7142 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 XXVII 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 8:27 a.m., January 9, 14 2007, in Room 302 of the Polk County 15 Courthouse, Des Moines, Iowa. 16 17 18 19 20 HUNEY-VAUGHN COURT REPORTERS, LTD. 21 Suite 307, 604 Locust Street 22 Des Moines, Iowa 50309 23 (515)288-4910 24 25 7143 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 RICHARD M. HAGSTROM 7 MICHAEL R. CASHMAN MICHAEL E. JACOBS 8 Attorneys at Law Zelle, Hofmann, Voelbel, 9 Mason & Gette, LLP 500 Washington Avenue South 10 Suite 4000 Minneapolis, MN 55415 11 (612) 339-2020 12 STEVEN A. LAMB Attorney at Law 13 Zelle, Hofmann, Voelbel, Mason & Gette, LLP 14 550 South Hope Street Suite 1600 15 Los Angeles, CA 90071 (213) 895-4150 16 ROBERT J. GRALEWSKI, JR. 17 Attorney at Law Gergosian & Gralewski 18 550 West C Street Suite 1600 19 San Diego, CA 92101 (619) 230-0104 20 KENT WILLIAMS 21 Attorney at Law Williams Law Firm 22 1632 Homestead Trail Long Lake, MN 55356 23 (612) 940-4452 24 25 7144 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY JOSEPH E. NEUHAUS 3 Attorneys at Law Sullivan & Cromwell, LLP 4 125 Broad Street New York, NY 10004-2498 5 (212) 558-3749 6 ROBERT A. ROSENFELD KIT A. PIERSON 7 Attorneys at Law Heller Ehrman, LLP 8 333 Bush Street San Francisco, CA 94104 9 (415) 772-6000 10 STEPHEN A. TUGGY HEIDI B. BRADLEY 11 Attorneys at Law Heller Ehrman, LLP 12 333 South Hope Street Suite 3900 13 Los Angeles, CA 90071-3043 (213) 689-0200 14 BRENT B. GREEN 15 Attorney at Law Duncan, Green, Brown & 16 Langeness, PC Suite 380 17 400 Locust Street Des Moines, IA 50309 18 (515) 288-6440 19 20 21 22 23 24 25 7145 1 RICHARD J. WALLIS STEVEN J. AESCHBACHER 2 Attorneys at Law Microsoft Corporation 3 One Microsoft Way Redmond, CA 98052 4 (425) 882-8080 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7146 1 (The following record was made out of 2 the presence of the jury at 8:27 a.m.) 3 MR. LAMB: Thank you, Your Honor. 4 Minor housekeeping matter. When I 5 offered exhibits to be admitted yesterday, I 6 misspoke and I said 1425 rather than 425. I 7 believe Mr. Holley agrees with me. And we'll 8 make that change if we could on the record, and 9 we'll provide copies to the court reporter. 10 THE COURT: Any objection? 11 MR. HOLLEY: None, Your Honor. 12 THE COURT: 425 then is admitted. 13 MR. LAMB: Thank you, Your Honor. 14 THE COURT: Thanks for clarifying 15 that. 16 MR. LAMB: Thank you, sir. 17 THE COURT: Mr. Holley, do you want to 18 use that table? 19 MR. HOLLEY: To be honest, Your Honor, 20 I probably need more room than I've got here, 21 but I think it's better for me to be able to 22 look at him. 23 THE COURT: Sure, that's fine. 24 (The following record was made in the 25 presence of the jury at 8:33 a.m.) 7147 1 THE COURT: Everyone else may be 2 seated. 3 Mr. Alepin, would you resume the 4 stand. 5 You're still under oath. 6 RONALD ALEPIN, 7 recalled as a witness, having been previously 8 duly sworn, testified as follows: 9 THE COURT: Mr. Holley, you may 10 cross-examine. 11 CROSS-EXAMINATION 12 BY MR. HOLLEY: 13 Q. Good morning, Mr. Alepin. 14 Repeatedly during your testimony over 15 the prior three days you used the phrase we in 16 the industry; is that correct? 17 A. I believe I did, yes. 18 Q. But you don't speak for everyone in 19 the computer industry, do you? 20 A. No. 21 Q. And I'd like you to look at Slide 754. 22 There are major associations in the 23 computer industry that have publicly taken 24 positions adverse to yours; is that correct, 25 sir? 7148 1 A. I'm not sure what you mean by my 2 position, but -- 3 Q. Well, for example, in United States 4 against Microsoft, CompTIA and ACT took 5 positions adverse to the positions that you've 6 stated here; correct? 7 A. To some of the positions, I believe, 8 that would be a fair statement, yes. 9 Q. And in the European Commission case 10 that you testified about in direct, CompTIA and 11 ACT have taken positions adverse to the 12 positions you've taken here; correct? 13 A. I'm not sure I recall having testified 14 or referred to the European proceedings with 15 respect to specific testimony here. 16 I may have mentioned that I 17 participated in it, but I don't recall stating 18 positions or referring to positions there. 19 Q. Fair enough. 20 Okay. But my question to you, sir, is 21 the positions that you have taken in the 22 European case have been opposed by CompTIA and 23 ACT; correct? 24 A. They have taken positions different 25 from the positions taken by others who retained 7149 1 me, yes. 2 Q. CompTIA includes among its members 3 Lenovo, Motorola, and Hewlett-Packard; correct? 4 A. I believe that's the case, yes. 5 Q. And among the members of ACT are 6 Oracle, ebay, and the Orbitz Online Travel; 7 correct? 8 A. I think so. 9 Q. Now, you have done work for at least 10 four of Microsoft's most important competitors; 11 correct? 12 A. I'm not sure who is Microsoft's most 13 important competitors are, but I've done work 14 for companies that work with Microsoft and 15 sometimes compete with Microsoft. 16 Q. Well, you've done litigation related 17 work for RealNetworks; correct? 18 A. That is correct. 19 Q. And litigation related work for 20 Oracle? 21 A. Maybe litigation is a slightly 22 different term in Europe, but -- a process 23 similar to that, I'd agree. 24 Q. And you've done litigation-related 25 work for Novell; correct? 7150 1 A. Well -- excuse me. Are we in the 2 context of adverse to Microsoft, or are you 3 just talking about -- 4 Q. Well, in the first instance, I was 5 just asking you whether you've done 6 litigation-related work for Novell. 7 A. Then the answer is yes. 8 Q. And you've done litigation-related 9 work for Sun Microsystems? 10 A. That is correct. 11 Q. And can you tell the jury for 12 RealNetworks, Oracle, Novell, and Sun 13 Microsystems, were those all representations 14 adverse to Microsoft? 15 A. The RealNetworks one was adverse to 16 Microsoft. 17 The Oracle engagement after a fashion 18 was, I think, adverse to Microsoft. 19 I'm not -- I'm not recalling the 20 Novell engagement specifically against 21 Microsoft. 22 And the Sun matter was, yes, adverse 23 to Microsoft. 24 Q. Now, you, sir, are currently a 25 technology advisor to a law firm called 7151 1 Morrison & Foerster; correct? 2 A. That is one position I hold, yes. 3 Q. And I'd like to take a look at Slide 4 Number 722. Is this your web page from the 5 Morrison & Foerster website? 6 You need a new picture? 7 A. I'm not sure whether the present would 8 be an improvement over that one. 9 Q. Okay. And Morrison & Foerster has 10 clients whose interests are adverse to 11 Microsoft; correct? 12 A. I'm unaware of clients who may be 13 adverse to Microsoft, other than I think 14 Novell. I think that one might be. 15 Q. Let's look at Slide Number 723, which 16 is a list of Morrison & Foerster clients. 17 Novell is listed there and Oracle as well; 18 correct? 19 A. I see that, yes. 20 Q. Now, you have participated, I believe 21 as you said on direct, in the European 22 Commission case against Microsoft; is that 23 right? 24 A. That's correct, yes. 25 Q. And your original involvement was for 7152 1 something called the Computer and 2 Communications Industry Association; is that 3 right? 4 A. The CCIA, yes. 5 Q. And when the CCIA withdrew from the 6 European Commission case, you switched horses; 7 correct? 8 You went to work for ECIS at that 9 point; is that correct? 10 A. I was retained by ECIS. 11 Q. Which stands for European Committee on 12 Interoperable Systems? 13 A. That's the -- yes, that's what it 14 means. 15 Q. I'd like to take a look, please, at 16 Slide Number 721. 17 Now, among the leading members of ECIS 18 are Microsoft competitors IBM, Oracle, 19 RealNetworks, Red Hat, and Sun Microsystems; 20 correct? 21 A. That seems to be correct, yes. 22 Q. Now, Mr. Lamb asked you some questions 23 at the very outset of your testimony about your 24 litigation-related experience. Do you remember 25 that? 7153 1 A. Yes, I remember him asking. 2 Q. Okay. And you described some of the 3 lawsuits that you've been involved in; is that 4 right? 5 A. Yes. 6 Q. And you didn't mention one case that 7 you worked on in New York City involving IBM; 8 is that right? 9 A. I probably didn't mention a number of 10 them. 11 Q. Well, in the case entitled Commercial 12 Data Servers, Inc., against International 13 Business Machines Corporation, you submitted an 14 affidavit; is that right, or a declaration? 15 A. I probably at some point did. It's a 16 long time ago, I think. 17 Q. Well, it was four years ago. And you 18 don't remember whether you submitted a 19 declaration or not? 20 A. I don't -- I've done a lot of work 21 over the -- in my career, and I'm not sure what 22 the date is. 23 Q. Do you recall that the Judge in that 24 case rejected your testimony as speculative and 25 devoid of hard evidence? 7154 1 A. I'm not aware of that at all, I'm 2 sorry. 3 Q. Let's look at Slide Number 770. Do 4 you remember reading the decision in this case, 5 Mr. Alepin? 6 A. No. 7 Q. So you've never read this? 8 A. No, I have not. 9 Q. Well, let's look at Slide 771. And 10 there is a paragraph over here on page 68 which 11 says, while Mr. Alepin concludes in his 12 declaration that customers are unwilling or 13 unable to consider replacing their S/390 14 systems -- that's the IBM mainframe; right? 15 A. That is. 16 Q. -- because the conversion cost is 17 prohibitive, he offers no examples to support 18 this opinion. 19 You never read this? 20 A. I did not. 21 Q. Okay. And then over on page 69, Judge 22 McMahon writes, expert testimony rooted in 23 hypothetical assumptions cannot substitute for 24 actual market data. The speculative affidavits 25 of Mr. Alepin and Mr. Reed do not overcome for 7155 1 the lack of hard evidence. 2 This is the first time you've ever 3 seen this criticism of your work? 4 A. That's correct, yes. 5 Q. Now, you submitted an expert report in 6 this case; is that correct? 7 A. I did. 8 Q. And large portions of what's in that 9 expert report were borrowed from an expert 10 report in the Minnesota class action that was 11 written by Doctor David Martin; is that right? 12 A. I'm not sure large portions is 13 correct. 14 Q. Well, there are sections of your 15 report in this case that were borrowed almost 16 verbatim from Doctor Martin's report; correct? 17 A. There are portions that I adopted as 18 mine, yes. 19 Q. And Doctor Martin is no longer 20 testifying in this case; is that right? 21 A. I don't know whether that's the case 22 or not. 23 Q. The report that you borrowed from 24 Doctor Martin's report was based on memoranda 25 that another one of Plaintiffs' experts called 7156 1 Andrew Schulman wrote; is that right? 2 A. That is correct, yes. 3 Q. And are you aware that those memoranda 4 were written by committee? 5 Have you ever seen Dr. Noll's 6 testimony on that subject? 7 A. I don't recall having linked it in 8 that way, no. 9 Q. Have you read the deposition testimony 10 of any of the other experts that the Plaintiffs 11 intend to call in this case? 12 A. Yes. 13 Q. I'd like to take a look, if we could, 14 please, at Professor Noll's October 30, 2002 15 deposition at page 215, line 6 to 13. 16 I'd like you to focus here on what 17 Doctor testifies. The question is asked: 18 Question: What's your understanding 19 of the manner in which the, quote, 20 investigative report on Microsoft's 21 exclusionary actions by Doctor Martin was 22 prepared? How did that come to be prepared? 23 Do you know? 24 And the answer is: 25 Answer: It was written by committee, 7157 1 basically. 2 Do you have any basis to disagree with 3 that testimony? 4 A. No, I don't have any basis to 5 disagree. 6 Q. Now, you submitted a report that bears 7 some resemblance to your report in this case in 8 the federal multidistrict litigation case 9 against Microsoft; is that correct? 10 A. That's correct. 11 Q. But you took some things out in 12 between the MDL report and this report; right? 13 A. Yes, sir. 14 Q. And one of the things that you decided 15 to delete was a sentence talking about 16 Microsoft's attack squad going to journalists 17 trying to persuade them that Windows was better 18 than OS/2; is that right? 19 A. That's -- well, I'd have to see it, 20 but I know I took material out. 21 Q. Well, do you remember taking that 22 material out? 23 A. The report's 170 pages long. There's 24 a lot of material in it. It's a little hard 25 sitting here to recall what I added and what I 7158 1 took out. 2 Q. Okay. Well, I don't mean for this to 3 be a memory quiz. 4 MR. HOLLEY: Your Honor, may I 5 approach the witness? 6 THE COURT: Yes, you may. 7 Q. Mr. Alepin, I'd like to show you, sir, 8 a copy of your deposition transcript taken in 9 this case on July 18 of 2006. 10 And if you'd direct your attention to 11 page 89, sir. 12 And I'm starting on line 21 of page 13 89. 14 I asked you the question: And I'm 15 interested in the paragraph that begins 16 Microsoft's, quote, attack, closed quote, squad 17 went to journalists, and you say uh-huh or 18 something like that. 19 And then I asked you the question: 20 That section does not appear in the Iowa 21 report. Can you tell me why that's gone? 22 Does that refresh your recollection, 23 sir, that you did delete in between the MDL 24 report and the Iowa report the statement about 25 Microsoft's attack squad? 7159 1 A. Well, I mean, it certainly refreshes 2 my recollection about the exchange that you and 3 I had, but it's still unclear to me what 4 particular passage and how much was taken out, 5 so -- but I recall now our exchange over this 6 particular item. 7 Q. And you're not denying that there was 8 a statement in the MDL report about Microsoft's 9 attack squad going to journalists talking about 10 OS/2 failures and that that was taken out in 11 the Iowa report? 12 A. I'm not denying that. 13 Q. Okay. And you told me in July that 14 the reason you took that out -- and I'm now at 15 page 90, line 7 to 8 -- was that it sounded too 16 much like breathless journalism; is that right? 17 A. That's correct. 18 Q. And the reason that you were worried 19 about breathless journalism is that you wanted 20 to have your opinions in this case be fair and 21 balanced; is that right, sir? 22 A. Well, I wanted my opinions to be fair 23 and balanced unrelated to that particular 24 passage. 25 Q. In this vein of fairness and balance, 7160 1 did you consider telling the jury that the 2 president of IBM's PC software division 3 traveled the world crashing Windows machines so 4 often that he got the nickname Blue Ninja? 5 A. Did I consider -- 6 Q. Did you consider telling the jury that 7 fact? 8 A. Which jury? This particular one? 9 Q. This jury, yes, sir. 10 A. No, I didn't. 11 Q. Okay. Did you review deposition 12 transcripts in forming your opinions in this 13 case? 14 A. Yes. 15 Q. And you reviewed as many as you 16 thought you needed to review in order to be 17 confident that your opinions were accurate; is 18 that right, sir? 19 A. Probably. And inevitably more than I 20 needed to, yes. 21 Q. All right. I'd like to show you a 22 video clip, number 64, of the deposition of Lee 23 Reiswig, the president of IBM's PC software 24 division, which was taken on the 19th of 25 January, 2002? 7161 1 MR. LAMB: Objection. Lacks 2 foundation. 3 MR. HOLLEY: Your Honor, I'm not 4 offering it into evidence. 5 THE COURT: Overruled. 6 (Whereupon, the following video of Lee 7 Reiswig was played to the jury.) 8 And as part of that marketing push, is 9 it true, sir -- 10 And as part of that marketing -- 11 Question: And as part of that 12 marketing push, is it true, sir, that you did a 13 demonstration in front of all of these people 14 and in front of the press on how Windows could 15 crash? 16 Answer: I was illustrating the 17 stability of OS/2 versus Windows. 18 Question: And to do that, you showed 19 the press and all these other people, you 20 specifically showed them a Windows interface 21 and showed it crashing; is that right? 22 Answer: I showed the misbehaving the 23 application would cause you to crash Windows 24 and have to reboot your PC and that very same 25 application in OS/2 would not. 7162 1 Question: And do you recall the term 2 bad app? 3 Answer: Vaguely. 4 Question: That's the term that IBM 5 used to basically describe an application that 6 it was demoing to crash Windows. 7 Answer: No, I don't recall that. I 8 do recall running the application, but I don't 9 remember calling it bad app. 10 Question: How many times did you 11 perform that demonstration over the next year? 12 Answer: I don't have exact count. I 13 did it every four to six weeks somewhere around 14 the world. 15 Question: And is it during this 16 period that you developed the nickname Blue 17 Ninja? 18 Answer: Yes. 19 (Whereupon, the playing of the video 20 of Lee Reiswig concluded.) 21 Q. Is it your testimony, Mr. Alepin, that 22 it was Microsoft's obligation to stand by 23 mutely as an IBM senior executive toured the 24 world crashing Windows? 25 MR. LAMB: Objection. Relevance. 7163 1 THE COURT: Sustained. 2 MR. HOLLEY: Your Honor, there's a 3 claim in this case about FUD relating to OS/2. 4 Q. You testified last Thursday, 5 Mr. Alepin, that you looked at Microsoft's 6 source code in connection with the MDL case; is 7 that right? 8 A. I believe that's the case, yes. I'm 9 sorry. I did testify, and I believe that was 10 the case. 11 Q. And have you had occasion to think any 12 further about that question, about where you 13 looked at source code? 14 A. No. I've been busy thinking about 15 other things. 16 Q. I'd like you to take a look at Slide 17 752, sir. 18 Now, last week I asked you questions 19 and you gave the answers on the left-hand side, 20 and you said in response -- we were trying to 21 figure out where you looked at the source code, 22 and you said in response: 23 Answer: I believe it occurred in 24 conjunction with the MDL litigation is really 25 when I think it occurred. 7164 1 But on the right-hand side in your MDL 2 deposition when you were asked the question, 3 did you run any -- did you execute any software 4 programs or look at any source code in 5 connection with any of your work? And you said 6 not this time. 7 How do you square those two 8 statements, sir? 9 A. There were difficulties in obtaining 10 the source code from Microsoft in the MDL 11 litigation, and I did not receive the source 12 code from the Plaintiffs' attorneys until after 13 my deposition in the MDL proceeding. So I got 14 the source code only after I was -- only after 15 this particular exchange on the right took 16 place. 17 Q. Okay. And the source code that you 18 looked at, just to be clear, is the source code 19 you describe on the left, which is for 20 QuickPascal, Quick C, MS-DOS, and certain 21 elements of Microsoft Windows? 22 A. Yes. 23 Q. Now, you also testified on direct that 24 you reviewed a large number of documents in 25 forming your opinions in this case; is that 7165 1 right? 2 A. Yes. 3 Q. I'd like you to take a look, if you 4 would, sir, at Slide 707. 5 Okay. Now, you said you relied upon 6 thousands of documents; is that right? 7 A. That's correct. 8 Q. Okay. Could we look at Slide 708, 9 please? 10 Now, in connection with your expert 11 reports both here and in the MDL case, you 12 provided exhibits which listed the documents 13 that you relied on in forming your opinions; is 14 that right? 15 A. I did. 16 Q. And the first one on the left here is 17 Exhibit B from your Iowa report, and it 18 incorporates by reference the documents you 19 relied on in your MDL report; is that right, 20 sir? 21 A. Yes. 22 Q. Okay. And I'm happy to have you count 23 them, but I've done it several times. I looked 24 at the two Exhibit B's and I get 501 documents. 25 Do you have any reason to disagree with that, 7166 1 sir? 2 A. If you counted several times, no. 3 Q. So what's right, 501 documents or 4 thousands of documents? 5 A. Thousands of documents is correct. 6 Q. But those weren't disclosed to 7 Microsoft in your expert report; correct? 8 A. I think there are two parts to the -- 9 to my answer, the first of which is that there 10 are many documents that are incorporated by 11 virtue of them being exhibits to depositions 12 and being parts of the pleadings submitted in 13 the various other proceedings. 14 For example, in the Caldera matter, 15 there are hundreds and hundreds of individual 16 documents, if not more, that are referenced by 17 the -- by those proceedings. 18 So the number would easily double or 19 triple that just on the basis of adding 20 embedded, if you will, documents. 21 The second part is that I have at 22 earlier points in time reviewed many more 23 thousands of documents, which are the same 24 documents and which provided me with an 25 understanding and a basis for my knowledge and 7167 1 experience in these matters. 2 Q. And that prior review of documents is 3 part of what you relied on in forming your 4 opinions in this matter; correct? 5 A. Necessarily so, I think. 6 Q. Okay. Now, in preparing for your 7 testimony in this case, you used things called 8 disassemblers and hex viewers in some respects; 9 correct? 10 A. I have, yes. 11 Q. And can you tell the jury what those 12 tools are used for, disassemblers and hex 13 viewers? 14 A. Well, a -- let's start with a 15 disassembler, perhaps. 16 When a user writes a piece of 17 software, a programmer writes a piece of 18 software, he uses a language that we as humans 19 can understand, and then it needs to be 20 translated into something, the zeroes and ones 21 that the computer can understand. 22 Today virtually all of our efforts are 23 spent using higher level languages, languages 24 that allow us to say if then else and to create 25 easier ways to talk about programmatic elements 7168 1 that are going to be in our software. 2 Back some time ago, and still in 3 certain -- today in certain instances, we write 4 using a program -- a language that's called the 5 assembler language. 6 And the assembler language is close to 7 the metal programming. It means that one 8 instruction that I write corresponds to one 9 instruction that the computer is going to 10 execute. 11 So, for example, add, I would write 12 add in the assembler language, and that would 13 translate into whatever the zeroes and ones 14 were that represent an add instruction on that 15 particular computer. 16 Well, that -- we call that assembler 17 language. 18 And when you -- there is a tool that 19 can take the zeroes and ones and reconstruct it 20 back to the add instruction that I originally 21 created. 22 So if zero one zero one is add, then 23 the tool reads zero one zero one and says, oh, 24 this is an add instruction and tells me that 25 it's add rather than me having to remember that 7169 1 zero one zero one is add. Those kinds of 2 tools. So reconstructs a program step by step 3 back into the assembler language. 4 Q. And if I use hex viewers and 5 disassemblers to look at the code, for example, 6 of Windows 95, I can learn a lot about what's 7 going on inside that operating system; correct? 8 A. You can learn some of what's going on. 9 I don't know what a lot is because there's an 10 awful lot to learn. So a lot is a relative 11 term. 12 Q. And hex viewers and disassemblers have 13 been widely available to software developers 14 for many years; correct? 15 A. A long -- I would say a long time, 16 yes. 17 Q. Now, I'd like to change topics now and 18 talk a little bit about your testimony on 19 direct about applications. 20 In talking generally about 21 applications, you gave as one example the 22 operating system utilities that Symantec 23 markets; is that right? 24 A. I'm not -- I know I mentioned 25 applications, and I know I mentioned Symantec 7170 1 and I assume the utilities, but I'm not sure I 2 conflated them into the same category. But if 3 you could perhaps help me out here. 4 Q. Okay. One of the things that you said 5 on direct was that there are companies like 6 Symantec that make antivirus and antiphishing, 7 p-h-i-s-h-i-n-g, software; right? 8 A. Yes. 9 Q. And you described that software as 10 very, very valuable for users, correct? 11 A. I believe so, yes. 12 Q. And one such utility that has 13 antivirus and antiphishing functionality is 14 Norton's Internet Security program; correct? 15 A. That's -- yes, so that's 2007 version. 16 MR. HOLLEY: Can we look at Slide 745, 17 please. 18 Q. And this is a page from the Symantec 19 website that describes Norton Internet 20 Security. 21 It says that it blocks spyware, 22 viruses, worms, crimeware, and other risks. 23 From a technological standpoint, how 24 does the functionality provided by Norton 25 Internet Security relate to the functionality 7171 1 provided by Windows XP? 2 A. Technologically, let's see if I can 3 describe -- it's a system utility type of 4 software that rides on top of the operating 5 system. So it's a -- it is a -- it works with 6 Windows. 7 Q. From a technological standpoint, what 8 is the relative technological content of 9 Windows XP versus Norton Internet Security in 10 terms of R and D time or lines of code or 11 similar measures? 12 A. Well, in the aggregate, if you're 13 including everything in the box of Windows, 14 including, for example, Solitaire and Reverse E 15 and those things, Windows XP source code is 16 probably several times the size of Norton's 17 utilities. Perhaps -- perhaps tens of times, 18 something like that. 19 Q. Maybe even hundreds of times, right, 20 hundreds of times larger? 21 A. Well, what I've seen from Microsoft's 22 statements describing in technical for its 23 software, sometimes the number 50 million lines 24 of code is referred to. 25 I don't have any reason to believe 7172 1 that that's not the case. It may be more; it 2 may be less. 3 And I would venture to say that 4 Norton's software package here is probably in 5 the million -- a million lines of code or more. 6 Q. How does the 69.99 price of Norton 7 Internet Security relate to the price of 8 Windows XP Home? 9 MR. LAMB: Objection. Relevance. 10 THE COURT: Overruled. 11 A. The retail price of Norton utilities 12 is $69, and I believe the Windows XP Home 13 Edition price -- now, this is going to -- I 14 think the full boat -- I'm sorry, the price for 15 Windows XP Home Edition is 199, but I could be 16 confusing that with the Windows XP Professional 17 license. 18 Q. You're not sure one way or the other 19 what the retail price of Windows XP Home is; 20 correct? 21 A. Not right now, no. 22 Q. Now, on direct in talking about 23 applications, you said that Microsoft did not 24 have any real applications between 1979 and the 25 late 1980s; is that right? 7173 1 A. I'm not sure that -- I believe I said 2 that Microsoft's applications were not -- when 3 Microsoft first started out, Microsoft did not 4 have applications. 5 Later Microsoft developed 6 applications, but they were not the preferred 7 or the most popular applications on the -- 8 available for PC users. 9 Q. Well, let's look at Slide Number 706. 10 Now, this is your slide; right? 11 A. Uh-huh. 12 Q. Okay. And what you say is first 13 killer app VisiCalc, and then you refer to 14 WordStar, Lotus 1-2-3, and WordPerfect, and 15 then the statement appears Microsoft had no 16 real applications; correct? 17 A. That's correct. 18 Q. Okay. And then let's look at Slide 19 Number 705. 20 Mr. Lamb was asking you about the 21 slide we just looked at, and he asked you the 22 question: During this time frame when 23 WordStar, Lotus 1-2-3, and WordPerfect came out 24 and were killer applications, did Microsoft 25 have any killer applications? 7174 1 You said: No -- excuse me -- it 2 didn't have any. 3 And then Mr. Lamb asked you: What 4 time period are we talking about here? What 5 time period? 6 And you said: We're talking about 7 1979 probably through the late 1980s; correct? 8 A. Yes. 9 Q. So your testimony was that from 1979 10 through the late 1980s, Microsoft had no real 11 applications? 12 MR. LAMB: Objection. Misstates his 13 testimony. 14 THE COURT: He can correct it if he 15 wishes. 16 A. It's no real killer applications was 17 the way I understood the exchange, what the 18 question was trying to get at. 19 Q. Okay. But let's look back again at 20 Slide 706. 21 That doesn't say no real killer 22 applications, does it? It says no real 23 applications. 24 A. The -- and I believe what I said, at 25 the time when Microsoft was formed, it did not 7175 1 have applications. It was a developer tools 2 software company that was -- I believe that's 3 the exchange that -- 4 Q. Well, let's put aside for a moment the 5 exchange you had with Mr. Lamb, and I'd just 6 like to ask you a question now to understand 7 what you're saying. 8 When you put this slide up and said 9 Microsoft had no real applications, what time 10 period were you referring to? 11 A. When Microsoft was first organized as 12 a company, it was a developer tools company. 13 That's what I'm referring to. 14 Q. Okay. Let's look at Slide Number 709. 15 Now, you have no reason to believe 16 that all of the Microsoft applications shown on 17 this chart between 1984 and 1989 were, in fact, 18 released, do you? 19 A. No. To the contrary, I know they were 20 released. 21 Q. And Word 1 for the Mac was a killer 22 application, wasn't it? 23 A. A killer application? 24 Q. For the Macintosh. 25 A. I believe the context is in the 7176 1 personal computer market, not the Macintosh 2 market. 3 Q. My question, sir, to you is, was Mac 4 Word a killer application for the Macintosh? 5 A. I don't think as much, no, not as -- 6 Q. So an 80 percent share doesn't equate 7 to killer in your parlance? 8 A. Not the -- not the way I described 9 what a killer application was. Not what I 10 intended when I used the phrase. 11 Q. Okay. Now, you testified on direct, 12 sir, that there is -- there was less 13 competition in the word processing business in 14 the mid '90s when you said Microsoft was 15 dominant with Word than there had been in 16 earlier periods; is that right? 17 A. That's correct. 18 Q. And you also testified, sir, that 19 there was less competition in spreadsheets by 20 the mid '90s when you said Microsoft had become 21 dominant than there was in the '80s; is that 22 correct? 23 A. That's correct. 24 Q. But that lesser competition didn't 25 lead to any higher prices for those two 7177 1 categories of applications, did it? 2 A. Are you asking whether the -- which 3 direction are you asking whether the price 4 changed? 5 Q. Okay. Well, let's look at Slide 6 Number 719 in respect to spreadsheets. 7 You say that in the period in orange 8 on the left there was more competition, right? 9 '88, '89, '90. 10 A. And going backwards, yes. 11 Q. And going backwards, fair enough. 12 And you say that there was less 13 competition in the mid '90s? 14 A. That's correct. 15 Q. And my question to you, sir, was but 16 the lower competition didn't cause prices to go 17 up, did it? 18 MR. LAMB: Objection. Lacks 19 foundation. Outside the scope. 20 These are not exhibits that have been 21 admitted. There's no foundation to them, and 22 they're not providing them to us before they 23 just flip them up. We provided them with 24 copies of everything before they put them up. 25 MR. HOLLEY: Your Honor, I hesitate to 7178 1 go into this now, but there was an agreement 2 between counsel that does not include 3 demonstrative views on cross-examination. 4 There is no procedure for providing 5 advance notice so that a witness can be 6 prepared about what I'm going to ask him on 7 cross. 8 MR. LAMB: I agree, Your Honor, but 9 that doesn't mean that they can show something 10 that has no foundation that hasn't been 11 admitted that goes to pricing which is not 12 relevant, which this witness didn't talk about. 13 MR. HOLLEY: Your Honor, nothing could 14 be more -- 15 THE COURT: At this time we are going 16 to take up the matter outside of the presence 17 of the jury. 18 I ask you to remember the admonition 19 previously given. 20 Leave your notebooks here, and please 21 exit to the jury room. 22 (The following record was made out of 23 the presence of the jury at 9:14 a.m.) 24 THE COURT: You may be seated. 25 Okay. What seems to be the problem 7179 1 here? 2 MR. LAMB: Excuse me, Your Honor? 3 THE COURT: What seems to be the 4 problem? Were they supposed to give you 5 demonstratives for cross or not? 6 MR. LAMB: No. The problem is they're 7 putting up a demonstrative of something that 8 hasn't been admitted to, that he has no 9 foundation to testify to, that they've laid no 10 foundation to. It's outside the scope. It 11 goes to pricing. They complained vociferously 12 about talking about market issues and economic 13 issues, and now they're going to pricing. 14 This witness did not testify about 15 specific pricing of any of these types of 16 things, and they're showing a slide that shows 17 something that they've laid no foundation for. 18 THE COURT: Mr. Holley? 19 MR. HOLLEY: Your Honor, this witness 20 testified and was allowed to testify about 21 impacts of Microsoft's actions on the computer 22 industry in general. 23 He also testified on direct that -- 24 about the value of applications software, and 25 he told the jury at least twice that 7180 1 applications are the reason why people buy 2 computers. 3 It is within -- once he's testified 4 about the value of software products, it's 5 within the scope of cross-examination to ask 6 him questions about relative value. 7 And the notion that that is irrelevant 8 is frankly mind-boggling to me. This is an 9 overcharge case. Prices are what this case is 10 about. 11 So that's the first point why it's 12 within scope and why it's relevant. 13 The second point is, this is 14 impeachment. It's cross-examination. 15 There is no agreement between the 16 parties that I have to give notice before I do 17 my cross of what I'm going to say and that -- 18 that would be quite remarkable. 19 Also, you can impeach witnesses with 20 all sorts of things that aren't admissible into 21 evidence. I don't think Mr. Lamb is suggesting 22 that. 23 MR. LAMB: Your Honor, they're 24 entitled to impeach with exhibits, and then 25 what happens is they show me the exhibit before 7181 1 they're going to impeach on any exhibit. Okay. 2 That's what we did with them. They 3 don't have to give it to us 48 hours in 4 advance, but they just can't flip it up on the 5 screen like this. 6 THE COURT: I agree. You have to show 7 it to the Plaintiffs first to lay a foundation 8 or make an objection. 9 MR. HOLLEY: Fair enough, Your Honor. 10 THE COURT: Also, if you're going to 11 continue this line of questioning regarding 12 price, you're opening the door for him to come 13 back on redirect on economics. 14 MR. LAMB: Thank you, Your Honor. 15 Thank you. 16 THE COURT: You just opened the door. 17 MR. HOLLEY: It's Microsoft's view 18 that he did testify extensively about 19 economics. 20 THE COURT: I don't recall anything 21 about price, but you opened the door. 22 MR. HOLLEY: I understand that point, 23 Your Honor. 24 THE COURT: So now he's free to 25 testify about price. 7182 1 MR. LAMB: Your Honor, may I make one 2 more comment? And it's a concern about the 3 video deposition that was shown. 4 THE COURT: Yes. 5 MR. LAMB: This is not something that 6 he testified that he saw. 7 One of the things that happened 8 yesterday, there was a huge vociferous 9 objection to referring to deposition testimony, 10 and then I tied it in and Mr. Alepin said he 11 reviewed it and he relied on it. He didn't say 12 he reviewed and relied on it. 13 That's not appropriate just to show 14 video deposition testimony, unless it's 15 something that he reviewed and relied on, and 16 then certainly they can impeach him on. 17 MR. HOLLEY: Your Honor, that's the 18 point. 19 He purports to have reviewed extensive 20 evidence in the record. I'm entitled to point 21 out evidence in the record that is inconsistent 22 with his testimony that he deemed to ignore. I 23 can't be limited on cross-examination to things 24 he says he relied on. 25 There are 23 million pages of 7183 1 documents in this case and scores and scores 2 and scores of depositions, and there are many, 3 many pieces of evidence that Mr. Alepin 4 conveniently ignored, and that is going to be a 5 theme of my cross-examination, and there's no 6 basis whatsoever to say that I can't do that. 7 MR. LAMB: Your Honor, I'll just -- 8 just one last statement. 9 I do not understand how that testimony 10 of that witness on that videotape was relevant 11 to impeaching anything that he testified to. 12 There was no linkup. There was no 13 relevance. They're just showing something that 14 they believe supports their case. 15 It had nothing to do with his 16 testimony. Whether someone went around 17 crashing IBM -- crashing Windows has nothing to 18 do with the subject matter that he testified 19 to. 20 MR. HOLLEY: Well -- Sorry. I didn't 21 mean to interrupt, Mr. Lamb. 22 There was a checkmark yesterday on the 23 infamous chart, which is now against the wall, 24 saying that Microsoft engaged in FUD against 25 OS/2. 7184 1 It's perfectly legitimate impeachment 2 of that testimony to point out that whatever 3 nasty things Microsoft said about OS/2 were 4 richly deserved because IBM was running around 5 the world telling people that Windows crashed. 6 That's perfectly legitimate, Your 7 Honor. 8 THE COURT: Well, consistent with my 9 prior order, which was in regard to this, is 10 that you may not produce evidence of other 11 entities' illegal or anticompetitive conduct 12 merely to show that illegal conduct occurred or 13 to justify its own conduct. It has to be 14 relevant to its specific defense or claim. 15 Also, the Court found that during the 16 openings, that I did allow you to talk about 17 it, and I'll decide the admissibility of acts 18 of conduct of the Defendant's competitors on an 19 issue-by-issue basis. 20 However, you must make some showing 21 that this was some practice that was prevalent 22 in the industry and something that happened and 23 -- but it can't be something that's illegal or 24 unlawful. 25 You do recall that; right? 7185 1 MR. HOLLEY: Yes, Your Honor, and it's 2 my view that anything that Mr. Reiswig did is 3 just the American way. It's part of the free 4 enterprise system. 5 People have a First Amendment right 6 under a case called Central Hudson Gas to go 7 around and say whatever they want to say about 8 their competitors' products as long as they 9 don't incur Section 2 liability for making 10 knowingly false statements. 11 I don't mean to suggest for a moment 12 that IBM did anything anticompetitive or 13 anything illegal. That is not our submission. 14 Our submission is that this is 15 elbows-out competition; it's good for 16 consumers. 17 THE COURT: You didn't want him to 18 talk about competition. 19 MR. HOLLEY: Pardon? 20 THE COURT: You objected during his 21 direct about him talking about competition. 22 MR. HOLLEY: And he continued to do it 23 for three days, Your Honor. 24 And I need -- now that that has 25 happened, I need to cross-examine him about all 7186 1 the things he was allowed to say. 2 THE COURT: He talked about the acts 3 of the Defendant, he didn't talk about acts of 4 IBM. 5 MR. HOLLEY: He didn't talk about 6 what, Your Honor? 7 THE COURT: He didn't talk about the 8 acts of IBM. 9 MR. HOLLEY: He did, actually. He 10 talked about some things that IBM did. But he 11 talked about things that Microsoft did, and it 12 is relevant when he says that Microsoft had 13 various stratagems and tactics and whatever 14 other words he uses to talk about what is 15 common in the market. 16 THE COURT: You got to lay foundation 17 for it and you haven't done that. You got to 18 lay some foundation. 19 MR. HOLLEY: That he -- 20 THE COURT: You can't just say -- put 21 something on the board and say this Blue Ninja 22 guy did this. 23 Can't you do some foundation that -- 24 did you do a study about what other companies 25 as well as Microsoft's done in the marketplace 7187 1 concerning FUD and other activities? 2 You can't just bore into it without 3 some foundation. Otherwise it will be 4 irrelevant. 5 MR. HOLLEY: Yes, Your Honor. 6 MR. LAMB: Your Honor, if I may. 7 Moreover, based on your prior ruling, 8 they can't impeach by other acts. They can 9 make the claim that it's elbows out, but they 10 can't turn around and list all these other acts 11 that other individuals and other companies did. 12 That would conflict with your order. 13 And we'd move to strike at this time 14 the Reiswig testimony. There's been no linking 15 up. There's been no relevance, and it violates 16 your express order. 17 MR. HOLLEY: Your Honor, for the 18 reasons I said earlier, it did not violate the 19 order. 20 The order talks about things like 21 saying, you know, DRI stole betas, therefore, 22 it's okay if Microsoft ever did it, which it 23 didn't, and because that conduct is illegal. 24 I'm not saying for a moment that what 25 Mr. Reiswig did is illegal or anticompetitive. 7188 1 It's a little -- 2 THE COURT: It just leaves the 3 impression to the jury that it is. 4 MR. HOLLEY: No, the impression -- 5 THE COURT: So you're going to tell 6 the jury, then, it's not illegal? 7 MR. HOLLEY: Absolutely. We're going 8 to tell the jury that this is the way 9 competition works in the software industry. 10 THE COURT: How is it relevant to what 11 he's been testifying? He's only talked about 12 the acts of Microsoft. 13 MR. HOLLEY: Because those acts, Your 14 Honor, are either competitive or 15 anticompetitive under instruction number -- 16 THE COURT: But you don't want them 17 talking about competition. 18 MR. HOLLEY: But, Your Honor, if you 19 look -- 20 THE COURT: And I sustained that 21 objection over and over again on your behalf 22 that he can't talk about competition. 23 MR. HOLLEY: Well, Your Honor, with 24 respect to Mr. Lamb, when Your Honor said 25 sustained, he would add the phrase in a 7189 1 technological sense or in your view and proceed 2 to ask the same question again. 3 So the -- all that testimony came in. 4 And if you look at the chart that 5 Mr. Alepin had up yesterday at the end of the 6 day, that's all about competition. That's all 7 that's about. It's all about competition. 8 So my view is that having allowed all 9 that testimony to come in, it's in the 10 evidence, it's in the record, Microsoft now has 11 to be able to cross-examine it. 12 Iowa law is very clear that 13 cross-examination is critical, that there has 14 to be quite free reign on cross-examination, 15 and that's part of a fair trial. 16 Plaintiffs' counsel have said that to 17 the Court already in this case. 18 THE COURT: Well, free reign does not 19 mean you can go into areas without establishing 20 foundation and relevance. 21 Do you agree? 22 MR. HOLLEY: I do agree with that, 23 Your Honor. 24 THE COURT: Then do it. 25 MR. HOLLEY: But I believe that the 7190 1 cross-examination concerning FUD is directly 2 relevant. 3 That is one of the -- that was the 4 first column in Mr. Alepin's chart, was FUD. 5 That's what he talked about. He talked about 6 it a lot. 7 He talked about it with regard to 8 DR-DOS and OS/2, and I'm -- you know, we have 9 to be entitled to challenge that testimony. 10 THE COURT: Okay. Motion to strike is 11 denied. 12 Anything else? 13 MR. LAMB: No, Your Honor. 14 THE COURT: Bring the jury back. 15 (The following record was made in the 16 presence of the jury 9:30 a.m.) 17 THE COURT: Everyone else may be 18 seated. 19 Continue, please. 20 CROSS-EXAMINATION (CONT'D) 21 BY MR. HOLLEY: 22 Q. Mr. Alepin, I'd now like to turn to 23 your general testimony about operating systems. 24 You had a slide that described various 25 operating systems available in the marketplace; 7191 1 correct? 2 A. I did, yes. 3 Q. Okay. And can we look at Slide Number 4 713, please. 5 This is your slide concerning 6 operating systems; is that right? 7 A. That's correct. 8 Q. Okay. And the purpose of this slide 9 was to show the jury what sorts of products are 10 available in the marketplace? 11 A. In part, yes. 12 Q. Now, you refer up there in the 13 right-hand corner to UNIX; is that correct? 14 A. I do. 15 Q. And UNIX isn't actually a product 16 itself, is it? It's a family of operating 17 systems? 18 A. It's an operating system, and there 19 are different flavors of operating system 20 products that are based on UNIX, the UNIX 21 operating system. 22 Q. Okay. And I'd like you to look if you 23 would, sir, at 714. 24 All of these things down in the 25 right-hand side are flavors of UNIX, right? 7192 1 A. I'm happy I chose flavors. 2 Q. Great minds think alike. Okay. 3 A. Well, thank you. 4 Q. So those are all flavors of UNIX on 5 the right; correct? 6 A. Yes, they seem to be, and companies 7 who supply them, yes. 8 Q. One of the UNIX suppliers is 9 Microsoft, correct, with a product called 10 Xenix? 11 A. This is over time and from the early 12 1980s, I think. So, yes, I don't think that 13 Microsoft -- I'm sorry. I'm not sure that 14 Microsoft continues to sell it, but over time, 15 that's true. 16 Q. Now, are you familiar with a request 17 by AT&T to Microsoft to create a merged version 18 of UNIX in the late 1980s that would 19 incorporate AT&T, System 5 UNIX, and Xenix? 20 A. I recall discussions about that at the 21 time. 22 Q. Okay. And AT&T, as you testified, was 23 the original developer at Bell Labs of UNIX; 24 correct? 25 A. It was the original, yes, developer, 7193 1 yes. 2 Q. Are you aware that that merged version 3 of System 5 UNIX and Xenix won an award as the 4 best version of UNIX in 1987? 5 A. That's quite possible; quite possible. 6 Q. And that version of UNIX supported 7 long file names, didn't it? 8 A. I'm not sure whether that's true or 9 not, but that's also possible. 10 Q. You don't know one way or the other? 11 A. This is 20 years ago with respect to 12 the specific functionality. I'm not sure 13 whether it was in the version in 1987 or 1991 14 or whenever, but it's possible. 15 Q. Now, you drew up on the board a 16 diagram of the structure of an operating 17 system; is that correct? 18 A. Yes. I think a couple of times, 19 perhaps. 20 Q. And I'd like to take a look at that. 21 I took the liberty of making it 22 pretty, but could we look at Slide 704? 23 Now, is this your diagram of an 24 operating system with the kernel in the center 25 and then the GUI and file system at the next 7194 1 ring, middleware at the next ring, and the 2 applications at the outer ring? 3 A. Not quite. 4 Q. Okay. 5 A. I think I -- excuse me. 6 Q. No, I'm sorry, I didn't mean to 7 interrupt you. 8 A. I think I drew the diagram, certainly 9 inartfully, but with the intention of not 10 having middleware complete a circle around the 11 operating system because -- and I think I 12 mentioned this at a couple of points; that not 13 all applications use middleware. 14 So they would be connected to the 15 interior portions of the operating system other 16 than riding on top of middleware. 17 So there's -- there should be a line 18 on middleware, and it shouldn't make a full 19 circle, maybe impressionistically a half 20 circle. 21 MR. HOLLEY: Your Honor, can I go draw 22 what the witness is describing on this so we 23 are agreeing about what it ought to look like? 24 THE COURT: Certainly. 25 MR. HOLLEY: It won't be as nice as 7195 1 that. 2 Q. So as I understand it, Mr. Alepin, you 3 say that there is a circle in the center, and 4 that's called the kernel? 5 A. Excuse me, could I -- I have to look 6 right through the reporter. 7 Q. Oh, I'm sorry. 8 I'm trying to make sure as many people 9 can see this as possible, but you're the most 10 important person. 11 So that's the kernel; right? 12 A. Yes. 13 Q. And then there's this ring there, and 14 it has things like GUI, the graphical user 15 interface, and the file system; correct? 16 A. And other components of the system, 17 yes. 18 Q. Okay. And then there's this, which is 19 middleware, and then there's this, which is 20 applications, and what you're trying to 21 illustrate is that while some applications call 22 middleware, some call the operating system 23 directly. Is that what you meant to say? 24 A. That was the point with that, yes. 25 Q. Now, it's not your testimony, is it, 7196 1 sir, that the -- 2 MR. HOLLEY: Chris, we can take that 3 slide down. Thank you. 4 Q. It's not your testimony, is it, 5 Mr. Alepin, that the only thing that's the 6 operating system is that little circle in the 7 middle called the kernel, is it? 8 A. No. It's not. 9 And this was one of a couple of 10 different drawings that I made of operating 11 systems arranging them differently just to be 12 clear, but this is one to be sure, one of the 13 diagrams of an operating system. 14 Q. But you're not unhappy with this 15 diagram; right? 16 A. No. 17 Q. What else other than the graphical 18 user interface and the file system are in that 19 second ring around the kernel? 20 A. There can be access to other support 21 time services, for example, or the ability to 22 communicate with different processes, different 23 portions of your program to create -- I talked 24 about multiple -- multiprocessing and 25 multiprogramming. 7197 1 Multiprogramming, you have multiple 2 applications running concurrently. Well, 3 there's this notion that sometimes you can send 4 messages from one application to another, and 5 the operating system functions perform 6 interprocess communication, another kind of 7 service that's performed by the operating 8 system components. 9 Q. Is support for networking protocols in 10 the kernel ring or the next ring out? 11 A. It can depend on how the system is 12 architected, but support for networking 13 communications protocols exists in different 14 portions of the system. 15 The actual handling of the hardware 16 sits at a layer, at the device driver layer. 17 So the handling of communications 18 protocol information that is coming into the 19 computer is handled at the device driver level, 20 and then there is successive layers of software 21 on top which deal with the communications and 22 then the communications protocol content. 23 Q. Now, on direct examination I think I 24 understood you to say that the test about 25 whether something is or is not part of an 7198 1 operating system is whether it's essential to 2 the functioning of the computer. Did I 3 understand that correctly? 4 A. I think that I was referring to the 5 kernel at the time, not to the operating system 6 generally. I don't think I would have said 7 that. 8 Q. So there are many things that won't 9 cause the computer to freeze or crash, but 10 they're still part of the -- if you remove 11 them, but they're still part of the operating 12 system. Do you agree with that? 13 A. They're still part of operating 14 systems, yes. 15 Q. Are you aware, sir, of any operating 16 system for personal computers that doesn't have 17 a graphical user interface at that second ring 18 out? 19 A. There are operating systems that offer 20 multiple different graphical user interfaces. 21 Q. I'd like to show you, Mr. Alepin, 22 Slide Number 715. 23 Now, these are four operating systems 24 used on PCs; correct? Fedora Linux, Mac OS X, 25 OS/2 Warp 4, and Suse Linux; correct? 7199 1 MR. HOLLEY: Your Honor, may I have 2 permission to get this out of the way? 3 THE COURT: Sure. 4 A. Yes. 5 Q. And each of them have a graphical user 6 interface; correct? 7 A. Each of them is displaying a graphical 8 user interface here, yes. 9 Q. Now, you're also -- you testified 10 about an operating system called the BeOS from 11 Be; is that correct? 12 A. I'm looking at the -- I'm still 13 looking at the diagram there on the bottom, and 14 I'm wondering what the -- it looks to me like 15 there's Microsoft Office buttons down there. 16 Q. Where are you looking, sir? I gave my 17 copy to Mr. Lamb. 18 A. It's in the Fedora. 19 Q. You're familiar with a product called 20 Wine; correct? Wine? 21 A. Wine, yes. 22 Q. And you can run Microsoft Office on 23 Linux using Wine, can't you? 24 A. You can. I believe it's roughly 25 possible. 7200 1 Q. All right. I'd like to return back -- 2 A. Sorry. 3 Q. -- to my question, sir. 4 You testified on direct about the Be 5 operating system; right? 6 A. I did. 7 Q. I'd like to show you a slide that 8 Ms. Conlin used in her opening, number 760, of 9 the BeOS desktop. 10 Now, do you recognize this as the Be 11 user interface? 12 A. This is one instance of the BeOS. 13 Q. And I'd like to focus on the lower 14 left-hand corner. That's the built-in web 15 browser in the Be operating system called net 16 positive; is that right? 17 A. I think so, yes. 18 Q. And one of the things that Be decided 19 to use the built-in web browser to do was make 20 help information and documentation available to 21 users in HTML format; is that right? 22 A. If memory serves, that's correct. 23 MR. HOLLEY: Your Honor, may I move -- 24 sorry, up and down. 25 Q. I'm going back to this diagram that we 7201 1 have of the operating system. 2 Is the multiple virtual DOS manager in 3 Windows 3 in the second ring, the first ring, 4 or someplace else? 5 A. The -- I'm sorry, the multiple virtual 6 DOS manager in -- 7 Q. In Windows 3.1. 8 A. It's -- well, it's in a couple of 9 places. 10 Q. Can you tell me which places it is? 11 A. It's in the -- in the operating system 12 as well as in the -- inside Windows. 13 Q. And that's because it's your testimony 14 that Windows 3.1 is not an operating system; 15 correct? 16 A. It was not an -- not called an 17 operating system and required an operating 18 system to work. 19 Q. From a technological standpoint, based 20 on what you say is in an operating system, it's 21 your testimony that Windows 3.1 is not an 22 operating system; right? 23 A. That's correct. 24 Q. I'd like to show you, sir, a Slide 25 Number 747 from Prentice Hall textbook on 7202 1 personal computer operating systems, and I'd 2 like you to focus, if you would, sir, and we're 3 going to blow it up just because it's easier to 4 see that, this diagram in the center. 5 Is this consistent with your 6 understanding of the architecture of Windows 7 3.1? 8 A. The Windows -- you're referring to the 9 Windows core, is that the portion that -- the 10 GDI, the kernel and the user? 11 Q. Actually my question was a little 12 different, sir. 13 Is it consistent with your 14 understanding that what's below the line that 15 goes across horizontally is MS-DOS in the real 16 mode section and what's above the line that 17 says protected mode is Windows 3.1? 18 A. Those are the elements of Windows 3.1 19 that's -- that are above the line. I believe 20 that's correct, yes. 21 Q. One of which is the kernel; right? 22 A. That's the Windows kernel, that's 23 correct. 24 Q. So Windows has a kernel, Windows 3.1 25 has a kernel, and it also has a graphical user 7203 1 interface and it has this thing you testified 2 about which permits communication among 3 different virtual machines; correct? 4 A. That's correct. 5 Q. What does it use -- Windows 3.1, what 6 does it use DOS for? 7 A. It uses DOS for certain functions, 8 including getting the computer to begin 9 running. 10 Q. Have you ever read the book written by 11 one of the Plaintiffs' other technical experts, 12 Mr. Schulman, called Unauthorized Windows 95? 13 A. I read -- well, it's not a 14 start-to-finish kind of book. It's not a page 15 turner in that sense. It's -- you go to it for 16 specific information. 17 So perhaps over time I have managed to 18 read all of it, but never at one sitting. 19 Q. Now, you testified, I believe on 20 direct, sir, that Windows 95 was really just 21 MS-DOS and Windows 3 bundled together; right? 22 A. I think that's -- I think I said that 23 there was a bundling and tying in there, but it 24 was bundled together, certainly. 25 Q. I'd like to show you a part of 7204 1 Mr. Schulman's Unauthorized Windows 95 book. 2 This is Slide 777. 3 Now, here Mr. Schulman writes, the 4 reason, quite simply, is that Windows 95 is 5 already -- that's his emphasis -- a genuine 6 operating system and that its reliance upon the 7 real mode MS-DOS code does not change this. 8 Windows 95 can be a genuine operating system, 9 and still use DOS for some operations. 10 And that's his emphasis. 11 You have no basis to disagree with 12 that, do you? 13 A. I think that's -- I have no reason to 14 disagree with that. 15 MR. HOLLEY: Chris, that slide can 16 come down. Thank you. 17 Q. I'd now like to turn to a slightly 18 different topic. 19 THE COURT: I'm sorry. The witness 20 wants a break? 21 THE WITNESS: If you wouldn't mind. 22 THE COURT: He just turned to me and 23 requested a break. So we'll take a break for 24 ten minutes. 25 Remember the admonition previously 7205 1 given, and leave your notebooks here. 2 See you in ten minutes. 3 (A recess was taken from 9:52 a.m. 4 to 10:06 a.m.) 5 THE COURT: Mr. Holley, you may 6 continue, sir. 7 MR. HOLLEY: Thank you, Your Honor. 8 Q. Mr. Alepin, you would agree with me, 9 would you not, that the concept of what 10 constitutes an operating system is a subject of 11 debate in the industry? 12 A. There is ongoing debate about what 13 constitutes an operating system at the edges, 14 yes. 15 Q. And you have testified that there are 16 shades of gray in trying to decide what is and 17 is not part of an operating system; correct? 18 A. Are you referring to a specific -- 19 Q. I was, but first I'd like to ask 20 whether you have any memory of testifying that 21 there are shades of gray in trying to decide 22 what is and is not in the operating system? 23 A. I think that that's consistent with 24 the previous answer that there are at the edges 25 these debates, yes. 7206 1 Q. You will also agree that the concept 2 of what constitutes an operating system in 2007 3 is more expansive than the concept of what 4 constituted an operating system in 1985 in 5 relation to PCs; correct? 6 A. I think I would say that with respect 7 to operating system products, as opposed to 8 operating systems, at the end of the day 9 operating systems has -- operating systems have 10 to perform a number of functions, core 11 functions in 1985 and in 2007. 12 Q. And the number of functions performed 13 by a PC operating system in 2007 versus 1985 is 14 much larger; correct? 15 A. With respect to personal computer 16 operating systems? 17 Q. Yes, sir. 18 A. I think that the personal computer 19 operating systems today perform more of the 20 functions you would expect to see in operating 21 systems. 22 Q. So what MS-DOS did in 1985 relative to 23 what the IBM mainframe operating system did in 24 1985 was a very small fraction; correct? 25 A. It provided memory management, and 7207 1 IBM's mainframe operating system provided 2 memory management. 3 There's a significant difference in 4 the quality of the two of them back in 1985, 5 but it -- so there -- the DOS operating system 6 performed several of the functions that the 7 IBM's mainframe system did, but didn't do them 8 nearly as well or as sophisticated. 9 Q. And my question was slightly 10 different, sir. 11 You would agree with me, would you 12 not, that PC operating systems have been 13 playing catch-up to mainframe operating systems 14 in the period from 1985 to today? 15 A. In certain areas, that's true, yes. 16 Q. Now, you testified on direct about the 17 migration of new functionality in operating 18 systems over time. Do you remember that? 19 A. Into operating systems products or -- 20 is that the -- 21 Q. Well, maybe we better get established 22 what we're talking about. 23 When you say operating system product, 24 how do you distinguish that from an operating 25 system? 7208 1 A. Well, an operating system product like 2 Windows includes many things in the package, 3 including games, primitive word processor, 4 primitive word application. It includes 5 systems support utilities as well as the 6 operating system and other software componentry 7 in the box, and that's an operating system 8 product -- 9 Q. Okay, and -- sorry. 10 A. Sorry -- to me. 11 Q. And if we drew a then diagram of an 12 operating system product as the big circle and 13 an operating system, as you use that term, as 14 the little circle, what's outside the operating 15 system? 16 A. All those things that I just 17 described, systems support utilities and those 18 starter applications. The tutorials, the other 19 pieces that are not the core of the operating 20 system functions that we would understand as 21 being an operating system, memory management 22 and that kind of stuff. 23 MR. HOLLEY: Your Honor, may I go draw 24 the diagram I just described? 25 THE COURT: Sure. 7209 1 MR. HOLLEY: Thank you. 2 Q. We're going to change colors for 3 variety. 4 So this is that then diagram I 5 described? 6 A. Excuse me, Mr. Holley, could you -- 7 Q. I'm sorry, Mr. Alepin. 8 A. That's better. Thank you. 9 Q. I forgot and did the same thing again. 10 I'm sorry. 11 So this is -- okay. Now, I would like 12 to focus for purposes of my question about just 13 the inner circle, the operating system. 14 You would agree with me that since the 15 mid 1980s, the operating system as you describe 16 it for PCs has taken on more and more and more 17 functions? 18 A. Yes. 19 Q. I'd like to show you Slide 756. 20 Now, this is your trial testimony, 21 sir. 22 You say that what happened over time 23 was that this functionality existed in each 24 application -- excuse me -- this functionality 25 that existed in each application became 7210 1 subroutine first so that different applications 2 could use the same subroutines. They were 3 separable from the application. 4 Later that became a single operating 5 system that allowed multiple applications to 6 use it. 7 And that is a process that you're 8 quite familiar with, correct, where some 9 functions started in an application, then it 10 migrated into some sort of, I guess we might 11 call it middleware or some sort of subroutines 12 that were independent from the applications, 13 and then the functionality migrated down into 14 the operating system so that multiple 15 applications could use it; correct? 16 MR. LAMB: Objection to the extent the 17 document reads they were separate from the 18 application, not separable from the 19 application. 20 MR. HOLLEY: I accept that correction. 21 I didn't mean to suggest any different. 22 THE COURT: Very well. 23 A. Actually, I was talking about the 24 again genesis of the operating system. So how 25 an operating system, a modern operating system 7211 1 came into being starting from the original 2 application in a world where no operating 3 systems exist, how that came to pass, how we 4 came to create operating systems over time. 5 Q. Okay. I accept that, but the process 6 has continued, has it not? 7 So, for example, the developers of 8 Microsoft Excel invented the concept of tool 9 bars and then that tool bar functionality 10 migrated into Windows so that everybody can use 11 it; is that right? 12 A. It migrated into the Windows product 13 operating system product, that's correct. 14 Q. Well, it migrated into the second 15 circle on your diagram -- 16 MR. HOLLEY: Your Honor, may I go to 17 the chart? 18 THE COURT: Sure. 19 MR. HOLLEY: Thank you. 20 A. It's -- excuse me. I'm afraid you're 21 going to have to do that again. 22 Q. I'm sorry. 23 MR. TULCHIN: My apologies. I moved 24 it so that the jury could see the screen 25 better. 7212 1 Q. We're the Keystone cops here, 2 Mr. Tulchin and I. 3 So the functionality of tool bars 4 migrated from Excel into the graphical user 5 interface components of Windows that were made 6 available through APIs to application 7 developers; correct? 8 A. That's a formulation I can agree with, 9 yes. 10 Q. Now, one of the things that used to be 11 as recently as 1992 separate from an operating 12 system was support for -- excuse me -- for 13 communication protocols like TCP, IP and FTP; 14 correct? 15 A. Support for those protocols was not 16 present in Microsoft's Windows product. 17 Q. And you believe that it was useful and 18 good for that functionality to be included in 19 Windows; correct? 20 A. Useful and good? It's certainly 21 useful to have communications protocol software 22 available to users of a computer system, yes, 23 absolutely. 24 Q. Okay. Well, more specifically, do you 25 recall being asked at your deposition in this 7213 1 case -- and I'm happy to give you a copy if 2 that would be helpful. 3 MR. HOLLEY: Your Honor, may I 4 approach the witness? 5 THE COURT: Uh-huh. 6 Q. And I've turned to the page I'm going 7 to talk about. 8 At 167 -- just bear with me one second 9 till I find it. 10 Actually, it starts on page 166, 11 Mr. Alepin. 12 I asked you the question: An example 13 of what I'm talking about would be the TCP/IP 14 stack. And stack is sort of slang for the 15 software that supports communications 16 protocols; is that right? 17 A. 166? 18 Q. Yes, sir, I'm sorry. 19 Maybe I should give you an opportunity 20 to make sure we're on the same page. 21 A. Thank you. 22 Q. So what I'm reading from is 166, line 23 15. Are you with me, sir? 24 A. I am now, yes. 25 Q. Okay. And I asked you the question: 7214 1 An example of what I'm talking about would be 2 TCP, IP stacks. 3 And just for the jury's benefit, a 4 stack is sort of slang for talking about 5 software code that supports networking 6 protocols; is that fair? 7 A. That's -- well, it's actually the 8 model of a communications protocols, and then 9 software implements that model in a stacked 10 layer, that's correct. 11 Q. Which until 1995 were offered 12 separately for a price sometimes exceeding the 13 price of Windows and are now part of Windows. 14 You don't regard that as a bad thing, 15 right, that integration of TCP/IP support into 16 operating systems like the Mac OS, Windows, and 17 Linux? 18 And you say, I don't know what bad 19 means, and I said bad to you. 20 Then you answered bad to me. 21 And I said, you're the only person who 22 can answer that question. 23 And then you gave this answer, 24 Mr. Alepin. 25 Well, you know, IBM's largest 7215 1 mainframe computer system, which has had 2 telecommunications capabilities in it since 3 1966 or so, provides TCP/IP stack as a separate 4 product. There's no necessity for integration. 5 The presence of that low-level functionality 6 is -- has been useful and good for the Windows 7 platform. 8 And you continue to believe that is 9 true, sir, right? 10 That the presence of low-level TCP/IP 11 support in Windows has been, in your words, 12 useful and good for the Windows platform? 13 A. To the extent that it's within this, 14 yes, that's what I -- I think I was making the 15 distinction about whether it needed to be part 16 of Windows, but certainly to have it available, 17 to have a communications protocol stack 18 available for users of Windows computer systems 19 is a -- is a benefit to those people who need 20 to use communications. 21 Q. But I'd like to focus on the words you 22 chose, sir. 23 You said the presence of that 24 low-level functionality is -- has been useful 25 and good for the Windows platform, and you 7216 1 don't disagree with that, do you? 2 A. I'm not saying in Windows. I'm saying 3 the presence of that low-level functionality 4 has been useful. Not in Windows, but to 5 Windows and to the Windows platform. 6 Q. Do you think that it was better in the 7 era when somebody had to pay $199.95 to FTP 8 software for a protocol stack than it is now 9 when it's free as part of Windows? 10 MR. LAMB: Objection. Lacks 11 foundation. 12 THE COURT: Overruled. You may 13 answer. 14 A. When the Winsock group arrived at a 15 proposed standard for the use of -- so it's not 16 sufficient to just provide the communications 17 protocol stack. You have to be able to connect 18 application programs to that stack when they 19 develop the standard. 20 It's my recollection that the prices 21 for this kind of software went down very 22 substantially. And, in fact, Netscape's 23 Navigator software did not require users to 24 spend $199 in order to get a communications 25 protocol stack for Windows 3.1 because Windows 7217 1 3.1 did not include a TCP/IP stack software in 2 it. 3 Q. But Windows 95 did; right? 4 A. Windows 95 included a TCP/IP 5 communications stack. 6 Q. Now, it is your professional opinion 7 based on your years of experience in the 8 software industry that the integration of new 9 functionality into operating systems -- 10 MR. HOLLEY: Your Honor, I hate to do 11 this, but can I go back and flip my chart? 12 THE COURT: Sure. 13 Q. By which I mean the inner circle on 14 the diagram, not the big circle, but the 15 integration of functionality into operating 16 systems is a good thing for consumers? 17 A. The ability to support multiple 18 microprocessors simultaneously is a good thing 19 insofar as it permits users who have those 20 kinds of computers to use that capability. 21 Q. All right, Mr. Alepin. 22 You remember, do you not, sir, giving 23 a deposition in the MDL case on January 21 and 24 22 of 2003; correct? 25 A. I remember having a deposition on or 7218 1 about that time, yes. 2 Q. And I'm not expecting you to have 3 total recall of all these pages so I'd like to, 4 if I could with the Court's permission, give 5 you a copy of this. 6 And I'm going to look, sir, at page 7 365 of that transcript starting on line 25. 8 A. This is Volume II dated -- this would 9 be the second day? 10 Q. Yes, Mr. Alepin, it took -- I think 11 the second volume starts like page 200 or 12 something? 13 A. 220, I think. 14 Q. Page 365 is indeed in the second 15 volume. 16 A. 365? 17 Q. Yes, sir. 18 A. All right. 19 Q. And I'm interested in the question 20 that my colleague Mr. Steinberg asked you 21 starting on the very last line of that page, 22 and I want to be sure you're there before we -- 23 A. I am, I think. 24 Q. So do you recall Mr. Steinberg asking 25 you the following question: 7219 1 Okay. Now, throughout this period of 2 time, operating systems manufacturers, whether 3 it was DRI or Microsoft or Apple, they were 4 adding more and more functionality into the 5 operating system; correct? Let's say 1989 to 6 1994. 7 Your answer is yes. 8 Mr. Steinberg asks you: And that was 9 a good thing for consumers; right? 10 And your answer was that's correct. 11 A. Yes. 12 Q. And you don't disagree with that 13 testimony, do you, sir? 14 A. No, I don't. 15 Q. And you don't disagree with this 16 proposition despite the fact that somebody who 17 used to sell a functionality that gets 18 integrated into Windows might lose business as 19 a consequence of that integration? 20 A. I'm sorry -- 21 MR. LAMB: Objection. Outside the 22 scope. 23 THE COURT: Overruled. You may 24 answer. 25 A. Excuse me. Could I have you ask the 7220 1 question again? 2 Q. Sure. 3 You don't think that indifferently 4 about whether the integration of new 5 functionality into PC operating systems is good 6 for consumers just because as a result of that 7 integration somebody who used to offer the 8 functionality, they got integrated as a 9 separate product might sell fewer copies as a 10 result? 11 A. No. Not just because of that, no. 12 Q. Now, in the course of your work on 13 this case in forming the opinions that you 14 delivered, did you have occasion to look at 15 Apple's OS X Tiger operating system? 16 A. I use it on one of my computers. 17 Q. So you're quite familiar with it? 18 A. Relative term, but yes, I use it. 19 Q. Now, among the many features that are 20 part of OS X Tiger are built-in faxing 21 capability; correct? 22 A. Yes, I think that's correct. 23 Q. And I'd like to show you Slide Number 24 781. This is a part of the Apple.com website 25 promoting OS X Tiger, and one of the things 7221 1 that Apple promotes, is it not, is that OS X 2 Tiger has faxing built in? 3 A. I see that. 4 Q. And another thing that's part of OS X 5 Tiger is a built-in address book that every 6 application running on the system can call; 7 correct? 8 A. Yes, I think that's the case. 9 Q. I'd like to take a look at Slide 782. 10 THE COURT: Can the jury see the 11 screen? 12 MR. HOLLEY: I'm sorry, Your Honor. 13 Excuse me. 14 Mr. Tulchin is falling down on the 15 job. He's my moving man. 16 MR. TULCHIN: I need to have my 17 functionality called. 18 Q. I'm sorry for the interruption, 19 Mr. Alepin. 20 Slide 782 shows that Mac OS X Tiger 21 has an address book, and Apple says it worked 22 seamlessly across the entire system; is that 23 right? 24 A. That's correct. 25 Q. And another feature of OS X Tiger from 7222 1 Apple is a built-in web browser; is that right, 2 called Safari now? 3 A. There is a bundled browser called 4 Safari. There was a bundled browser called 5 Internet Explorer for the Mac, yes. 6 Q. Well, isn't it more than bundled? 7 Isn't it technologically tied in the way that 8 you used that term? 9 A. In the way that I used that term, I 10 wouldn't say so, no. 11 Q. Have you studied all the 12 cross-dependencies that exist between the 13 Safari web browser and every other part of 14 OS X Tiger? 15 A. I've not studied all of those 16 dependencies, no. 17 Q. Okay. Let's look at Slide 783. 18 Now, this is another part of the Apple 19 website, and it promotes OS X Tiger as the 20 world's most advanced operating system; 21 correct? 22 A. I see that. 23 Q. Okay. And one of the things that 24 Apple promotes as an aspect of why OS X Tiger 25 is the world's most advanced operating system 7223 1 is that it has, as Apple says, cutting-edge 2 Internet applications that let you experience 3 science fiction as reality today. 4 You see that, do you not, sir? 5 A. I do. 6 Q. And one of the things that Apple says 7 that you can do with Safari is engage in 8 personal videoconferencing that looks as 9 elegant as the boardroom. 10 Do you see that, sir? That's the 11 second bullet point. 12 A. I do. 13 Q. Do you know what other components of 14 Mac OS X Tiger work with Safari to provide that 15 videoconferencing capability? 16 A. That would be the communications 17 protocol within the Mac OS product. 18 Q. So there's a cross-dependency between 19 Safari and those networking protocol stacks in 20 OS X Tiger; correct? 21 A. Well, there is a dependency. I'm not 22 sure cross-dependency, if it means that it's 23 transitive as opposed to intransitive. Either 24 one way -- the communications stack doesn't 25 depend on Safari, but Safari would depend on 7224 1 the communications stack. 2 That's a subtlety, perhaps, that -- it 3 was unnecessary. 4 Q. I appreciate the clarification, but 5 it's true that if you pulled the communications 6 stack out of Mac OS X Tiger, the 7 videoconferencing capability of Safari would 8 stop working; right? 9 A. Until you substituted or did something 10 else, yes. If you took it out, it would not 11 work. 12 Q. Now, I'd like to refer you again, sir, 13 to Mr. Schulman's book. 14 And I appreciate that you said you 15 didn't read it cover to cover like a spy novel, 16 but did you have occasion to consider what 17 Mr. Schulman had to say about the process of 18 integrating new functionality into PC operating 19 systems over time? 20 A. Without seeing the specific reference, 21 I'm not sure I have considered what Mr. 22 Schulman has said. And he has written rather 23 extensively on these kinds of subjects. 24 Q. I'm sorry. You have or have not? 25 A. I may have, but without seeing 7225 1 something to jog my memory about a specific 2 instance. Because he has, in fact, written 3 many different pieces. It would be hard to 4 say. 5 Q. Okay. Well, let's look at page 11 of 6 his book, which is Slide Number 778. 7 Now, Mr. Schulman writes up at the 8 top, when Microsoft put disk compression into 9 MS-DOS 6 -- and I'd like to just pause here for 10 one moment. 11 The first company to put disk 12 compression in an operating system was DRI, 13 right, not Microsoft? 14 A. Personal computer operating system, I 15 think that's DRI. I think that's correct, yes. 16 Q. So they -- DRI was integrating new 17 functionality into DR-DOS sometimes before 18 Microsoft was; right? 19 A. Indeed, yes. 20 Q. So when Microsoft put disk compression 21 into MS-DOS 6, leading to nearly immediate 22 layoffs at Stac -- and now Stac was an 23 independent company that offered disk 24 compression utilities; correct? 25 A. It offered a disk compression -- well, 7226 1 utilities as well as a disk compression -- a 2 compressed disk file system device driver. 3 So utilities that enabled you to 4 manage a disk that you had used that you were 5 going to access that the contents of which were 6 compressed. 7 Q. And one of the things that the stacker 8 product did was compress the files on your 9 disk; correct? 10 A. That's -- yes, that's correct. 11 Q. Okay. So sorry for the interruption, 12 but I want to make sure we understand the terms 13 we're talking about here. 14 So when Microsoft put disk compression 15 into MS-DOS 6 leading to nearly immediate 16 layoffs at Stac, the response of most 17 developers, myself included, was heck, disk 18 compression belongs in the OS. 19 And he means operating system, right, 20 there, OS? 21 A. I'm not sure whether he means 22 operating system product or operating system, 23 but he's talking about operating system there 24 in the OS, yes. 25 Q. Okay. And then he goes on and says, 7227 1 Stac had a nice ride for a while. Let them 2 find another line of business. Them's the 3 brakes. 4 So Mr. Schulman basically said it's 5 tough luck for Stac; right? 6 A. That sounds like what Mr. Schulman is 7 saying. 8 Q. And then he goes on on this page at 9 the bottom, he says, if an ISV makes an 10 application or utility product that it thinks 11 most PC users should buy, then -- almost by 12 definition -- it seems that product's 13 functionality belongs as part of the operating 14 system. 15 So Mr. Schulman is saying that if 16 something becomes so broadly useful that 17 everybody ought to have it, it belongs in the 18 operating system; correct? 19 A. That's what Mr. Schulman is writing. 20 Q. Now, did you have occasion to look at 21 what Plaintiffs' counsel said in opening in 22 this case about the benefits that software 23 developers get from including functionality in 24 PC operating systems? 25 A. I don't -- I read some portions of the 7228 1 opening, but it -- I did not perhaps focus on 2 that particular passage without being able to 3 see it again. 4 Q. Okay. Well, let's take a look at the 5 transcript for the trial of the 7th of 6 December, Pearl Harbor Day of last year, and 7 this is page 3468, lines 1 to 24. 8 Now, what Plaintiffs' counsel said to 9 the jury in opening was that APIs are a great 10 help to ISVs. 11 And ISV is a very common term for 12 talking about software developers, right, 13 independent software vendor? 14 A. That's the term I used. It's a common 15 term, yes. 16 Q. APIs are a great help to ISVs because 17 it means that they can focus on the special 18 features of their application rather than 19 spending time reinventing the wheel, so to 20 speak, by writing the same functions that 21 everybody else has to write. 22 For example, Windows manages the 23 windows. 24 Meaning the windows on the screen; 25 right? 7229 1 It provides you all kinds of APIs for 2 popping up the windows and controlling their 3 size and moving them around on the desktop and 4 so forth. 5 An applications developer, then, 6 doesn't have to write the thousands of lines of 7 code that it takes to manage the windows needed 8 to use -- needed to be used by that 9 application. 10 Instead, he can write one or two 11 lines, call that API, and then that API will do 12 those functions with the windows. 13 And I think, frankly, that ought to be 14 a lower case "w". 15 Do you agree with me we're still 16 talking about moving the windows around? 17 A. Right. 18 Q. There are thousands, many thousands of 19 APIs in Windows. 20 Now, you agree with this, right, that 21 one of the good things about including 22 functionality in Windows or some other PC 23 operating system is that you can then expose 24 that functionality through APIs, application 25 programming interfaces, and then software 7230 1 developers can call those APIs and get the 2 function, and they don't have to write it 3 themselves; right? 4 A. I agree that -- I agree with the 5 proposition that APIs are a good thing insofar 6 as they enable applications developers, as the 7 text here says, to concentrate on different 8 elements of their application and not reinvent 9 certain functionality. 10 But the second part of the question is 11 whether they ought to be in Windows, or at 12 least I was reading -- I was understanding your 13 question as being necessarily in Windows, that 14 those APIs had to exist or be provided. 15 Q. Well, that actually was my question, 16 and I wonder whether you could look with me, 17 sir, at page 140 of your Iowa deposition. 18 Do you still have that up there, sir? 19 Or did I take it back? 20 A. I'm sorry, the page reference? 21 Q. Page 140. 22 A. I've got it. 23 Q. Okay. And read as much of this as you 24 need for context, but I asked you the question, 25 starting on line 8: 7231 1 That's, in fact, one of the benefits 2 of having something in the operating system, is 3 that the applications developer doesn't have to 4 rewrite the same code; correct? 5 And your answer is: For certain 6 functions, that's correct. 7 And you agree with that testimony; 8 right? 9 A. That's correct. Or I do. Let's be 10 more helpful. 11 Q. I understand what you meant. 12 Now, on direct examination, one of the 13 examples that you gave the jury of an 14 application was something called Quicken 2007; 15 is that right? 16 A. 2007, or was it 2005? It was Quicken, 17 and it was a very recent version; very recent. 18 Q. A recent version, okay. 19 And one of the things you observed 20 about Quicken was that it has an engaging 21 graphical user interface; right? 22 A. That's correct. It metaphorically 23 speaks to a -- to the task of managing 24 financial information for people, individuals. 25 Q. Now, I'd like to show you again what I 7232 1 believe is your slide about Quicken, which is 2 number 785. 3 Now, I take it there are three 4 products being shown here; right? There's 5 QuickBooks, which is not Quicken, and there's 6 Turbo Tax, which is not Quicken, but if we look 7 at the window -- the big window in the back, 8 that is the Quicken user interface; correct? 9 A. That's correct. 10 Q. Okay. And across the top of that user 11 interface, there are entries for drop-down 12 menus. 13 Can you tell the jury what a drop-down 14 menu is? 15 A. A drop-down menu is a -- an element of 16 a graphical user interface, which when a user 17 clicks on it or selects it in some way, 18 additional menu choices will appear that are 19 related to the particular name of the menu that 20 runs atop the menu bar. 21 Q. And the code that generates the 22 develop drop-down menus in Quicken is in 23 Windows, isn't it? 24 A. Well, there are two pieces to it. One 25 is inside the Quicken program that says I would 7233 1 like to have menu items including business and 2 cash flow and property and debt. 3 Windows doesn't have those kinds of 4 menu items in it, and it's Quicken that decides 5 to have that displayed. But it's actually the 6 graphical user interface functions, in part the 7 foundation classes that I talked about, that 8 are -- that help to get that information 9 displayed up on the top of the screen for 10 Quicken. 11 Q. I'm sorry, I didn't mean to interrupt 12 you. 13 And those foundation classes, if you 14 want to call them that, are in Windows; right? 15 A. They're in the -- they're in Windows, 16 yes. 17 Q. Okay. And Microsoft tells developers, 18 among other places, on the Microsoft developer 19 network website how to call APIs in Windows to 20 generate these sorts of menus; right? 21 A. Yes. 22 Q. I'd like you to take a look, please, 23 if you would, at Slide Number 710. 24 Now, first of all, Mr. Alepin, I'm not 25 sure we -- you talked about this on direct, but 7234 1 could you tell the jury what MSDN is? 2 A. MSDN stands for Microsoft developer 3 network. 4 It is a -- it is a number of things, 5 so it includes a website, which we're looking 6 at, or this -- I'm taking it as a screen shot 7 from the Microsoft developer network website. 8 It is also a program -- not a computer 9 program, but a program that Microsoft operates 10 that people can subscribe to and receive 11 information from Microsoft and copies of 12 Microsoft software. 13 I've been a Microsoft developer 14 network member for 15, 16 -- I think since it 15 first came into being. 16 Q. And one of the things you get as a 17 subscriber to the Microsoft developer network 18 are periodic DVDs full of information from 19 Microsoft about how to write Windows 20 applications; correct? 21 A. That's part of the -- what Microsoft 22 distributes. 23 Q. And there's information on those DVDs 24 about how to call APIs, and there's sample 25 source code on those DVDs that shows you how to 7235 1 do it; is that right? 2 A. Yes. 3 Q. Now, this particular screen shot from 4 MSDN is talking about menus, controls and tool 5 bars, and it says, Microsoft Windows includes a 6 number of components to support user input. 7 These interactive components enable users to 8 carry out commands and specify values. 9 Now, this isn't talking about what you 10 can do just looking at Windows alone, right, in 11 the operating system? 12 It's talking about functions that 13 software developers can call in Windows to put 14 functions in their products? 15 A. That's correct, yes. 16 Q. Now, you talked on direct a lot about 17 Internet Explorer; right? 18 A. Yes. 19 Q. And it was your testimony that 20 Internet Explorer was improperly tied and 21 bundled into Windows; is that correct? 22 A. I don't recall saying improperly. 23 Q. Okay. You weren't meaning to make any 24 judgment about that one way or the other? 25 A. Not a value judgment, no. 7236 1 Q. Okay. But you did say that Internet 2 Explorer was tied and bundled into Windows? 3 A. Technologically, yes. 4 Q. Okay. Are you aware -- and let's go 5 back to -- I'm losing track of my slides here. 6 I want to go back to that Quicken user 7 interface. I think it's 784. I may be wrong. 8 785. 9 Now, we talked about those drop-down 10 menus across the top. 11 Do you know how the Quicken user 12 interface generates contact in HTML format in 13 its user interface? 14 A. There's a little bit of technical 15 ambiguity in your question. Are you asking how 16 Quicken causes HTML content to be rendered on 17 the screen or -- 18 Q. Exactly. I'm sorry, that's what I 19 meant to say, and if I was unclear, I 20 apologize. 21 A. Okay. 22 It uses a set -- I believe it uses a 23 set of programming interfaces, APIs, to have 24 the content displayed. 25 Q. And those APIs in Windows call 7237 1 Internet Explorer, don't they? 2 A. More precisely, they call the HTML 3 rendering engine. 4 Q. Which is part of Internet Explorer, 5 isn't it? 6 A. Microsoft shipped the HTML rendering 7 engine as part of Internet Explorer, yes. 8 Q. Now, if I punch that button up there 9 that says quicken.com, Quicken will generate a 10 browsing window that it gets by calling the 11 Internet Explorer components of Windows; 12 correct? 13 A. That's this button here. It will -- 14 as a technical matter, I believe what it will 15 do is it will launch the Internet Explorer 16 control. 17 Q. Which is also known as the web browser 18 OC; is that right? 19 A. That's control, yes. OC's are 20 controls in Windows. 21 Q. I just want to make sure we're talking 22 about the same thing, okay. 23 So it will launch the web browser OC, 24 which is a function in Windows that permits a 25 developer like Quicken to host web pages inside 7238 1 of its application; is that right? 2 A. That's correct. 3 Q. Now, Quicken is the most popular 4 personal finance software by a considerable 5 margin; is that right? 6 A. The last time I looked, it was, and I 7 believe that's -- it's still true. 8 Q. It has a share of somewhere near 70 9 percent; right? 10 A. No reason to disagree with you. 11 Q. And you're not suggesting for a 12 moment, are you, that that dominant 70 percent 13 share that Quicken has is the result of any 14 anticompetitive action by Intuit, its vendor, 15 are you? 16 A. I wouldn't have an anticompetitive 17 opinion at all about that. 18 Q. Do you think that personal finance 19 software like Quicken provides value to 20 consumers? 21 A. Of course. 22 Q. In fact, you testified on direct to 23 that effect, right, that it's valuable 24 software? 25 A. The software -- applications software 7239 1 such as Quicken is the reason why I believe 2 consumers -- people buy computers, yes. 3 Q. Do you know how much Quicken costs? 4 A. There are several different versions 5 of Quicken, and I think the least expensive on 6 an update basis may be 19.95. 29.95 for a 7 basic edition. 39.95 for one that manages your 8 will and other things, and going on up the 9 line. 10 I think that's kind of the price 11 range, but that's my -- those are my estimates 12 or recollection for the prices. 13 MR. HOLLEY: Your Honor, can I just -- 14 one moment, I need to go grab something from 15 one of my colleagues. 16 THE COURT: Sure. 17 Q. Now, on Saturday I asked one of my 18 colleagues to go buy a copy of Quicken at Best 19 Buy on University Avenue in Clive. 20 MR. HOLLEY: And I'd like to hand this 21 to the witness, Your Honor. 22 THE COURT: You may. 23 Q. Now, that copy of Quicken, which seems 24 basic to me, costs 79.95; right? 25 I'm sorry, 79.99. I don't want to 7240 1 pare off the four cents. 2 A. That's what the receipt says. It's 3 not -- what you've handed me is not the basic 4 Quicken. 5 Q. Okay. So that's the premier version? 6 A. Actually, there's -- yeah, there's -- 7 there are four versions that are listed on the 8 back of the box. 9 This would be the third -- the second 10 most expensive or the second most full-featured 11 of the Quicken product line. So this is the 12 premier edition. 13 Q. And you would agree with me from a 14 technological standpoint that there is far, far 15 less functionality in that box, that checkbook 16 software from Quicken than there is in Windows 17 XP; right? 18 A. I think that's correct. 19 Q. Now, we talked a little bit about 20 developers and how they benefit from including 21 new functionality in Windows. 22 I'd like to turn to the topic of end 23 users, normal people. 24 When you were forming your views about 25 -- forming your opinions in this case, did you 7241 1 consider testimony in the record about whether 2 consumers benefit from integrating new 3 functionality into operating systems? 4 A. I'm not sure which specific testimony 5 you're referring to, but I considered lots of 6 different testimony. 7 Q. I didn't have anything specifically in 8 mind. I was just trying to establish that you 9 did indeed look at things in the record in 10 deciding what your opinions were about the 11 impact on consumers of integrating new 12 functionality into Windows. 13 A. I did. 14 Q. Okay. And among the things that you 15 looked at, did you consider the testimony of 16 Professor Lee Hollaar of the University of 17 Utah? 18 A. I considered his testimony, I think, 19 on a couple of points in particular, but if you 20 had something specifically. 21 MR. HOLLEY: Sorry for the 22 interruption, Mr. Alepin. 23 Q. I'd like to show you the testimony -- 24 we're going to look at it up on the screen 25 because I don't have it in hard copy at the 7242 1 moment -- of the December 18, 1998 deposition 2 of Professor Hollaar. And this is at page 257, 3 20, to 258, 1. 4 Now, looking at this on the screen, 5 I'm going to ask you if this refreshes your 6 recollection whether this is one of the things 7 in Professor Hollaar's deposition that you 8 looked at. 9 He was asked the question: What would 10 be the benefit of doing that to this 11 consolidator person? 12 And the context here is they were 13 talking about Windows and DOS being installed 14 together. 15 And Professor Hollaar answered: There 16 may be some users that don't want to go through 17 the bother of installing multiple pieces of 18 software; that they are willing to pay someone 19 a little bit higher, maybe ten bucks to put it 20 on one disk. And there are instances of that 21 with Windows 3 and with DOS. 22 Did you consider the testimony of 23 Professor Hollaar that it would be worth $10 a 24 copy for a consumer to have Windows and MS-DOS 25 installed rather than making the consumer do 7243 1 that on his or her own? 2 A. I think this is Professor Hollaar's 3 testimony in the Caldera -- this is litigation 4 involving Caldera, is that -- 5 Q. That is correct. Your memory is 6 correct. 7 But just to be clear before you 8 answer, and I don't mean to interrupt you, you 9 did look at things from the Caldera case in 10 forming your views; right? 11 A. Yes, I did. Yes. 12 I believe I read that particular 13 passage, and I'm not sure whether it was 14 excerpted by -- in Microsoft's papers as well, 15 but I think I read that when I reviewed 16 Professor Hollaar's deposition testimony. 17 Q. And did you take this into account in 18 forming your views in this case? 19 A. I did. 20 THE COURT: We're going to take a 21 recess now for lunch for one hour. 22 Remember the admonition previously 23 given. 24 Please leave your notebooks here. 25 We'll see you at noon. Thank you. 7244 1 (A recess was taken from 10:58 a.m. 2 to 11:58 a.m.) 3 (The following record was made out of 4 the presence of the jury.) 5 MR. LAMB: One matter before the jury 6 comes in, if we could. 7 During the cross-examination earlier 8 this morning, a bunch of testimony was elicited 9 regarding pricing, and we objected, and then 10 further evidence was elicited regarding pricing 11 as it relates to Quicken, and that's not a 12 relevant market, and counsel is attempting to 13 tie that in with the technology. 14 That is beyond the scope of the direct 15 examination, there's no foundation for it, and 16 it's not relevant, and it really conflicts with 17 this Court's instructions to the jury and the 18 findings of fact, Your Honor. 19 MR. HOLLEY: Your Honor, if the Court 20 will recall -- and I think I have the slide 21 with me somewhere -- in the summary of the 22 testimony yesterday about the effects of 23 Microsoft's conduct, there was a slide, and it 24 said, if I remember, faster innovation -- or 25 less innovation, fewer choices, something about 7245 1 prices. 2 And I wish I had it right handy, but 3 that -- this cross is squarely within that 4 testimony yesterday by Mr. Alepin, which was 5 summarizing his testimony over the prior three 6 days. 7 He said, in testifying about the 8 impact of Microsoft's conduct on other players 9 in the industry and on the industry in general, 10 that Microsoft slowed down innovation, provided 11 fewer choices to customers, and caused things 12 to be more expensive. 13 And that can be tested on 14 cross-examination, Your Honor. 15 MR. LAMB: Your Honor, he testified 16 about the cost of development. He didn't talk 17 about the cost to the consumer. He never 18 testified about the cost to the consumer. 19 MR. HOLLEY: Your Honor, may I find 20 the slide because I think this is quite 21 important? 22 MR. LAMB: Furthermore, his testimony 23 pertained to the products at issue, operating 24 systems, not Intuit or any of these 25 applications. 7246 1 MR. HOLLEY: Your Honor, I can't find 2 the slide at the moment. 3 But he repeated today on 4 cross-examination his testimony yesterday that 5 he believed that Quicken, for example, was a 6 very valuable product. In fact, he repeated 7 his testimony that those sorts of applications 8 are the reasons why consumers buy PCs. 9 Having testified to that, which he did 10 now on direct, Microsoft is entitled to pursue 11 on cross the relative value of Quicken, which 12 he says is very valuable versus Windows. 13 That's perfectly appropriate cross. 14 MR. TULCHIN: Mr. Holley, here's your 15 slide. 16 MR. LAMB: Your Honor, it's apples and 17 oranges. It's apples and oranges, you know. 18 We're talking about the operating system here, 19 not the applications. 20 MR. HOLLEY: Your Honor, cheaper is a 21 price concept, and the notion was that things 22 would have been cheaper but for Microsoft's 23 conduct, and it's perfectly relevant to ask him 24 about the relative price-to-value ratios of 25 products in the industry. 7247 1 He's an industry expert, that's what 2 Plaintiffs say, and he testified about price. 3 MR. LAMB: Your Honor, the 4 price-to-value ratio of an application is not 5 relevant in relation to the price-to-value of 6 an operating system. 7 It's apples and oranges. Moreover, it 8 would have to be similar applications. 9 MR. HOLLEY: I'm fascinated to hear 10 this testimony. 11 It may be a big shock when we get to 12 the situation of cross-examining Professor 13 Mackie-Mason and Professor Netz about their 14 benchmarks which are not the same applications. 15 But the point remains that if you're 16 going to say that a price could be cheaper, it 17 has to be relative to other software products. 18 I'm not talking about the price of a 19 cup of coffee or dinner at the Olive Garden, 20 Your Honor. I'm talking about the price of 21 other software products; what functions do they 22 supply to consumers relative to how much do 23 they cost. 24 And I don't have the transcript page 25 handy, but I believe in the colloquy that the 7248 1 Court had with Mr. Tulchin on this subject, and 2 I don't mean to put words in Your Honor's 3 mouth, but I believe the record will reflect 4 that the Court said that if you're comparing 5 software products, that's a different matter. 6 And that's what I am doing, Your Honor. 7 MR. LAMB: Your Honor, again, this is 8 a different market, and probably more 9 importantly what counsel did was raised a huge 10 issue to keep out economic testimony. 11 We never proffered economic testimony. 12 We weren't proffering economic testimony. They 13 made it very clear. The Court issued specific 14 direction regarding no economic testimony. He 15 didn't testify regarding that. 16 So now he's testified for three days, 17 and now they're trying to open their own door 18 that they closed earlier essentially through a 19 motion in limine, and it's improper. 20 MR. HOLLEY: Your Honor, I don't mean 21 to belabor this, but the fact of the matter is, 22 whatever the Court ruled on the scope of 23 Mr. Alepin's testimony, Mr. Lamb elicited 24 testimony about this slide and the question of 25 price, and that's -- that cheaper means the 7249 1 price is lower or higher. 2 That's a relative price concept. It 3 isn't a development cost concept. 4 The Plaintiffs -- this is a problem of 5 their own making. If they didn't want us to do 6 this, they should not have had Mr. Alepin talk 7 about things being cheaper. 8 MR. LAMB: That is not true. That's 9 not what he testified to. 10 THE COURT: Okay. At what point was 11 this, yesterday? 12 MR. HOLLEY: Yes, Your Honor. 13 MR. LAMB: It was cheaper to develop. 14 That's what he said. 15 THE COURT: I'll have to look at the 16 transcript from yesterday. 17 Anything else? 18 MR. HOLLEY: No, Your Honor. 19 MR. LAMB: No, sir. 20 THE COURT: We're in recess. 21 (A recess was taken from 12:05 p.m. 22 to 12:13 p.m.) 23 THE COURT: Court has reviewed the 24 transcripts from yesterday and also on Friday. 25 There was some mention of pricing, 7250 1 limited, but I believe it's sufficient. So the 2 objection is overruled. 3 You may proceed. 4 Call the jury in. 5 (The following record was made in 6 the presence of the jury at 12:16 p.m.) 7 THE COURT: I apologize for the delay. 8 We had an issue of law which only the Court and 9 the attorneys could decide. 10 Mr. Holley, you may proceed, sir. 11 CROSS-EXAMINATION (CONT'D) 12 BY MR. HOLLEY: 13 Q. Good afternoon, Mr. Alepin. 14 You recall, do you not, sir, 15 testifying on direct about standards in the 16 industry? 17 A. Yes. 18 Q. And you testified that Microsoft 19 sometimes embraces and then extends existing 20 standards; is that correct? 21 A. I did. 22 Q. And embracing and extending a standard 23 is something that lots of other people in the 24 software industry in addition to Microsoft do 25 as well; correct? 7251 1 A. In a different way, but yes. 2 Q. Now, let's focus on the issue of HTML. 3 You talked about that under direct testimony; 4 right? 5 A. I did. 6 Q. And that stands for hypertext markup 7 language? 8 A. Correct. 9 Q. And that's the language that people 10 write web pages in that dictates the layout of 11 texts and visuals on the page; correct? 12 A. Correct. 13 Q. That wasn't invented by Netscape, was 14 it? 15 A. No, sir. 16 Q. In fact, it was invented by Tim 17 Berners-Lee and others at something called CERN 18 in Switzerland? 19 A. Yes. 20 Q. And what Netscape did was embrace HTML 21 which the folks at CERN invented; right? 22 A. It embraced HTML. 23 Q. And after embracing HTML, Netscape 24 started extending it by doing things like 25 adding support for frames on a web page or 7252 1 adding support for things called cascading 2 style sheets or adding support for embedded 3 applets; is that correct? 4 A. I think it proposed additions to the 5 standard in that way proposing extensions that 6 the rest of the industry participants could 7 use, yes. 8 Q. Netscape didn't wait until the 9 engineering task force approved any of its 10 suggestions before it implemented them in 11 Navigator, did it? 12 A. I think that's broader than what 13 happened. But in some instances, it is the 14 case that Netscape -- Netscape's Navigator 15 included proposed standards extensions before 16 the standards bodies had voted on them. 17 Q. And did Netscape's Navigator include 18 extensions to HTML that Netscape created before 19 Microsoft had access to those extensions? 20 A. I'm sorry, I'm not sure what -- which 21 access to the extensions. I'm not sure what 22 you mean by access in that context. 23 Q. Okay. What I mean by access in that 24 context is, was Microsoft able to adopt the 25 extensions to HTML that Netscape was 7253 1 incorporating in Navigator at the time that 2 Netscape was doing that or did it have to wait? 3 A. Do you have a particular case in mind 4 here or are you talking generally? 5 Q. I was asking you a more general 6 question, which is, based on your experience, 7 do you know whether in every case Microsoft had 8 access to the extensions to HTML that Netscape 9 was creating at the same time that Netscape 10 did? 11 A. I'm not sure in every case, no. I 12 don't know in every case whether that was the 13 case. 14 Q. So there may be cases that you're 15 unaware of in which Netscape went ahead and 16 implemented some extension to HTML in its 17 browser called Navigator before Microsoft had 18 any opportunity to do that same extension in 19 Internet Explorer; correct? 20 A. Well, I mean, there's two parts to 21 this. 22 The first part is that it has to be -- 23 in terms of these HTML extensions, they must be 24 implemented in the browser in order to 25 understand what a bold instruction means in the 7254 1 markup language, but it also has to be 2 implemented -- content owners have to create 3 pages in that -- that use those extensions like 4 bold -- and bold is not a -- bold is just what 5 I'm using as a simple example. But like bold. 6 So you need to have content owners use 7 the extension at the same time as the browser 8 uses them. And I believe that those extensions 9 were available to the content owners to use. 10 Q. Okay. But my question was different, 11 sir, which is, did Netscape implement in its 12 browser support for its extensions to HTML 13 before it told Microsoft how to implement those 14 same extensions in Internet Explorer? 15 And by my question I mean, in every 16 case did Netscape do that? 17 A. And extensions to its browser that 18 make use of HTML are -- require that content 19 owners use the -- encode the web pages using 20 those extensions. 21 So I believe that the -- in those 22 cases, the information was available to 23 Microsoft in the community as a whole because 24 it -- the users needed to know how to encode 25 the content using the extensions to HTML. 7255 1 Q. Okay. But I want to focus just for a 2 moment not on content providers and their 3 ability to encode pages in these new Netscape 4 extensions to HTML, but I'm trying to figure 5 out whether there was a level playing field 6 between Microsoft and Netscape in terms of 7 adding support to their browsers for these new 8 extensions. Are you with me so far? 9 A. I'm -- yes, I'm trying to be with you, 10 yes. 11 Q. Okay. I just want to make sure we're 12 on the same page. 13 And my question to you, sir, is, can 14 you testify that in every case when Netscape 15 was adding support for an HTML extension to 16 Navigator, it provided contemporaneous 17 information to Microsoft to let it implement 18 that same extension at the same time? 19 A. There were two -- that information is 20 available in two places, either in the browser 21 or for encoding the web page, the same 22 information. 23 And I believe that the information was 24 available to Microsoft that would describe the 25 specifications of the HTML tags or the HTML 7256 1 markup. 2 And so it's either -- you can either 3 get it from the browser or you can get it from 4 the -- from the web page, the same 5 specification on one side or the other. 6 Q. Okay. I don't want to fight with you 7 about this; I just want to understand your 8 testimony. 9 Your testimony is that it's your 10 understanding that in every case when Netscape 11 was extending HTML and providing support for 12 those HTML extensions in its browser, Microsoft 13 had equal access to that information that would 14 enable it to support those same HTML extensions 15 in Internet Explorer? 16 A. I don't know whether in every case 17 that was the case. 18 Q. Now, you testified on direct, sir, 19 that Microsoft had a strategy of embracing, 20 extending, and exterminating or extinguishing. 21 I think your word was extinguish. Do you 22 recall that? 23 A. I recall saying that there was 24 strategy of embracing and extending, the 25 consequence of which was extinguishing. 7257 1 Q. And you acknowledge readily, do you 2 not, sir, that you have never seen in any 3 Microsoft document the phrase embrace, extend, 4 extinguish? 5 A. I don't think I have seen it, but I've 6 looked at many documents. I don't know whether 7 that's the case or not sitting here now. 8 Q. Well, weren't you just asked about 9 this a couple days ago? 10 Do you remember being asked the 11 question: Mr. Alepin -- and I'm now at page 12 6597, starting at line 17 of the trial 13 transcript. 14 Mr. Alepin, have you heard the phrase 15 embrace, extend, extinguish before? 16 Answer: Several times, yes. 17 Question: In what context, sir? 18 Answer: With reference to Microsoft's 19 strategies. 20 Question: And was this expression 21 used by people from Microsoft? 22 And then there was an interruption. 23 And the question was asked: Where did you get 24 this information from? 25 You answered: It's public in our 7258 1 industry. It's a well-known phrase in our 2 business. 3 And then Mr. Lamb asked you this 4 question: But have you read documents authored 5 by Microsoft that use that phrase? 6 And you answered not the third element 7 of it. 8 Correct? 9 A. I think that's what I said and what I 10 just repeated here. 11 Q. You've never seen a Microsoft 12 document, I just want to be clear, that says -- 13 that has the phrase in it embrace, extend, 14 extinguish; correct? 15 A. Not that I can recall. That's my 16 testimony. 17 Q. Now, Mr. Lamb read to you -- excuse me 18 -- an excerpt from the testimony of a man named 19 McGeady. Do you recall that? 20 A. Yes. 21 Q. And in that testimony Mr. McGeady said 22 that a man from Microsoft named Paul Maritz had 23 a meeting attended by various people at Intel. 24 Said two things; that Microsoft would cut off 25 Netscape's air supply and also that Microsoft 7259 1 intended to extinguish HTML. 2 Do you remember that testimony from 3 Mr. McGeady? 4 A. I think so, yes. 5 Q. Now, in forming your views in this 6 case, did you have occasion to read what 7 Mr. Maritz said about that meeting at Intel? 8 A. I did, yes. 9 Q. Okay. And in particular, did you have 10 occasion to read the written direct testimony 11 that Mr. Maritz submitted in the government 12 case? 13 A. I may have read portions of it. As I 14 recall, it was a somewhat lengthy document. 15 Certain portions of it. 16 Q. Mr. McGeady, I'd like to show you 17 Slide Number 765 and -- which is a portion of 18 the written direct testimony of Paul Maritz, 19 who at the time was the group vice president in 20 charge of all operating systems at Microsoft. 21 And I'd like to focus your attention, 22 sir, on the first block of text up there and 23 ask you if you took this into account in 24 forming your views in this case? 25 Mr. Maritz says at the meeting, I 7260 1 again told Intel that Microsoft's approach was 2 to develop and promote high-quality 3 implementations of Internet standards, to 4 integrate Internet technologies into Windows, 5 and to introduce new functionality in order to 6 promote use of the Internet. 7 I never said, in the presence of Intel 8 personnel or otherwise, that Microsoft would, 9 quote, cut off Netscape's air supply, closed 10 quote, or words to that effect. 11 Did you consider Mr. Maritz's flat 12 denial of what Mr. McGeady said in forming your 13 opinion, sir? 14 A. I did. 15 Q. I'd like to focus your attention on 16 the next paragraph where Mr. Maritz writes, 17 similarly, I did not say that Microsoft would 18 kill HTML as Mr. McGeady alleges. 19 Did you take that statement, sir, into 20 account when forming your opinions in this 21 case? 22 A. I did. 23 Q. And I'd like to focus your attention 24 on the third block of text where Mr. Maritz 25 writes, in short, Microsoft has 7261 1 enthusiastically promoted HTML, not sought to 2 kill it. Indeed, it is probably fair to say 3 that Microsoft has done more to promote HTML 4 than any other company. 5 I believe that Mr. McGeady's 6 accusation in this regard speaks volumes about 7 his attitude toward Microsoft and the 8 credibility of his testimony? 9 Now, in forming your opinions in this 10 case about whether Mr. McGeady is telling the 11 truth or Mr. Maritz is telling the truth, did 12 you look into Mr. McGeady's employment history 13 at Intel? 14 A. I read portions of, I believe, the 15 examination of Mr. McGeady, which -- by 16 Microsoft, which if memory serves, it covered 17 his employment history or elements of his 18 employment history, and there was other 19 testimony during the Department of Justice case 20 that Microsoft, I believe, elicited from other 21 employees -- from another employee of Intel 22 concerning Mr. McGeady. 23 There were contemporaneous press 24 reports and other background stories, and what 25 have you, in the trade press that also 7262 1 discussed that subject. 2 Q. Do you recall Mr. McGeady's 3 performance review in which Mr. Barrett, who is 4 now, I believe, the CEO of Intel, criticized 5 Mr. McGeady for screwing up the Microsoft 6 relationship? 7 And I may be being more polite than 8 Mr. Barrett was being at the time. 9 A. Thank you. 10 I think Mr. Barrett became the CEO. 11 He's no longer the CEO of Intel. But that -- 12 now that you mention it, that may have come 13 before me, yes. 14 Q. Now, it's not your testimony, is it, 15 Mr. Alepin, that Microsoft does not have the 16 same right that Netscape has to embrace and 17 extend HTML? 18 A. No. 19 Q. And at this state as we're sitting 20 here in 2007, the HTML standard is under the 21 control of something called the Worldwide Web 22 consortium, also known as the W3C; is that 23 correct? 24 A. Yes. 25 Q. And extensions of HTML created both by 7263 1 Netscape and by Microsoft are now part of the 2 W3C standard for HTML, right? 3 A. That's the way our industry works, is 4 people contribute, companies contribute 5 proposals for extensions to existing standards 6 or new standards. 7 Q. Focusing still on this question of 8 standards, you're familiar, are you not, sir, 9 with something called web services? 10 A. Very much so, yes. 11 Q. Okay. And that's a big new thing in 12 computing, is it not, web services? 13 A. In underneath the rubric of 14 services-oriented architectures, yes, web 15 services is a very exciting new technology. 16 Q. And one of the things that web 17 services permits you to do is to have software 18 code running on UNIX, for example, communicate 19 with software code running on Windows, and they 20 can perform tasks together, working together 21 across the network; is that right? 22 A. That's the idea, and that's what we're 23 working towards. 24 Q. Now, it's fair to say, is it not, that 25 the two leaders in the field of web services 7264 1 are Microsoft and IBM? 2 A. Web services is a very broad concept, 3 and there are lots of component elements to web 4 services. 5 In certain areas, Microsoft and IBM 6 are more vigorously working. In other areas, 7 Sun is a larger participant. 8 But generally speaking, it's fair to 9 say that IBM and Microsoft are very active in 10 the web services arena. 11 Q. And Microsoft has contributed numerous 12 technologies to something called the web 13 services initiative or WSI; is that correct? 14 A. WSE. 15 Q. Maybe that's what it's now called. 16 A. There's WSI, which is web services 17 interoperability. Is that the thing you 18 were -- 19 Q. That's what I was referring to, yes. 20 A. Okay. Microsoft has contributed draft 21 standards for several of the pieces of WSI, as 22 has -- have other companies. 23 Q. It's not just Microsoft. Sun and IBM 24 and VeriSign and lots of companies are all 25 working together to create standards so that 7265 1 there's interoperability between different 2 kinds of machines at the application execution 3 layer; correct? 4 A. That's correct. 5 Q. I'd like to -- I think it's a very 6 closely related topic, but I'd like to move 7 from standards to the question of Java, which 8 you -- and you remember testifying quite 9 extensively about Java on direct; correct? 10 A. I do. 11 Q. And you were shown Plaintiffs' Exhibit 12 5906. 13 MR. HOLLEY: And could we see that up 14 on the screen, please? 15 Q. Do you recall Mr. Lamb showing you 16 this E-mail from Mr. Gates' technical 17 assistant, Aaron Contorer, in 1997? 18 A. Yes, I recall being shown this. 19 Q. And you used this document to suggest 20 that Microsoft had done something wrong in 21 relation to Java; isn't that right? 22 A. I don't know wrong was what I 23 suggested. 24 Q. Well, let's look as you did at that 25 paragraph four of this document. 7266 1 Mr. Lamb took you through these 2 options that Mr. Contorer outlined for 3 Microsoft's approach to the Java -- the threat 4 of the Java platform, and one of the things 5 that Mr. Contorer said that Microsoft could do 6 -- he says it in the last sentence of this 7 paragraph. He says, the third choice is to 8 make great -- I'm sorry. 9 The third choice is to make major 10 innovations to our platform so people still 11 prefer to write to us instead of some tepid 12 cross-platform Java layer. 13 You don't think there was anything 14 wrong, do you, with Microsoft adopting that 15 strategy; namely, making major innovations in 16 Windows, our platform, so people still prefer 17 to write to us instead of some tepid 18 cross-platform Java layer? 19 A. Well, again, with the wrong -- I'm not 20 sure I can deal with right or wrong in this 21 context. I don't know what that means here. 22 Q. Well, you had some fairly critical 23 things to say, did you not, on direct, about 24 what Microsoft had done in relation to Java? 25 A. I had some statements about what 7267 1 Microsoft had done, that's correct. 2 Q. And they were critical, were they not, 3 sir? 4 A. I think inevitably they'll be 5 interpreted as critical, yes. 6 Q. That was your intention, wasn't it, 7 Mr. Alepin? 8 You weren't providing neutral 9 statements on direct about Microsoft's Java 10 strategy, were you? 11 A. I was providing statements of what I 12 had observed about what Microsoft had done. 13 Q. All right. 14 Now, Java is not some sort of public 15 interest project by Sun Microsystems, is it? 16 A. Public interest project is defined as 17 what, sir? 18 Q. Meaning when a corporation does 19 something for no profit motive, but just out of 20 the goodness of their hearts. 21 A. I don't think it was intentionally 22 done out of the goodness of their hearts. 23 Q. Well, in forming your opinions in this 24 case, did you consider what Sun's strategy was, 25 what its business strategy was in relation to 7268 1 Java? 2 A. I did. 3 Q. Okay. And in the context of that, did 4 you review documents in the record, including 5 documents relating to Sun's strategy? 6 A. I believe so. 7 Q. Okay. Was one of the documents you 8 looked at an article relating Mr. McNealy's 9 reaction when he first saw Java? 10 A. This would be in nineteen -- Mr. -- 11 Q. I'm sorry. 12 A. I'm sorry. 13 I was asking whether this would have 14 been in 1994 or whether it was a document 15 written after 1994 talking about him having 16 seen it. 17 Q. In that -- in the early phase when his 18 executives and engineers showed him what Java 19 was. 20 A. I remember some discussion about the 21 initial reaction, but I can't remember whether 22 here it was favorable or not favorable. 23 Q. Okay. I'd like to show you what's 24 been marked as Defendant's Exhibit 1297 and ask 25 you if you considered this document in forming 7269 1 your opinions in this case. 2 I'd like to direct your attention in 3 particular to the second paragraph, which reads 4 when Scott McNealy, chief executive of Sun 5 Microsystems, first saw a demonstration of the 6 prototype, which later evolved into the 7 much-touted Java programming language, he was 8 so impressed that he fired off an E-mail 9 message, quote, charge, exclamation mark, kill 10 HP, IBM, Microsoft, and Apple all at once. 11 Did you consider this evidence of 12 Micro -- excuse me -- of Sun's strategy with 13 regard to Java in forming your opinions in this 14 case? 15 A. Yes. 16 Q. And one of the Sun's strategic goals 17 was to render both Windows and Intel 18 microprocessors irrelevant; correct? 19 A. I think more to -- not to render them 20 irrelevant, but to perhaps reduce their 21 importance. 22 Q. And one of the goals that Sun had was 23 to make it possible to run applications as 24 easily on Sun's SPARC microprocessors as those 25 applications ran on Intel processors; correct? 7270 1 A. That's correct. 2 Q. And one of the goals that Sun had was 3 to permit applications to run as easily on its 4 Solaris version of UNIX as they ran on other 5 operating systems; correct? 6 A. The applications would run as easily 7 on Sun Solaris as they would on -- I'm sorry, 8 the other -- 9 Q. On Windows, for example. 10 A. Yes. 11 Q. Now, one of the things that Microsoft 12 did in response to this Sun strategy was to 13 improve Windows; right? 14 A. One of the things -- yes. 15 Q. Let's look back at this exhibit that 16 Mr. Lamb showed you, which is Plaintiffs' 17 Exhibit 5906, and on page 3, Mr. Contorer talks 18 about what Microsoft did to avoid losing to 19 Java. 20 He writes here, you would think it 21 would be our top priority at such a time to 22 (a) fix any serious flaws in Windows, which 23 could push customers over to the Java platform. 24 (B) add so much new and unique value 25 that this vaporous Java platform -- what is 7271 1 your understanding of what he means by vaporous 2 there? 3 A. Well, I would imagine it's something 4 akin to chimerical or -- 5 Q. Not real? 6 A. Not real, although I'm interpreting 7 his meaning here, what he means by this 8 vaporous Java platform. 9 Q. He says (b) add so much new and unique 10 value that this vaporous Java platform doesn't 11 sound very attractive anyway. 12 And (c) make damn sure that our new 13 value is really hard to copy so it doesn't show 14 up tomorrow in Sun's or Oracle's offerings. 15 Now, there's nothing unusual or 16 wrongful in your view about doing any of those 17 things, is there? 18 A. Well, again, wrong is something that I 19 wouldn't want to talk about in this context. 20 I would say that there -- it's unusual 21 in the sense that the Java community was 22 organized around advancing the common platform. 23 In fact, the -- at the time, Java was 24 going off in so many directions, people saw so 25 many potential opportunities, that there was a 7272 1 hard time keeping the -- keeping track of all 2 the areas into which Java and the Java 3 community believed that you could take this 4 technology. 5 So, in fact, it did look rather wide 6 and large as it expanded. 7 So it seemed unusual to me to talk in 8 the context of the -- of Java to be extending 9 it or making enhancements that are not going to 10 be part of the community. 11 Q. Okay. I appreciate that answer, but 12 I'd like to focus on what Mr. Contorer actually 13 said. 14 The first thing that he said is, fix 15 any serious flaws in Windows, which could push 16 customers over to the Java platform. 17 Certainly there's nothing unusual 18 about a company, when faced with a competitive 19 threat, saying we better fix any problems we've 20 got in our product. 21 You'd agree with that? 22 A. They should fix independent of the -- 23 independent of the competitive threat, they 24 should fix the problems, yes, I think that's 25 right. 7273 1 Q. And the second thing that Mr. Contorer 2 said is, add so much new and unique value that 3 this vaporous Java platform doesn't sound very 4 attractive anyway. 5 And you would agree that, when faced 6 with a competitive threat, it is very common in 7 business to try to make your product better, so 8 much better that people are not tempted to go 9 to the competitor; correct? 10 A. That's the way it works, I believe, or 11 should work anyway. 12 Q. And the third thing that Mr. Contorer 13 says is, make damn sure that our new value is 14 really hard to copy, so it doesn't show up 15 tomorrow in Sun's or Oracle's offerings. 16 And you're familiar, are you not, sir, 17 from your time at Fujitsu and other companies 18 that it is routine in the software industry to 19 seek intellectual property protection for your 20 inventions so they are not copied? Is that not 21 correct? 22 A. Yes. 23 Q. Now, I'd like to go on to the next 24 paragraph, where Mr. Contorer says, we are 25 doing all of this. We are fixing TCO -- that's 7274 1 a reference to total cost of ownership; 2 correct? 3 A. I believe it is, yes. 4 Q. And further improving our dev tools. 5 And that's a shorthand for development tools, 6 right? 7 A. That's what I would understand it to 8 be. 9 Q. And you testified on direct that those 10 are the tools that Microsoft provides that 11 enable people to write applications to run on 12 top of Windows; correct? 13 A. In this context, I believe he's 14 talking about Microsoft's development because 15 there are other -- obviously other companies 16 have development tools. 17 Q. Fair point, but Microsoft makes 18 development tools that are -- that assist 19 people in writing Windows applications; 20 correct? 21 A. Yes. 22 Q. Then he says, we are providing new 23 value such as Viper and great multimedia and 24 unified storage. 25 Now, those are improvements he's 7275 1 describing to Windows; correct? 2 A. I think that's correct. I think 3 that's correct. 4 Q. And then he says, we are making sure 5 that Windows, not some new platform, is the 6 most attractive place to run apps written in 7 this new programming language. We were 8 building the best virtual machine in the world 9 and optimizing it to run on Windows. 10 And Microsoft did that, right? It 11 built the best Java Virtual Machine in the 12 world? 13 A. I don't know whether it was the best 14 virtual machine in the world, but it was a good 15 virtual machine for running on Windows. 16 Q. Well, you were asked yesterday, were 17 you not, sir: 18 Was Microsoft's Java machine, Java 19 Virtual Machine, faster than Sun's Java Virtual 20 Machine? 21 Answer: Yes. 22 Question: How much faster? 23 Depending on what you were doing, it 24 could be several times faster. 25 Correct? 7276 1 A. Yes. 2 Just to be clear, I was preferring 3 to -- and no difference here, it's just on the 4 Windows platform. 5 So the Sun virtual machine that was 6 running was not as fast as the Windows -- as 7 the Microsoft virtual machine on Windows. 8 Q. And the Microsoft virtual machine was 9 faster than the Symantec one and the Borland 10 one and the Netscape one as well, was it not, 11 all running on Windows? 12 A. I think that was the case, yes. 13 Q. Now, I'd like to go back to the 14 earlier page of Mr. Contorer's memo that 15 Mr. Lamb spent some time talking to you about. 16 And there he talks about this concept 17 of embracing and extending that both Mr. Lamb 18 and I have been talking to you about. 19 And his definition of extend is, 20 extend means when we, Microsoft, provide 21 tremendous value that nobody else does. 22 So (a) you really want to switch to 23 our software; and (b) once you try our 24 software, you would never want to go back to 25 some inferior junk from our competitors. 7277 1 Customers usually like when we do 2 this, since by definition, it's only an 3 extension if it adds value. Competitors hate 4 when we do this because by adding new value, we 5 make our products much harder to clone. 6 Now, it is not your testimony, is it, 7 sir, that by making Microsoft's products more 8 valuable and, therefore, harder to clone, 9 Microsoft did anything wrong, is it? 10 MR. LAMB: Objection. Calls for a 11 legal conclusion. 12 THE COURT: Sustained. 13 Q. When you testified on direct that 14 there was something untoward about Microsoft's 15 extend strategy in relation to Java, were you 16 referring to this? 17 A. Well, I think this is not quite a fair 18 statement of what Microsoft was doing, so to 19 the extent that what Microsoft did differs from 20 this paragraph here that you've read, I would 21 have to disagree. 22 Q. So you think Mr. Contorer's 23 description is not what Microsoft did? 24 A. It was not what Microsoft did, and 25 especially not in the context of this 7278 1 particular technology, of the Java technology 2 and the Java platform. 3 Q. I'd like to show you another of the 4 exhibits that Mr. Lamb showed you on direct, 5 which is Plaintiffs' Exhibit 2708. 6 And this is this E-mail that 7 Mr. Slivka sent to Mr. Gates in May of 1997. 8 Now -- and you considered this E-mail, 9 did you not, sir, in forming your views in this 10 case? 11 A. I did. 12 Q. And when you were testifying that 13 Microsoft should not have encouraged developers 14 to rely on the native functionality of Windows 15 when writing in Java, did you consider what 16 other operating system vendors were doing in 17 that regard? 18 A. I'm not sure I know specifically what 19 you're referring to. 20 Q. Fair enough. 21 Let's look at the third paragraph of 22 this exhibit. 23 This is the paragraph where Mr. Slivka 24 says, this summer we're going to totally 25 divorce Sun. Apple's announcement yesterday 7279 1 that they will encourage rhapsody developers to 2 write in Java and call native rhapsody services 3 was a mere shadow of what we're going to be 4 encouraging developers to do. 5 You understand this, do you not, sir, 6 to mean that Apple was encouraging developers 7 writing on its operating system to make calls 8 to native Macintosh services; correct? 9 A. To make use of native rhapsody 10 services, perhaps by the identified way of 11 doing that through the JNI interfaces. 12 Q. And I just want to be a little clear 13 on that. 14 If I write an application in Java and 15 I use JNI to call an underlying operating 16 service, I'm tied to that underlying operating 17 system, am I not? 18 A. You're -- there's a different level of 19 tying -- I'm sorry, not tying. Tying is 20 probably a confusing word. 21 There's a different level or degree to 22 which the application is locked into the 23 underlying platform. 24 Q. But it is locked into the underlying 25 platform because it's using the Java native 7280 1 interface to call native code on the operating 2 system; correct? 3 A. Well, it's -- actually, to be more 4 precise, it's using a class library interface, 5 which can be substituted for by a different 6 platform vendor. 7 So in the case of JNI, the application 8 refers and passes through the JNI class library 9 interfaces in order to get to the services 10 underlying it, and it is still possible for a 11 different platform vendor to substitute at that 12 level so as to provide a means whereby the 13 application is not tied to the platform -- to 14 the specific platform. 15 Q. But the promise of write once, run 16 anywhere, WORA, W-O-R-A, does not hold if a 17 developer writing in Java decides to use JNI, 18 the Java native interface to call native 19 services in a given operating system; correct? 20 A. The promise of WORA is undermined to 21 some degree by the use of these interfaces that 22 are platform dependent. 23 That's not the sense of how 24 application developers, however, are taught to 25 think about the Java platform. 7281 1 They're taught to think in terms of 2 platform independence, portability of 3 applications. That's the -- sort of the over 4 -- that's one of the big ideas I believe I 5 described it as at that time. 6 Q. I just want to be clear. 7 Java native interface, JNI, that's not 8 a Microsoft technology; right? That's from 9 Sun? 10 A. That was part of the Java 11 specification. 12 Q. Did you look -- well, first of all, 13 let me ask you this question. 14 In forming your opinions in this case, 15 to some extent, you relied on the trade press; 16 correct? 17 A. Were you finished? 18 Q. I cut you off, and I apologize. I'm 19 happy with the question I asked you. 20 A. The trade press is a source of 21 information about current events. 22 Q. And -- 23 A. And I did rely on it. 24 Q. And among the things that you relied 25 on were articles in PC Week and PC Magazine? 7282 1 A. Among others, yes. 2 Q. Did you have occasion, sir, to look in 3 the trade press for analyses of the relative 4 performance of different Java runtime 5 environments? 6 A. I did in particular given the nature 7 of my work on Java just-in-time compilers at 8 Fujitsu in the mid -- in the 1997 time frame. 9 Q. So you'd had occasion to do that long 10 before you ever got retained as an expert in 11 this case; correct? 12 A. Quite -- yes, quite well before that. 13 Q. I'd like you to take a look, if you 14 would, sir, at what's been marked as 15 Defendant's Exhibit 3165. 16 And first we're going to look at the 17 first page just so we can identify what it is. 18 This is a PC Magazine issue, and it 19 relates to make Java work for you, and I'm 20 particularly interested in the article that 21 begins on page 137, and we're going to now move 22 to that. 23 I guess we're not. 24 Have you seen this before, sir, this 25 article? 7283 1 A. I have been a subscriber to this 2 magazine since the first edition. So I receive 3 -- I have a garage full of PC Magazines. 4 Q. That's probably not what the fire 5 department wants to hear. 6 A. We won't tell them then, will we? 7 Q. So you're aware that there was this 8 article entitled Java environments that 9 compared different Java runtime environments? 10 A. I'm sure I was aware of it at the 11 time, yes. 12 Q. Okay. I'd like to direct your 13 attention, sir, to page 139, which is two pages 14 in, and here it says that based on the testing 15 that PC Magazine has done, the editor's choice 16 award for virtual machines goes to Microsoft; 17 is that correct? 18 A. That's correct. 19 Q. And one of the attributes that 20 Microsoft's Java Virtual Machine had that made 21 it the editor's choice was how compatible it 22 was with cross-platform applets; is that right? 23 A. I'm not seeing the cross-platform 24 reference in this particular highlight. 25 Q. Okay. Well, you would agree, would 7284 1 you not, sir, that if you wrote an applet in 2 Java and you didn't call upon any of the 3 Microsoft specific extensions in the Microsoft 4 programming tools, that Java applet would be 5 cross-platform; right? 6 A. Subject to some other limitations, 7 that's correct, yes. 8 Q. Now, I would like to turn -- and the 9 pagination of this article is very strange, but 10 from -- at the bottom of 146, it starts talking 11 about the Microsoft Java Virtual Machine and -- 12 let me -- let the guys catch up with me. 13 MR. HOLLEY: Can you highlight the 14 whole thing there, Chris? 15 Thank you very much. 16 Q. So they're now talking about different 17 JVM on different operating systems, and what it 18 says down here is that our testing showed that 19 Microsoft's Java environment is clearly the 20 fastest, with Windows NT slightly outpacing 21 Windows 95, and that's consistent with your 22 earlier testimony that this was a very fast 23 Java Virtual Machine; correct, on Windows? 24 A. That's very fast -- yes, relatively 25 speaking, yes. 7285 1 MR. LAMB: Your Honor, can we have a 2 sidebar, please? 3 THE COURT: Yes. 4 (The following record was made out of 5 the presence of the jury at 1:03 p.m.) 6 THE COURT: Mr. Lamb. 7 MS. CONLIN: Actually, let me address 8 this topic, if I may. 9 The Court's ruling on trade press 10 precludes its use for the truth, and that is 11 exactly what Mr. Holley is doing. 12 He can offer it for -- on some 13 other -- for some other reason. He cannot put 14 it up there and say do you agree or disagree 15 because that is for the truth, and that's what 16 he's doing. 17 MR. HOLLEY: I'm not offering it at 18 all. I'm using it to impeach this witness who 19 said that Microsoft did something that impaired 20 Java, and the point I'm making is that that has 21 the world upside down. 22 Microsoft had the most compatible Java 23 Virtual Machine. It's pure impeachment. We 24 can have a fight at another day, which we 25 probably will, about whether this document is 7286 1 admissible in evidence, but it's clearly 2 impeachment, Your Honor. 3 MS. CONLIN: Well, Your Honor, he 4 can't be impeached with an article he didn't 5 write. That's not -- that's not a learned 6 treatise. He can't be impeached with that for 7 an -- under a learned treatise basis. 8 I simply know of no way that this 9 article can be used for the purpose for which 10 he's using it. It's not impeachment if he 11 didn't write it or if it's not a learned 12 treatise. 13 MR. HOLLEY: Well, he testified that 14 he relied -- because I laid that foundation, I 15 got him to say that he relied on trade press in 16 forming his opinions, including this magazine, 17 and then he volunteered that he's been a 18 subscriber to this magazine since its first 19 issue. 20 And all I'm doing, Your Honor, is 21 showing him that what this magazine's analysis 22 of JVM says is contrary to his testimony. 23 MR. LAMB: Well, what he said was -- 24 MR. HOLLEY: Excuse me. I hate to do 25 that, but I thought you said yesterday that 7287 1 only one of us can talk. It has to be fair. 2 It has to be the same. 3 MS. CONLIN: I think that was meant 4 for -- in the public place. 5 MR. LAMB: I was going to ask the 6 Judge if I could speak. 7 THE COURT: Go ahead. 8 MR. LAMB: Your Honor, what he 9 testified to was that he has reviewed a 10 magazine, not this particular article, nor did 11 he testify that he relied on this particular 12 article. But that's all I wanted to say. 13 That's what the testimony was. 14 MR. HOLLEY: Your Honor, once again, 15 and I hope -- I don't think that the plaintiffs 16 are going to be happy with the rule which says 17 that you can only cross-examine somebody with 18 something that they say they relied on because, 19 of course, that would mean that if the whole 20 point of the line of questioning is they should 21 have and they ignored it, you're precluded from 22 asking that line of questions. That can't be 23 right. I've never heard of such a thing. 24 MR. LAMB: Well, they -- I'm sorry. 25 MR. TULCHIN: If I may, Your Honor, as 7288 1 long as two lawyers on the other side are 2 speaking, I wonder if I could have permission? 3 THE COURT: Why not. No one obeys my 4 rules anyway. 5 MR. TULCHIN: No. If that's the rule 6 Your Honor -- 7 THE COURT: You know, I'm getting 8 tired of it, frankly. I'm getting really tired 9 of going over the same thing over and over 10 again. The motions I've ruled on over and over 11 again mean nothing to both sides, and we just, 12 I guess, keep going this way. But, you know, 13 it really makes me disgusted. 14 The objection is sustained because 15 it's improper. If you want to make further 16 record, go right ahead and anyone can talk. 17 MR. HOLLEY: Well, Your Honor, I 18 believe I laid the appropriate foundation. 19 THE COURT: I don't think you did, and 20 the objection is sustained. You want to make 21 further record, go ahead in front of Janis 22 here. 23 He did not say he relied on that 24 article. It's not been shown that the person 25 who wrote that article is a learned person in 7289 1 this field. He's recognized as an expert, and, 2 therefore, it can't be used. Clearly offered 3 for the truth of the matter asserted, and 4 that's my ruling. 5 And you can make whatever record you 6 want with the court reporter. Go ahead. Make 7 your record for appeal. 8 MR. HOLLEY: I think the Court's 9 ruling is quite clear, and I'll move on. 10 MS. CONLIN: Your Honor, before we go, 11 collateral estoppel, we're getting awful close 12 to that as well. I just want to bring that to 13 the Court's attention. Also ask that the Court 14 say its ruling on the record. 15 MR. HOLLEY: Well, I don't think 16 that's fair, Your Honor. I'll just go on to 17 another question. I mean, that was -- 18 Mr. Lamb's suggestion the other day was that -- 19 THE COURT: The objection wasn't made 20 on the record. You asked for a sidebar. 21 MR. LAMB: Your Honor, we're just 22 asking that it be taken off and the testimony 23 be stricken. 24 THE COURT: Okay. Go ask out there. 25 MR. LAMB: Thank you, Your Honor. 7290 1 (The following record was made in the 2 presence of the jury at 1:05 p.m.) 3 THE COURT: Do you have an objection? 4 MR. LAMB: Yes, Your Honor, that the 5 exhibit and the testimony relating to the 6 exhibit be stricken. 7 THE COURT: Sustained. 8 Q. I'd like to show you, Mr. Alepin, a 9 diagram, which I believe is your diagram. I 10 mean, obviously, a slightly fancier version of 11 -- is your diagram of multiple Java virtual 12 machines running on different operating 13 systems? 14 MR. HOLLEY: It's Slide Number 1004. 15 MR. LAMB: Your Honor, for the record, 16 I don't object to him using this, but I do 17 object to him it being referred to as 18 Mr. Alepin's diagram. It's not Mr. Alepin's 19 diagram. 20 THE COURT: He can say if it is or it 21 isn't. 22 Q. I guess my question is, is this a 23 rendition of the same thing that you drew on 24 the board yesterday? 25 A. Well, I think I used the idea of a 7291 1 tunnel in describing the path between the 2 applet in the Windows context and Windows. 3 So subject to that, that's -- there is 4 -- subject to that difference, that's the 5 diagram -- has the same -- is the same. 6 Q. I was actually going to ask you, the 7 green lines that run from the applet straight 8 down to Windows, those are the things you were 9 referring to as tunnels; right? 10 A. Well, I think I was referring -- what 11 I intended was that J Direct was a tunnel and 12 that you'd have application programming 13 interfaces that were dependent on Windows 14 passing through that tunnel, the J Direct 15 tunnel. 16 Q. Now, was anybody writing Java 17 applications for the Microsoft Java Virtual 18 Machine required to use the tunnels? 19 A. Required meaning? 20 Q. Did Microsoft make them? 21 A. Well, it's my understanding that parts 22 of the agreements to -- the first wave 23 agreements with respect to Java called for the 24 use of Java Virtual Machine from Microsoft in 25 the 1996, '97 time frame -- 1997 time frame. 7292 1 Q. Did the first wave agreement require 2 anyone to use J Direct in particular? 3 MR. LAMB: Objection to the extent it 4 calls for a legal conclusion. 5 THE COURT: Overruled. You can answer 6 that one. 7 A. I don't believe that you had to use 8 the J Direct interfaces. 9 Q. Now -- and I'm going to use these 10 colors just because I think it's easier to talk 11 about. 12 If I'm writing for the Microsoft 13 virtual machine, the Microsoft Java Virtual 14 Machine, and the only interfaces that I call 15 upon are the same blue ones that are in the 16 UNIX and Mac virtual machines, then the applet 17 is perfectly portable; correct? 18 A. That's the idea of Java and Java 19 cross-platform portability or WORA, yes, write 20 once, run everywhere -- or anywhere. 21 Q. Now, someone who decided to use the 22 tunnels, some developer who decided to use 23 those green lines that went straight to 24 Windows, however you want to describe them, 25 they knew what they were doing, didn't they? 7293 1 MR. LAMB: Objection. Calls for 2 speculation. 3 THE COURT: Sustained. 4 Q. Was it possible, Mr. Alepin, to 5 distinguish in looking at the developer tools 6 between the blue lines which called the 7 Microsoft virtual machine and the green lines 8 which called to Windows? 9 A. Was it possible for whom are you 10 referring to in this particular case? 11 Q. Well, let me -- maybe we should back 12 up. 13 Have you looked at the -- at Microsoft 14 Visual J++? 15 A. Yes, I owned a copy of it. 16 Q. And that was the set of Microsoft 17 developer tools used to create Java 18 applications; correct? 19 A. That I believe was the -- yes, it is 20 the developer tool. 21 Q. And the ability to use these green 22 tunnels that went straight to Windows, that 23 ability was contained in Visual J++; correct? 24 A. Visual J++ provided the developer 25 access. 7294 1 Q. Now, when you were going to use one of 2 those green tunnels and you were a developer, a 3 knowledgeable developer, you knew when you were 4 going to call Windows, didn't you? 5 MR. LAMB: Objection. Calls for 6 speculation. Improper attempt to impeach the 7 collateral estoppel ruling regarding Java 8 deception. 9 THE COURT: Overruled. You may 10 answer. 11 MR. HOLLEY: Your Honor -- 12 A. Excuse me, Mr. Holley, could you 13 repeat the question, please? 14 Q. Yes. 15 The question is, based on your 16 experience with Visual J++, if you were writing 17 a Java application using that developer 18 tooling, could you distinguish between calls to 19 the Java Virtual Machine and calls made 20 directly to Windows? 21 A. The notation as a programmer, the 22 notation would be -- would identify it J 23 Direct. 24 Q. At J Direct? 25 A. I'm sorry, would identify at J Direct 7295 1 invocation or have programmer's reference to a 2 J Direct based API. 3 Q. I'd like to go back now to this write 4 once, run anywhere tag line. I think that was 5 your reference to it yesterday; right? It was 6 the Sun tag line? 7 A. I may have used that word, but that 8 was the idea that was being used in the -- in 9 our business, yes. 10 Q. And in practice, did that prove to be 11 true? 12 Did it prove to be true that if you 13 wrote a Java applet once, that you could just 14 run it everywhere without making any changes to 15 it at all? 16 A. Do you have a particular time frame in 17 mind for that? 18 Q. Well, I'd like to focus, I think, on 19 the same time frame that you did on direct, 20 which is in 1997 time frame. 21 A. The initial products and technologies 22 on the various platforms were emerging, if you 23 will. 24 They were still learning how to 25 deliver completely on their promise of 7296 1 cross-platform interoperability or 2 compatibility. 3 And there were issues with software, 4 just the same as, for example, Microsoft showed 5 -- and Microsoft would have between the virtual 6 machine running on its Windows 95 platform and 7 on its Windows NT platform. 8 So there were issues that we needed to 9 get done, that we needed to work through in 10 order to deliver across all applications, 11 across all platforms, the write once, run 12 anywhere promise. 13 Q. Is that promise true even now in 2007? 14 A. Well, I mean, the answer to that is 15 yes, it's -- it's true in -- across a good 16 variety of software that's available on 17 servers. 18 Q. There's an implementation of Java on 19 servers called J2EE or Java 2 Enterprise 20 Edition; correct? 21 A. That's correct. 22 Q. And it's your testimony that if I 23 write an application to the Sun version of 24 J2EE, that it will run with no modification on 25 the BEA version of J2EE? 7297 1 A. That's -- I mean, these things have 2 limits, but that's the idea, and that's what 3 happens. 4 We have interoperability tests and 5 interoperation tests where we -- where 6 companies in the industry try to ensure that 7 they have interoperability and cross-platform 8 portability for applications. 9 Q. I want to distinguish between the idea 10 which I think you've explained and practical 11 reality, and it's your testimony that if I 12 write a complex line of business application on 13 the Sun version of J2EE, it will run without 14 modification on the BEA version of J2EE? 15 A. It should -- it should do that, yes. 16 I'd be interested -- 17 Q. Should? 18 A. Well, I'd be interested to see the one 19 that didn't. 20 Q. So, when you say should, it's your 21 belief that it does? 22 A. That's correct. 23 Q. Have you ever heard the phrase write 24 once, debug everywhere? 25 A. I have. 7298 1 Q. And that is a commonly used phrase in 2 the software industry to slam Java and its 3 failure to meet the write once run anywhere 4 promise; correct? 5 A. In the early days of Java, that phrase 6 was used to indicate that there were still 7 problems that needed to be resolved to deliver 8 on the write once, run everywhere, run anywhere 9 promise. 10 Q. In forming your views about the merits 11 of Java for this case, did you consider the 12 experience of companies like Netscape and Corel 13 in seeking to write complex client side 14 applications, meaning PC applications in Java? 15 A. I did. 16 Q. So you're aware, are you not, that 17 Netscape abandoned its effort to rewrite 18 Navigator in Java? 19 A. I recall that, yes. 20 Q. And do you recall reading 21 Mr. Andreessen's explanation of why? 22 A. I probably did. I don't recall it 23 sitting here, but it is something I probably 24 reviewed. 25 Q. Something you probably reviewed in 7299 1 what context? In preparing for your testimony? 2 A. Before that, I would say in my -- in 3 my capacity with respect to my clients like 4 Fujitsu. 5 Q. What was it about your job at Fujitsu 6 that required you to keep apprised of 7 developments relating to applications written 8 in Java? 9 A. Well, Fujitsu had a server platform, 10 an enterprise applications server platform 11 called Interstage. Interstage was a 12 J2EE-compliant, as well as CORBA-compliant 13 platform that would run Java server side 14 applications. So would run software to run 15 businesses on a server. 16 MR. HOLLEY: Your Honor, may I 17 approach the witness? 18 THE COURT: Yes. 19 Q. Mr. Alepin, is that an article that 20 you have read before? 21 A. I remember reading an article like 22 this in our business. 23 These kinds of stories are picked up 24 and presented through a variety of different 25 fronts. 7300 1 Like this here is on Tech Web. But 2 CMP has different magazines and different 3 tabloids, and so this article -- much the same 4 content would have been perhaps available in 5 one of the magazines that I subscribe to. 6 Q. I'm sorry, I need to ask you a 7 different question, which is not was it in a 8 magazine that you subscribe to, but it is an 9 article that you recognize that you've seen 10 before and read? 11 A. And I'm sorry, I was trying to say 12 that I have the sense that I read this article, 13 but it might not have been -- I read the 14 content, but not this article. 15 Q. I'll just ask you to not show 16 everybody what it is just yet. 17 A. Oh. 18 Q. And did you rely on the contents of 19 this article in forming your opinions in this 20 case? 21 A. I did. 22 Q. Okay. 23 MR. HOLLEY: I'd like to put up DX 24 3174. 25 Q. Now, in this article, Mr. Andreessen 7301 1 says, and I'm looking at the third and fourth 2 paragraphs, Javagator -- and that was the sort 3 of funny name that people gave to the Java 4 version of Navigator; is that right, Javagator? 5 A. I'm glad you find it funny, but, yes, 6 that's the idea. 7 Q. Well, I didn't say I did. 8 Javagator is dead he said in an 9 interview after a speech at the Enterprise 10 Outlook Conference here in Burlingame, 11 California. 12 Then he turned facetious on the merits 13 of a Java browser. 14 Quote, my joke is that a Java 15 Navigator will have a lot of good attributes. 16 It's slower. It will crash more and have fewer 17 features so you can do fewer things. It will 18 simplify your life, he said, laughing. 19 Now, this, although facetious, is 20 serious in the sense that Java applications for 21 PC clients had some serious problems, did they 22 not? 23 A. Well, the middleware that supported 24 those applications had some serious problems. 25 So an application -- yes, and by 7302 1 extension the application running on that 2 software would have problems. 3 Q. And one of the problems that trying to 4 run -- trying to develop -- excuse me -- a Java 5 application, a big one that would run on PCs 6 was that the user interface elements of Java 7 were fairly primitive; correct? 8 They were called AWT, and they were 9 quite primitive? 10 A. They were -- I'm not sure that 11 primitive is the correct word, but they were 12 different from the -- from the user graphical 13 interface elements that people saw on, for 14 example, a Mac or a Windows computer. 15 MR. LAMB: Objection, Your Honor. 16 This is irrelevant and it's an improper attempt 17 to impeach Finding of Fact 397. 18 THE COURT: Ladies and gentlemen, 19 we'll take a recess at this time. 20 Remember the admonition previously 21 given. 22 Leave your notebooks here. Thank you. 23 (A recess was taken from 1:27 p.m. to 24 1:43 p.m.) 25 THE COURT: Please take the stand, 7303 1 sir. You're still under oath. 2 Objection is overruled at this time. 3 You may continue. 4 Q. Mr. Alepin, I'd like to go back -- and 5 we're going to put it up on the screen -- to 6 Plaintiffs Exhibit 2708, which is Mr. Gates's 7 E-mail to Mr. Slivka. I'm sorry, quite exactly 8 the opposite. Mr. Slivka's E-mail to 9 Mr. Gates. 10 And I'd like to look at the first -- 11 excuse me -- the second full paragraph there. 12 Now, you testified about this 13 yesterday, and I'd like to go back to it. 14 It says, the Java community is having 15 a hard time digesting JDK 1.1. While it has 16 important new features like beans, it still has 17 that crappy AWT stuff. 18 Now, AWT stands for advanced Windows 19 toolbox, is that what it stands for? 20 A. No, I think it's the widget tool kit. 21 Q. Widget tool kit, okay. 22 And that was the stuff used to create 23 user interface elements in Java? 24 A. That's correct. We refer to widgets 25 as objects that you put on a graphical user 7304 1 interface. 2 Q. And Mr. Slivka also points out that 3 the JDK 1.1 had shit at this printing; correct? 4 A. I see that. 5 Q. He has colorful language. 6 And then he says, the list goes on and 7 on. 8 And you interpret that to mean that 9 the problems with JDK go on and on; correct? 10 A. His list goes on and on. 11 Q. Okay. 12 Now, I asked you at the outset of this 13 line of questioning whether you were familiar 14 with efforts by Netscape and Corel to develop 15 client side applications, and I'd now like to 16 turn to Corel. 17 You are aware, are you not, sir, that 18 Corel tried to create a version of WordPerfect 19 office called Java Office written in Java? 20 A. I am. 21 Q. And that effort was abandoned as a 22 failure, was it not? 23 A. It was not a commercial success, and 24 it was -- and Corel stopped developing that 25 product. 7305 1 Q. Do you know -- I'm sorry. 2 Do you know how much money Corel 3 invested in trying to write Java Office? 4 MR. LAMB: Objection. Relevance. 5 THE COURT: Overruled. You can 6 answer. 7 Go ahead. 8 A. I don't remember the amount of money. 9 At some point in time I believe I've seen it, 10 but I don't remember here. It was a 11 substantial number. 12 Q. Now, in forming your opinions in this 13 case, did you have occasion to look at any of 14 the evidence in Sun's private lawsuit against 15 Microsoft? 16 A. A limited amount, but yes, some. 17 Q. And did you look at any of the 18 declarations that were submitted on Sun's 19 motion for a preliminary injunction? 20 A. It's quite possible. 21 MR. HOLLEY: Your Honor, may I 22 approach the bench -- or the witness, excuse 23 me? 24 Q. You haven't been elevated to Judge 25 yet, Mr. Alepin. 7306 1 Mr. Alepin, among the documents that 2 you looked at in the record of the Sun case, 3 was this declaration from the CEO of Corel, 4 Mr. Derek Burney, among them? 5 A. I take it there are two copies of the 6 same document. 7 Q. My apologies. Can I have one back? 8 That's just a mistake. Thank you. 9 A. Actually, there's three copies. 10 I think I may have seen references to 11 the text declarations to specific paragraphs. 12 I don't think I saw the declaration as a whole. 13 Q. Well, was the content of this 14 declaration something that you took into 15 account in forming your opinions in this case? 16 A. Yes. 17 Q. Now, if you look at the first 18 paragraph of this declaration, Mr. Burney says, 19 I am the president and chief executive officer 20 of Corel Corporation, and at that time -- and 21 this is dated -- I guess if you look on the 22 back, it's dated 24 July 2002; correct? If you 23 look at page 5. 24 A. Yes. 25 Q. Someone made a million copies of this 7307 1 document. I'm not quite sure why. 2 Now, if you turn to paragraph eight, 3 Mr. Burney says, Corel experienced several 4 substantial technical difficulties in 5 developing its Java Office product. 6 First, Corel discovered that the 7 application programming interfaces, APIs, 8 exposed by Java class libraries were very 9 restrictive and lacked several features; e.g., 10 printing functions and access to hardware 11 devices, that are critical to business 12 productivity applications such as word 13 processing or spreadsheet applications. 14 And this criticism of printing is the 15 same one that Mr. Slivka expressed in slightly 16 more rude language, correct, in Plaintiffs' 17 Exhibit 2708? 18 A. I don't think that the two are the 19 same. 20 Q. Well, Mr. Burney is clearly saying 21 that among the deficiencies of Java that Corel 22 encountered in trying to write Java Office was 23 that Java lacked several features including 24 printing functions; right? 25 A. That's what he's saying, yes. 7308 1 Q. I'd like to turn to paragraph nine, 2 the very next paragraph. 3 It says second, the secure environment 4 that is a core feature of the Java runtime 5 environment -- and let's just stop there 6 because this can be confusing, at least to me. 7 People talk about Java runtime 8 environments and Java virtual machines. What's 9 the difference? 10 A. They're often used interchangeably. 11 The Java runtime environment is the 12 environment in which Java applet will run, 13 which is what I've been variously referring to 14 as the Java Virtual Machine, the set of 15 services that are available to an application 16 when the application written in Java is 17 running. 18 Q. So in your view, it's okay for 19 purposes of understanding to think of JRE and 20 JVM, Java runtime environment and Java Virtual 21 Machine, as being pretty much the same concept? 22 A. For here, I think we could agree with 23 that, yes. 24 Q. Okay. All right. 25 And what Mr. Burney says is, second, 7309 1 the secure environment that is a core feature 2 of the Java runtime environment made it 3 difficult to develop a robust desktop 4 application such as a word processor or 5 spreadsheet product that would run in such a 6 JRE. 7 The so-called security sandbox of the 8 JRE made it difficult to access key features of 9 the computer. 10 Also, Corel found that when running 11 Java Office in a JRE, it was difficult for 12 Corel to control the allocation of the 13 available memory of the computer, which is 14 essential for the development of a reliable and 15 efficient desktop application. 16 So what Mr. Burney is saying here is 17 that Corel encountered problems with the 18 security model of Java in writing a complex 19 desktop application; correct? 20 MR. LAMB: Objection. Lacks 21 foundation. Irrelevant as to what this 22 declarant was believing or doing. The only 23 thing that's relevant is what the witness 24 relied on, if anything. 25 THE COURT: The witness can answer if 7310 1 he is able to, but -- the witness will have to 2 state what he relied upon from this. 3 Go ahead. 4 Q. I believe the instruction from the 5 Court was that you could answer if you were 6 able to, and I -- do you want me to ask the 7 question again? 8 Because basically what I did was refer 9 you to paragraph nine, which you have in front 10 of you; right, sir? 11 And my question was, that were you 12 aware when you formed your opinions in this 13 case that Corel had encountered problems with 14 the security model of Java in seeking to create 15 a version of WordPerfect Office called Java 16 Office? 17 MR. LAMB: Objection. Lacks 18 foundation. Irrelevant as phrased, and assumes 19 facts not in evidence. 20 THE COURT: Overruled. 21 As stated, he can answer. Go ahead. 22 A. Well, the phrase securities sandbox is 23 not one that I understood to be the issue or an 24 issue here. 25 Q. I'm not sure I understand your answer, 7311 1 sir, so I'd like to pursue it a little further. 2 You accept, do you not, sir, that 3 Mr. Burney, the CEO of Corel, says that in 4 trying to write a version of WordPerfect Office 5 for Java -- in Java, to run in a Java runtime 6 environment, Corel had difficulty with 7 allocating available memory on the computer 8 which he says is essential to the development 9 of that sort of application? 10 MR. LAMB: Same objection, Your Honor. 11 THE COURT: Overruled. 12 Go ahead. 13 A. I understood that that was Corel's 14 experience. 15 Q. And my question to you, sir, is did 16 you take Corel's experience into account in 17 forming your views in this case? 18 A. Yes. 19 Q. Let's move to the next paragraph. 20 Mr. Burney says, Corel observed a 21 substantial decrease in performance of a Java 22 application running in a JRE as compared to a 23 program written in a programming language like 24 C++ that is compiled into object code that runs 25 directly on the operating system installed on 7312 1 the computer. 2 Now, this is the same concept that you 3 were referring to and that you worked in, 4 correct, this just-in-time compilation notion 5 that is required to compile Java byte codes? 6 Is that your understanding of what 7 this man is saying? 8 A. No. I think he's referring to the 9 fact that under ordinary circumstances when 10 Java virtual machines were first introduced, 11 they did not have these advanced compilation 12 techniques such as the one that I was working 13 on and that -- called just-in-time compilers, 14 which would take a Java byte code and perform 15 the same kind of compilation and optimization 16 that a C++ compiler would provide, but that the 17 -- in the early days, the JIT technology had 18 not been brought to bear on Java. 19 Q. Just to -- when you say the early 20 days, what do you mean? Because Mr. Burney is 21 talking about the period 1995 to 1997. You can 22 see that, sir, by looking at his references in 23 paragraphs five and seven to time periods. 24 MR. LAMB: Same objection, Your Honor. 25 This is referring to the collateral estoppel 7313 1 period. 2 THE COURT: Mr. Alepin has stated that 3 he used this to rely -- he can make statements 4 regarding how he used it. However, anything 5 that goes against the findings of fact can't be 6 stated. 7 MR. HOLLEY: I appreciate that, Your 8 Honor. 9 I'm not trying to elicit such 10 testimony. 11 Q. So my question to you, Mr. Alepin, is, 12 did you take into account in forming your 13 opinions in this case the experience of Corel 14 that Java Office -- and I'm quoting him here -- 15 was larger, slower, and used more memory than a 16 similar application written in a programming 17 language like C++ that did not require 18 interpretation in the same way as Java? 19 A. I did. 20 Q. And finally, I'd like you to look at 21 paragraph 11 of Mr. Burney's declaration. 22 He says, fourth, Corel found that the 23 cross-platform approach to software development 24 marketed by Sun Microsystems for Java required 25 Corel's developers to limit themselves to 7314 1 writing applications that made use of only 2 those features and functionality that were 3 available on every operating system on which 4 the application might run. 5 You are familiar are you not, sir, 6 with the concept of least common denominator as 7 applied to Java? 8 MR. LAMB: Objection, Your Honor. 9 He's just reading something and then asking a 10 totally different question. It has nothing to 11 do with what the witness relied on. 12 THE COURT: Sustained. 13 MR. HOLLEY: I'll lay a better 14 foundation. 15 Q. In the very next sentence, Mr. Burney 16 says, thus, Corel's developers could not make 17 use of features or functionality that, for 18 example, are available on the Windows operating 19 system, but not available on one of the many 20 UNIX operating systems. 21 Moreover, this least common 22 denominator approach meant that Corel's 23 developers could not take advantage of newer 24 technologies available on recently released 25 operating systems because the applications 7315 1 would not work on computers using older 2 versions of the same operating system. 3 And just for background, before I ask 4 the question, are you familiar, sir, with the 5 concept of least common denominator as applied 6 to Java? 7 MR. LAMB: Objection. Lacks 8 foundation. 9 THE COURT: Overruled. 10 You may answer the question. 11 A. Excuse me. I don't recall that phrase 12 being applied to Java. 13 Q. Did you take into account in forming 14 your opinions in this case Corel's -- the 15 experience of Corel's developers when they were 16 trying to write Corel Office that they were 17 limited to the least common denominator of 18 features and functionality available on all 19 operating systems on which their application 20 might run? 21 A. Certainly, that was the idea behind 22 Java. 23 Q. That you would limit yourself to the 24 least common denominator? 25 A. That you would use only those features 7316 1 that were available across the platforms. 2 Q. Okay. So just so I can make sure I 3 understand this concept, if a Windows mouse has 4 a right button -- a left button and a right 5 button and a UNIX mouse doesn't understand 6 right mouse clicks and I'm writing a 7 cross-platform Java application, I can't use 8 right mouse clicks, can I? 9 A. Well, there are different ways in 10 which those kinds of differences are handled so 11 that you can have a -- an idealized -- the 12 whole idea behind a virtual machine is that you 13 present a machine that has a set of functions 14 and features, which may or may not correspond 15 to the features and functions available on the 16 particular machine in which you're running. 17 So you can, for example, provide two 18 mouse buttons on an operating system that 19 doesn't have two mouse buttons or three mouse 20 buttons or what have you. 21 You can through the Java Virtual 22 Machine layer insulate those differences from 23 your applications. 24 Q. How do you deal with the hardware 25 differences, sir? 7317 1 I mean, the functionality of the Mac 2 OS is tied to the Mac PC, is it not? 3 A. I'm sorry, I'm not following that 4 statement. 5 Q. Okay. So I'm trying -- here's my 6 hypothetical. 7 I'm writing an application -- let's 8 say it's Corel Office -- and I want it to be as 9 functional as I can make it. 10 A. Yes. 11 Q. But I have to deal with the fact that 12 I want to run it on the Mac operating system 13 and Linux and Windows and OS/2, and I know that 14 the feature sets in terms of functions of those 15 four operating systems are different. Some 16 have some features and others have others. 17 The only way that I can deal with that 18 situation is to basically target only the 19 functions that are available on all four; 20 correct? 21 A. The only way that I can do that is 22 target the Java Virtual Machine, which is 23 intended to present you with the same virtual 24 machine, ideal machine, or idealized machine 25 that would be available on each one of those 7318 1 machines. 2 Q. Well, let's go back -- I don't want to 3 belabor this, but let's go back to that diagram 4 that I created from your earlier diagram. I 5 think it's 1004. 6 Now, in this instance, if we take the 7 four blue lines that are coming -- that are 8 exposed by each of the three JVMs, the Java 9 Virtual Machine layer can't create more 10 functionality than exists in the underlying 11 operating system, can it? 12 A. Why -- I'm sorry. Yes, it can. 13 Q. So -- but in terms of things like 14 mouse plug-ins, how is it that you propose that 15 the Java Virtual Machine layer make a physical 16 mouse on a UNIX box do more than it does now? 17 A. We call these things gestures, the 18 motions with the mouse double clicking, 19 selecting, pressing -- pressing and holding a 20 mouse button down, and it's possible to take 21 the -- these gestures that come from the 22 underlying operating system and translate them 23 into a standardized set of events or 24 standardized set of information to the 25 application regardless of the computer on which 7319 1 it's running. 2 So Java is taking the capabilities of 3 the operating system and translating them into 4 a common, if you will, vocabulary or common set 5 of capabilities. 6 Q. So you have no understanding 7 whatsoever, then, of what Mr. Burney means when 8 he says in paragraph 11, thus, Corel's 9 developers could not make use of features or 10 functionality that, for example, are available 11 on the Windows operating system but not 12 available on the many UNIX operating systems? 13 A. I don't think that's what I intended 14 by my previous answers. 15 Q. Because you do understand what he's 16 talking about. 17 You understand that one of the 18 challenges of writing a cross-platform Java 19 application, especially a complicated one like 20 a spreadsheet or a word processor, is that you 21 may not use features or functionality that are 22 available on one of the operating systems but 23 not available on the other target operating 24 system? 25 A. Well, preferentially, yes, that's the 7320 1 idea. 2 Of course, you know that when you 3 begin the project. 4 I mean, it's rather surprising here 5 that Mr. Burney's criticism of Java -- and this 6 particular element of Java -- come about after 7 they had begun the project and they understood 8 the box in which applications were going to run 9 when running for the Java platform. 10 It's not like they discovered this at 11 the end or sometime later on. They understood 12 going in what Java was capable of doing. 13 Q. Now, I'd like to move on to a slightly 14 different topic now, related again, which is 15 network computers. 16 You recall giving testimony on direct 17 examination about network computers; correct? 18 A. I do. 19 Q. And is it -- is my understanding 20 correct that a network computer or an NC will 21 only work if it's attached to the network; 22 right? 23 A. Subject to certain refinements, that's 24 correct. 25 Q. The refinement being that the more 7321 1 power the NC has, the more it is like a PC, the 2 more it has stand-alone capability; is that 3 right? 4 A. Well, there are two instances, one as 5 you just described, and the second one is once 6 it has visited the network for the purposes of 7 obtaining information or obtaining an 8 application, it can then operate without the 9 network. 10 Q. Did you in the course of forming your 11 views about network computers and the impact of 12 Microsoft's actions on the evolution of network 13 computers look at evidence in the record of 14 this case? 15 A. I did. 16 Q. Did you have occasion to look at 17 testimony of a man named John Throckmorton from 18 Samna Corporation, which developed OmniPro, 19 which was later acquired by Lotus? 20 A. I looked -- yes, I looked at 21 Mr. Throckmorton's testimony, yes. 22 Q. And you took that into account, 23 correct, in forming your opinions? 24 A. Yes. 25 Q. I'd like to play you a portion of 7322 1 Mr. Throckmorton's deposition from November, 2 2001, and then ask you whether this is part of 3 what you took account of. 4 A. Just so I'm clear, excuse me, I read 5 the deposition; I didn't watch the video. 6 Q. Fair point. 7 But we're going to see the transcript 8 playing at the bottom, and if it's different 9 from what you remember, tell me. 10 MR. LAMB: I object, Your Honor. I 11 think you should just read the transcript and 12 show him the transcript if he didn't review the 13 video. 14 THE COURT: He can go ahead and -- 15 it's the same. 16 Overruled. Go ahead. 17 (Whereupon, the following video of 18 John Throckmorton was played to the jury.) 19 Question: All right. Now, did it 20 take off -- did network computing take off at 21 all during the period 1998 to 2000? 22 Answer: No. 23 Question: And do you have any 24 understanding of why that occurred? 25 Answer: I just don't think that the 7323 1 willingness to give up desktop PCs was there. 2 Question: Any reason to think -- do 3 you blame Microsoft for the fact that network 4 computing didn't take off? 5 Answer: I don't know that I blame 6 anyone. As I said, I don't know why it didn't. 7 I just -- I think it was a reluctance to give 8 up PCs. 9 (Whereupon, the playing of the video 10 of John Throckmorton was concluded.) 11 Q. Was the reluctance of consumers to 12 give up their PCs and their stand-alone 13 functionality something that you took into 14 account in forming your opinions about NCs and 15 the impact of Microsoft's actions on NCs? 16 A. Well, I think that I'm not sure that 17 the reluctance that Mr. Throckmorton is 18 referring to is something that I understand how 19 he's using that, but that's probably something 20 that's going to come out as I try and answer 21 the question. 22 The -- as with any new technologies, 23 network computing, as we're talking about here, 24 you have to get the idea out and get the idea 25 accepted by the development community and then 7324 1 by certain select customers and try and improve 2 the technology and encourage wider adoption. 3 And so my comment was that the 4 improvement did not take place; that we were 5 not able to improve the network computing 6 technology during this time sufficiently. 7 Q. Wasn't another problem that -- about 8 NCs and their evolution that the price of PCs 9 was dropping rapidly at the same time that Sun 10 and Oracle and other companies were promoting 11 the concept of the network computer? 12 A. PCs were -- I'm sorry. 13 Q. Sorry. 14 A. Yes, PC prices were declining. 15 Q. And did you take into account in 16 forming your views the impact on the fall in 17 the price of PCs relative to the ability to 18 promote this alternative NC technology? 19 A. I did. 20 Q. Okay. In the context of doing that, 21 did you have occasion to review the deposition 22 testimony of Eileen Rudden of Lotus and her 23 comments on NCs? 24 A. That -- sitting here, that name 25 doesn't seem familiar, but as you said earlier, 7325 1 there are a lot -- scores and scores of 2 depositions, and it's quite possible I did. 3 Q. Well, let me -- just don't say 4 anything about what this says, but I just want 5 to show you something and ask you whether this 6 triggers any recollection on your part about 7 whether this is something that you looked at. 8 MR. HOLLEY: May I approach the 9 witness? 10 THE COURT: Yes. 11 Q. Mr. Alepin, that is an excerpt of some 12 testimony, and I would like you to read it, 13 sir, and see whether it triggers any 14 recollection if that's something that you 15 looked at in forming your views in this case. 16 A. I don't think this particular excerpt 17 -- it doesn't refresh my recollection, I'm 18 sorry. 19 Q. Fair enough. Thank you for doing 20 that, sir. 21 Have you heard reference to the $500 22 PC? 23 A. As a -- in a particular context? 24 Q. Fair enough. 25 In the context of discussions about 7326 1 the appeal of network computers. 2 A. I think there were certain labels that 3 computer price points were given. 4 Q. And in your view, didn't the emergence 5 of the $500 PC enable corporate customers to do 6 essentially everything that the NC promised 7 them that they could do? 8 A. I don't think that that is quite what 9 happened. 10 The corporate users, who were the 11 principal likely users of network computers, 12 had come to realize that it was not just the 13 initial amount of money that they had to pay 14 for the computer, but rather, how much the 15 computer would cost them to operate over time. 16 And so the businesses became much more 17 concerned about ownership over the life rather 18 than the initial price point. 19 Q. Well, did you have occasion in 20 analyzing this issue about NCs and what did and 21 did not contribute to their lack of evolution, 22 what Sun's view was of the prospects for NCs 23 once they saw the Pentium processor and 24 Microsoft's Java implementation? 25 A. I need a little more context. 7327 1 Q. Okay. Well, let me show you 2 something. 3 And again, I want you to look at it 4 and tell me whether or not it's something that 5 you had occasion to review and rely on before 6 you say anything about what it is. 7 MR. HOLLEY: I'm sorry, Your Honor, 8 may I approach? 9 THE COURT: Yes. 10 A. Excuse me, what portion of it -- 11 Q. I'm particularly interested in the 12 E-mails at the top and the bottom, but please 13 take as much time as you want to read it. I 14 don't think it will take very long. 15 A. I understand what he's -- what's being 16 discussed in the E-mail and -- 17 Q. That's a slightly different question 18 than the one that I asked. 19 A. I figured as much. 20 Q. What I need to know is whether this is 21 a document that you reviewed in the course of 22 all the hundreds of thousands of documents that 23 you've looked at. That's my first question. 24 A. No. 25 Q. Okay. Fair enough. Thank you. 7328 1 A. Not that I recall anyway. Not that I 2 recall. 3 Q. Thank you. 4 I'd like to switch topics now away 5 from network computers and talk about Windows 6 media player. 7 You testified on direct about Windows 8 media player; is that right? 9 A. I did. 10 Q. You don't object, do you, to the idea 11 that Microsoft elected to compete with Apple 12 and RealNetworks in providing multimedia 13 software? 14 A. I don't have objections, no. 15 Q. And it is true, is it not, that every 16 modern PC operating system has various kinds of 17 media play back functionality? 18 A. I think that's probably a fair 19 generalization, yes. 20 Q. Well, in the course of your work on 21 this case, did you have occasion to look at 22 other operating systems for PCs to see whether 23 they have media functionality? 24 A. They do. 25 Q. And that's true of Apple's OS X Tiger; 7329 1 right? 2 A. Yes. 3 Q. It has two kinds, actually. It has 4 QuickTime and iTunes; right? 5 A. To the extent that they are different, 6 yes. 7 Q. They have cross-dependencies, don't 8 they? 9 A. I think again it's one has a 10 dependency on the other. 11 Q. So iTunes has a dependency on 12 QuickTime; correct? 13 A. That's correct. 14 Q. And it's also true of Suse and Red Hat 15 Linux, they also have media functionality in 16 the package that they provide to consumers; 17 correct? 18 A. Yes, I believe they supply different 19 -- even multiple media players. 20 Q. And it's also true of Solaris, the 21 operating system provided by Sun, which 22 obviously runs on different kinds of computers, 23 but also Intel-based PCs? 24 A. I believe that's the case. 25 Q. I'd like you to take a look, if you 7330 1 would, sir, at Slide 726. 2 This is a data sheet -- here we go, 3 sorry -- a data sheet from the Sun Microsystems 4 website on something called Solaris 10, Java 5 desktop system, and among the things that this 6 supports are various formats for audio and 7 video content; correct? 8 A. Those are formats in the top bullet. 9 Q. Right. And Sun also provides a copy 10 of Real Player 10 with Solaris; correct? 11 A. I believe that's the case, yes. 12 Q. Now, you made reference to the 13 availability in Europe of a version of Windows 14 without Windows media player on direct; right? 15 A. I did. 16 Q. And that's called Windows XPN, isn't 17 it? 18 A. Yes. 19 Q. Do you know how many copies of Windows 20 XPN have been sold into distribution in Europe? 21 A. At any particular point in time? 22 Q. As of April 2006. 23 A. I understood it to be nineteen -- 24 1,800 or 1,900 copies. Perhaps you could 25 correct me if I'm wrong. 7331 1 Q. It's 1,787. Does that comport with 2 your memory? 3 A. I think 1,800 is close enough. 4 Q. Okay. I agree with you. 5 And how, sir, does that 1,800 copies 6 sold into distribution of Windows XPN relate to 7 the total number of copies of Windows XP sold 8 in Europe during the preceding nine months from 9 April -- before April 2006? 10 A. It's a small percentage. 11 Q. Would you disagree with me if I told 12 you it was 1,787 out of 35 and a half million 13 copies? 14 A. I wouldn't disagree with you. 15 Q. You are also aware, are you not, sir, 16 that this Windows XPN, which is available 17 within the countries of the European Union, has 18 not been preinstalled by a single computer 19 manufacturer on a single PC? 20 A. I think that is correct. 21 Q. Now, among the things you talked about 22 in your testimony relating to media players was 23 the history of Microsoft's inclusion of media 24 playback and Windows, correct, on direct 25 testimony? 7332 1 A. I touched on that history, yes. 2 Q. Okay. In the course of your work on 3 this case, did you have occasion to look at 4 press releases and other documents issued by 5 Microsoft in the early 1990s relating to the 6 inclusion of media playback functionality in 7 Windows? 8 A. In this case? 9 Q. Well, that's a fair point, but maybe 10 not literally in this case. 11 But have you looked at those sorts of 12 documents in any context in a way that forms a 13 basis of what you're testifying about in this 14 case? 15 A. Yes, I have. 16 Q. Are you familiar with the press 17 release that Mr. Glaser on behalf of Microsoft 18 issued in connection with something called 19 multimedia extensions for Windows 3.0? 20 A. Yes. 21 MR. HOLLEY: Your Honor, just one 22 moment, please. I need to get Mr. Lamb a full 23 copy. 24 THE COURT: Sure. 25 Q. So I'd like to show you Slide 772, 7333 1 which is a May 4, 1991 press release entitled 2 Microsoft announces further details of 3 multimedia systems software. 4 And I'd like to focus in particular on 5 -- it just happened magically. 6 Now, just for purposes of background, 7 Rob Glaser is now the CEO of RealNetworks; 8 correct? 9 A. He may still be. He certainly was the 10 founder of RealNetworks. 11 Q. But at this time he was at Microsoft? 12 A. Yes. 13 Q. And, in fact, this says he was the 14 general manager of Microsoft's multimedia 15 systems group. 16 A. That apparently was his title. 17 Q. Okay. 18 Now, when you testified on direct that 19 Microsoft didn't have media playback -- I may 20 have misunderstood you, so please correct me. 21 But when you testified on direct that 22 there was no media playback software in Windows 23 until 1996, had you taken into account of this 24 press release and its description of the 25 multimedia extensions for Windows 3.0? 7334 1 A. I was not referring to multimedia 2 playback. I was, in fact, referring to the 3 Windows media player, not the Win -- the 4 Windows media player. 5 Q. Okay. Well, I'd like to show you -- 6 first of all, let me ask you, have you had 7 occasion to look at Microsoft's website which 8 has a section devoted to the history of Windows 9 media player? 10 A. I have. 11 Q. I'd like to show you Slide 743. 12 Now, this says at the top, in 1991 13 Microsoft added the first digital audio and 14 video capabilities to the Windows -- excuse 15 me -- to the Microsoft Windows operating system 16 with multimedia extensions in Windows 3.0. 17 And down below in the section relating 18 to Windows 3.0 with multimedia extensions, 19 there is a little user interface for something 20 called the media player, and it's your 21 testimony that that is not Windows media 22 player? 23 A. That's correct. 24 Q. Okay. So when you testified that 25 Microsoft didn't put Windows media player in 7335 1 Windows until 1996, you weren't suggesting that 2 there was no support for audio or video in 3 Windows until that time? 4 A. No, I was not. 5 Q. Now, one of the reasons -- and let's 6 go back, please, to Mr. Glaser's comments on 7 Slide 772. 8 One of the reasons that Mr. Glaser 9 said -- and this is the Microsoft Mr. Glaser, 10 when he was still at Microsoft. 11 That one of the reasons that he gave 12 for adding multimedia capability to Windows -- 13 and this is in that third paragraph. It's in 14 the block that got pulled out -- was that 15 multimedia not only enabled new content rich 16 applications, but also makes the end user 17 environment easier to use and more complete. 18 Now, from a technology standpoint, you 19 understand Mr. Glaser to be saying, do you not, 20 that one of the benefits of adding media 21 support to Windows is that people who want to 22 build on top of it, for example, somebody who 23 wants to create an interactive encyclopedia 24 with audio clips and little movies of John 25 Kennedy making famous speeches can do that by 7336 1 calling on services in the operating system 2 rather than having to do all that in their own 3 application? 4 A. I apologize. I lost you at John 5 Kennedy's speech there. 6 Q. Okay. I take that as an implicit 7 criticism, which I accept. 8 What you understand from a 9 technological standpoint, that what Mr. Glaser 10 is saying here is that adding media content to 11 Windows enables, as he says, new content rich 12 applications because the applications 13 developers can call upon this media 14 infrastructure in Windows rather than having to 15 do it in their own applications? 16 A. In this particular case, yes. 17 Q. And he also says that having support 18 for various kinds of audio and video and 19 animation in Windows makes the end user 20 environment easier and more complete. 21 And from a technology standpoint you 22 understand him to mean that this audio and 23 video capability makes Windows itself easier to 24 use and more complete; correct? 25 A. That -- I think it provides additional 7337 1 capabilities that can be used for tutorials, 2 for example. 3 So, yes, I think that's correct. 4 Q. Now, you testified that the inclusion 5 of what you call Windows media player in 1997 I 6 think you said, had an adverse impact on 7 competing media player vendors on direct 8 examination. Do you remember that? 9 A. I'm not sure exactly -- I'm not sure 10 exactly the term I used, but the bundling and 11 tying of the media player had an adverse 12 effect. 13 Q. Okay. And I just want to be clear 14 because we've got these terminological 15 problems, when you say the bundling and tying 16 of the media player, you are not talking about 17 what we looked at on Slide 743, which is the 18 media player user interface in Windows 3.0 or 19 the user interface in Windows 3.1? 20 A. I'm not talking about this 21 demonstration application, no. 22 I'm talking about the Windows media 23 player with streaming media capabilities that 24 -- using the Internet. 25 Q. Apple's QuickTime and Real Player's 7338 1 Real Player are both very popular media 2 players; correct? 3 A. Very popular is a -- 4 Q. Relative to -- 5 A. -- relative term. 6 Q. Relative to Ogg Vobis and other sort 7 of strange things; right? 8 They are the most commercially popular 9 media players in the marketplace, right, based 10 on your experience? 11 A. Here in the U.S., I believe that the 12 three most popular are RealNetworks, QuickTime, 13 and Windows media player. 14 Q. And it is not your testimony that the 15 presence of Windows media player in Windows 16 causes QuickTime or Real Player to malfunction 17 or fail to run on Windows, is it? 18 A. It's -- fail to run is a little bit of 19 an elastic term, a term that has some different 20 possible meanings. 21 Fail to run when a media player should 22 be launched is a fail to run, as well as fail 23 to run when an application would stop working. 24 There's two different kinds of 25 interpretations there. 7339 1 Q. I understand the ambiguity that you've 2 identified. 3 So what I meant was your second sense 4 of fail to run, which is the presence of 5 Windows media player doesn't cause QuickTime to 6 stop working, does it? 7 A. I don't -- in the sense of failing, 8 the QuickTime application failing, no, I don't 9 think so. 10 Q. And the same is true of Real Player, 11 correct; that the presence of Windows media 12 player in Windows does not cause Real Player to 13 malfunction in the sense of stopping working? 14 A. I don't believe so. 15 Q. Did you mean to testify -- I'm just 16 not clear on this point so I'm asking -- that 17 the presence of Windows media player in Windows 18 prevented Apple and RealNetworks from getting 19 their media players distributed broadly? 20 A. After a time, yes. 21 Q. After what time? 22 A. Well, once the -- once Windows media 23 player was distributed on all PCs, it was 24 difficult -- it became difficult for them to do 25 that, to get onto PCs, to distribute their 7340 1 software and to have it taken up by users. 2 Q. Okay. Now, in forming that opinion 3 that you just expressed, did you have occasion 4 to look at statements made by Mr. Glaser now in 5 his capacity as the CEO of RealNetworks about 6 his distribution opportunities? 7 A. I need a little more help with respect 8 to the documents you have in mind. 9 MR. HOLLEY: May I approach the bench, 10 Your Honor? 11 THE COURT: The witness, yes. 12 MR. HOLLEY: The witness. 13 THE COURT: Don't need to refresh my 14 recollection. 15 Q. My first question. Again same ground 16 rules. Don't say what that is until we've 17 established a few things about it. 18 Is this an article that you have 19 reviewed in connection with this case? 20 A. I don't -- I don't recall this 21 particular article. The Business 2.0 is a 22 magazine to which I subscribe, but I'm -- I 23 don't remember this particular article. 24 Q. And do you remember in the context of 25 any proceeding in which you've been involved 7341 1 the substance of this article being articulated 2 or stated? 3 A. I think I've heard something about 4 this, yes. 5 Q. What you heard about this, is that 6 something that you relied on in forming your 7 views in this case? 8 A. Well, I considered the subject area 9 here and what is being discussed as -- by Mr. 10 Glaser. 11 MR. HOLLEY: May I approach the 12 witness, Your Honor? 13 Q. Thank you, Mr. Alepin, for looking at 14 that. 15 Did you consider in forming your views 16 about the impact of the inclusion of Windows 17 media player in Windows on distribution 18 opportunities for RealNetworks Mr. Glaser's 19 view about the efficacy of certain kinds of 20 distribution mechanisms? 21 A. I considered the views of many people, 22 including the executives at RealNetworks, which 23 probably included Mr. Glaser, I would think. 24 Q. And it was your understanding, was it 25 not, that Mr. Glaser's view was that most of 7342 1 the distribution, 90 percent or more of the 2 distribution of his product Real Player came 3 through the Internet, downloading through the 4 Internet? 5 A. I believe that's what he is 6 indicating. 7 Q. Have you done any analysis to see the 8 extent to which Real Player is preinstalled by 9 computer manufacturers on new PCs? 10 A. I have not personally done that 11 analysis. 12 Q. You are aware, are you not, from your 13 work either in this case or in related matters, 14 that that analysis has been performed? 15 A. I am aware of it, sir. 16 Q. And did you take account of that 17 analysis in reaching the views that you reached 18 in this case? 19 A. I did. 20 MR. HOLLEY: Your Honor, may I 21 approach the witness, please? 22 THE COURT: Yes. 23 Q. Mr. Alepin, I will tell you at the 24 outset that the call-outs, the square boxes 25 around certain icons on those pictures, are 7343 1 things that we did, but do you recall seeing 2 such screen shots attached to an analysis of 3 the preinstallation of media players other than 4 Windows media player on new PCs? 5 A. It looks familiar. If you could tell 6 me the particular document, I could confirm 7 that for you. 8 Q. Okay. I hope I have that with me. 9 If I told you that it was prepared by 10 LECG and used in the European case, would that 11 trigger your recollection of when you've seen 12 it? 13 A. That's -- that would trigger my 14 recollection. I'm not sure at which point, 15 though. There were two different, I believe -- 16 two different reports; at least two different 17 reports submitted. 18 Q. Okay. And did you take account of 19 those LECG reports in forming your views in 20 this case? 21 A. I took account of them in forming my 22 opinions, yes. 23 MR. HOLLEY: Your Honor, may I 24 approach Mr. Alepin? 25 THE COURT: Yes. 7344 1 Q. You are aware, are you not, sir, that 2 LECG, when it did its study of the presence of 3 non-Microsoft media players on new PCs, found 4 that RealNetworks continued to be preinstalled 5 on a number of them; is that correct? 6 A. It's my recollection that there were 7 some problems with the LECG report and that 8 certain of its observations, certain of the 9 data described in its report were -- did not 10 reflect the current conditions at the time that 11 they were presenting the information. 12 Q. Do you know what the status is of the 13 agreement between Time Warner and RealNetworks 14 concerning the distribution of Real Player with 15 AOL's client access software? 16 A. No, I don't. 17 Q. You are aware, are you not, sir, that 18 for a number of years AOL distributed Real 19 Player with the AOL client access software? 20 A. Yes, I am. 21 Q. Now, you testified on direct 22 examination that media players offered a 23 platform alternative to Windows; correct? 24 A. I believe I described it as a 25 potential or partial platform alternative -- 7345 1 had the potential to offer an alternative 2 platform. 3 Q. Okay, potential partial. 4 Let's look at those one at a time. 5 So it's not your testimony that as we 6 sit here today, Real Player is an alternative 7 platform to Windows; correct? 8 A. That's correct. It's not a complete 9 -- that's what I meant by partial, certainly. 10 Q. Do you know what percentage of the 11 APIs, these application programming interfaces, 12 that are exposed by Windows XP have an 13 equivalent in Real Player? 14 A. Numerically, I don't. 15 Q. Can you give the jury some sense of 16 the relative size? I mean, is it 1 to 100? 17 1 to a 1000? Do you know? 18 A. I think it would be -- a different way 19 of measuring it would be more appropriate how 20 much does it overlap with the multimedia 21 functionality available and exposed by Windows 22 media player is the correct way to weigh those 23 two things. Not against the Real Player as an 24 operating system because, of course, it's not 25 an operating system. 7346 1 Q. In fact, it never was meant to be a 2 substitute for a PC operating system, was it? 3 A. It is a media player that exposes 4 application programming interfaces, which can 5 be extended and combined with other software to 6 complete a set of programming interfaces or 7 applications. 8 Q. Okay. But I want to focus, if I 9 could, please, just on Real Player itself. 10 It was never intended as a substitute 11 for a PC operating system, was it, standing 12 alone? 13 A. I don't know what RealNetworks' people 14 had as their complete vision for the system. 15 Q. Well, I'll give this to you because 16 I -- 17 MR. HOLLEY: May I approach the 18 witness, Your Honor? 19 THE COURT: You may. 20 Q. I'd like to show you again, 21 Mr. Alepin, your deposition in the MDL case, 22 the federal case. 23 And I direct your attention, sir, to 24 page 122, starting at line 22, and the section 25 I'm interested in carries over to 123. 7347 1 And just tell me when you've had an 2 opportunity to look at that, sir. 3 A. I've seen it, yes. 4 Q. Okay. So you were asked the question 5 at the MDL deposition: 6 Question: There's no evidence that 7 RealNetworks ever intended to market their 8 media player as a substitute for PC operating 9 systems; correct? 10 And your answer was: No, I don't 11 believe that there is any evidence. 12 A. That's correct. 13 Q. And that's correct, is it not? 14 A. That's correct. 15 Q. There's no evidence that RealNetworks 16 ever intended to market Real Player as a 17 substitute for PC operating systems? 18 A. That's what I said. 19 Q. And you hold the same view which you 20 held at the MDL deposition in the next question 21 and answer pair with regard to Apple's 22 ambitions in terms of creating an operating 23 system substitute. 24 The question was asked: No evidence 25 that Apple ever intended to market in its media 7348 1 player technology as a substitute for PC 2 operating systems; correct? 3 And you said: That's correct. 4 And you continue to believe that 5 today; right, Mr. Alepin? 6 A. That's correct. 7 Q. Now, on this question of how many APIs 8 the Real Player exposes, I'd like you to look, 9 if you would, sir, at page 124 of the MDL 10 deposition transcript, and read as much of it 11 as you want around this, but 124, lines 3 to 5, 12 you were asked the following question: 13 Several is the best answer you can 14 give me to how many APIs RealNetworks product 15 exposes; correct? 16 And your answer was: That's correct. 17 So your testimony was that several is 18 the number of APIs that Real Player exposes? 19 A. I'm just catching up to you, sir. 20 Q. Sorry, I didn't -- take as much time 21 as you need. 22 A. If I'm going back to where the 23 exchange begins, I think it's page 123, I'm 24 doing this rather quickly, the question begins: 25 How many platform APIs does 7349 1 RealNetworks media player expose? 2 Then we go through some clarification, 3 and then I answer, ultimately, I think is 4 several, and it's in respect to the platform 5 APIs. 6 Real Player offers a lot of media 7 player application programming interfaces, many 8 hundreds of those. Possibly even, I think, 9 over a thousand in the Helix system -- Helix 10 set of APIs, which is Real Networks programming 11 interfaces for its media player technology. 12 Q. And are all of those Helix interfaces 13 implemented on the client as well as the 14 server? 15 A. I think there are different sets for 16 different parts. Some on the server, some on 17 the client. 18 Q. And how many are on the client? 19 A. You know, I don't recall having 20 engaged in a counting of them. 21 Q. How many platform APIs are there in 22 Windows XP? 23 A. Thousands. 24 Q. Now, on direct examination, you 25 testified about a feature of Real Player called 7350 1 Tinkerbell. Do you remember that? 2 A. I do. 3 Q. What does Tinkerbell do? Obviously, 4 not the one in Peter Pan, but the RealNetworks' 5 Tinkerbell. 6 A. Tinkerbell loads and runs in the 7 background of the -- while Windows loads up. 8 So it's setting behind, if you will, Windows. 9 Q. And it sets down there silently in the 10 system tray checking to see whether Real Player 11 is the designated handler for particular file 12 types; correct? 13 A. It does that, yes, among other things. 14 Q. Every ten minutes it looks to see 15 whether Real Player is the default handler for, 16 for example, the MP3 format? 17 A. For example, yes. 18 Q. And if it finds out that some other 19 media player has been designated as the handler 20 for MP3, it grabs it back without asking 21 whether the user wants to do that or not; is 22 that correct? 23 A. It does that in response to the fact 24 that other software overrode users' preferences 25 at the time. 7351 1 Q. In reaching the view that you just 2 expressed about the operation of Tinkerbell, 3 did you have occasion to read the written 4 direct testimony of Professor Kenneth Elzinga 5 of the University of Virginia in the government 6 case? 7 A. Excuse me. Was this in the remedies 8 proceedings or in the direct? 9 Q. In the remedy proceedings, yes. 10 A. Excuse me, I may have read portion -- 11 I read portions of it. 12 Q. All right. I'm going to give you two 13 things to look at. 14 I'm going to give them to Mr. Lamb 15 first so he can look at them. 16 MR. HOLLEY: May I approach the 17 witness, Your Honor? 18 THE COURT: Yes. 19 Q. So I'm happy to have you look at as 20 much of the full testimony that you'd like, but 21 I did excerpt the part that I'm interested in. 22 And my question to you, sir, is, did 23 you review that paragraph 62 of Professor 24 Elzinga's written direct testimony in forming 25 your views in this case? 7352 1 A. I did. 2 MR. HOLLEY: May I approach the 3 witness? 4 THE COURT: You may, Mr. Holley. 5 We're going to stop right there for 6 the day. It's now three o'clock. I promised 7 to let you go at this time so I wanted to keep 8 my promise. 9 Remember the admonition previously 10 given. 11 We'll see you tomorrow morning at 12 8:30. Please drive carefully. Leave your 13 notebooks here. 14 All rise. 15 (The following record was made out of 16 the presence of the jury at 2:58 p.m.) 17 THE COURT: Take a ten-minute recess. 18 Then we'll take up the issues you have, 19 Mr. Cashman. 20 MS. CONLIN: The Defendants have 21 proposed that we take up the many, many, many 22 pending motions in this week. Plaintiffs 23 object to doing that. We have so many 24 deposition and exhibit matters to cover, that 25 none of these motions are of an urgent nature 7353 1 so that -- but if the Court decides to take 2 them up, we have a proposed order that differs 3 from that that the Defendant suggests, and so 4 I'll give that to the Court -- 5 THE COURT: Is this in response to 6 their letter? 7 MS. CONLIN: Yes, it is, Your Honor, 8 and it is in response, though, as I indicated, 9 our preference is to put these off until we get 10 these depositions in the can, so to speak. So 11 that we're ready to proceed whatever happens. 12 Though we're going much more slowly 13 than we anticipated, we do want to be ready, 14 and I think both parties agree we do not want 15 to waste the jury's time, and so that's the 16 reason why we would prefer to put these off to 17 a later date. 18 THE COURT: Okay. 19 MR. TULCHIN: Your Honor, if I may, I 20 wonder if I could have an opportunity to look 21 at Ms. Conlin's letter, which, of course, I've 22 just been given. 23 THE COURT: Sure. 24 MR. TULCHIN: And to report back to 25 the Court at 8:15 or 8:20 tomorrow. 7354 1 My letter wasn't meant to be an 2 imposition on anyone, and I don't feel terribly 3 strongly about when these motions are heard, 4 but I'd like to at least review this and report 5 back tomorrow morning. 6 THE COURT: Sure, absolutely. 7 MS. CONLIN: David, if you don't care, 8 can we just agree to delay them? 9 MR. TULCHIN: Can I send you an E-mail 10 tonight? 11 MS. CONLIN: Sure. 12 MR. TULCHIN: That would be great. 13 Thank you, Your Honor. 14 THE COURT: Thanks. See you tomorrow. 15 (A recess was taken from 3 p.m. to 16 3:09 p.m.) 17 THE COURT: Hello again. 18 MR. GRALEWSKI: Good afternoon, Your 19 Honor. 20 THE COURT: Nice to see you all. 21 MR. GRALEWSKI: Nice to see you. 22 As you know, we're here to continue 23 the Harlan argument and pick up with the Dixon 24 argument, if we have time, which I believe we 25 will. 7355 1 THE COURT: We were on page 198. 2 MR. GRALEWSKI: Yes, Your Honor. 3 Before we turn to that, I would like 4 to provide the Court with some cases that we 5 discussed yesterday, if I may. 6 THE COURT: Yes. Actually, we're past 7 198. 8 MR. GRALEWSKI: I believe we are. 9 THE COURT: We're on 201, 222, and 10 238. 11 Thank you. 12 MR. GRALEWSKI: Your Honor, if you 13 recall yesterday, we discussed at some length 14 the issue of nonresponsiveness, and I just 15 wanted to, without going back over things, 16 unless the Court is interested, provide the 17 Court with the case law that we discussed 18 yesterday. 19 The first thing I handed up is the 20 Wigmore treatise that discussed Plaintiffs' 21 position. 22 The next thing I handed up -- and I'll 23 just note these for the record -- is the Eighth 24 Circuit case of Parente versus United States 25 82 F. 2d 722. 7356 1 The relevant jump cite is at 724 where 2 the Eighth Circuit says the answer was not 3 irrelevant and the fact that it was not 4 directly responsive did not make it 5 inadmissible in evidence. 6 The next cases are All State court 7 cases, I believe, Your Honor, from other 8 states, and there's no argument by Microsoft 9 that the case law is any different in Iowa. 10 Those cases, in order that I've 11 presented them to you, are Smith versus State 12 of Texas, 763 S.W. 2d 836. And the relevant 13 jump cite is at 841. 14 And I'll just note for the record that 15 an important part of this case is the Court 16 makes the point that when a question calls for 17 a yes or no answer, the witness can certainly 18 explain his or her answer, and in large 19 measure, that's what Ms. Harlan has done. 20 The next cite is State of North 21 Carolina versus Batts, B-a-t-t-s, 303 -- or 22 I'll give you the Southeast 2d cite. 277 S.E. 23 2d 385 at 388. 24 And then two more. 25 Commonwealth versus Strickland, 7357 1 415 N.E. 2d 886 at 887, and State of North 2 Carolina versus Williams, 305 S.E. 2d 519 at 3 522. 4 And I've highlighted, Your Honor, the 5 relevant portions of those cases and provided 6 those highlights to Microsoft as well. 7 THE COURT: Thank you very much. 8 You may continue. 9 MR. GRALEWSKI: Thank you, Your Honor. 10 I was walking up to the bench when you 11 directed us where we were starting. I believe 12 we were starting at 222, 8 to 23; is that 13 right? 14 THE COURT: Weren't we in the middle 15 of talking about -- 16 MS. BRADLEY: I think we were in the 17 middle of 201. 18 THE COURT: You may have completed 19 your thoughts on 201, but if you haven't, go 20 ahead. I think you were responding back, but 21 I'm not sure. 22 MR. GRALEWSKI: This is 201, 11, to 23 202, 5? 24 THE COURT: Right. 25 MR. GRALEWSKI: I, Your Honor -- 7358 1 THE COURT: I think you did have some 2 further response, but maybe you were moving on. 3 I don't know. You can go ahead, though, 4 whatever you want to do. 5 MR. GRALEWSKI: Unless Ms. Bradley 6 would like to talk about 201, 11, to 202, 5, 7 I'm prepared to move on to -- 8 MS. BRADLEY: I'm sorry, Your Honor. 9 I have a few more things that I'd like to 10 mention about 201, if I may. 11 THE COURT: Ms. Bradley. 12 MS. BRADLEY: I wasn't sure that we 13 were finished with that. 14 Just to refresh everyone's memory, 15 this was an answer to which Microsoft objected, 16 and the Special Master sustained the hearsay 17 objection where Ms. Harlan is speaking about 18 her conversations with OEMs, two different 19 OEMs, Zenith Data System and an unnamed OEM in 20 Texas, about conversations with them in which 21 they, quote, very much wanted to testify before 22 the FTC, and then goes on to describe what she 23 believed that they wanted to talk about. 24 And so not only are these 25 conversations that Ms. Harlan is reporting, 7359 1 which are pure hearsay from the OEM 2 representatives, but they're also highly 3 unreliable. 4 This information, these conversations 5 were had in the context of Ms. Harlan gathering 6 evidence and information for a lawsuit against 7 Microsoft and attempting to convince others to 8 participate in actions against Microsoft. 9 Those types of conversations are pure 10 litigation posturing of the type that you, Your 11 Honor, have excluded again and again in this 12 case, and they're equally inadmissible here. 13 Because we have no opportunity to 14 cross-examine the OEM representatives whose 15 statements Ms. Harlan repeats here or describes 16 and summarizes, the statements by -- the 17 reported statements by those OEM 18 representatives are simply inadmissible. 19 THE COURT: When you talk about 20 posturing, aren't you talking about it in the 21 sense of negotiations, trying to get a better 22 deal, things like that? 23 MS. BRADLEY: Well, there are two 24 types of posturing that we've spoken about -- 25 THE COURT: Legal posturing. 7360 1 MS. BRADLEY: -- in other contexts, 2 and the one I think we're really thinking of 3 here is a litigation type posturing, a 4 preparation and a gathering of facts to build a 5 case against Microsoft. 6 And those types of documents -- you'll 7 recall seeing numerous, numerous documents, 8 exhibits, where somebody within a company will 9 be gathering evidence, asking their colleagues 10 to report on evidence that they might have or 11 know about in support of certain claims against 12 Microsoft. 13 This is similar to those types of 14 exhibits. 15 And, I'm sorry, I don't have an 16 example for you here today. But types of 17 exhibits whose hearsay objections you've 18 sustained again and again. 19 THE COURT: The posturing here you're 20 saying is being done by Ms. Harlan, not by the 21 people they're talking to; right? 22 MS. BRADLEY: Well, it looks like it's 23 probably a two-sided posturing here. 24 That when Ms. Harlan calls an OEM and 25 asks them about the dirty things that Microsoft 7361 1 has reportedly done to them, then there's 2 posturing going on in all likelihood in both 3 directions. 4 And the simple fact of the matter is, 5 regardless of whether the OEMs' statements were 6 reliable or unreliable, these are reports of 7 statements made by OEM representatives and 8 they're not admissible. 9 THE COURT: Okay. 10 MR. GRALEWSKI: May I respond, Your 11 Honor? 12 THE COURT: Sure. 13 MR. GRALEWSKI: It seems to me, with 14 all due respect, that whenever Microsoft is up 15 against the wall, they pull the reliability 16 argument out of their back pocket, and I think 17 there's a problem with that in this situation 18 and in other situations for two reasons. 19 Number one, it's just an argument that 20 they make up. 21 There is no evidence in the record 22 that in this instance these particular OEMs 23 that Ms. Harlan was discussing these issues 24 with were making things up. 25 So I would submit that if they want to 7362 1 rely on the reliability argument here, they 2 need to do more. 3 Now, Ms. Bradley said that Microsoft 4 didn't have the opportunity to cross-examine 5 these particular OEMs that Ms. Harlan spoke 6 with. That's not true. Or I should say that's 7 not accurate is a better way to put it. 8 This deposition was taken in the 9 Caldera case. They had every opportunity if 10 they wanted to cross-examine these OEMs on 11 these issues to do so. 12 And if they didn't do it in the 13 Caldera case, they could have done it in the 14 MDL case, and they could have done it in this 15 case. 16 The fact of the matter remains is they 17 didn't, or if they did, there's no evidence 18 that they were posturing in this particular 19 situation. 20 The second problem with the 21 reliability argument is that what we have here 22 -- it's sort of a false premise. What we have 23 here -- 24 THE COURT: Go ahead. 25 MR. GRALEWSKI: What we have here is 7363 1 that Ms. Harlan is not repeating out-of-court 2 statements. 3 As I made the point yesterday, the 4 most important portion of this designation is 5 at 201, line 20. 6 What's happening here is she is 7 reporting what she herself thought after having 8 a conversation with the OEMs, and that is 9 what's being offered. 10 As we talked a lot about yesterday, 11 knowledge acquired through others is not 12 hearsay if you're not repeating the 13 out-of-court statement. 14 THE COURT: Very well. 15 MR. GRALEWSKI: Thank you, Your Honor. 16 THE COURT: Anything else on this one 17 before we move on to page 207? 18 MS. BRADLEY: No, Your Honor. 19 THE COURT: 207, lines 17. 20 MR. GRALEWSKI: Your Honor, if you 21 recall yesterday, we had agreed to do -- to 22 actually skip 207. We'll come back to it. 23 THE COURT: You're right. 24 MR. GRALEWSKI: The next two are 25 related. 7364 1 THE COURT: 222, I beg your pardon. 2 MR. GRALEWSKI: It is efficient to do 3 it this way because 222, 8 to 23, and also 238, 4 14, to 239, 19, relate to this same legal 5 issue, which is whether or not this is hearsay 6 or not -- 7 THE COURT: You're right. 8 MR. GRALEWSKI: -- if you're 9 testifying about what you believe. 10 THE COURT: My mistake. 11 MR. GRALEWSKI: That's fine. 12 222, 8 to 23. 13 Here at this designation Ms. Harlan is 14 asked how she knew that Microsoft used per 15 processor agreements with the larger OEMs in 16 the United States, and she answers three 17 different ways. 18 She says that she got reliable 19 information from her DRI salespeople, DRI 20 executives spoke directly with the OEMs, and 21 that Harlan herself -- I should say Ms. Harlan 22 herself spoke directly with two OEMs in 23 particular, Zenith and another company in Texas 24 that she couldn't remember the name of. 25 Now, again not to belabor the point, 7365 1 and I do think we'll move through these a 2 little more quickly, Harlan, Ms. Harlan is not 3 repeating out-of-court statements here either. 4 She's simply explaining what the basis of her 5 knowledge is. 6 With respect to the basis of her 7 knowledge gained from conversations with DRI 8 salespeople and DRI executives, we believe the 9 law is that knowledge acquired through others 10 is not hearsay if you aren't repeating the 11 out-of-court statements. 12 I've said that before, I'll say it 13 again here, because it's what the issue is, and 14 we believe that's exactly what's going on here. 15 She's not repeating the out-of-court 16 statements. 17 With respect to the conversations that 18 she directly had with Zenith and the other OEM 19 in Texas, in particular this testimony was 20 about these two companies not wanting to take 21 only Microsoft DOS -- this testimony reflects 22 what Ms. Harlan herself observed, and we've 23 talked about it in Mr. Speakman's argument and 24 we've talked about it a lot here. 25 We believe the case law in Iowa is 7366 1 that when you're testifying about what you 2 observed, the testimony is not hearsay. 3 And then the Grayson case and the 4 Kehoe case, which we've talked a lot about 5 also, support this position that information 6 that you gain that's obtained in your official 7 capacities is not hearsay, and also summaries 8 of impressions are not hearsay when you gain it 9 through firsthand knowledge like Ms. Harlan did 10 here by having direct specific conversations 11 with Zenith and this other company in Texas. 12 Thank you, Your Honor. 13 THE COURT: Thank you. 14 Ms. Bradley. 15 MS. BRADLEY: The question posed to 16 Ms. Harlan, Your Honor, is about the source of 17 her knowledge of Microsoft's use of per 18 processor agreements. 19 Ms. Harlan, as Mr. Gralewski stated, 20 provides three sources of knowledge, all three 21 of which are hearsay. 22 She talks about reports from DRI 23 salespeople, reports from other executives, and 24 her own conversations with two distinct OEMs. 25 As for the executives, she directly 7367 1 states that the executives had conversations. 2 Quote, spoke directly to the OEMs and passed 3 that information to me. 4 We know that her personal 5 conversations -- reports of those personal 6 conversations consist of hearsay, and we know 7 that the reports from salespeople also resulted 8 from conversations with OEMs. 9 We know that in a number of ways. 10 First, it's difficult to imagine how 11 else salespeople would obtain such information. 12 Also, we have testimony from others that 13 supports that inference. 14 You'll hear about Richard Dixon in a 15 few moments. He was a DRI salesperson. 16 He testified in his deposition that 17 he, quote, never saw a per processor license 18 between Microsoft and any of his OEM customers 19 and that everything he testified to was, quote, 20 what customers told him. 21 So the reports from DRI salespeople 22 are hearsay. They're the result of 23 conversations that the DRI salespeople held 24 with OEMs. 25 The reports from executives are 7368 1 hearsay. Ms. Harlan states in her testimony 2 that they come from conversations with OEMs. 3 Ms. Harlan's own conversations with 4 two OEMs, one of which is unnamed, also are 5 hearsay. 6 The question is the source of 7 Ms. Harlan's information. 8 Ms. Harlan admits that the three 9 sources of information that she has on this 10 topic are sheer hearsay. They're what she 11 heard from others, who in most cases heard them 12 from yet another. 13 That's inadmissible, and it's not an 14 adequate basis for Ms. Harlan's testimony about 15 this. 16 The Plaintiffs' contention that these 17 are somehow just Ms. Harlan's observations is 18 also incorrect. 19 If you'll look at the last couple of 20 lines of testimony, Ms. Harlan reports about 21 her conversations with the Zenith subsidiary 22 and this company in Austin that, quote, they 23 didn't want to have to take only MS-DOS. They 24 thought it was a worse product. 25 Ms. Harlan didn't observe that. 7369 1 Ms. Harlan heard it or purportedly heard it 2 from the OEMs. 3 That's hearsay. And it's difficult to 4 imagine any appropriate not-for-truth purpose 5 for presenting an OEM statement or a report on 6 an OEM statement that they thought it was a 7 worse product. 8 That's offered for its truth and it's 9 inadmissible. 10 MR. GRALEWSKI: If I may respond, Your 11 Honor. 12 THE COURT: Yeah, go ahead. 13 MR. GRALEWSKI: We have during the 14 argument in Mr. Speakman's testimony and now 15 during the argument on Ms. Harlan where these 16 issues have really first arisen, we have 17 provided the Court with significant amount of 18 case authority in Iowa, the Mattingly case, the 19 Grayson case, the Kehoe case, and now of a 20 very, very respected federal judge who makes 21 the point that knowledge acquired through 22 others is still personal knowledge within the 23 federal rules, and it's not hearsay because 24 it's not repeating what someone else said. 25 Now, we've provided all this 7370 1 authority, and I'm unsure -- I mean, I don't 2 recall Microsoft providing counter authority. 3 They've been arguing to Your Honor 4 that in situations like this, it's hearsay. 5 But I would submit that, again, that is simply 6 argument. 7 The facts support the law, and the law 8 is that knowledge acquired from other people is 9 not hearsay if you're not repeating the 10 out-of-court statements. 11 What's going on here is Ms. Harlan 12 again is offering what her own views are and 13 she's vouching for her own statements. 14 She isn't relying on or vouching for 15 or repeating the statements of out-of-court 16 declarants. That's just not what's going on. 17 THE COURT: I have a question, a 18 fundamental question. 19 The question asked is, how did she -- 20 okay, how did she know, okay. 21 MR. GRALEWSKI: To address any concern 22 that the Court has on this issue, because I 23 know we've been bouncing back and forth on 24 different objections, there is no unresponsive 25 objection to this testimony. It's a hearsay 7371 1 objection only. 2 THE COURT: Anything else on this one? 3 MS. BRADLEY: Just a couple of quick 4 things. 5 First, Your Honor, I would say with 6 all due respect that the Iowa Rules of Evidence 7 support our position on hearsay, and that is 8 that an out-of-court statement offered for the 9 truth of the matter asserted is inadmissible 10 absent some hearsay exception, which is not 11 present here. 12 We've submitted authority, Your Honor, 13 on the fact that summaries of out-of-court 14 statements are equally inadmissible as hearsay, 15 and we're happy to resubmit that authority if 16 you'd like to see it again. We don't have it 17 with us today, Your Honor. 18 And just finally, the suggestion that 19 knowledge gained from out-of-court statements 20 is admissible essentially swallow up the rule 21 on hearsay. 22 It would mean that any time anybody 23 learned something from a statement, that that 24 statement was somehow admissible in court over 25 the hearsay rule or that the hearsay rule was 7372 1 inapplicable. And that also can't be the law. 2 That's not argument. That's the hearsay rule. 3 THE COURT: Well, there's also an 4 opposite effect, too. If a person was asked 5 where Egypt was and they said Africa, they said 6 where did you get that? My eighth-grade 7 teacher in geography. Isn't that hearsay using 8 your example? 9 MS. BRADLEY: No, Your Honor, because 10 the source of a person's information itself 11 isn't -- doesn't necessarily make a statement 12 hearsay. 13 But here, Your Honor, where the only 14 potential source for that is conversations with 15 others, and this is just really a paraphrase of 16 conversations that a witness is remembering. 17 That's where we've stumbled directly into 18 hearsay territory, and there's really no way 19 around it. 20 THE COURT: I understand what you're 21 saying, but there's knowledge that's gained 22 through conversations every day and it's not -- 23 the question is hearsay. 24 MS. BRADLEY: The issue, for instance, 25 with your hypothetical is there are any number 7373 1 of potential sources for a piece of information 2 like that. 3 That person has many ways of acquiring 4 information about where Egypt is, including a 5 newspaper or a globe or, you know, seeing it on 6 television. 7 And here, Ms. Harlan admits that the 8 only source of her information and indeed the 9 only conceivable source of such information is 10 hearsay. She admits that she never saw the 11 licenses. 12 THE COURT: Anything else? 13 MS. BRADLEY: No, Your Honor. 14 MR. GRALEWSKI: The only thing I would 15 say, Your Honor, is -- and I think the Court 16 has it right with the question that the Court 17 posed, but I would submit that the party here 18 that's taking this issue of whether something's 19 hearsay or not too broadly is Microsoft, and 20 it's for the exact reason that the Court has 21 asked. 22 Taking Microsoft's position to its 23 logical conclusion, a witness couldn't testify 24 about anything. And I think that's the point 25 that Judge Posner was making in his 7374 1 well-reasoned opinion. 2 Turning, unless there's anything else, 3 to the next and I believe final designation 4 that raises these points. 5 THE COURT: 238? 6 MR. GRALEWSKI: 238, 14, to 239, 19. 7 Again, the examining attorney here 8 asks Ms. Harlan about the use of per processor 9 contracts at three different OEMs. Those are 10 Trigem, Zenith, and again this Texas company. 11 And I'd like to note before we discuss 12 these particular designations or this 13 particular designation that the Special Master 14 made no ruling -- the Special Master made no 15 ruling with respect to the Zenith testimony, 16 and there is no improper opinion objection 17 that's currently pending. 18 Now, again, taking them one by one. 19 With respect to Trigem, again, 20 Plaintiffs' position, supported by the 21 testimony, we believe, is that Ms. Harlan is 22 not repeating out-of-court statements. To the 23 contrary, she is explaining what the basis of 24 her knowledge is about per processor contracts, 25 and that is she was in a meeting where the 7375 1 contracts were discussed. 2 Ms. Harlan concludes the discussion 3 about Trigem by saying, quote, I felt -- again 4 this is her taking ownership and her testifying 5 about what she personally believed based on 6 knowledge that she has gained. 7 She says, quote, I felt that I came 8 away from that meeting and discussion with a 9 very good understanding of what Microsoft's 10 practices were. 11 Again, not hearsay admissible 12 testimony. 13 With respect to the Trigem testimony, 14 I think it's important to note that -- and let 15 me get the exact cite to direct Your Honor. 16 I'm sorry, I was several pages behind. 17 Where Ms. Harlan testifies at lines 20 18 through 24 on 238, she says, I was in the room 19 when we talked with the FTC. They were very 20 interested in this practice because they felt 21 that it was unfair. 22 What's important to note there is that 23 she is offering her own belief again, her own 24 belief that she thought that others thought 25 these per processor contracts were unfair. 7376 1 Now, I've used this example in the 2 past and I'm going to point it out again here, 3 Your Honor. 4 There is nothing different about this 5 testimony than about Mr. Crummey testifying in 6 a deposition that he thought based on 7 conversations he had and working around 8 Mr. Manzi, that Mr. Manzi had a case of Gates 9 envy. 10 Now, whatever the Court rules, those 11 situations, I believe, are analogous. 12 It's a situation where a witness is 13 testifying about something they believe based 14 on conversations they had with others or about 15 learning information based on interacting with 16 other people. 17 The conversations with Zenith and the 18 Texas company do the same thing. They inform 19 her own understanding. 20 Indeed during this testimony she 21 testifies about what she believed, what she 22 personally believed Zenith felt. 23 And for all the same reasons that the 24 other testimony is admissible, we think this 25 testimony is not hearsay and is admissible as 7377 1 well. 2 THE COURT: Thank you. 3 Ms. Bradley? 4 MS. BRADLEY: Your Honor, it's very 5 important to note at the outset that Ms. Harlan 6 admits that the source of her information from 7 Mr. Kim was from sitting in the room with him 8 when he testified before the Federal Trade 9 Commission. 10 She talks about face-to-face 11 conversations with Mr. Kim and being in the 12 room when he talked with the FTC. 13 This is -- Your Honor has already 14 precluded Plaintiffs from offering FTC 15 declarations or testimony before the FTC 16 because those are hearsay. 17 This is also hearsay. 18 Ms. Harlan sitting in the room and 19 reporting what she heard when Mr. Kim talked to 20 the FTC or met with the FTC is really a back 21 door way of getting in the same testimony that 22 Mr. Kim would have been precluded from offering 23 had he -- had Plaintiffs presented deposition 24 transcript or a declaration from Mr. Kim that 25 he submitted himself. 7378 1 The fact that this is one time removed 2 from such testimony; that is, that Ms. Harlan 3 is reporting on what Mr. Kim told the FTC and 4 what the FTC said during that deposition, that 5 the practice was unfair and that they asked 6 very good questions about it doesn't make the 7 -- Mr. Kim's testimony admissible, and 8 Ms. Harlan's testimony is equally inadmissible. 9 As for the other two sources of 10 Ms. Harlan's knowledge or understanding about 11 Microsoft's use of per processor agreements, 12 it's personal conversations of hers with Zenith 13 and the company in Texas -- and this is, as 14 Mr. Gralewski said, very similar to the last 15 segment that we looked at. And that is that 16 Ms. Harlan gained her information and is 17 reporting on conversations with those OEMs. 18 And this isn't just Ms. Harlan's 19 impression or sense. This is Ms. Harlan 20 testifying that Zenith told her that Microsoft 21 used per processor licenses, and a company in 22 Texas she had very similar discussions with. 23 Those aren't just general knowledge. 24 These are specific reports from specific OEMs 25 about Microsoft's use of per processor 7379 1 licenses. 2 There may have been many ways for 3 Ms. Harlan to learn similar information, but 4 here she's reporting on conversations that 5 she's had with OEMs, and those are 6 inadmissible. 7 THE COURT: Anything else? 8 Mr. Gralewski? 9 MR. GRALEWSKI: Yes, Your Honor. 10 Just a point, not specifically on the 11 designation, but on Ms. Bradley's argument 12 about the FTC issue. 13 The Court certainly did exclude FTC 14 transcripts that we sought to designate from. 15 The reason, I believe, that those 16 transcripts were excluded was because Microsoft 17 did not have an opportunity to cross-examine 18 the person offering the declaration or 19 affidavit. 20 That's not obviously what's going on 21 here. As a matter of fact, as I informed the 22 Court at the beginning of this discussion 23 yesterday, Microsoft sought to and did conduct 24 this deposition of Ms. Harlan. 25 The entire initial portion of it is 7380 1 cross-examination, and if they wanted to 2 cross-examine her on these points, they could 3 have done so further. 4 They also, as I argued about before, 5 they could have, and I'm not sure that they 6 didn't, but they could have certainly deposed 7 Mr. Kim and cross-examined him in light of 8 Ms. Harlan's testimony. 9 Microsoft should not be permitted to 10 make a decision or -- albeit strategic or not, 11 to elect not to cross-examine somebody during a 12 deposition on certain testimony or to conduct 13 the deposition of a person after certain issues 14 come to light and then sit here at this trial 15 in Iowa and attempt to limit the testimony by 16 arguing that we didn't have an opportunity to 17 cross-examine. 18 THE COURT: Anything else? 19 MS. BRADLEY: Just one very quick 20 thing. 21 First, it's not Ms. Harlan's testimony 22 that we're concerned about not being able to 23 cross-examine. We did cross-examine Harlan. 24 That's what happened throughout most of this 25 deposition. 7381 1 It's the declarants who at the time 2 that they made the statements that Ms. Harlan 3 is reporting here were not cross-examined. 4 You'll recall, Your Honor, that as to 5 some of the declarants in the FTC declarations 6 and the FTC testimony, Microsoft later did have 7 the opportunity to cross-examine those same 8 witnesses. But you found that it was years 9 later and that wasn't an effective 10 cross-examination as it related to the 11 statements made before the FTC. 12 And similarly here, whether or not 13 Microsoft had the opportunity to cross-examine 14 Mr. Kim or any of these declarants far down the 15 road is irrelevant to the trustworthiness of 16 the statements as they made them to Ms. Harlan 17 at the time -- or to the FTC at the time that 18 Ms. Harlan and the FTC were gathering evidence 19 against Microsoft. 20 THE COURT: Very well. 21 Page 207 and 208. 22 MR. GRALEWSKI: 207, 17, through 208, 23 6, is the next one, Your Honor. 24 Here Ms. Harlan is asked if Novell, 25 again postmerger between DRI and Novell, and 7382 1 she then became counsel at Novell, just to 2 remind the Court. 3 Ms. Harlan is asked if Novell had 4 evidence of Microsoft requiring OEMs to 5 purchase MS-DOS in order to get Windows, and 6 then they say other than evidence from Diamond 7 Trading. 8 Diamond Trading was an OEM, and we've 9 talked in other arguments about how there was a 10 letter from Microsoft to Diamond Trading on 11 this point. 12 So again, she's asked if there was 13 other evidence. She answers in the 14 affirmative. Oh, absolutely, I believe we had 15 evidence of this. And she testified about 16 Microsoft was communicating to the OEMs in this 17 regard. 18 The Microsoft statements that she 19 testifies about are admissions and should be 20 admitted for that reason. 21 THE COURT: Ms. Bradley? 22 MS. BRADLEY: Your Honor, it's 23 Microsoft's statements at least once or twice 24 removed, if statements at all. 25 These are Novell salespeople reporting 7383 1 to Ms. Harlan what they've heard from OEMs who 2 tell them that Microsoft has said, quote, if 3 you want Windows, then you must take all of 4 your DOS requirements from us. 5 That's hearsay several times removed. 6 Plaintiffs keep coming back to the 7 Microsoft is -- Microsoft statements are 8 admissions argument, failing to take a look at 9 the numerous declarants who stand between 10 Microsoft and that statement. 11 This statement is really only an 12 alleged statement by Microsoft because we have 13 really no basis for it other than hearsay twice 14 removed. 15 Ms. Harlan is asked down -- if you'll 16 look down the page 208, 17 through 21. 17 Do you know whether you developed for 18 the complaint to provide to the EC further 19 firsthand evidence of this practice; that is, 20 either documents from an original source or 21 statements under oath from an original source? 22 And Ms. Harlan goes on for a while, 23 but eventually answers that she didn't have any 24 other knowledge or evidence to support this 25 claim other than what was reported to her by 7384 1 Novell's salespeople who reported hearing it 2 from OEMs in the field. 3 Again, this was information gathered 4 in the course of trying to build a case against 5 Microsoft here, trying to draft a complaint 6 against Microsoft. 7 Evidence is extreme bias and is 8 inadmissible. 9 THE COURT: Anything else on this one? 10 MR. GRALEWSKI: Yes, Your Honor. 11 I think since we started to look at 12 208, 17 through 21, we should keep reading just 13 for a bit because I think it informs the issue. 14 At the bottom of 208, line 22, 15 Ms. Harlan says, quote, I think after Diamond 16 Trading -- and again to remind the Court, this 17 was a situation where Microsoft sent a letter 18 to Diamond Trading that basically said -- and 19 this is in. It's a business record and an 20 admission, and it's been -- if it hasn't been 21 admitted yet, it will be in one of the 22 witnesses. 23 But Microsoft told Diamond Trading, 24 unless you buy MS-DOS from us, we're not going 25 to provide Windows to you. 7385 1 So Ms. Harlan says, I think after 2 Diamond Trading, Microsoft became very careful 3 about the documents that went out. 4 So we certainly did not have any 5 documents from Microsoft because they meant to 6 and were able to keep us from having such 7 documents. 8 And then the question is, when you say 9 you think or guess whatever Microsoft became 10 careful, that's your speculation, you didn't 11 have any conversations with people from 12 Microsoft or documents generated by Microsoft 13 disclosing or indicating that? 14 She says, what I have are the results 15 that we got. 16 Question: Fine. 17 The question is: No, you don't have 18 either conversations or original documents from 19 Microsoft; is that correct? 20 She says, I have information -- and 21 this is the important part -- and I believe, I 22 believe this information is accurate. 23 I added the word this information. I 24 should read it as it is for the record. 25 I have information that I believe is 7386 1 accurate and that has stood up in terms of my 2 experience. 3 So what she's doing here is saying 4 that her testimony that she gives regarding the 5 testimony at issue is her own belief or -- 6 again, I guess this is another situation where 7 it comes up -- it's her own opinion, it's her 8 own knowledge that she gains from other people. 9 So because she's gained this knowledge 10 from other people, it's not hearsay, and the 11 knowledge that she has gained is an admission 12 by Microsoft. 13 THE COURT: Okay. Anything else on 14 this one before we press on? 15 MS. BRADLEY: Just one quick note, and 16 that is that Microsoft -- also testimony that's 17 in, as Mr. Gralewski said, is evidence that 18 Microsoft retracted that single letter or sent 19 a correction letter I believe two days after 20 the Diamond Trading letter was sent, and that's 21 why that evidence is in, and it's important. 22 THE COURT: Does that cure an 23 admission? 24 MS. BRADLEY: Doesn't cure anything, 25 but just trying to give some context for 7387 1 Mr. Gralewski's description of why he proposes 2 that Ms. Harlan didn't have any other evidence. 3 THE COURT: Okay. I see what you're 4 saying. 5 All right. Let's go to 245. 6 MR. GRALEWSKI: Your Honor, I do need 7 to just respond to that. 8 THE COURT: I'm sorry, go ahead. 9 MR. GRALEWSKI: I would love to be or 10 have been a fly on the wall to have seen what 11 transpired after the salesperson who sent the 12 Diamond Trading letter was told and the reasons 13 for that retraction. 14 That's exactly the point here. That 15 that was the practice. And Microsoft's 16 executives, after learning about the Diamond 17 Trading letter, put a kibosh on communications 18 like that, and so what's left is knowledge 19 gained from talking to OEMs and knowledge 20 gained from others is not hearsay. 21 245, 7 -- 22 THE COURT: This is the first -- this 23 wasn't passed upon by the Special Master, this 24 is just an unduly prejudicial argument? 25 MR. GRALEWSKI: That's right. 7388 1 MS. BRADLEY: Yes, Your Honor. 2 THE COURT: Okay. 3 MR. GRALEWSKI: Let me just -- the 4 witness is asked here, Your Honor -- it's a 5 relatively medium lengthy designation, so let 6 me summarize it for you. 7 But in ruling on a prejudice 8 objection, I do think that if we don't take it 9 line by line, it's important to look at the 10 entirety of it. 11 What's going on here is the witness is 12 asked based on her experience at DRI whether 13 Microsoft's business practices prevented DRI 14 from gaining OEM business. 15 Now, not many pieces of evidence in 16 the case are more central to Plaintiffs' case 17 than testimony about the ways in which 18 Microsoft locked up the distribution channel 19 for operating systems. 20 That issue is precisely what this 21 testimony is about. 22 So under the law on balance, its 23 probative value substantially outweighs any 24 danger of confusion of the issues, misleading 25 the jury, undue delay or waste of time, and 7389 1 I've -- it will take about -- not very long to 2 get this testimony in. 3 All this testimony does -- and I, 4 frankly, have a hard time even seeing the 5 argument, but all this testimony does is 6 recount facts about preannouncements that 7 Ms. Harlan was aware of given her position at 8 the company. And I don't think this is a close 9 call. 10 THE COURT: Ms. Bradley? 11 MS. BRADLEY: Your Honor, you'll 12 recall yesterday we talked a little bit about 13 who Ms. Harlan was, and she was a DRI lawyer 14 who -- a large part of her job while at the 15 company, and later Novell, was to build a case 16 against Microsoft. 17 She was at the time of her deposition, 18 or at least in the year of her deposition, 19 hired as a consultant for the Plaintiffs in the 20 Caldera case. 21 And she's asked here at the end of her 22 deposition by her own lawyers to give what's 23 essentially a mini summation about what 24 Microsoft did to lock DR-DOS out of the market. 25 That's wholly improper. It's not -- 7390 1 its probative value is virtually nonexistent. 2 And the reason for that is something that we've 3 seen throughout the arguments over the last 4 couple of days, which is the basis for 5 Ms. Harlan's purported knowledge of any of 6 these facts is essentially hearsay. 7 And so what happens here is that 8 Ms. Harlan's own lawyer asks her at the end of 9 this long deposition to sum up her case against 10 Microsoft. 11 And extreme risk of confusion of the 12 issues for the jury -- of the jury placing too 13 much weight on evidence that is -- that for 14 which there's no foundation and from an 15 incredibly biased witness who's opining about 16 things on which she has no personal knowledge. 17 I have to agree with Mr. Gralewski, 18 it's not really a close call. 19 MR. GRALEWSKI: Well, at least we 20 agree on that, Your Honor. 21 I apologize. 22 THE COURT: Just for purposes of the 23 record, any foundation objection should have 24 been made before the Special Master; correct? 25 MS. BRADLEY: Right. 7391 1 And as to this testimony, we've only 2 lodged an unduly prejudicial objection. 3 THE COURT: Okay. 4 MS. BRADLEY: But within that context, 5 we, of course, need to weigh the probativeness 6 versus the prejudice, and the probativeness is 7 nearly nil, and the reason for that being that 8 there's very little foundation for anything in 9 here, and the potential for prejudice from 10 DRI's own lawyer sitting on the stand giving 11 mini summation is extreme. 12 THE COURT: Doesn't that go to the 13 weight rather than admissibility? 14 MS. BRADLEY: Well, at some point on 15 the scale things become inadmissible because 16 they're unduly prejudicial now. 17 Of course, that's a decision for you, 18 but if we're weighing it on the scale or if it 19 falls on a spectrum, I think we've talked about 20 a spectrum before, it seems to us to fall on 21 the inadmissible end of that spectrum. 22 THE COURT: Don't put me on a scale. 23 My weight's too much. 24 MR. GRALEWSKI: Your Honor, in 25 response, I was going to point out those two 7392 1 things exactly; that there is no improper 2 opinion objection presently pending before the 3 Court; and importantly, there is no foundation 4 objection with respect to any of this 5 testimony. 6 By making this following argument, I 7 want to be clear that I don't believe that 8 Microsoft's position is appropriate. 9 And that was that all the sources of 10 Ms. Harlan's information are improper because 11 they lack foundation and are hearsay. 12 Even if her sources of information 13 came from other people, as I've argued, that 14 shouldn't be a problem based on the case law 15 we've provided the Court. 16 But I do want to point out, and I 17 suggested that we might have to do this, and I 18 think we need to, we need to delve specifically 19 into the answer. 20 And if we do, Your Honor will see that 21 this answer is based on publicly available 22 information that any executive at a software 23 company at the time would have been aware of. 24 She -- this is what she does. 25 THE COURT: Isn't she also an 7393 1 executive besides being an attorney? 2 MR. GRALEWSKI: She was on, as I said, 3 the executive committee and the pricing 4 committee. 5 Part of her responsibilities on the 6 pricing committee which we -- which are in the 7 earlier part of her deposition, had to do with 8 being aware of and getting new products to 9 market. 10 And that's exactly what this answer 11 happens to do -- happens to deal with actually. 12 At the bottom of 245 and then at the 13 top of 246, Ms. Harlan testifies about DRI 14 announcing a new product. 15 She would know about that. 16 And then at line 6 on 246, she says, 17 after we announced the product, immediately -- 18 this is a quote -- immediately Microsoft put 19 out a press release saying, and then it goes on 20 about what the press release said. 21 Again, that's something that is 22 readily available in the marketplace and 23 certainly somebody who's an executive at the 24 company whose responsibilities include those 25 issues would be aware of. 7394 1 Then the following paragraph, she 2 says, quote, I remember there was -- that was 3 about a year before the product came out -- 4 again, she would have knowledge of that -- and 5 they were saying MS-DOS is better in this way. 6 Again, that is something that she is 7 saying was in the press releases or in the 8 market that she was aware of. 9 Again, that's something that she would 10 know about. 11 She concludes the answer by talking 12 about their practices with respect to their 13 beta releases, these earlier releases of MS-DOS 14 that they broadcast to the masses. 15 And, again, that's something that she 16 would have information about. The largeness of 17 the release is what this paragraph is about. 18 And as Your Honor looks at the 19 testimony, I do want to put some context around 20 the first thing I said about what objections 21 are and are not before the Court. 22 Ms. Harlan, after she says at the 23 beginning of her answer, I don't want to be 24 unfair to Microsoft, she does say, but the lies 25 that they were telling when DR-DOS 5.0 first 7395 1 came out, they did not have a plan for a new 2 DOS product. 3 Now, potentially that's an improper 4 opinion, but there is no improper opinion 5 objection before the Court. 6 Similarly, at the end of the answer, 7 she has in the last sentence said the reason it 8 was a huge release is because they had 9 intentionally put the error message and 10 problems in there that we had talked about. 11 Now, there is independent evidence on 12 the fact that Microsoft did put error messages 13 in their beta releases, but be that as it may, 14 there is no foundation objection to this 15 portion of the answer, and because there's no 16 opinion objection and because there's no 17 foundation objection and because these answers 18 -- this answer is knowable to anybody but 19 specifically an executive at DRI, it's 20 admissible. 21 THE COURT: Clearly, though, the Court 22 could take into consideration the fact that the 23 opinion being expressed could be improper in 24 the context of being prejudicial. 25 Even though there's no objection based 7396 1 on improper opinion, the fact remains that it 2 can still look at that time from the standpoint 3 of whether or not it's prejudicial. 4 MR. GRALEWSKI: If the Court were 5 inclined to do that, I would offer two 6 responses. 7 THE COURT: Okay. 8 MR. GRALEWSKI: One is that the -- on 9 balance, because the evidence is so central to 10 the case, locking up the distribution channel 11 and the way in which they went about locking it 12 up, that the probative value would outweigh 13 that prejudicial effect. 14 It would also outweigh that 15 prejudicial effect because there's independent 16 evidence suggesting that this is actually what 17 happened. 18 You're going to hear evidence from 19 Phil Barrett, who was a Microsoft executive at 20 the time. There's evidence from Mr. Silverberg 21 that the beta -- the beta release contained 22 this error mention intentionally. 23 The second point I would say, Your 24 Honor, is that to the extent Your Honor was 25 inclined to do that -- 7397 1 THE COURT: I was just throwing it 2 out, the devil's advocate. 3 MR. GRALEWSKI: Right. 4 The second point is I wouldn't throw 5 out the baby with the bath water. 6 And what I mean by that is to the 7 extent you were concerned about Ms. Harlan 8 talking about lies and to the extent Your Honor 9 was concerned about her testimony regarding 10 intentional conduct, you could certainly, as 11 you've done, carve those out. 12 But the majority of the answer should 13 not be carved out because it doesn't suffer 14 from those opinion and foundation problems and 15 is publicly available information. 16 THE COURT: Okay. Ms. Bradley? 17 MS. BRADLEY: Nothing further. 18 THE COURT: Last one then, page 256. 19 MR. GRALEWSKI: 256, 20 through 257, 20 11, Your Honor. 21 In response to a question that asked 22 about Ms. Harlan's own experiences -- again, 23 that's the critical issue here for this appeal. 24 Ms. Harlan's own experience with 25 CompuAdd -- CompuAdd was another OEM -- and 7398 1 Microsoft's use of per processor licenses with 2 them, Ms. Harlan testifies, like Mr. Speakman 3 did, that this OEM liked DR-DOS and wanted to 4 be able to offer it, but couldn't because it 5 couldn't afford to pay for two operating 6 systems which is the effect of the per 7 processor contracts. 8 Without belaboring the point, this 9 testimony reflects what the witness herself 10 observed, thought, or stated, much like the 11 arguments we've been making today and much like 12 the evidence we talked about yesterday or the 13 testimony we talked yesterday with respect to 14 Mr. Speakman. 15 The last point on this, Your Honor, 16 and then I'm finished, I believe, is that if 17 the Court considers these statements, or 18 considers this testimony, I should say -- that 19 was a misstatement. 20 If the Court considers this testimony 21 to be CompuAdd's statements, which the 22 Plaintiffs don't believe they are, the 23 testimony is admissible under the Callahan case 24 that we've talked a lot about because these are 25 CompuAdd's statements in that instance 7399 1 explaining its motive in purchasing MS-DOS over 2 DR-DOS. 3 And the reason that CompuAdd would be 4 purchasing MS-DOS over DR-DOS is that it would 5 be too expensive to purchase DR-DOS because of 6 the per processor contract. 7 Thank you, Your Honor. 8 THE COURT: Ms. Bradley? 9 MS. BRADLEY: Your Honor, I'll point 10 you to page 257, lines 15 through 20, where the 11 questioning attorney asks: What's the basis of 12 your understanding about CompuAdd? 13 Ms. Harlan answers, quote, I think 14 Dick Williams met with them. 15 Question: And Dick Williams then 16 spoke to you about it? 17 Answer: Spoke to me about it, yes. 18 That's Ms. Harlan's answer about the 19 basis of her knowledge, is a conversation with 20 her supervisor, Dick Williams, about his 21 conversations with CompuAdd. 22 That's hearsay and it's inadmissible. 23 It's also inadmissible under the 24 Callahan case for reasons we've discussed 25 previously, which is that the trustworthiness 7400 1 here is lacking. 2 These are either litigation posturing 3 or negotiation posturing in a way that we just 4 -- we just can't trust, and we can't test the 5 statements, and they're inadmissible and -- but 6 I think you can rule purely based upon the 7 information that you're presented at the very 8 end of this deposition, which is that the sole 9 source of her knowledge about this. 10 So that essentially the testimony that 11 she's provided previously is a report of her 12 conversation with Dick Williams based on his 13 report of his conversation with OEMs. 14 MR. GRALEWSKI: In response, Your 15 Honor, statements, statements aren't being 16 repeated, and under that analysis, the witness 17 would be able to offer very little testimony 18 and wouldn't be -- to use the Court's analogy, 19 wouldn't be able to testify that Egypt was in 20 Africa. 21 THE COURT: Anything else? 22 MR. GRALEWSKI: No, Your Honor. 23 THE COURT: Next witness. 24 MR. CASHMAN: Your Honor, Michael 25 Cashman for the Plaintiffs. 7401 1 THE COURT: Do you have something for 2 me to look at? 3 MR. CASHMAN: I'm handing up to the 4 Court a joint rulings chart and the highlighted 5 transcript from Mr. Richard Dixon. 6 THE COURT: Dixon, not Nixon, right? 7 MR. CASHMAN: Not Nixon. 8 The Plaintiffs affirmatively 9 designated testimony from Mr. Dixon's testimony 10 in the Caldera case. 11 Mr. Dixon was the former director of 12 OEM relations at Novell in 1992 through 1993, 13 and prior to that had been the general manager 14 of Novell's Asia specific desktop systems 15 division and vice president then of DRI's Asia 16 specific operations prior to Novell's 17 acquisition of DRI. 18 DRI, as the Court knows, made DR-DOS, 19 which was a rival operating system. 20 Before we get into the particulars of 21 the designation, yesterday I think Mr. Tuggy 22 inadvertently made reference to this case, and 23 I see he's got it handy so I won't give him a 24 copy. 25 But I think the Court will find it 7402 1 helpful and instructive not only as it relates 2 to Mr. Dixon, but also concerning the arguments 3 that Mr. Gralewski made in relation to 4 Ms. Harlan. 5 And this case is called U.S. 6 Information Systems, Inc., versus International 7 Brotherhood of Electrical Workers Local Union 8 Number 3, and I'm going to refer to that as the 9 IBEW case. 10 Its cite is 2006 Westlaw, 2136249, 11 Southern District of New York, August 1, 2006. 12 The reason this case is significant is 13 it's an antitrust case. 14 And in particular, if you look at the 15 discussion that begins on the Westlaw upper 16 right-hand corner page number, number 5, and 17 then continuing through page number -- 18 actually, through page number 10, there's a 19 discussion of two of the issues that run 20 through both Dixon and Harlan and will run 21 through other witnesses; and that is in this 22 case, the Defendants argued that certain 23 evidence was inadmissible hearsay, and the 24 Plaintiffs in the case said either it was -- if 25 it was hearsay, it was admissible under the 7403 1 Callahan type exception or it wasn't hearsay at 2 all; that it was just personal knowledge that 3 these witnesses had. 4 And the Court in that case pointed 5 out, as I think Mr. Gralewski has, and as I 6 would argue in relation to Mr. Dixon, that 7 Microsoft has taken a very overly broad view of 8 what constitutes hearsay when it's, in fact, 9 knowledge acquired through others. 10 And here, directing the Court's 11 attention to page -- on page 7 where the Court 12 analyzes the personal knowledge acquired 13 through others, first they cite the quotation 14 from Mr. Posner or Judge Posner that 15 Mr. Gralewski referenced. 16 But probably more importantly for the 17 purposes of these witnesses is that the Court 18 actually puts that statement by Judge Posner 19 into practice in relation to a number of 20 different types of evidence, which the 21 Defendants in the IBEW case argued was hearsay. 22 And in virtually every instance, with 23 a couple of real narrow exceptions, the Court 24 concluded that this information wasn't hearsay, 25 but, in fact, it was the personal knowledge of 7404 1 the witness; that they were testifying about 2 personal knowledge that they had acquired 3 through conversations with other people. 4 For example, on page 8 of the case, 5 this is the Court examining the first piece of 6 evidence that was in dispute, was a deposition 7 transcript from somebody at a place called DVI 8 Communications as the Court can see. 9 This is in the left-hand column, 10 talking about Exhibit 7. 11 And the Court notes at the bottom of 12 that paragraph, all of Mr. Ramallini's 13 testimony rests on knowledge in the marketplace 14 gained through years of experience and his 15 personal knowledge of particular jobs. 16 That is very much like the testimony 17 that Ms. Harlan offered, and as I will explain 18 when we go through line by line on Mr. Dixon, 19 is very much like Mr. Dixon's situation. 20 And in the same context, I harken the 21 Court back to Mr. Tuggy's arguments, 22 Microsoft's arguments on the testimony of John 23 Sculley. 24 When we had those arguments before, 25 Mr. Tuggy took the position that Sculley's 7405 1 opinions were not hearsay and had foundation 2 and were not improper opinion because -- just 3 because he was the CEO at Apple and that he was 4 a competitor of Microsoft. 5 And the Court, in fact -- I'm 6 referencing 4317 of the transcript on December 7 12. 8 The Court asks Mr. Tuggy, other than 9 the fact that he, Mr. Sculley, was a CEO of 10 Apple, what's his foundation? 11 And Mr. Tuggy said, his foundation at 12 -- he -- Apple was a competitor with Microsoft 13 in the applications area. 14 And Mr. Tuggy -- there was further 15 colloquy then between the Court and Mr. Tuggy 16 where Mr. Tuggy emphasized that the mere fact 17 that Apple was a competitor of Microsoft's gave 18 Sculley the foundation and the knowledge to 19 provide the testimony, much of which the Court 20 concluded was proper. 21 That's no different, really, than the 22 reasons why the Court in the IBEW case 23 concluded that the testimony was personal 24 knowledge and admissible and why as we get to 25 the line-by-line designations the testimony of 7406 1 Mr. Dixon that are at issue here are 2 appropriate and should be admitted, and I'll 3 note also the same reason why Ms. Harlan's 4 testimony is appropriate and should be 5 admitted. 6 I won't belabor the point about going 7 through each of these different types of 8 evidence at issue in the IBEW case, but in 9 virtually every instance when they go through 10 and analyze this, it's very similar to the kind 11 of issues that arise with respect to Dixon and 12 with respect to Harlan, and emphasize that the 13 arguments that Microsoft has been making about 14 how somebody comes to know something and their 15 assertion that it's hearsay are just wrong. 16 And, again, as Mr. Gralewski pointed 17 out, they have not provided any authority for 18 their contention that the type of evidence at 19 issue in Harlan and in Dixon is hearsay and 20 should be excluded on the grounds that they 21 allege. 22 In fact, all of the authority is to 23 the contrary. 24 And Plaintiffs submit that the IBEW 25 case is an excellent example of that 7407 1 circumstance, that issue. 2 So with that preface, Plaintiffs would 3 like to turn to the first designation. 4 MR. TUGGY: Your Honor, may I speak to 5 this point, because the first designation is 6 not even a hearsay objection? 7 They've made an argument on these 8 cases, and my request is that I can respond to 9 that point before we get into a nonhearsay 10 issue. 11 MR. CASHMAN: Well, the reason why I 12 think it's appropriate we wait till after -- 13 the IBEW case talks about hearsay, but it also, 14 in essence, touches upon some of these other 15 objections which Microsoft has made about lack 16 of personal knowledge, which are on the flip 17 side of their hearsay objections. 18 As you will see in virtually all these 19 instances, Microsoft said we object, 20 speculation, lack of personal knowledge and/or 21 hearsay, and the Special Master when he was 22 ruling on these, his instructions were to rule 23 on all the objections. Even if one would have 24 done the trick, he was supposed to rule on all 25 of them. 7408 1 So you'll see that in many of these 2 you'll have a designation which has a hearsay 3 objection and lack of personal knowledge 4 objection, both of which will be sustained. 5 So Microsoft was saying if it's not 6 one, it's the other. 7 The IBEW case -- and as we go through 8 these individual designations, I would point 9 out that it's neither. 10 It's neither hearsay and it's -- the 11 objections for lack of personal knowledge are 12 also not sustainable, and both of those issues 13 are covered in the IBEW case. 14 And I think it's appropriate we take 15 up the first objection, and Mr. Tuggy, if he 16 wants to talk about IBEW in that context, 17 that's fine. 18 THE COURT: Mr. Tuggy? 19 MR. TUGGY: I'm afraid I'm going to 20 get filibustered out of time today, but if 21 that's his oral argument, they've started it. 22 I prefer to do the argument on the 23 IBEW case that you have that in mind, and then 24 by then we'll probably conclude the day. 25 And we'll start specific -- 7409 1 THE COURT: Go ahead. 2 MR. TUGGY: The case that's been 3 handed up to you is out of the Southern 4 District of New York and provides some good 5 examples of a Court grappling with some of the 6 issues we faced here as the Plaintiffs point 7 out. 8 In the IBEW case, the Court actually 9 resolves through the opinion and an appendix 48 10 different segments of testimony involving 11 hearsay objections and foundation objections. 12 And in the case, at page 8 of the 13 Westlaw printout that was provided to you. 14 This is an unpublished opinion -- there is the 15 quote from Judge Posner's statement in the 16 Agfa-Gevaert case in 1989, and in Posner's 17 statement, he makes it clear how he viewed the 18 application of the rule against hearsay when a 19 witness is making a statement in testimony that 20 is based upon what that witness has heard from 21 others. 22 And the key language in Posner's 23 statement, which appears at page 8 in the left 24 column, about a couple inches down, near the 25 end of that indented section, Judge Posner 7410 1 states, a statement offered on the authority of 2 the out-of-court declarant and not vouched for 3 as to truth by the actual witness. That's how 4 he would define hearsay. A statement offered 5 on the authority of an out-of-court declarant. 6 In other words, if a person in 7 deposition says this is so and the reason I 8 know it is so is only because it's what someone 9 else told me, under Posner's view, which is 10 applied by this Court, as I'll show you, that's 11 inadmissible hearsay. 12 Hearing it -- the statement that the 13 plaintiff made that personal knowledge can be 14 acquired through hearing it from others applies 15 only when what's at issue is knowledge of the 16 statement. 17 When what is at issue is whether the 18 statement is true, the question is upon whose 19 authority is the statement true. 20 If the declarant is saying I know it 21 to be true, I know Egypt is in Africa, then 22 that person has personal knowledge upon which 23 he can testify. 24 If the person says I know Egypt is in 25 Africa only because it was told to me yesterday 7411 1 by my friend or told to me last week by my 2 teacher, that's the only basis upon which I 3 know it, the authority rests with the 4 out-of-court declarant. 5 This is not new. This is the law 6 against -- the rule against hearsay as applied 7 consistently by the Special Master. 8 We've submitted substantial authority 9 on the rule. 10 And what's very instructive is to take 11 a look at how the Court applied Posner's 12 description of how the rule against hearsay 13 ought to be used. 14 And there are several good examples, 15 but I'll pick one for the purposes of saving 16 time, and that is on page 9 of the case, 17 headnote 13. 18 Here the Plaintiffs -- again, as I 19 mentioned yesterday, this case was about a 20 summary judgment motion and the admissibility 21 of evidence in support of a motion. 22 The Plaintiffs cited the testimony of 23 a person named Liz Pastore, facilities manager 24 for agency.com. 25 Now what -- the testimony of Liz 7412 1 Pastore had five segments. 2 First, she said the project was on a 3 tight schedule requiring overtime by the 4 electricians. 5 She also said, as soon as USIS began 6 its portion of the work, the Nead electricians 7 stopped working overtime. 8 Third, she said as a result, 9 construction ended two weeks late. 10 Fourth, she said there were three 11 incidents of vandalism. 12 And fifth, she said -- fifth, and this 13 is very important, Ms. Pastore believed the 14 general contractor and Nead Electric split the 15 cost of replacing severed cables. 16 And you may recall that in 17 Mr. Gralewski's argument he emphasized over and 18 over again, if a witness says I believe, it's 19 in that witness' personal knowledge. 20 As you'll see in this case, the Judge 21 in the Southern District of New York disagreed, 22 applying the exact same Posner standard that 23 Plaintiffs want to apply in this case. 24 And the case -- the Court in New York 25 got it right, just like the Special Master did. 7413 1 The Defendants claim, according to 2 this opinion, that Ms. Pastore's testimony 3 concerning the work slowdown was hearsay 4 because the employees who stopped working 5 overtime did not personally tell her that they 6 were walking off. 7 The Court says this is a 8 misunderstanding of the nature of personal 9 knowledge. 10 Ms. Pastore and representatives of her 11 general contractor, her architects, and Nead 12 Electric held a meeting to talk about the 13 problem as soon as the men stopped working 14 overtime. She did not need to hear directly 15 from the employees to know that there was a 16 slowdown. 17 The Defendants also claim, according 18 to the Court, that Ms. Pastore's testimony 19 about three incidents of severed or nicked 20 telecommunications cables is hearsay because 21 she did not see the damaged cables. 22 But as she testified, she did see the 23 cut cable in one instance, stood directly 24 beneath workers as they inspected cables and 25 the ceiling insulation in the second instance, 7414 1 and sent one of her employees to the site as 2 soon as she learned of the third severed cable 3 so she could begin making phone calls to 4 rectify the situation. 5 Ms. Pastore did not need to see the 6 cables to know they were cut, and her testimony 7 is admitted. 8 Now the key. However, her statement 9 that she believed the general contractor and 10 Nead Electric split the cost of new cable was 11 based on hearsay and is struck. 12 It's not some magical formula where a 13 witness can say I believe or I think or I 14 thought or I felt, and then it's not hearsay. 15 The question is, what is the authority 16 upon which the statement is made. 17 And what you will see in the Dixon 18 testimony that we'll address when we go through 19 these one by one is that Mr. Dixon testifies 20 that he did not have conversations with 21 Microsoft employees about what they said to 22 OEMs. 23 He never once saw Microsoft's 24 licensing agreement with OEMs, and everything 25 he says about Microsoft's interactions with 7415 1 OEMs is based upon what OEMs told him. It's 2 based on hearsay. He could not and did not 3 vouch for it personally. 4 Whether he believed it to be true does 5 not take it out of the rule against hearsay. 6 It's based on the authority of the persons who 7 are not testifying, the declarants, under the 8 hearsay rule. 9 It's their authority that upon which 10 he believes that Microsoft made these 11 statements, and that is hearsay. 12 And as was done with Ms. Pastore's 13 statement here about her belief, it needs to be 14 struck, and that's what the Special Master did 15 consistently when the testimony was a statement 16 of belief based on an out-of-court statement by 17 a declarant. 18 THE COURT: Was she allowed to state 19 that there was vandalism? 20 MR. TUGGY: She was allowed to state 21 that there were three incidents of vandalism. 22 That was the cut -- 23 THE COURT: How did she get from 24 seeing it cut to know that it was vandalism? 25 MR. TUGGY: Well -- 7416 1 MR. CASHMAN: Your Honor. 2 MR. TUGGY: I think that whether it 3 was or was not vandalism was not a matter of a 4 hearsay question in this testimony. 5 The question was whether the cables 6 were cut by someone, and for a witness to infer 7 upon seeing a cut cable -- I'm sorry. 8 THE COURT: Go ahead. 9 MR. TUGGY: For a witness to infer 10 upon seeing a cut cable three different times 11 that it was vandalism as opposed to some 12 accident, it seems to me that that's something 13 a witness can infer. 14 MR. CASHMAN: Your Honor, if I may, 15 just because we're running out of time, and I'm 16 sure there will be more discussion about this 17 case tomorrow, perhaps after you've had a 18 chance to read it. 19 But Mr. Tuggy has obviously ignored 20 the multiple other examples here which are more 21 on point as it relates to Ms. Pastore's 22 comment. 23 Mr. Tuggy has glossed over the fact 24 that there's no reference in the case to 25 Ms. Pastore's belief being based on something 7417 1 that was told to her by an OEM or somebody 2 else, which is what makes it a wholly different 3 situation. 4 All the case says is that she believed 5 this, so it was a naked assertion, a belief 6 that -- and that was all, which when we go 7 through the specifics of Dixon and when you 8 look through the specifics of Harlan, you'll 9 see that the personal knowledge of Mr. Dixon 10 and Ms. Harlan is based on information that was 11 provided by others, which is exactly how 12 personal knowledge is derived. 13 And just to quickly address the other 14 point that Mr. Tuggy made when he referenced 15 the statement by Judge Posner, a statement 16 offered on the authority of the out-of-court 17 declarant and not vouched for as to truth by 18 the actual witness is he is again glossing over 19 the fact that Ms. Harlan and Mr. Dixon never, 20 never are offering a statement of an 21 out-of-court declarant and saying that 22 statement is the truth, believe in the truth of 23 that statement. 24 That's not what they're doing. They 25 say I have personal knowledge based on 7418 1 conversations with OEMs and my other people in 2 the marketplace, and this is my conclusion. 3 This is my belief. This is my opinion. This 4 is my understanding based on these 5 conversations with OEMs and such. 6 To take Mr. Tuggy's example to the 7 extreme, he wants to use the Egypt and Africa. 8 Maybe a better example would be has man landed 9 on the moon. None of us have ever been to the 10 moon and we have no proof -- we personally have 11 no proof that any man has landed on the moon, 12 other than what we hear through the media. 13 But we wouldn't be precluded from 14 saying that -- testifying that man landed on 15 the moon in 1969. Or even something more 16 basic, that the earth is round. 17 We're relying on others for that kind 18 of information, and all of that is proper kind 19 of testimony. 20 And just as we will see when we go 21 through Dixon, the testimony is proper. It's 22 his personal knowledge, or in some cases 23 subject to the Callahan exception, but is not, 24 is not hearsay when somebody acquires that 25 personal knowledge through conversations with 7419 1 their OEMs. 2 THE COURT: All right. We'll continue 3 this tomorrow, 3 o'clock. I would do it 4 earlier, but we have a matter at 8:15 I have to 5 take up with the Court. 6 MR. TUGGY: Then, I think, tomorrow 7 and Thursday, there are some motions that -- 8 THE COURT: That's what we're taking 9 up tomorrow, scheduling this. 10 MR. CASHMAN: They're going to figure 11 out the order in the morning. 12 MR. TUGGY: One of the things I'd be 13 willing to do as well is we have set aside 14 Friday as an evidence day, and to the extent I 15 think that Mr. Gralewski, for example, would 16 like to argue the Barrett deposition and try to 17 get Dixon, Barrett, and Harlan done this week, 18 and I'm willing, if Plaintiffs are, that on 19 Friday morning we start at 8 and we could try 20 to get some witnesses out as well. 21 THE COURT: Friday is reserved for the 22 3,760 exhibits. 23 MR. CASHMAN: Your Honor, I'm glad you 24 mentioned that because Ms. Conlin talked to me 25 right before she left here today, and I guess 7420 1 Mr. Holley has indicated that he's about 2 halfway through his cross-examination of 3 Mr. Alepin, and there will be some redirect 4 after that. 5 We have John Constant as a witness who 6 is appearing live, and he's from England, and 7 so it looks like he won't get on until 8 Thursday, and I think it's a near certainty 9 that his testimony will carry over on to 10 Friday. 11 Given the fact that he's from England, 12 the Plaintiffs -- I don't believe there should 13 be any problem with this. That Friday should 14 be used to complete that testimony and we'll 15 have to make other arrangements for these other 16 matters. 17 THE COURT: All right. Well, like I 18 said, we're going to have discussion about that 19 tomorrow at 8:15 so -- thanks for telling me 20 that. I'll inquire of her about that further, 21 but it sounds like you're right. 22 MR. TUGGY: Although, I can't -- we 23 would want to know from the Plaintiffs their 24 estimate of how long Constant will take because 25 in my view, it's not conceivable that he'll be 7421 1 completed on Friday, so it's going spill over 2 into next week anyway. 3 MR. CASHMAN: Well, regardless, the 4 Plaintiffs would take the view that until he's 5 finished, we should use those days to get him 6 done as soon as we can, not keep him in Iowa 7 longer than necessary. 8 THE COURT: And Monday is a holiday. 9 All right. 10 MR. CASHMAN: Thank you, Your Honor. 11 THE COURT: Thank you. Have a good 12 evening everybody. Be safe. 13 (Proceedings adjourned at 4:34 p.m.) 14 15 16 17 18 19 20 21 22 23 24 25 7422 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 19 9th day of January, 2007. 20 21 22 ______________________________ Certified Shorthand Reporter(s) 23 24 25