about how I ask the questions and 8 you give the answers. 9 I think -- 10 Answer: I don't see where it says 11 mistake. 12 Question: It doesn't say mistake. It 13 says major sin. 14 And if you think that major sin is 15 something different than a mistake, you can 16 answer my question that, no, that's not what 17 you think Mr. Maritz means. 18 My question is clear. You can answer 19 it yes, no, or you can't tell. 20 Answer: What is the question? 21 Question: My question is whether -- 22 as you understand what Mr. Maritz is saying 23 here, is he saying that Microsoft should not 24 make the same mistake with Netscape's browser 25 as it did with Novell's NetWare? 6052 1 Answer: No, I think he is saying 2 something else. 3 Question: Okay. Do you think that 4 when Mr. Maritz uses the term major sin that 5 Microsoft made, he is referring to what he 6 thinks is a mistake? 7 Answer: Probably. 8 Question: Okay. 9 MS. CONLIN: This would be a good 10 time, Your Honor. The next is quite a lengthy 11 discussion. 12 THE COURT: Very well. We'll take a 13 recess for 15 minutes. 14 Remember the admonition previously 15 given. Leave your notebooks here. 16 All rise. 17 (A recess was taken from 1:13 p.m. 18 to 1:31 p.m.) 19 THE CLERK: All rise. 20 THE COURT: You may proceed. 21 MS. CONLIN: Thank you, Your Honor. 22 (Whereupon, the following video 23 resumed playing to the jury.) 24 Question: Let me ask you to look next 25 at a document marked as Exhibit 387. 6053 1 This is an e-mail from Brad 2 Silverberg, or it's a message from Brad 3 Silverberg -- I don't know whether it's an 4 e-mail or not -- dated April 12, 1995, at 12:53 5 p.m. 6 Have you ever seen this message 7 before, sir? 8 Answer: No. 9 Question: The first paragraph says, I 10 have spoken to Paul Maritz and he is in 11 agreement that we should get our Internet 12 client distributed as broadly as possible as 13 soon as possible. 14 Did you understand that that was the 15 view of Mr. Maritz in April of 1995? 16 Answer: I think -- I think it 17 probably was. 18 Question: And when reference is made 19 here to Microsoft's Internet client, do you 20 understand that to be Internet Explorer? 21 Answer: I think at the time of this 22 document, it meant O'Hare. 23 Question: And what did O'Hare become? 24 Answer: It became Internet Explorer 25 plus some other things. 6054 1 Question: Let me ask you to look next 2 at a document marked as Exhibit 388. 3 The second e-mail or message here is a 4 message dated April 12, 1995, at 12:54 p.m. 5 from Paul Maritz to you and a number of other 6 people; correct, sir? 7 Answer: That's what it appears to be. 8 Question: And the subject is the 9 three year plan thoughts-draft; correct? 10 Answer: That's, yes, the subject. 11 Question: Did you receive this 12 message on or about April 12, 1995? 13 Answer: I don't remember receiving 14 it, but I have no reason to doubt that I did. 15 Question: Now attached here is 16 something that is titled 3 year plan follow-up 17 (draft). 18 Do you see that? 19 Answer: Yes. 20 Question: Did you receive this at or 21 about the time indicated of April 12, 1995? 22 Answer: I'm not sure. 23 Question: Let me ask you to look at 24 the page that bears in the bottom right-hand 25 corner the Microsoft document production stamp 6055 1 ending 7193. And, in particular, the portion 2 that is under the heading Shell/browser. 3 Do you have that? 4 Answer: Yes. 5 Question: And it says here, quote, we 6 should get a view as to what will be handled by 7 the Win97 Shell, and what will not. And, if 8 not, how is the needed extension integrated 9 into the Win97 environment, close quote. 10 Do you see that? 11 Answer: Uh-huh. 12 Question: Were you told in or about 13 April of 1995 that one of the issues in terms 14 of planning that was needed to be decided was 15 what would be handled by the Win97 shell and 16 what would not be? 17 Answer: I'm not sure -- I'm not sure 18 what is meant by Win97 shell here. I don't 19 remember seeing that at the time. 20 Question: Well, you know what a shell 21 is in this context, do you not, sir? 22 Answer: Yes. 23 Question: And you recognize Win97 as 24 a reference to what ultimately became Windows 25 98, do you not, sir? 6056 1 Answer: No. 2 The fact that we use a name like that 3 before we have decided what's in a product 4 doesn't mean that when we used that name back 5 then it references the things that eventually 6 got into the product. 7 Question: Let me make sure if I 8 understand that last answer. 9 Was Win97 a reference that was used 10 within Microsoft to refer to what ultimately 11 became Windows 98? 12 Answer: It was a term that was used 13 to refer to a project. When it was used, none 14 of us knew either what would be in the project 15 or what it would be called. 16 So any time you see that reference, 17 you can't assume it's a reference to the things 18 that eventually became Windows 98. 19 All you know is they're referring to 20 the next project related to enhancing Windows. 21 Question: Let me ask the question 22 this way. 23 Was the project that was internally 24 described within Microsoft as Win97 the project 25 that ultimately resulted in Windows 98? 6057 1 Answer: I believe so. 2 Question: Mr. Gates, let me show you 3 a document marked as Government Exhibit 390. 4 The first message here purports to be 5 a message to you and Mr. Maritz and Mr. Allchin 6 on February 24, 1997, at 11:07 p.m. 7 Do you see that? 8 Answer: Yes. 9 Question: And it talks about a focus 10 group report and it says that most of the 11 people in the focus group were Navigator users. 12 And then it goes on to say about those 13 Navigator users, quote, they said they would 14 not switch, would not want to download IE 4 to 15 replace their Navigator browser. 16 However, once everything is in the OS 17 and right there, integrated into the OS, in 18 their face, so to speak, then they said they 19 would use it because there would be no more 20 need to use something separate, close quote. 21 Do you see that? 22 Answer: Yes. 23 Question: Do you recall being told 24 that in or about February, 1997? 25 Answer: No. 6058 1 Question: Okay. 2 Let me ask you to turn to the fifth 3 page of this exhibit. And this is an original 4 message dated February 24, 1997, at 10:38 a.m. 5 also relayed into the Memphis focus group's 6 report. 7 Answer: It's an enclosure to the 8 message above. 9 Question: It's an enclosure to the 10 message above. 11 That is what you have is first a 12 message dated February 24, 1997, at 11:07 p.m. 13 that went to you and Mr. Maritz and 14 Mr. Allchin, and then you have another message 15 that was an enclosure that went to you and 16 others; correct? 17 Answer: Yes. 18 Question: So you would have received 19 the second message when you received the 20 message that was addressed to you; correct? 21 Answer: If I did, which I told you I 22 don't remember, but I have no reason to doubt 23 that I did. 24 Question: Right. 25 The next to last paragraph on the 6059 1 fifth page of the exhibit, the one that ends 2 with the Microsoft document production stamp 3 8179, do you have that page? 4 Answer: Yes. 5 Question: The next to last paragraph 6 of this material that was sent to you on 7 February 24th, 1997, if, in fact, it was, on 8 page 5 it says, quote, it seems clear that it 9 will be very hard to increase browser market 10 share on the merits of IE 4 alone. It will be 11 be more important to leverage the OS asset to 12 make people use IE instead of Navigator. 13 Do you see that? 14 Answer: Yes. 15 Question: Were you told that in or 16 about February of 1997? 17 Answer: Out of the context of this 18 memo? 19 Question: Well, first let's ask were 20 you told that in the context of this memo? 21 Answer: Those sentences seem to 22 appear in this memo that's talking about some 23 features. It wasn't a product demo, but some 24 features, including WebView, that they showed 25 to some end users. 6060 1 Question: Let me try to break the 2 question down. 3 First, do you recall being told in any 4 context in or about February of 1997, quote, it 5 seems clear that it will be very hard to 6 increase browser market share on the merits of 7 IE 4 alone. It will be more important to 8 leverage the OS asset to make people use IE 9 instead of Navigator? 10 Answer: Those words? 11 Question: Let me begin with that. Do 12 you recall being -- 13 Answer: No. 14 Question: -- communicated those words 15 in or about February of 1997? 16 Answer: I said no. 17 Question: Do you recall being 18 communicated those words at any time, whether 19 in or about February of 1997 or any other time? 20 Answer: Isn't that what I just 21 answered? 22 Question: Perhaps you did. I thought 23 the first answer related to February, 1997, but 24 if you're telling me you don't recall ever 25 being told that, I just want that clarified for 6061 1 the record. 2 Answer: Those words, no. 3 Question: Do you recall being told in 4 substance what is stated here at any time in 5 the language that I've just quoted? 6 Answer: That's a self-contradictory 7 question. 8 You can't say you're asking me 9 something in substance and then say in the 10 language you just quoted. That's completely 11 contradictory. 12 Question: Sir, if you don't 13 understand the question and you can't answer 14 it, all you have to do is say so. 15 Answer: I understand that the 16 question is contradictory to itself. 17 Question: This document that purports 18 to have gone to you, sir, says, it seems clear 19 that it will be very hard to increase browser 20 market share on the merits of IE 4 alone. It 21 will be more important to leverage the OS asset 22 to make people use IE instead of Navigator. 23 Do you recall ever being told or ever 24 receiving a communication that said, in 25 substance, what is reflected there? 6062 1 Answer: No. 2 Question: All right. 3 Let me show you Exhibit 591 -- or I 4 guess it's Exhibit 391. 5 This purports to be a message to you 6 dated April 18, 1995, to you and other people. 7 Did you receive this message in or 8 about April of 1995? 9 Answer: I don't remember receiving 10 it, but I have no reason to doubt that it was 11 sent to me. 12 Question: Let me ask you to look at 13 the bottom of the first page, the next to the 14 last paragraph, the sentence that begins, 15 quote, this does not mean that Netscape needs 16 to be a direct competitor. 17 Do you see that? 18 Answer: Yes. 19 Question: Do you recall discussions 20 in or about April of 1995 about whether or not 21 Netscape would or would not be a direct 22 competitor of Microsoft? 23 Answer: I'm sure there was some 24 discussion about Netscape and the whole 25 Internet phenomenon, and particularly what that 6063 1 meant about the business Nathan was in charge 2 of, which was Marvel. 3 I don't remember specifically if we 4 figured out whether they would or wouldn't be a 5 competitor or what they were doing. 6 Question: Do you recall 7 communications within Microsoft in or about 8 April of 1995 about what might be done to be 9 sure that Netscape did not become a direct 10 competitor of Microsoft? 11 Answer: No. 12 Question: Do you recall any 13 communications within Microsoft in or about 14 April of 1997 relating to what Microsoft might 15 do to influence whether or not Netscape became 16 a direct competitor of Microsoft? 17 Answer: No. 18 Question: Do you recall any 19 discussions within Microsoft at any time or any 20 communications within Microsoft at any time 21 relating to what Microsoft might do to 22 influence whether Netscape became a direct 23 competitor of Microsoft? 24 Answer: No. 25 Question: Okay. Let me ask you to 6064 1 look next at an exhibit marked as Government 2 Exhibit 392. 3 The second item here purports to be a 4 message from you to Paul Maritz and Brad 5 Silverberg with copies to a number of other 6 people dated January 28, 1997, at 10:34 a.m. 7 Do you see that? 8 Answer: Yes. 9 Question: Did you send this message 10 to Mr. Maritz and Mr. Silverberg and others on 11 or about January 28, 1997? 12 Answer: I don't remember doing so, 13 but I have no reason to doubt that I did. 14 Question: You say that, quote, there 15 has been -- or at the beginning of this 16 document, the very beginning of the document, 17 you say, quote, there has recently been an 18 exchange on e-mail with people in the Office 19 group about Office and HTML. 20 In one piece of mail, people were 21 suggesting that Office had to work equally well 22 with all browsers and that we shouldn't force 23 Office users to use our browser. This is wrong 24 and I wanted to correct this, close quote. 25 Do you see that? 6065 1 Answer: Yes. 2 Question: Did you send that message 3 to Mr. Maritz and Mr. Silverberg and others in 4 or about January of 1997? 5 Answer: You already asked that and I 6 told you I don't remember sending it. 7 Question: Did you convey the 8 substance of what is here to Mr. Maritz and 9 Mr. Silverberg in or about January of 1997? 10 Answer: I don't know the time frame, 11 but there was a question for very advanced 12 features in Office that had to do with the fact 13 that older browsers, including our own older 14 browsers, couldn't display the information and 15 should we, therefore, display it to no one or 16 what should we do about advance display 17 semantics. 18 And I know in that case the issue came 19 up about should we support the advanced display 20 semantics at all. 21 Question: Is it your testimony, 22 Mr. Gates, that that is what you were talking 23 about here? 24 Answer: Absolutely. That's what this 25 message -- I mean, if you read it, that's what 6066 1 it is about. 2 Question: This is a message that you 3 don't recall sending; is that correct? 4 Answer: I've read it today, but I 5 don't recall sending it, that's right. 6 Question: But what you're doing is 7 you're testifying under oath that when you say 8 that you should force Office users to use 9 Microsoft's browser, you were talking about 10 what you just described. 11 Is that your testimony? 12 Answer: I don't see that in the 13 message. 14 Question: Well, you're saying here 15 that Microsoft should force Office users to use 16 Microsoft's browser, are you not, sir? 17 Answer: No. 18 Question: Well, sir, you say, quote, 19 in one piece of mail people were suggesting 20 that Office had to work equally well with all 21 browsers and that we shouldn't force Office 22 users to use our browser. This is wrong and I 23 wanted to correct this. 24 Is it your testimony under oath that 25 you are not saying that the assertion that you 6067 1 had heard that Microsoft shouldn't force Office 2 users to use Microsoft's browser was wrong? 3 Answer: There's a sentence there that 4 talks about whether Office has to work equally 5 well with all browsers. 6 And because I'm talking about Trident 7 here, Trident was a set of technologies we were 8 doing to extend things so that you could work 9 with Office documents that are very rich 10 documents in a new way that no previous browser 11 including our own previous browsers, was 12 willing to display. 13 And there was a question of whether 14 they should take advantage of those Trident 15 things or not. 16 Some people are questioning whether we 17 should take advantage of those Trident things, 18 and here I'm making very clear -- and all you 19 have to do is read the complete e-mail -- I'm 20 saying we should go ahead and take advantage of 21 those Trident things. 22 Now, that is very different than 23 saying that people are forced to use any 24 browser. 25 It's just if you want the best 6068 1 experience in terms of seeing those rich 2 documents, what we're doing in Trident I 3 thought we should take advantage of. 4 Question: Now, sir, is it your 5 testimony sitting here under oath that when in 6 the language that I have quoted, you wrote, 7 this is wrong and I wanted to correct this, 8 relating to the previous sentence in which it 9 said, in one piece of e-mail people were 10 suggesting that Office had to work equally well 11 with all browsers and we shouldn't force Office 12 users to use our browser, you were talking 13 about Trident? 14 That's your testimony? 15 Answer: Well, I think you've 16 mischaracterized my testimony. 17 Question: All I'm asking is whether 18 that is your testimony. 19 If you tell me that's not your 20 testimony, we'll go on. 21 MS. NELLES: Your Honor, may we 22 approach? 23 THE COURT: Yes. 24 (Off-the-record sidebar discussion was 25 held.) 6069 1 (Whereupon, the following video 2 resumed playing to the jury.) 3 Question: Is that what you're telling 4 me, sir? 5 Answer: Are you trying to 6 characterize my previous testimony? 7 Question: I was trying to see whether 8 we understood your previous testimony. 9 Answer: Your characterization was 10 wrong. 11 Question: Okay. 12 In the second paragraph of this 13 exhibit you write, in one piece of mail people 14 were suggesting that Office had to work equally 15 well with all browsers and that we shouldn't 16 force Office users to use our browser. This is 17 wrong and I wanted to correct this. 18 Does that statement relate to Trident, 19 sir? 20 Answer: I explained how it relates to 21 Trident. 22 Question: So your answer is that that 23 relates to Trident? 24 Is that your testimony? 25 Answer: In order to know that, I read 6070 1 the entire piece of e-mail, and upon reading 2 it, I know that what that relates to is whether 3 we should exploit the advanced features of 4 Trident so that Office works particularly well 5 with the new browser from us with those Trident 6 features. 7 Question: Mr. Gates, isn't it clear 8 that the discussion at the end of the memo 9 about Trident is about a different point than 10 the point we've been talking about? 11 Answer: Absolutely not. 12 Question: Well, sir, immediately 13 after the paragraph we've been talking about, 14 don't you write, another suggestion in this 15 mail was that we can't make our own unilateral 16 extensions to HTML. I was going to say this 17 was wrong and correct this also. 18 And then you go on to talk about 19 Trident. 20 Isn't that what you wrote here? 21 Answer: I think you've correctly read 22 some of the words in the e-mail. We could go 23 on and read more of the words so you could 24 understand why what I've told you is correct. 25 Question: Is there anything in here 6071 1 that asserts that forcing Office users to use 2 Microsoft's browser is limited to the Trident 3 situation? 4 Answer: It's clearly about whether 5 Office should exploit HTML that takes advantage 6 of Trident and whether that's a good idea or 7 not. That's what this piece of e-mail is 8 about. 9 Question: If that's all it's about, 10 Mr. Gates, why do you introduce the Trident 11 discussion by saying, another suggestion in 12 this mail is that we can't make our own 13 unilateral extensions to HTML. I was going to 14 say this was wrong and correct this also? 15 Aren't you clearly saying this is an 16 additional point? 17 Answer: No. You're just trying to 18 misread my e-mail. It talks about Office. 19 Question: Yes, it certainly does talk 20 about Office. 21 And it talks about forcing Office 22 users to use your browser; correct, sir? 23 Answer: No. 24 Question: It doesn't? 25 When you say that somebody is saying 6072 1 -- that you've seen an e-mail of people saying 2 we shouldn't force Office users to use our 3 browser and that this is wrong, you're not 4 saying that you should use Office to force 5 users to use your browser? 6 Is that what you're saying? 7 Answer: That was the most circular 8 thing I've ever heard. 9 Question: I think it was pretty 10 circular because -- 11 Answer: You continue to not read the 12 sentence and look at the piece of e-mail. 13 The question in this e-mail is whether 14 Office should work equally well with all 15 browsers. 16 And it's talking about -- 17 Question: Now, sir -- 18 Answer: If you want to look further 19 to understand it -- 20 Question: How about let me put a 21 question? 22 Okay. Actually, I've read the first 23 sentence, but I'll read it again. 24 The first sentence, which is one 25 paragraph says, there has recently been an 6073 1 exchange on e-mail with people in the Office 2 group about Office and HTML. 3 Second paragraph says, in one piece of 4 mail people were suggesting that Office had to 5 work equally well with all browsers and that we 6 shouldn't force Office users to use our 7 browser. This is wrong and I wanted to correct 8 this. 9 Third paragraph says, another 10 suggestion in this mail was that we can't make 11 our own unilateral extensions to HTML. I was 12 going to say this was wrong and correct this 13 also. 14 Now, have I read correctly the first 15 three paragraphs of this memo, Mr. Gates? 16 Answer: Yes. 17 Question: And is it your testimony 18 that when you said that the e-mail suggesting 19 that Office had to work equally well with all 20 browsers and that Microsoft shouldn't force 21 Office users to use Microsoft's browser was 22 wrong, that all you were talking about there 23 was Trident? Is that your testimony? 24 Answer: I'm not sure what you mean 25 all I was talking about. 6074 1 This e-mail is about Office and HTML. 2 Question: Yes. 3 Answer: There is a new extension to 4 HTML being created in Trident. 5 There was a question of whether Office 6 could take advantage of it, which meant that it 7 would take advantage of those new browsers in a 8 better way than it would take advantage of our 9 old browsers or other people's browsers without 10 those extensions. 11 I was suggesting here, and it's 12 totally a mischaracterization to suggest that 13 that third paragraph isn't totally in line with 14 it, that we should take advantage of those 15 Trident HTML extensions and, therefore, Office 16 documents would look better, at least for those 17 users. 18 Question: And is it your testimony -- 19 and all I'm trying to do is clarify your 20 testimony, Mr. Gates, because once the 21 testimony is done, then the trier of fact can 22 decide what credibility to give it. All I'm 23 trying to do is identify it. 24 And you have said that the extensions 25 to HTML relates to Trident; correct? 6075 1 Answer: Yes. 2 Question: Now, what I'm trying to 3 find out is whether these extensions to HTML 4 that relate to Trident is also the only point 5 of your statement that you should force Office 6 users to use your browser? 7 Answer: That's a sentence fragment 8 here. 9 What people were saying was if we took 10 unique advantage of Trident, wouldn't people 11 feel like they needed to upgrade to Trident. 12 And I said, hey, if that's the only 13 way they can see the advanced document 14 capability, then fine. 15 Question: Mr. Gates, I mean, that's 16 not what this e-mail says. 17 Answer: We certainly know what the 18 e-mail says. 19 Question: Yes, exactly. 20 And I don't mean to be disrespectful 21 here, but aren't you doing what we talked about 22 before here, just trying to substitute 23 different words for the words that you actually 24 wrote that you think will sound better in the 25 context of this litigation? 6076 1 Answer: I've explained to you what 2 this e-mail is about. You don't seem to like 3 the facts. 4 Question: Mr. Gates, my question -- 5 and if the answer is yes or no or I don't 6 understand your question, you can give me that 7 testimony. 8 But is the explanation that you're 9 giving me now of this document an explanation 10 where you're trying to use words differently 11 now because of the litigation than you used 12 them back in 1997? 13 Answer: No. 14 Question: Not at all, sir? 15 Answer: No. 16 Question: Do you feel more 17 uncomfortable admitting in a deposition in this 18 case that you were trying to force Office users 19 to use your browser than you did back in 20 January of 1997? 21 Answer: You're mischaracterizing the 22 e-mail. 23 Question: Well, let me ask you a 24 question independent of the e-mail. 25 Do you feel more uncomfortable with 6077 1 the characterization that Microsoft is forcing 2 Office users to use Microsoft's browser today 3 than you did back in January, 1997? 4 Answer: I've never been comfortable 5 with lawyers mischaracterizing the truth. 6 Question: Well, Mr. Gates, could I 7 have my question answered? 8 Answer: I answered it. 9 MR. BOIES: Would you read the 10 question back, please? 11 (Requested portion of the record 12 was read.) 13 Question: Could I have an answer to 14 that question, sir? 15 Answer: My view of lawyers 16 mischaracterizing something has not changed. 17 Question: Mr. Gates, I'm not talking 18 about your view of lawyers mischaracterizing 19 things. 20 I'm talking about your view of the use 21 of language. 22 You've got a document in here in which 23 you talk about forcing Office users to use your 24 browser. 25 You say, quote, in one piece of mail, 6078 1 people were suggesting that Office had to work 2 equally well with all browsers and we shouldn't 3 force Office users to use our browser. 4 You go on to say to the top executives 5 of your company, this is wrong. 6 Now, my simple question is whether 7 you're more concerned about the use of those 8 words today than you were back in January of 9 1997, whether this litigation is influencing 10 the care and precision, if you want to put it 11 your way, with which you are determined to use 12 words? 13 Answer: I'm not sure what I'm 14 comparing to what. 15 Question: Okay. Let me try to be 16 clear. 17 In January of 1997 you wrote this 18 e-mail -- 19 Answer: In total. 20 Question: In total. 21 And at the time you wrote this e-mail, 22 you didn't have any expectations it was going 23 to show up in this litigation, did you? 24 Answer: I'm not sure what you mean by 25 that. 6079 1 Question: What I mean is you thought 2 this was a private e-mail. You thought you 3 were writing to your executives and you didn't 4 think anybody outside the company was going to 5 review this and do what I'm doing now, which is 6 asking you questions about it; right? 7 Answer: Oh, I think the general 8 notion that any e-mail I write might be 9 reviewed at some point is one that I've 10 understood certainly since 1990. 11 Question: All right, sir. 12 So it is your testimony that taking 13 this e-mail in its entirety, that you today are 14 entirely comfortable that the memo, the e-mail 15 in its entirety, is a fair and accurate 16 statement of your views; is that correct? 17 Answer: If somebody takes the trouble 18 to understand it, yes. 19 Question: Right. That is, if 20 somebody reads this document all the way 21 through, takes the trouble to figure out what 22 is here, you say that's a fair and accurate 23 statement of my views; correct? 24 Answer: Views on what? 25 Question: Views on the things that 6080 1 you're talking about in the memo. 2 Let me try to approach it a different 3 way. 4 Sometimes when people write things 5 after the fact, they say, I wish I hadn't 6 written it that way, that just isn't accurate. 7 Or I overstated it, or I got it wrong. 8 Are you saying that about this 9 document? 10 Answer: I guess I can say that if I 11 realized how you might misinterpret the thing, 12 I would have put a little footnote in here for 13 you to help make sure you didn't misinterpret 14 it. 15 Question: And that's because you 16 think that what I'm doing, as you've said 17 before, is mischaracterizing what's here; 18 correct? 19 Answer: Several of your questions I 20 believe have mischaracterized it. 21 Question: Now, suppose, Mr. Gates, 22 that you have to worry not about what I think 23 about this memo, which is really irrelevant, 24 but only about what the trier of fact thinks 25 about this memo. 6081 1 Assume that a neutral trier of fact is 2 going to look at this memo in a fair and 3 balanced way. 4 Would you say to that neutral trier of 5 fact, I really shouldn't have written this, 6 this really doesn't reflect on my views, I made 7 a mistake? Or would you say, if you read the 8 whole thing and read it fairly, that's what I 9 believe? 10 Answer: If they understood what it 11 was about, I wouldn't feel any need to amend or 12 change it. 13 Question: Change the memo. I mean, 14 on that basis I think we can leave it to the 15 trier of fact to determine what it means. 16 Because I think the one thing that we 17 both -- you believe this memo is clear, don't 18 you? 19 Answer: I don't know what you mean by 20 that. You've made it clear that somebody can 21 misinterpret this memo. Whether that is being 22 done maliciously or not, I don't know. 23 So now I understand that somebody who 24 doesn't understand the subject matter of the 25 memo can misinterpret it. In particular, you 6082 1 can misinterpret what is meant there. 2 Question: Well, you've told us that 3 extensions to HTML that you are referring to 4 here were the Trident extensions, haven't you, 5 sir? That's what you've said? 6 Answer: And general principles about 7 HTML extensions, yes. 8 Question: All right. 9 Let me ask you to look next at 10 Government Exhibit 395. 11 This purports to be a memo or message 12 from you dated February 19, 1997, to 13 Mr. Allchin with copies to Mr. Maritz, among 14 others. 15 Did you send this message on or about 16 February 19, 1997? 17 Answer: I don't remember sending the 18 message. 19 Question: The second message here in 20 this exhibit is a message from Mr. Allchin to 21 you dated February 18, 1997, at 5:17 p.m. with 22 a copy to Mr. Maritz. 23 Do you see that? 24 Answer: Yes. 25 Question: And am I correct that when 6083 1 you sent your message, you enclosed this 2 earlier message from Mr. Allchin with your 3 message? 4 Answer: That's right. The default 5 reply command does the enclosure. 6 Question: Let me ask you to look at 7 the second page, the first full paragraph in 8 which Mr. Allchin writes to you, I am convinced 9 the path we're on is the wrong one. 10 We are playing into Netscape's 11 strengths and against our own. I hear lots of 12 words about how the software will of course be, 13 quote, better, close quote, on Windows because 14 we have more people working on Windows, but I 15 can't sell abstract statements like this. 16 Do you see that? 17 Answer: Uh-huh. 18 Question: He then goes on in the very 19 next sentence to say, quote, we focus attention 20 on the browser battle where we have little 21 market share instead of focusing the battle at 22 integrating things into Windows where we have 23 market share and a great distribution channel. 24 Did Mr. Allchin write this to you on 25 February 18, 1997? 6084 1 Answer: I'm not sure. 2 Question: Did Mr. Allchin communicate 3 that to you at some point, whether in February, 4 1997 or some other time? 5 Answer: I know Jim was a big advocate 6 of increasing the integration features to make 7 them even stronger. 8 MR. BOIES: May I have the question 9 read back, please? 10 (Requested portion of the record 11 was read.) 12 Question: May I have an answer to 13 that question, sir? 14 Answer: That's what I answered. 15 Question: I'm not asking you what 16 Mr. Allchin was a big advocate of. I'm asking 17 whether he communicated this to you at some 18 point. 19 Answer: Those specific words? 20 Question: Or what you understand to 21 be the substance of those words. 22 Answer: In looking at the substance 23 of those words, I can say that the one part of 24 that I do remember him communicating is that he 25 was a big advocate of strengthening even 6085 1 further the integration benefits of the browser 2 technology in Windows. 3 Question: Well, sir, when he talks 4 about integrating the browser technology into 5 Windows, which he does in the very next few 6 sentences, what he says is, when IE 4 first was 7 discussed, we were, quote, integrating the 8 browser into Windows, close quote. That is 9 what we told everyone. 10 That was a strong message for Windows. 11 That message is now gone since IE 4 is going 12 onto all platforms. It won't be as, quote, 13 integrated, close quote, open parenthesis, 14 whatever they means technically, close 15 parenthesis, but all the words about WebPC and 16 the like convince me we are determined to put a 17 gun to our head and pull the trigger. 18 Now, did he tell you that, Mr. Gates, 19 in or about February of 1997? 20 Answer: I don't remember him using 21 those words. They're colorful enough. 22 Sometimes I might remember that, but I don't 23 remember that. 24 Question: All right, sir. 25 Let me ask you to look at a document 6086 1 that has been marked as Government Exhibit 396. 2 And this purports to be some questions 3 and answers on the use and misuse of technology 4 by Bill Gates dated October 24, 1995, 5 copyrighted 1992 to 1995 by the Microsoft 6 Corporation. 7 Do you recall preparing these 8 questions and answers, sir? 9 Answer: I know I was at a meeting 10 where this was worked on. 11 Question: And did the statements set 12 forth here reflect your views at the time? 13 Answer: I don't remember specifically 14 these sentences, but I have no reason to doubt 15 this is what was discussed and put into the 16 column. 17 Question: And you understood that 18 when this was prepared and, as you put it, put 19 into the column, that it was going to be 20 published, did you not, sir? 21 Answer: Yeah, the column is 22 published. 23 Question: Where is the column 24 published? 25 Answer: Number of newspapers. 6087 1 Question: Now, when you refer here on 2 the second page, fourth line, to winning for 3 Microsoft a larger share of the market for 4 Internet browsers. 5 Do you see that? 6 Answer: No. 7 Question: It's on the second page, 8 fourth line. 9 Answer: Oh, you're on the second 10 page. 11 Let me just read this. 12 Okay, go ahead. 13 Question: When you refer in here to 14 winning for Microsoft a larger share of the 15 market for Internet browsers, do you see where 16 you say that? 17 Answer: Yes, it's part of a sentence 18 here. 19 Question: What did you mean by the 20 market for Internet browsers, sir? 21 Answer: I assume I meant usage share 22 of browsers on the World Wide Web. 23 Question: You then go on in 24 parenthesis to say, quote, an Internet browser 25 is software that lets an individual roam the 6088 1 worlds of information available on the 2 Internet. Microsoft's browser is called the 3 Internet Explorer, close quote. 4 Do you see that? 5 Answer: Close paren. Yeah. 6 Question: Close paren and then close 7 quote, since I'm quoting it. 8 Did you believe that was an accurate 9 statement at the time that you made it and 10 published it? 11 Answer: In trying to give an 12 explanation to the broad audience that the 13 column was aimed at, yes, I thought it was a 14 good way of describing it to that audience. 15 Question: Let me ask you to look at a 16 -- 17 MS. CONLIN: Your Honor, the next part 18 goes on for several pages, so this would be a 19 good place to stop. 20 THE COURT: Very well. 21 Ladies and gentlemen of the jury, you 22 are finished for today. 23 Please remember the admonition given. 24 I think it was raining outside earlier so drive 25 carefully on your way home. Keep your 6089 1 notebooks here. They will be safe. 2 And see you at 8:30 a.m. Have a good 3 evening. 4 All rise. 5 (The following record was made out of 6 the presence of the jury at 2:25 p.m.) 7 THE COURT: You may be seated. 8 Ms. Conlin, you mentioned earlier 9 there was something you wanted to bring up. 10 MS. CONLIN: Two things, Your Honor. 11 One has to do with the schedule. 12 What it appears we're doing is about 13 four hours plus every day. And it doesn't 14 really matter very much when we are not doing 15 the live witnesses, but when we have witnesses 16 coming literally from all over the world, I'm a 17 little concerned about the shortness of the 18 schedule, the shortness of our days. 19 What happens -- and I think this is 20 nearly inevitable, you know -- is when we go on 21 our breaks, for every -- it always takes longer 22 than we think. And then there have been other 23 matters that have intervened as well. 24 Initially, Your Honor, you were not 25 going to have morning and afternoon breaks. 6090 1 THE COURT: Right. 2 MS. CONLIN: With our smokers, that 3 doesn't seem to be very possible. 4 So I would like to make a suggestion 5 about an alternate schedule that at least when 6 we are doing live witnesses gets us to about 7 five hours and 20 minutes. 8 If we kept the breaks right exactly to 9 what we need, and that would be if we went from 10 8:30 -- you know, start promptly at 8:30 and go 11 to 9:30 and then have like a little stand-up 12 like a minute or so so people could move around 13 a little bit and then go from 9:30 to 10:30 14 with a break, then, of about 20 minutes, 15 returning at 10:50, going to 11:50 with a 16 little stand-up, then 11:50 to 12:50, then a 17 break, and then 1:10 to 2:30 at the end. 18 That's, again, assuming we can 19 actually do that. That would be five hours and 20 20 minutes. 21 And we've gotten them their microwave 22 and their refrigerator and their coffeemaker so 23 they can, you know, bring stuff. I don't know 24 how many of them are going out for something to 25 eat, but if at least during the time when we 6091 1 have the live witnesses we could ask them 2 perhaps or ask you, Your Honor, if that would 3 be a potential schedule that they would think 4 would work better or at least get us more time. 5 That would move us from about four 6 hours plus to five hours and 20 minutes. And 7 the usual day here is about six hours. 8 So we wouldn't be much under that. 9 And perhaps, again, if you considered the 10 length of the breaks, that that might be a way 11 to get in a little bit more testimony and to 12 assure that those witnesses, the live witnesses 13 wouldn't be here week after week. 14 THE COURT: Okay. 15 I assume that Defendant has -- this is 16 the first time they have heard it so if you 17 want to respond later you can. 18 MS. NELLES: It is the first time 19 we've heard about it, Your Honor. 20 I think Your Honor will recall that I 21 wasn't an advocate of the original schedule 22 when Ms. Conlin first proposed it much because 23 I was concerned about this. 24 I actually think this perhaps has some 25 merit and we should be trying to get a little 6092 1 bit more time into these days. 2 I'm not positive it's practical and 3 perhaps we should think about if there's a way 4 to discuss it with the Jury given that they 5 have already made probably some plans. 6 But I would be -- I agree with 7 Ms. Conlin that I think it would be a good idea 8 to see if there was a way to squeeze a little 9 more testimony into each day and perhaps she 10 and I can just discuss it and we'll give our 11 further views to you in the morning. 12 MS. CONLIN: What do you think, Your 13 Honor? 14 THE COURT: I'll do whatever the 15 jurors and the parties want to do. 16 MS. CONLIN: Okay. 17 THE COURT: You guys discuss it. 18 MR. TULCHIN: There may be a little 19 bit of revolt, Your Honor, if we take away 20 their lunchtime. 21 MS. NELLES: Yeah. 22 MR. TULCHIN: And maybe there's some 23 way -- I just throw this out as a possible 24 alternative. 25 Maybe there's a way of modifying this 6093 1 somewhat. It cuts the lunch break down to 30 2 minutes from 60, and, I mean, a real 30 3 minutes, not, you know, sort of verging to 40 4 or 45. 5 I just throw that out as a 6 possibility. I'm guided by whatever Ms. Nelles 7 tells me here. But I, too, believe that if we 8 can get a little more time out of each court 9 day, that's a good thing. 10 THE COURT: Okay. 11 MS. NELLES: Yeah. I'd just like to 12 look at it for just a few more minutes and see 13 if there's a way to do it, but I'm happy to 14 talk to Ms. Conlin about it. 15 I wouldn't worry about, you know, 16 giving them stand up stretches. That's sort of 17 preschoolish. 18 THE COURT: Why don't you talk about 19 it more when you come in about 8:15. 20 MS. NELLES: That's a good idea. 21 MS. CONLIN: I do really think we need 22 to take this up with the jury because they have 23 become accustomed to a particular schedule and 24 they are pretty married to it. They get real 25 antsy -- 6094 1 MS. NELLES: Oh, I absolutely agree. 2 I don't think we are going to do anything 3 without the jurors weigh-in that it's okay. 4 MR. GREEN: If it is different, do we 5 each get final arguments to the Jury? I'm just 6 kidding. 7 THE COURT: All right. 8 MS. CONLIN: And the other thing -- 9 THE COURT: What was the other issue? 10 MS. NELLES: Pay no attention to the 11 man behind the curtain. 12 THE COURT: What else? Did you have 13 something else? 14 MS. CONLIN: Your Honor, the other 15 thing I wanted to take up was the issue of the 16 exhibits that we thought were preadmitted. 17 That was the group that I gave the 18 Court of 3,760 exhibits to which no objections 19 were urged. 20 But I would like, if I could, to have 21 about a few minutes, Your Honor, to confer with 22 Ms. Davis and give the court reporter a break 23 and to use the restroom. 24 THE COURT: Confer with Ms. Davis? 25 MS. CONLIN: Yes. 6095 1 THE COURT: Oh, okay. 2 MS. CONLIN: She's right there, Your 3 Honor. 4 THE COURT: Are we anticipating a long 5 argument or what? 6 MS. CONLIN: Well, I'm not, Your 7 Honor, but it may be, but I do also beg the 8 Court's indulgence for a little break. 9 THE COURT: It's just that I have a 10 judges meeting I was told by the chief that I 11 have to attend at 3:45. 12 MS. CONLIN: Oh, we should certainly 13 be done by then, Your Honor. Just five 14 minutes, 10 minutes. 15 THE COURT: Mr. Tulchin? 16 MR. TULCHIN: I have one item, Your 17 Honor. I hesitate to bring this up because the 18 information I've been given about this is 19 incomplete. 20 And there are no accusations being 21 made here, but I did hear a report that someone 22 who we think is associated with Ms. Conlin and 23 working for her in this matter is present with 24 the jurors in the smoking room of the cafeteria 25 occasionally during lunch. 6096 1 And, of course, my only concern -- as 2 I say, I have very incomplete information about 3 this. I just raise this to put everyone on 4 notice that the two sides presumably should not 5 have people eavesdropping on the jurors' 6 conversations and, instead, should make every 7 effort to avoid being present and listening to 8 anything the jurors say. 9 And I assume that the Plaintiffs would 10 agree with that and be guided by it. 11 I did have this report today that a 12 consultant who's present in the courtroom now 13 seemed to be wandering around with the jurors 14 in that room. 15 THE COURT: Okay. 16 MS. CONLIN: Well, there is only one 17 smoking room, Your Honor, and we do, 18 unfortunately, have someone -- more than one 19 person actually -- on our team that smokes 20 cigarettes. 21 And I'm sure that she's not trying to 22 overhear the jurors. She's just meeting her 23 addictive needs. 24 MR. TULCHIN: Well, I would hope, Your 25 Honor, someone could go outside and that we not 6097 1 have people affiliated with either side in this 2 lawsuit spending time listening to the jurors. 3 Presumably the jurors are just doing 4 chitchat and there's nothing significant. But, 5 nevertheless, it seems quite unseemly. 6 THE COURT: They should be just 7 talking about -- 8 MS. CONLIN: Yeah. 9 THE COURT: -- matters that don't 10 relate to the case. 11 However, to avoid appearances of 12 impropriety, both sides shall have their staff 13 and whoever is working for them avoid the 14 jurors and not be in the same room when they 15 are on break. 16 MR. TULCHIN: Thank you, Your Honor. 17 MS. CONLIN: All right, Your Honor. 18 Kind of a bad day to go outside, 19 but -- 20 THE COURT: Well, it's covered in some 21 portions. She should quit smoking. It's bad 22 for you. 23 MS. CONLIN: Yes. I've made that 24 suggestion, Your Honor, on a number of 25 occasions. 6098 1 THE COURT: You should start chewing 2 gum. 3 MS. CONLIN: Well, I've got gum for 4 all. I should perhaps be handing it out to the 5 jurors as well. 6 Your Honor, could we take a few 7 minutes? 8 THE COURT: Sure, go ahead. 9 And Sandy probably needs some time 10 too. 11 (A recess was taken from 2:34 p.m. 12 to 2:42 p.m.) 13 THE COURT: Ms. Conlin? 14 MS. CONLIN: Thank you, Your Honor. 15 On December 15th, the Plaintiffs 16 offered into evidence approximately 3,760 17 Plaintiffs' exhibits. 18 Each of those exhibits was and remains 19 free of any objection. 20 We've provided to the Court and to 21 counsel a list of the 3,760 exhibits. And we 22 provide to the Court now, as well as counsel, 23 the list of the 3,760 exhibits detailing what 24 objections, if any, Microsoft asserted to the 25 exhibit within the Special Master process, as 6099 1 well as what its current status is, and, of 2 course, that is free of objections. 3 We believe, Your Honor, that these 4 exhibits are admitted into evidence because 5 they do not have objections. 6 Microsoft is attempting to block the 7 admission of these exhibits by arguing that 8 they still might assert relevance or prejudice 9 objections to them. 10 Microsoft's argument is nothing more 11 than a thinly veiled attempt to block the 12 display of otherwise admissible evidence on the 13 Court's website. 14 This is really, Your Honor, not about 15 admissibility. It is about Microsoft's 16 continued attempt to conceal from the public 17 the depth and breadth of its wrongful conduct. 18 There are two pretty simple reasons 19 for denying this motion. 20 First of all, Your Honor, we do 21 believe that Microsoft has a right to check the 22 accuracy of the list. That is to say, to make 23 sure that we have not made a mistake in our 24 compendium. 25 In other words, Your Honor, certainly 6100 1 we did everything that we could to be entirely 2 accurate to include on the disk and on the list 3 only those exhibits that were free of 4 objections. 5 But certainly Microsoft has the right 6 to assure that we are correct in that respect. 7 In other words, that those that we have 8 included are, in fact, free of objections. 9 That's not an issue. 10 We do think that anything like that 11 should have been done by now or should 12 certainly be done very soon because we did 13 provide it now more than a week ago. 14 With respect to the second issue, 15 which is whether or not Microsoft now can make 16 up objections to these exhibits to which they 17 did not previously object. 18 Your Honor, the red folder like this 19 includes the materials to which I'm going to 20 refer. 21 The black notebook, Your Honor, 22 includes page after page after page where 23 Microsoft asserted the very objections that 24 they now say they get to assert at this point, 25 and that list is what they asserted during the 6101 1 Special Master process, Your Honor. And that's 2 in the black notebook. 3 On July 7th, 2005, Your Honor entered 4 an amended and substituted pretrial scheduling 5 order. The order states that the Special 6 Master shall issue a schedule for the parties' 7 designation of trial exhibits and prior 8 testimony and their respective objections 9 thereto. 10 In a footnote to that provision, the 11 Court states that, quote, objections under Iowa 12 Rule of Evidence 5.401, 5.402, or 5.403 are to 13 be resolved by the Court in motions in limine 14 or at trial. 15 Under the controlling order, Your 16 Honor, relevance and unduly prejudicial 17 objections are to be resolved by the Court at 18 trial, but must be lodged during the Special 19 Master process. 20 And, in fact, Your Honor, as this 21 notebook makes clear, both parties did exactly 22 that. Your Honor, both parties asserted all of 23 their relevance objections and all of their 24 unduly prejudicial objections in the Special 25 Master process, though it was not anticipated 6102 1 that the Special Master would resolve those 2 exhibits. 3 What did happen, Your Honor, in many 4 cases were that the parties in their meet and 5 confer process resolved some of the objections 6 with respect to relevancy and unduly 7 prejudicial. 8 There's nothing in the pretrial 9 scheduling order that permits either party to 10 withhold those objections during the Special 11 Master process. 12 And second, Your Honor, Microsoft's 13 argument is contrary to the Special Master's 14 December 16th, 2005 order requiring that all 15 objections be asserted in the Special Master 16 process. 17 The Special Master's December 16th, 18 2005 order concerning schedule that permits 19 either party to withhold -- does not permit 20 either party to withhold objections. 21 In each phase, the Special Master 22 required the parties to assert its objections 23 to the other party's exhibits. 24 There's nothing that permits a 25 withholding of objections. 6103 1 When Microsoft asserted its objections 2 to the Plaintiffs' trial exhibits, Microsoft 3 stated that it was making its objections 4 pursuant to the Special Master's December 16th, 5 2005 order. 6 Your Honor, you have Microsoft's cover 7 letter to its Phase 1 objections. 8 And, Your Honor, Microsoft recognized 9 both of these points when it lodged more than 10 1,600 relevance and unduly prejudicial 11 objections during the Special Master process. 12 Both parties lodged those objections 13 during the Special Master process. They were 14 the subject of meet and confers in many cases. 15 It was stunning to us to learn at the 16 time that I made the offer of the exhibits to 17 which no objection was lodged that Microsoft 18 was going to take a particular -- a different 19 position. 20 And one of the reasons it was 21 stunning, Your Honor, is because the very day 22 before Mr. Tulchin, in his -- you may well 23 remember this, Your Honor. 24 Mr. Tulchin was arguing with respect 25 to an exhibit. The exhibit was the 2002 6104 1 consent decree. 2 And here, Your Honor, is what he said. 3 This is December 14th, 2006. 4 We had an evidentiary process. We 5 designated that as our exhibit. It is my 6 understanding -- and I believe this is 7 correct -- that there was never any objection 8 to that so under our process that is, you know, 9 in evidence. 10 That, Your Honor, was the day before I 11 made this offer. That is consistent with the 12 parties' behavior. That is consistent with our 13 understanding. 14 The transcript at page 4920, lines 13 15 through 18, is where that quote appears. 16 Microsoft cannot change its mind on 17 this issue of admission from day to day to suit 18 its own purposes. 19 The day before I made the offer Mr. 20 Tulchin correctly stated the parties' 21 understanding. The parties' behavior was 22 consistent with that understanding and it is as 23 follows. 24 Exhibits to which no objection was 25 raised in the Special Master process are 6105 1 admitted. That's what he said. That's what 2 the parties believed. That's how the parties 3 behaved. 4 It is now -- Microsoft is now taking a 5 position inconsistent with what Mr. Tulchin 6 said to the Court the day before. 7 And as I indicated, Your Honor, this 8 is not about admissibility, though it appears 9 as though Microsoft is willing to put the Court 10 and the parties again through the entire 11 process. 12 It is important to remember that every 13 single one of these exhibits that's on the list 14 has, in fact, been discussed by the parties, 15 been reviewed by the parties, been met about, 16 been conferred about, all the exhibits have 17 gone through that process. 18 The exhibits that we seek to admit are 19 without objection, and we believe cannot be 20 objected to now. 21 Microsoft had its chance to urge any 22 objection that it had. It was required to urge 23 any objection that it had during the process. 24 We seek the admission of these 25 exhibits, and we do seek to display them on the 6106 1 Court's website pursuant to the Court's 2 November 2nd, 2006 order, which provided the 3 Court finds that exhibits may be displayed on a 4 proposed website approved by the Court if they 5 are first admitted into evidence by the Court 6 on the record. 7 To the extent that Microsoft seeks to 8 review the list of exhibits, Plaintiffs request 9 that such review be completed by December 26. 10 To the extent that Microsoft now seeks 11 to object to such exhibits, we urge the Court 12 not to permit this to occur. 13 In addition, Your Honor, exhibits that 14 were agreed to be relevant during the Special 15 Master process; in other words, those that the 16 Defendant didn't urge a relevance objection to 17 or an unduly prejudicial objection to, that's 18 not going to change in the process. 19 An exhibit that was relevant prior to 20 the trial is not going to get like irrelevant 21 during the trial. It might go the other way, 22 Your Honor. 23 There may be an exhibit to which 24 relevance was objected to and it may become 25 relevant during the trial, but it's very hard 6107 1 for me to conceive of a situation in which the 2 opposite could possibly occur. 3 The same is true with respect to 4 unduly prejudicial objections. 5 A document once passed through the 6 process to which no such objection was urged is 7 unlikely, I think impossible, to conceive of a 8 situation where that exhibit could become in 9 the course of the trial unduly prejudicial. 10 Your Honor, we think that the Special 11 Master process through which the parties have 12 passed now for months and months and months 13 which has taken a great deal of time and energy 14 in which the parties had an understanding, 15 behaved consistently with that understanding, 16 and should be held to that understanding. 17 And not only held to the understanding 18 that the parties had during the Special Master 19 process, but also to the understanding that Mr. 20 Tulchin clearly expressed only the day before I 21 made the offer of these exhibits, Your Honor. 22 THE COURT: Very well. 23 Response? 24 MS. NELLES: Okay, Your Honor. 25 I won't attempt to match Ms. Conlin 6108 1 word for word because I think we've had this 2 argument before. 3 I will briefly say that this is not at 4 all about Ms. Conlin displaying the documents. 5 Ms. Conlin is displaying the documents 6 every single day to the world through Web TV or 7 Court TV or whoever is broadcasting this. 8 The issue here is that Your Honor very 9 specifically entered an order that said 10 objections under Iowa Rule of Evidence 5.401, 11 5.402, or 5.403 or other objections that can be 12 made only in light of the trial record may be 13 made at trial. 14 And it's not only Microsoft that 15 relied on that order, Your Honor, it was also 16 Plaintiffs. 17 In fact, while I didn't know this 18 argument or Ms. Conlin's briefing was coming, I 19 was given no heads up. I wasn't that 20 surprised, so I do have a brief. 21 And I'm going to -- do we have three 22 copies? We may be short one copy here, Your 23 Honor. So I'm going to hand it up as soon as I 24 finish reading this document. 25 I'm looking at a letter from 6109 1 Ms. Davis, who is sitting next to Mr. Tuggy, 2 that says attached are Plaintiffs' objections 3 to Microsoft's -- Ms. Conlin, excuse me, 4 sitting next to Ms. Conlin and across the table 5 from Mr. Tuggy so that the record is clear. 6 Phase 6 designation of trial exhibits 7 that were not previously designated in Gordon. 8 These objections are made pursuant to 9 Special Master McCormick's December 17, 2005 10 ruling and the parties' agreement concerning 11 business records, handwriting, and foundation 12 as detailed in your letter dated December 5, 13 2006, to Roxanne Conlin and a letter dated 14 January 9, 2006 from Roxanne to you. 15 Here we go. 16 Plaintiffs -- and I quote, Plaintiffs 17 reserve their right to object to any exhibit 18 based on Rule 5.401 and/or Rule 5.403 grounds. 19 Plaintiffs also reserve their right to 20 object to any exhibit which becomes subject to 21 the final collateral estoppel ruling in this 22 case. 23 Let me give you another example of 24 what is actually what the parties 25 understanding. 6110 1 This is an e-mail from Ms. Davis to 2 Mr. Tuggy and Mr. Silverman with copies to 3 Mr. Gralewski, I believe, and Mr. Cashman. 4 Please attached -- excuse me. 5 Attached please find Plaintiffs' conditional 6 withdrawals from seven of Microsoft's first ten 7 witnesses. 8 The conditionally withdrawn objections 9 are struck through. 10 We will provide you with our 11 conditional withdrawals from Sculley, Scamardo, 12 and Reiss tomorrow. 13 This list is provided to you for meet 14 and confer purposes only. 15 Plaintiffs believe that the following 16 -- I'm going to stop again so we're clear on 17 the record. 18 I am now quoting from Ms. Davis' 19 e-mail. 20 Quote, Plaintiffs believe that the 21 following types of objections are not proper 22 for the Special Master's consideration and, 23 therefore, should not be met and conferred on: 24 Relevance. Often referred to as G5 in 25 Plaintiffs' objections. 6111 1 Collateral estoppel. Often referred 2 as G2 in Plaintiffs' objections. 3 And testimony regarding an exhibit 4 later deemed inadmissible, often referred to G1 5 in Plaintiffs' objections. 6 There's nothing in the Court's order, 7 there is nothing in the Special Master's 8 scheduling orders that require to -- as 9 Ms. Conlin says, requires the parties to lodge 10 every objection. 11 There are, as this Court recognized, 12 objections that only can be raised in light of 13 the trial record, and certainly relevance and 14 undue prejudice are some of those. 15 With all due respect to Plaintiffs, 16 relevance in this case has to me seemingly 17 moved from moment to moment and minute to 18 minute if not day to day. 19 I can think of an obvious example 20 where we may have an objection to a document 21 that was not clear earlier and that might have 22 to do with spoliation and what might happen 23 after an evidentiary hearing is held if there 24 should be one. 25 I think both parties understood that 6112 1 as much as could be accomplished should be 2 accomplished through the Special Master 3 process. I think a great deal was 4 accomplished. 5 And I think parties lodged objections 6 they could think of understanding -- both sides 7 understanding that other objections, 8 particularly relevance and prejudice 9 objections, might arise during trial and that 10 those objections could be raised during trial 11 for Your Honor to rule on. 12 And collateral estoppel being the 13 other one, which I do think is an issue, a 14 continuing issue. 15 We are not trying to block Plaintiffs 16 from having exhibits admitted into the record. 17 Indeed, Mr. Tuggy, I believe, has 18 spent most of today and much of yesterday 19 working with Mr. Cashman, and perhaps 20 Mr. Gralewski as well, in the Gates -- every 21 one of the exhibits that was shown during the 22 Gates' deposition so that -- and I think -- 23 well, I expected that when Ms. Conlin raised 24 this morning that it would have to do with 25 those documents and that I was hopeful to be 6113 1 ready to say that they are all admitted or they 2 are all admitted subject to one or two. 3 We will be prepared to agree on 4 admissions to all the documents that were shown 5 by Mr. Gates or be prepared to raise the few 6 objections that we have to those in the 7 morning. 8 I think these documents -- that's a 9 very -- and I think once we get through this 10 process, we are doing that ahead of time so if 11 Ms. Conlin wants to put them in or if 12 Plaintiffs would want to put them in at the 13 start of a witness, who is appearing by 14 deposition, we should be able to clear this 15 ahead of time if that's the process. 16 I think that's a reasonable process. 17 But as we go through, and particularly 18 with live witnesses, there are going to be 19 documents. There's going to be testimony that 20 arises to which both sides, I'm confident, but 21 certainly Microsoft, is going to have issues 22 related to relevance, related to prejudice, and 23 related to collateral estoppel. 24 Your Honor specifically ruled that 25 those were reserved. We are happy to work to 6114 1 clear as many of these as we can in as timely a 2 fashion as we can. On, I think, a witness-by- 3 witness basis is a very good way to start since 4 we know how it's coming in through the 5 testimony. 6 But we think Your Honor should not 7 change the ruling that's been in place now for, 8 I believe, a year and a half and which 9 certainly Microsoft relied. 10 Thank you. 11 And I'm going to -- now that I've 12 read, I'm going to hand you my only two copies, 13 one to you and one to the Plaintiffs. 14 THE COURT: Mr. Tuggy, did you want to 15 say something or not on this? 16 MR. TUGGY: Your Honor, just to say 17 that during this process, Microsoft did rely on 18 the prior order. 19 And while we reviewed these exhibits 20 and made an effort to raise prejudice and 21 relevance objections where it appeared on the 22 face of the document that those existed, we did 23 not consider it at the time as our exclusive 24 opportunity to raise those objections. 25 So when those objections appeared 6115 1 obvious from the face of the document, they 2 were asserted and they were volunteered to 3 Plaintiffs in that process. We did not feel we 4 were compelled to do that. 5 But under no circumstances were we 6 intending to assert those exclusively as if we 7 weren't able to do that process later. 8 It may very well be that the parties 9 just didn't have a meeting of the mind on this; 10 that the Plaintiffs thought that was supposed 11 to happen, except that Plaintiffs themselves 12 made this reservation in the letter that has 13 been provided to you. 14 And in the meet and confer process, I 15 do want to make it quite clear, that we did not 16 in the meet and confer process meet and confer 17 about prejudice or relevance objections. 18 Those meet and confers began when we 19 started working up prior testimony to be 20 presented at trial. 21 On November 1st we started a process 22 with the Plaintiffs to present evidence through 23 prior testimony, and exhibits, for example, 24 that were shown in the Gates' deposition, and 25 others may be subject to prejudice, they were, 6116 1 in fact, subject to prejudice objections, that 2 we withdrew in the meet and confer process 3 then. 4 There was not any kind of meeting and 5 conferring consistent with Ms. Davis' e-mail. 6 The e-mail that was read to you is one with 7 which we agreed; that these are issues not to 8 be met and conferred on in the Special Master 9 process because they weren't proper for his 10 consideration. 11 The Special Master's scheduling ruling 12 which Ms. Conlin pointed to laid out a schedule 13 for asserting objections. In our view, that 14 schedule applied to the objections within his 15 authority, not objections that were reserved by 16 the Court for -- under its authority. 17 Now, with respect to the 3,760 18 documents that have been provided to us on the 19 CD, the question is what -- in my view, is 20 what's the appropriate process for having those 21 reviewed and then appropriate -- any 22 appropriate relevance, undue prejudice, or any 23 other type of objection that may be reserved 24 for trial. 25 For example, collateral estoppel, now 6117 1 that that ruling is final, what's the 2 appropriate process for that? You know, should 3 there be a time, for example, 45 or 60 days for 4 Microsoft to do it or should there be a process 5 that we discussed previously which is if 6 Plaintiffs have live witnesses coming on which, 7 you know, these -- some of these exhibits would 8 be used, they could provide those to Microsoft 9 so prior to those examinations we could 10 preclear them. 11 And then at the end of Plaintiffs' 12 case, presumably Plaintiffs would want in their 13 summation to refer to documents that have been 14 admitted. 15 And so, at that point, whatever's left 16 of the 3,760 that had not been used with the 17 live witness or a deposition witness, we would 18 then review those, assert any objections which 19 could then be met and conferred on and then 20 litigated here so that by the time summation 21 came, Ms. Conlin would be able to have her set 22 of fully admitted exhibits, even those that 23 weren't used with the witness. 24 So for those reasons, for the reasons 25 that we relied on the prior order regarding 6118 1 what objections had to be asserted in the 2 Special Master process and not all relevance 3 and undue prejudice objections were. 4 And I can -- there are many examples 5 of issues that were -- that a complaint may 6 have appeared relevant at the time, but now 7 that we are at trial and Plaintiffs aren't 8 pursuing those particular claims, it changes 9 the balance entirely for a relevance or undue 10 prejudice objection. 11 An example would be operating systems 12 and embedded devices and the dot net issues. 13 The Plaintiffs have not included that now 14 within their class. They are not asserting 15 claims based on those type of operating 16 systems. There's lots of exhibits that relate 17 to that issue. 18 At this point the relevance and undue 19 prejudice calculation changes as to those 20 exhibits and we need to review them in that 21 light. 22 So based on all those things, 23 Microsoft respectfully requests that the Court 24 consider a procedure for dealing with these 25 3,760 exhibits, allowing Microsoft to assert 6119 1 the objections that should be made at trial, 2 which are listed and described in your order, 3 and that it be done at a reasonable pace, and 4 Microsoft is committed to doing this in a way 5 that doesn't interfere with Plaintiffs' case. 6 Finally, with respect to the 7 statements attributed to Mr. Tulchin, that had 8 to do with an exhibit that was first designated 9 after the Special Master process concluded. 10 So the argument relating to that just 11 doesn't relate to the argument we're having 12 here. 13 That's all I have. 14 THE COURT: Ms. Conlin or Ms. Davis? 15 MS. CONLIN: Your Honor, I think 16 perhaps it would be helpful to the Court to 17 have a little of the history here in terms of 18 what went on in Gordon, and the Plaintiffs' 19 very strong antipathy toward what went on in 20 Gordon. 21 A whole bunch of exhibits were, in 22 fact, admitted in Gordon at the beginning, but 23 the Court inexplicably said those documents 24 could not be published, even though they were 25 part of the record, even though they were 6120 1 admitted. 2 The Court made the ruling that in 3 order for those to be on the Court's website, 4 that they would have to be referred to by a 5 witness. 6 Now, that was both surprising and 7 disconcerting to us, given the fact that it's a 8 public trial in a public place and those 9 exhibits were, in fact, admitted into the 10 record. 11 It's also important to know, Your 12 Honor, that these 3,760 exhibits to which no 13 objection was lodged, were lodged, are about a 14 third of the total Plaintiffs' exhibits. 15 There are 10,000, roughly, give or 16 take a few hundred, exhibits. 17 So these are -- you know, this is just 18 a fraction, about a third, maybe more than 19 that, maybe 40 percent, of what ultimately 20 Plaintiffs expect to have become part of the 21 record in this case. 22 We were proceeding, as were defendant, 23 on the idea that when these exhibits -- or when 24 the trial opened, these exhibits would be 25 admitted. Because there were no objections 6121 1 lodged to those. 2 And it's also important, Your Honor, 3 there's no foundation objections to these 4 exhibits. Those were resolved in the Special 5 Master process. 6 There's no hearsay objections to 7 these. Those were resolved in the Special 8 Master process. 9 So but-for relevance, undue prejudice, 10 or some other of those, these documents would 11 be admitted and I could publish them to the 12 Jury whenever I wished to or whatever portions 13 I wished to publish to the Jury at any time 14 that I wished to do so. 15 So I'm thinking that there's a 16 misunderstanding on the part of the Defendant 17 that we have to have a witness in order to 18 put -- to publish an exhibit. We do not. 19 When the exhibit has foundation and 20 there's no hearsay objection, we have the right 21 to publish that exhibit to the Jury, and we 22 intended to do so -- intend to do so at 23 appropriate times. 24 What Defendant are asking for here is 25 to redo the entire Special Master process. 6122 1 The objections to the exhibits were 2 not reserved. What was reserved in the Special 3 Master process was the resolution of those 4 objections. That was reserved for you, Your 5 Honor. 6 Mr. Tulchin clearly stated the day 7 before I made this offer what the parties -- 8 how the parties had proceeded. 9 Mr. Tulchin happened to be wrong about 10 that particular exhibit. It didn't go through 11 the Special Master process, Your Honor. It was 12 late designated, and I made that point as well. 13 But what he said about the parties' 14 understanding as to the Special Master process 15 and whether or not objections were lodged was, 16 in fact, entirely correct. 17 And if an exhibit had no objections, 18 it was deemed admitted. That's all I was 19 trying to do on December 15th, was put these 20 exhibits to which no objection had been lodged 21 into this record so that I could refer to them, 22 so that I can publish them, so that I can do 23 what you do with exhibits. 24 It really isn't the right time, I 25 don't think, to start over. 6123 1 And there's a little bit of a 2 precedent for this, Your Honor, in terms of 3 what Defendant wanted. And that was they 4 wanted the not-for-the-truth uses of exhibits 5 to be presented to the Special Master, and that 6 was done. Or it was done until the Court said 7 we didn't have to do that anymore. 8 We never wanted to do that because 9 that did not make any sense to us. 10 If the Court is at all inclined to let 11 the Defendant start all over again with these 12 3,760 exhibits, we certainly think that it is 13 totally inappropriate to give them 45 to 60 14 days to look, again, at exhibits that they have 15 already looked at for the purpose of making up 16 new objections when they should have made the 17 objections before this. 18 And we think that if there's any 19 inclination to do that, Your Honor, that they 20 should certainly do that within a week or so, 21 not 45 to 60 days. 22 This just is very disheartening and 23 will make our presentation of our evidence even 24 more complicated than it already is. 25 I did -- I think I mentioned this at 6124 1 the time I made the presentation or the offer, 2 Your Honor. 3 There are no spoliation documents on 4 this list. Despite the fact that there were 5 spoliation exhibits to which no objection was 6 lodged, in light of the Court's ruling, we 7 removed from this list all spoliation 8 documents. So they're not there, Your Honor. 9 All these are are just your regular 10 documents. 11 And Mr. Tuggy's statement about the 12 embedded devices is a bit confusing to me given 13 the fact that we never included embedded 14 devices in the class, Your Honor. 15 That was not the purpose for which we 16 were offering embedded -- evidence with respect 17 to embedded devices. It was another way that 18 Microsoft was intending to protect its 19 applications barrier to entry and its already 20 existing operating system market which we still 21 intend to do. 22 There has never been a time in this 23 almost seven years this case has been pending 24 when the embedded devices have been a part of 25 the class. 6125 1 Presenting these on a witness by 2 witness basis does not comport with the way 3 that the parties acted nor does it comport with 4 the way that we would ordinarily do this. 5 And we ask the Court to admit the 6 3,760 documents subject to the right of 7 Microsoft to check the accuracy of the list and 8 permit us to proceed as we would ordinarily 9 proceed in any other case with documents that 10 were admitted. 11 We also, of course, want these 12 documents displayed on the Court's website when 13 we have a Court's website, which I don't think 14 we have quite yet. 15 THE COURT: I have no idea what the 16 status of that is. 17 MS. CONLIN: All right. In any event, 18 Your Honor, I guess that's neither here nor 19 there. 20 The issue is whether or not these 21 documents are deemed admitted by the fact that 22 objections were not made within the Special 23 Master process. 24 And Mr. Tulchin admitted the day 25 before I made the offer that, in fact, when no 6126 1 objection was made, the documents were deemed 2 admitted. And that's exactly what he said. 3 I will just quote him one more time. 4 It is rare, Your Honor, that I quote Mr. 5 Tulchin. 6 But for this purpose I do so. 7 We designated that as our exhibit. It 8 is my understanding, and I believe this is 9 correct, that there was never any objection to 10 that. 11 So under our process that is, you 12 know, in evidence. 13 THE COURT: Comments? What did Mr. 14 Tulchin mean by that? 15 MS. NELLES: Very briefly, Your Honor. 16 I will -- let me address them all. I'll take 17 them very quickly in order. 18 First of all, I'd just like to say 19 that what happened in Gordon is not in issue. 20 We've had a very different pretrial 21 procedure because both sides learned a lot 22 during that, and both sides wanted adjustments. 23 Actually I think, believe it or not, I think 24 the one we've got here is a lot better. 25 Second, we have no interest in 6127 1 starting over again. We simply want the right 2 to reserve our -- make our relevance and undue 3 prejudice objections in light of the trial 4 exhibit as is explicitly called for in the 5 Court's order. 6 And with respect to Mr. Tulchin's 7 statement, I will remind Your Honor that -- 8 first of all, this had to do with openings. 9 There were different and clearly 10 unclear agreements about how things were coming 11 in and out during openings. There was a lot of 12 late nights meeting and conferrings and coming 13 to Your Honor. 14 But with respect -- I do believe 15 Ms. Conlin jumped up and objected to that 16 document on the grounds of relevance and 17 prejudice and kept the Jury out of this room 18 for more than an hour to make an argument in 19 the middle of Mr. Tulchin's opening with regard 20 to issues related to relevance and prejudice. 21 And Your Honor ruled on them and redacted 22 portions of that document. 23 Things come up in light of the trial 24 record. We simply want -- we are willing to 25 get as much of this in as fast as we can. 6128 1 THE COURT: What did Mr. Tulchin mean 2 that since he didn't object to it earlier, when 3 was she supposed to object on relevance? 4 MS. NELLES: We had provided that -- 5 we had designated that document in late 6 November, if I remember correctly. 7 I'm glad Mr. Tuggy is here. There was 8 a process with respect to the openings for 9 conferring and objecting to evidence that was 10 going to be used and displayed during the 11 openings. It was a very different set of 12 documents and issues. 13 THE COURT: Okay. 14 MS. NELLES: It was a special 15 procedure the parties had specifically on 16 openings. 17 THE COURT: Let me ask this question. 18 I have this notebook of Plaintiffs' 19 exhibits, descriptions and initial objections 20 and pending objections. 21 Do these include objections to the 22 3,000 some odd exhibits? 23 MR. TUGGY: That is a notebook 24 Plaintiffs' prepared. 25 MS. NELLES: I honestly don't know, 6129 1 Your Honor. I just received it when you 2 received it. 3 THE COURT: Well, if it does, and if 4 there is an objection, for instance, already in 5 here as to relevancy, can't the Court go ahead 6 and rule on it? 7 MR. TUGGY: Yes. 8 MS. CONLIN: Your Honor, if I may 9 answer the Court's question. 10 None of the exhibits to which any 11 objection, including relevance or prejudice, 12 remained is on the list. The 3,760 exhibits 13 are free of objections. They have no 14 objections. 15 We give you this, Your Honor, to show 16 you that unduly prejudicial, collateral 17 estoppel, and relevance objections were, in 18 fact, urged during this process. Resolution 19 was reserved. 20 The objections were made. And we've 21 got 1,600 of them, Your Honor, made during that 22 process. 23 And you can see, Your Honor, that 24 sometimes -- there's an initial objection and 25 then those -- some of those initial objections 6130 1 are resolved. 2 And then the second or I guess it's 3 fourth column is the pending objections. That 4 means, Your Honor, that these objections 5 remained pending and, in fact, any objection, 6 no matter how lacking in merit, if there was 7 any objection at all, that document does not 8 appear on the disk nor on the list. 9 So we're only talking about those 10 documents for which there was no objection. 11 THE COURT: Okay. 12 MS. CONLIN: Oh, I'm sorry. I'm 13 sorry, Your Honor. 14 When I said none, we have a whole 15 section -- Ms. Davis is pointing out to me. 16 These are the last Tab 7 you see, Your Honor -- 17 THE COURT: Yeah. 18 MS. CONLIN: -- pending objection 19 where it says none, none, none. 20 THE COURT: Yeah, okay. 21 MS. CONLIN: Most of those, Your 22 Honor, there was never any objection raised to 23 them. There was no initial objection and 24 there's no pending objection. 25 That's the 3,760 that we already -- 6131 1 that I offered. 2 And with respect to Ms. Nelles' 3 statement that I jumped up in the course of Mr. 4 Tulchin's opening -- 5 MS. NELLES: Maybe it was 6 Mr. Hagstrom. If so, I apologize. 7 MS. CONLIN: And I also don't -- I 8 don't jump up, Your Honor. And I was not 9 making the objections. 10 And the objection made to that 11 document was not relevance. It was on the 12 basis of the fact that it was settlement and 13 came squarely within the Court's ruling on the 14 motion in limine. 15 What Defendant is doing now is trying 16 to make a distinction without a difference 17 because there is no explanation for Mr. 18 Tulchin's statement other than the one that I 19 am giving you, Your Honor. 20 And that is the parties understood 21 that without an objection that meant the 22 document was admitted. That's what he said. 23 That's what he meant. That's how the parties 24 behave. And I would ask respectfully that 25 that's how the Court rule. 6132 1 THE COURT: Okay. 2 MS. NELLES: Your Honor, just one very 3 brief comment. I'm not going to reargue 4 anything I've already said. 5 You have our papers on this, which I 6 would ask that you read as well. 7 But the one thing that Ms. Conlin said 8 that I must respond to earlier -- and I 9 certainly don't want to get into argument about 10 it now, but I would like an opportunity to 11 argue about it now. 12 Ms. Conlin apparently has said 13 something about the reason we can't do this on 14 a witness by witness basis is because she will 15 have other documents that she can publish 16 however she wants whenever she wants. 17 I am frankly at a loss to understand 18 how Plaintiffs are going to display documents 19 other than through their summation without a 20 witness. 21 Now -- 22 THE COURT: Well, wait just a minute. 23 MS. NELLES: And I certainly want to 24 hear about that. 25 THE COURT: As part of the Special 6133 1 Master process, if there was a foundation 2 problem, that should have been brought up. 3 MR. TUGGY: That's correct. 4 MS. NELLES: That's correct, and they 5 were. 6 THE COURT: So if there's an objection 7 there was no foundation or hearsay, the only 8 objection I could think of is the ones in 9 5.401, 5.402, and 5.403. 10 MS. NELLES: That is correct. 11 THE COURT: Which has to do with 12 relevance and undue prejudice. Right? 13 MS. NELLES: That is correct. 14 Absolutely. 15 THE COURT: So if someone asked to put 16 a document in, the only objection you can make 17 now that you haven't -- if you haven't made 18 those, it's irrelevant, Your Honor. 19 MS. NELLES: I agree, Your Honor. 20 Please don't misunderstand me. 21 THE COURT: You can't argue now, oh, 22 you've got to have a witness to do that. 23 That's wrong. 24 MS. NELLES: No, no. They should all 25 get admitted at the end to the extent there's 6134 1 no pending objection. 2 THE COURT: Why can't she introduce 3 them when she wants? 4 MS. NELLES: How is she going to give 5 them to the jury? Is she just going to hand 6 them to them? 7 MS. CONLIN: No. I'm going to read 8 portions to them, Your Honor, like we always 9 do. 10 THE COURT: What's the problem? If 11 it's admission, it's admissible. I don't 12 understand. 13 If it's a document that doesn't 14 require any foundation because you haven't made 15 an objection, it doesn't need a witness to 16 support it. 17 MS. NELLES: I simply want to make 18 sure Ms. Conlin is not going to be standing up 19 and making -- or Mr. Hagstrom standing up and 20 making arguments about the exhibits in the 21 middle of the -- 22 THE COURT: No, I won't let them do 23 that. 24 But if they want to show the Jury an 25 exhibit, fine. 6135 1 MS. NELLES: That's understood. 2 THE COURT: Without comment. 3 MS. NELLES: Without comment. That's 4 my only concern. 5 THE COURT: That's fine now. I 6 understand now. I misunderstood. 7 Yeah, I understand. Okay. 8 MS. NELLES: It's late. It's almost 9 Christmas. Forgive my being inarticulate. 10 THE COURT: I've got you. I thought 11 you said they had to have a witness read it. 12 MS. NELLES: No. Simply I don't want 13 to have any internal summation, Your Honor. 14 THE COURT: No. All you've got to do 15 is show it. 16 MS. NELLES: Thank you, Your Honor. 17 THE COURT: All right. 18 Anything else on this? 19 MS. NELLES: We'll let you take it 20 under submission on this end. 21 THE COURT: We'll have it by tomorrow. 22 MS. CONLIN: Thank you, Your Honor. 23 THE COURT: Anything else? 24 MR. TUGGY: When are we going to deal 25 with -- I thought we were going to deal with 6136 1 the Gates' exhibit. Is that what we were going 2 to -- 3 MS. CONLIN: I don't know a thing 4 about the exhibits. 5 MR. TUGGY: Because at the conclusion 6 of this deposition, I think the Plaintiffs want 7 to move into evidence Gates' exhibits. 8 I've got agreements with Mr. Cashman 9 on all of them except one issue, but I think he 10 ought to be there for that. 11 MS. NELLES: Let's try to all work 12 that out so we don't take the Court's time up 13 if we don't have to. 14 MS. CONLIN: If we can do that 15 tomorrow morning maybe. 16 MR. TUGGY: If we can't resolve it 17 tonight. 18 THE COURT: Sure. 19 MS. CONLIN: As long as you don't go 20 beyond 8:30. 21 THE COURT: We got people coming at 22 8:15. 23 Do you want to come at 8? 24 MR. TUGGY: Yes. 25 MS. NELLES: What did we say we were 6137 1 taking up at 8:30? 2 THE COURT: Schedule. That won't take 3 long. 4 I asked Carrie also to take a poll on 5 the jurors kind of what some of the things you 6 guys talked about. 7 Is that all right? 8 MS. NELLES: Yeah, that's great. 9 MS. CONLIN: Sure. 10 THE COURT: Any feedback. 11 MS. NELLES: No, she hasn't done it 12 yet. 13 THE COURT: Take a poll. 14 MS. CONLIN: Yes. 15 THE COURT: We can go off the record. 16 (An off-the-record discussion was 17 held.) 18 (Proceedings adjourned at 3:26 p.m.) 19 20 21 22 23 24 25 6138 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 20th 19 day of December, 2006. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25