5669 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 XXI 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation ,) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 8:30 a.m., December 14 19, 2006, 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 5670 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 MICHAEL R. CASHMAN 7 Attorney at Law Zelle, Hofmann, Voelbel, 8 Mason & Gette, LLP 500 Washington Avenue South 9 Suite 4000 Minneapolis, MN 55415 10 (612) 339-2020 11 ROBERT J. GRALEWSKI, JR. Attorney at Law 12 Gergosian & Gralewski 550 West C Street 13 Suite 1600 San Diego, CA 92101 14 (619) 230-0104 15 16 17 18 19 20 21 22 23 24 25 5671 1 Defendant by: DAVID B. TULCHIN 2 SHARON L. NELLES JOSEPH E. NEUHAUS 3 Attorneys at Law Sullivan & Cromwell, LLP 4 125 Broad Street New York, NY 10004-2498 5 (212) 558-3749 6 STEPHEN A. TUGGY HEIDI B. BRADLEY 7 Attorneys at Law Heller Ehrman, LLP 8 333 South Hope Street Suite 3900 9 Los Angeles, CA 90071-3043 (213) 689-0200 10 DANIEL S. SILVERMAN 11 Attorney at Law Heller Ehrman, LLP 12 4350 La Jolla Village Drive Seventh Floor 13 San Diego, CA 92122-1246 (858) 450-8400 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 RICHARD J. WALLIS Attorney at Law 20 Microsoft Corporation One Microsoft Way 21 Redmond, CA 98052 (425) 882-8080 22 23 24 25 5672 1 (The following record was made in the 2 presence of the jury.) 3 THE COURT: Everyone else may be 4 seated. 5 Good morning. You may proceed. 6 MS. CONLIN: Thank you, Your Honor. 7 Continue with the deposition of Mr. Gates. 8 (Whereupon, the following video was 9 played to the jury.) 10 Question: Let me go back to Exhibit 11 368, which is the June 27, 1997 E-mail from 12 Mr. Waldman to you. 13 Do you recall -- and I know you've 14 said you don't recall receiving this E-mail, 15 but do you recall anyone describing the threat 16 to cancel Mac Office 97 as a bargaining point 17 that you had in dealing with Apple in or about 18 June of 1997? 19 Answer: I remember going to meetings 20 where Paul Maritz took the position that we 21 shouldn't do the update, the Mac Office 97 22 update. 23 And the main negotiation we had with 24 Apple at that point was a discussion about a 25 patent cross license. 5673 1 And so I said to Paul I wanted to 2 understand better where we were on the patent 3 cross license and understand the state of the 4 Mac Office development. 5 And then it appears that this is an 6 E-mail that is coming after that meeting. 7 I don't remember somebody using those 8 exact words. 9 Question: Whether you remember 10 somebody using the exact words that Mr. Waldman 11 uses in his June 27, 1997 E-mail to you, do you 12 remember people telling you in substance that 13 the threat to cancel Mac Office 97 was a strong 14 bargaining point that you had against Apple and 15 that canceling Mac Office 97 would do a great 16 deal of harm to Apple immediately? 17 Answer: I know there was the internal 18 debate about whether to do the update. And I 19 know there was the patent discussion going on. 20 And I said that maybe even if it didn't make 21 business sense to do the update, maybe as part 22 of an overall relationship with the patent 23 cross license, that we should go ahead and do 24 it. 25 And so a commitment to do the upgrade 5674 1 was one of the things that we told Apple we 2 might commit to as part of the patent cross 3 license relationship. 4 Question: And did you believe in 1997 5 that canceling Mac Office 97 would do a great 6 deal of harm to Apple, as Mr. Waldman writes it 7 would? 8 Answer: There was a question about 9 whether to do the upgrade and whether it made 10 business sense. I can't really say how much 11 impact it would have on Apple of us doing the 12 upgrade or not. 13 Certainly Ben, as the person in charge 14 of the upgrade, was very passionate about its 15 importance and its dramatic nature. 16 Question: My question to you now, 17 sir, is whether you believed that canceling Mac 18 Office 97 would do a great deal of harm to 19 Apple? 20 Answer: Well, I know that Apple would 21 prefer that we have a more updated version of 22 Mac Office, that that would be a positive thing 23 for them, and so that's why it was part of the 24 negotiation relative to the patent cross 25 license. 5675 1 Question: And did you believe that 2 canceling the Mac Office 97 would do a great 3 deal of harm to Apple? 4 Answer: I told you I think it would 5 be better for Apple to have everybody doing 6 major upgrades like this. I doubt -- I can't 7 characterize the level of benefit of the 8 upgrade to Apple, but certainly it's something 9 they wanted us to complete. 10 Question: The next sentence in 11 Mr. Waldman's June 27, 1997 E-mail to you 12 begins, I also believe that Apple is taking 13 this threat pretty seriously. 14 Did someone tell you in or about June 15 of 1997 that Apple was taking Microsoft's 16 threat to cancel Mac Office 97 seriously or 17 pretty seriously? 18 Answer: Well, Maritz had taken the 19 position that it didn't make business sense to 20 finish this upgrade. And it's very possible 21 Apple might have heard about Maritz's opinion 22 there and therefore been worried that we, 23 businesswise, didn't see a reason to complete 24 the upgrade and that they would have the older 25 Mac Office as opposed to this new work that we 5676 1 were part way along on. 2 Question: Mr. Gates, my question is 3 not what position Mr. Maritz did or did not 4 take. 5 My question is whether anyone told you 6 in or about June of 1997 that Apple was taking 7 pretty seriously Microsoft's threat to cancel 8 Mac Office 97? 9 Answer: Apple may have known that 10 senior executives at Microsoft, Maritz in 11 particular, thought that it didn't make 12 business sense to complete that upgrade. 13 Question: Mr. Gates, I'm not asking 14 you what Apple may have known or may not have 15 known. 16 What I'm asking you is whether anybody 17 told you in or about June of 1997 that Apple 18 was taking pretty seriously Microsoft's threat 19 to cancel Mac Office 97? 20 Answer: Those particular words? 21 Question: Told you that in words or 22 in substance. 23 Answer: I think I remember hearing 24 that Apple had heard about Maritz's view that 25 it didn't make sense to continue the upgrade, 5677 1 but -- and that, you know, they wanted us to 2 continue that upgrade. But I -- I don't 3 remember any of the -- it being phrased at all 4 the way you're phrasing it. 5 Question: Well, the way I'm phrasing 6 it is the way that Mr. Waldman phrased it to 7 you in his E-mail of June 27, 1997; correct, 8 sir? 9 Answer: Well, in reading it, I see 10 those words, yes. 11 Question: Yes. And you don't have 12 any doubt that you received this E-mail, do 13 you, sir? 14 Answer: I have no reason to doubt it. 15 I don't remember receiving it. I do remember 16 in general sending an E-mail like the one 17 that's at the top there. 18 Question: Do you recall anyone 19 telling you in words or in substance in or 20 about June of 1997 what Mr. Waldman is writing 21 here in this E-mail? 22 Answer: This is a very long piece of 23 E-mail. Have you read the whole E-mail 24 yourself? 25 Question: I think my question was 5678 1 imprecise. I was probably trying to avoid 2 quoting something for yet another time, but I 3 think -- I accept your counsel's view that the 4 question was probably defective. 5 I thought it was clear what portion of 6 the E-mail we were talking about, but I will 7 make it clear. 8 Mr. Gates, Mr. Waldman on June 27, 9 1997, sends you an E-mail that says, the threat 10 to cancel Mac Office 97 is certainly the 11 strongest bargaining point we have, as doing so 12 will do a great deal of harm to Apple 13 immediately. I also believe that Apple is 14 taking this threat pretty seriously, closed 15 quote. 16 Do you recall anyone -- 17 Answer: Do you want to finish the 18 sentence or not? 19 Question: You can if you think it is 20 necessary to answer the question. 21 Do you recall anyone telling you what 22 I have just quoted in words or in substance in 23 or about June, 1997? 24 Answer: No. 25 Question: In the period of 1996 5679 1 forward, after you concluded that Java, or as 2 you put it, Java runtime threat and Netscape 3 were competitive threats to Microsoft, what 4 were your goals in terms of dealing with Apple? 5 What were you trying to get Apple to agree to 6 do for Microsoft? 7 Answer: Well, the main reasons we 8 were having discussions with Apple in this '97 9 period was that they had asserted that various 10 patents that they had applied to various 11 Microsoft products, and so our primary focus in 12 discussing an agreement with them was to 13 conclude a patent cross license of some kind. 14 Question: I want to be sure that the 15 question and answer are meeting. I asked for a 16 period of 1996 to the present and you answered 17 about 1997. 18 Were your goals in 1996 or after 1997 19 any different than the goals that you've just 20 described in dealing with Apple? 21 Answer: There's only one agreement 22 with Apple, so I don't know what you're talking 23 about. 24 Question: Okay. Do you understand 25 the word goals or objectives? 5680 1 Answer: You talked about agreeing 2 with Apple -- there's only one agreement with 3 Apple that I know about that we're discussing 4 and that was the one that was concluded in I 5 think late July or early August, 1997, and 6 there's no other agreement that I know was even 7 discussed or considered. 8 Question: Okay. Let me ask you to 9 look at a document previously marked as 10 Government Exhibit 369. 11 The second item on the first page of 12 this exhibit purports to be an E-mail from you 13 dated June 23, 1996, to Paul Maritz and Brad 14 Silverberg with copies to Messrs. Higgins, 15 Bradford, Waldman, and Ludwig on the subject of 16 Apple meeting, closed quote. 17 Did you send this E-mail, Mr. Gates, 18 on or about June 23, 1996? 19 Answer: I don't remember it 20 specifically, but I don't have any reason to 21 doubt that I did. 22 Question: In the second paragraph you 23 say, quote, I have two key goals in investing 24 in the Apple relationship: 1) Maintain our 25 applications share on the platform and, 2) See 5681 1 if we can get them to embrace Internet Explorer 2 in some way, closed quote. 3 Do you see that? 4 Answer: Yeah. 5 Question: Does that refresh your 6 recollection as to what your two key goals were 7 in connection with Apple in June of 1996? 8 Answer: First of all, June of 1996 is 9 not in the time frame that your previous 10 question related to. 11 And certainly in the E-mail to this 12 group, I'm not talking about the patent thing, 13 but believe me, it was our top goal in thinking 14 about Apple for many, many years because of 15 their assertions. 16 Question: My time frame in my 17 question, sir, was a time frame beginning in 18 1996 when you began to view Netscape or the 19 Java runtime threat as a competitive threat to 20 Microsoft. 21 Answer: And that was after June of 22 1996. 23 Question: Is it your testimony that 24 in June of 1996 you did not consider Netscape 25 to be a competitive threat to Microsoft? 5682 1 Answer: Netscape was a competitor, 2 but in terms of Java and all the runtime 3 related issues, we didn't have a clear view of 4 that at all. 5 Question: So that -- I want to be 6 sure I've got your testimony accurately. 7 It is your testimony that in June of 8 1996, you considered Netscape to be a 9 competitive threat, but you did not consider 10 Java or Java runtime to be a competitive 11 threat; is that your testimony? 12 Answer: We considered Netscape to be 13 a competitor, and I told you earlier that until 14 late '96 we were unclear about our position on 15 various Java runtime things and what other 16 companies were doing and what that meant for us 17 competitively. 18 Question: Do you agree that in June 19 of 1996, the two key goals that you had in 20 terms of the Apple relation were, one, maintain 21 your applications share on the platform, and 22 two, see if you could get Apple to embrace 23 Internet Explorer in some way? 24 Answer: No. 25 Question: Do you have any explanation 5683 1 for why you would have written to Mr. Maritz 2 and Mr. Silverberg on June 23, 1996, that those 3 were your two key goals in the Apple 4 relationship? 5 Answer: They weren't involved in the 6 patent issue at all. 7 So when I write to them, I'm focused 8 on the issues that relate to them. I do 9 mention patents in here, but that certainly was 10 the primary goal at this time and in subsequent 11 times. 12 Question: Let me be clear. When you 13 write to Mr. Maritz and Mr. Silverberg, you 14 talk about patents, do you not, sir? 15 Answer: Where do you see that? 16 Question: Well, do you talk about -- 17 did you talk about patents? 18 Answer: Do you want me to read the 19 entire mail? 20 Question: Have you read it enough to 21 know whether you talk about patents? 22 Answer: I saw the word patent in one 23 place. 24 If I read the whole thing, I can find 25 out if it's in other places as well. 5684 1 Question: You do talk about patent 2 cross license, do you not, in this memo? 3 And if you want to look at the last 4 page, five lines from the bottom. 5 Answer: Yeah. They weren't involved 6 in the patent issues at all, so it looks like 7 in this mail I just mention that in a summary 8 part, but it was our top goal in our 9 discussions with Apple. 10 Question: When you write to 11 Mr. Maritz and Mr. Silverberg, you don't 12 describe that as your top goal. In fact, you 13 don't even describe it as one of your two or 14 three key goals; correct, sir? 15 Answer: This piece of E-mail doesn't 16 talk about the patent goal as the top goal. 17 It's most likely that's because the people 18 copied on the mail don't have a thing to do 19 with it and I wouldn't distract them with it. 20 Question: I want to be sure I have 21 your testimony correct. 22 In June of 1996, what was Paul 23 Maritz's title? 24 Answer: He was involved in product 25 development activities. 5685 1 Question: He was involved in product 2 development activities. 3 What was his title? 4 Answer: I don't know. Systems. 5 Question: Systems? 6 Answer: Uh-huh. 7 Question: Did he have a title that 8 went with that? 9 Answer: Senior vice president 10 systems. I don't know. 11 Question: Senior vice president 12 systems, I see. 13 Did Mr. Silverberg have a position in 14 June of 1996? 15 Answer: He worked for Mr. Maritz. 16 Question: Did he have a title? 17 Answer: I don't know what his title 18 was at the time. He would have been an officer 19 of some kind. 20 Question: An officer of some kind. 21 So you're writing a memo to Paul 22 Maritz, a senior vice president, and Brad 23 Silverberg, an officer of some kind, and you're 24 sending copies to four other people on the 25 subject of the Apple meeting. 5686 1 And you say, I have two key goals in 2 investing in the Apple relationship. 3 Answer: That's quite distinct than 4 any goals I might have for a deal with Apple. 5 It says, I have two key goals in 6 investing in the Apple relationship, not I have 7 two key goals for a deal with Apple. 8 Question: Well, sir, at the bottom 9 you say what you propose in terms of a deal and 10 you talk about what Apple will get out of the 11 deal and what Microsoft will get out of the 12 deal; correct, sir? 13 Answer: Do you want me to read you 14 the E-mail? 15 I mean, I don't know anything more 16 than just what it says in the E-mail. I'm glad 17 to read it to you. 18 Question: Well, sir, does it say at 19 the bottom of the E-mail that you are proposing 20 something with Apple and you are identifying 21 what Apple would get under your proposed deal 22 and what Microsoft would get under your 23 proposed deal? 24 Answer: Yeah, that's at the bottom of 25 the E-mail. 5687 1 Question: In fact, the bottom of the 2 E-mail talking about a proposed Apple-Microsoft 3 deal, you say, quote, the deal would look like 4 this, and then you've got a column Apple gets, 5 and a column Microsoft gets, and a column both 6 get; right, sir? 7 Answer: I'm reading that. 8 Question: Okay. Now, in this E-mail 9 of a page or page and a half in which you are 10 proposing this deal, you describe your two key 11 goals as maintaining Microsoft's applications 12 share on the platform and getting Apple to 13 embrace Internet Explorer. 14 Answer: No, that's wrong. 15 Question: That's wrong, okay. 16 Answer: The word deal and the word 17 relationship are not the same word. 18 This says I have two key goals in 19 investing in the Apple relationship. This down 20 here is an agreement which I thought we could 21 reach with Apple. 22 Question: Is it your testimony here 23 today under oath that your two key goals in 24 investing in the Apple relationship, which you 25 mention in the second paragraph of this E-mail, 5688 1 is different than your two key goals in the 2 proposed deal that you describe five paragraphs 3 later? 4 Answer: I don't see anything in here 5 about the two key goals -- two key goals in the 6 deal. I've told you that I'm certain that my 7 primary goal in any deal was the patent cross 8 license. 9 Question: Mr. Gates, my question is 10 whether it is your testimony today here under 11 oath that when you talk about your two key 12 goals in investing in the Apple relationship in 13 the second paragraph of this E-mail, that that 14 is different than what your key goals were in 15 the deal that you proposed five paragraphs 16 later? 17 Answer: That's right. Investing in a 18 relationship is different than the deal. 19 Question: Now, you don't tell 20 Mr. Maritz or Mr. Silverberg that your goals 21 for investing in the Apple relationship are 22 different than your goals in the proposed deal, 23 do you, sir? 24 Answer: But the goals and the deal 25 are quite different, so obviously they would 5689 1 have known they were quite different. 2 Question: Well, sir, you say the 3 goals and the deal are quite different. One of 4 your two key goals that you talk about in your 5 first -- in your second paragraph is to get 6 Apple to embrace Internet Explorer in some way. 7 And the very first thing under what 8 Microsoft gets in your proposed deal is, quote, 9 Apple endorses Microsoft Internet Explorer 10 technology. Do you see that, sir? 11 Answer: Uh-huh. 12 Question: Now, does that refresh your 13 recollection that the deal that you were 14 proposing had some relationship to the two key 15 goals that you were identifying? 16 Answer: Some relationship, yes, but 17 they aren't the same thing at all. 18 Question: All right, sir. 19 Did you ever prepare any E-mail to 20 anyone, Mr. Maritz or Mr. Silverberg or anyone, 21 in which you said that your primary goal in an 22 Apple deal was obtaining a cross license? 23 Answer: I don't remember a specific 24 piece of E-mail, but I'm sure I did with at 25 least Mr. Maffei and Mr. Maritz. 5690 1 Question: You're sure that you sent 2 them E-mail saying that? 3 Answer: I'm sure I communicated it to 4 them in some way. 5 Question: Do you believe you sent 6 them anything in writing or an E-mail? 7 Answer: I think it's likely, but I 8 don't remember a specific document. 9 Question: You certainly haven't seen 10 any such document in being prepared for your 11 deposition; is that fair? 12 Answer: I didn't say anything about 13 what may or may not exist at this point. I 14 said I'm sure I communicated to Mr. Maritz and 15 Mr. Maffei that our primary goal in doing the 16 deal with Apple was the patent cross license. 17 Question: And I had thought, and 18 perhaps I misunderstood, I thought that you had 19 said that you believed that you actually 20 communicated that not merely orally but by 21 E-mail or in writing. 22 Answer: I think it's likely that I 23 communicated it in E-mail. 24 Question: And if you had communicated 25 it in E-mail, would that E-mail have been 5691 1 preserved? 2 Answer: Not necessarily. 3 Question: A lot of these E-mails were 4 preserved because we now have copies of them; 5 right? 6 Answer: That's right. 7 Question: How did Microsoft decide 8 what E-mails would be preserved and what 9 E-mails would not be preserved? 10 Answer: Individuals get E-mail into 11 their mailbox and they decide. 12 Question: Do you have any explanation 13 as to why people would have decided to keep the 14 E-mail that described your two key goals in the 15 Apple relationship as being what they are 16 stated to be here and not have preserved your 17 E-mail that you say you sent saying you had a 18 primary goal of a cross license? 19 Answer: You're missing -- 20 Question: I'll restate the question 21 to just be absolutely certain that it's a fair 22 question, Mr. Gates. 23 If it were the case that neither your 24 counsel nor myself, after diligent search, can 25 find an E-mail that says your primary goal in 5692 1 dealing with Apple was a patent cross license, 2 do you have any explanation as to why that 3 E-mail that you say you think exists would not 4 have been saved; whereas, the E-mail that 5 describes one of your two key goals as getting 6 Apple to embrace Internet Explorer was 7 preserved? 8 Answer: When you say dealing with 9 Apple, there were a lot of things we were 10 dealing with Apple on. I've told you in terms 11 of the deal, the deal that I was involved in 12 discussing in '96 and under another management 13 at Apple in '97, there's no doubt the primary 14 goal was the patent cross license. 15 Question: And by the primary goal, 16 what you mean is the primary goal that you, 17 Mr. Gates, had; is that correct? 18 Answer: I don't think I'm the only 19 one who had it, but certainly, yes, that was 20 the primary goal of myself and for the company. 21 Question: And when you said in your 22 June 23, 1996 E-mail, I have two key goals in 23 investing in the Apple relationship, closed 24 quote, you were talking about yourself 25 personally; is that correct? 5693 1 Answer: Yeah. When I say investing 2 in the Apple relationship, that means spending 3 time with Apple and growing the relationship. 4 Question: And when in describing the 5 deal five paragraphs later the very first thing 6 that Microsoft gets is, Apple endorses 7 Microsoft Internet Explorer technology, closed 8 quote, did that calculate to you that that was 9 an important part of what you were getting in 10 terms of the deal? 11 Answer: No such deal was ever struck, 12 so I'm not sure what you're saying. 13 Question: Was that an important part 14 of the deal that you were trying to get, sir? 15 Answer: We never got as far as trying 16 to get that deal, unfortunately. 17 Question: You never got as far as 18 trying to get that deal; is that what you're 19 saying? 20 Answer: No. Well, in this time 21 frame, Gil Amelio's total focus was on his new 22 OS strategy, and so what I outlined here, we 23 never got them to consider. 24 Question: Well, sir, your E-mail 25 begins, last Tuesday night, I went down to 5694 1 address the top Apple executives; correct, sir? 2 Answer: That's right. 3 Question: And down at the bottom when 4 you're introducing the deal, you say, quote, I 5 proposed. 6 Now, you're referring to what you 7 proposed to the Apple top executives, are you 8 not, sir? 9 Answer: Yes. 10 Question: Okay. And what you 11 proposed was, quote, the deal that you then 12 describe at the bottom of the first page and 13 the top of the second page; correct, sir? 14 Answer: That's right. 15 Question: And that was a deal that 16 you proposed the Tuesday night before June 23, 17 1996, to what you describe as the top Apple 18 executives; correct, sir? 19 Answer: I had put forward some of 20 those points. 21 Question: Well, you put them forward 22 and you describe them as proposing the deal; 23 correct, sir? 24 Answer: That's how I describe it 25 here, yes. 5695 1 Question: All right, sir. 2 Now, you'd said that the deal that you 3 were talking about never got done. 4 Did you ever get Apple to endorse 5 Microsoft Internet Explorer technology? 6 Answer: You're trying to just read 7 part of that? 8 Question: I'm actually -- what I'm 9 doing is asking a question right now, sir. 10 I'm asking whether in 1996 or 11 otherwise, at any time did you get Apple to 12 endorse Microsoft Internet Explorer technology? 13 Answer: Well, you can get a copy of 14 the agreement we reached with Apple and decide 15 if in reading that you think it meets the 16 criteria or not. 17 Question: Sir, I'm asking you, as the 18 chief executive officer of Microsoft, I'm 19 asking you whether you believe that you 20 achieved that objective? 21 Answer: We did not get some exclusive 22 endorsement. We did get some -- there's some 23 part of the deal that has to do with Internet 24 Explorer technology. 25 Question: Do you know what that part 5696 1 of the deal is? 2 Answer: Not really. It has something 3 to do with they will at least ship it along 4 with other browsers. 5 Question: Does the deal prohibit them 6 from shipping Netscape's browser without also 7 shipping Internet Explorer? 8 Answer: I'd have to look at the deal 9 to understand. 10 Question: It is your testimony 11 sitting here today under oath that you simply 12 don't know one way or the other whether Apple 13 is today free to ship Netscape's browser 14 without also shipping Internet Explorer? 15 Answer: That's right. 16 Question: When you identify things as 17 key goals, do you typically tend to follow up 18 and see to what extent those goals have been 19 achieved? 20 Answer: In a very general sense, yes. 21 Question: Did you ever follow up to 22 see whether one of the two key goals that you 23 identify in your 1996 E-mail to Mr. Maritz and 24 Mr. Silverberg and others of getting Apple to 25 embrace Internet Explorer technology in some 5697 1 way had been achieved? 2 Answer: Well, certainly what I said 3 here, I have two goals in investing in the 4 Apple relationship, that -- those weren't 5 achieved because the investments I made were 6 with Gil Amelio, who was fired from Apple very 7 soon thereafter. 8 Question: Was there something about 9 Mr. Amelio getting fired that changed what your 10 goals were for the Apple relationship? 11 Answer: I said, I have two key goals 12 in investing in the Apple relationship. The 13 form that investment took was spending time 14 with Gil Amelio. That turned out to be wasted 15 time because he was fired from Apple rather 16 abruptly within about, oh, eight months of 17 this. 18 Question: When he was fired, did that 19 change what goals you had for the Apple 20 relationship, Mr. Gates? 21 Answer: It was basically a complete 22 restart because we had to understand what the 23 new management, what they were going to do with 24 Apple and where they were going. 25 Question: Did your goals change? 5698 1 Answer: Goals for what? For 2 investing in the relationship? 3 Question: You say in this E-mail that 4 you have two key goals for investing in the 5 Apple relationship. One of -- 6 Answer: In investing in the Apple 7 relationship. 8 Question: One of them is to get Apple 9 to embrace Internet Explorer technology in some 10 way. What I'm asking you is whether that 11 changed after this person got fired? 12 Answer: We re-evaluated all of our 13 thoughts about working with Apple based on what 14 the new management was going to do, whether 15 they were going to target the machines, what 16 they were going to do with their machines. 17 Since they continued to say we were in 18 violation of their patents, it continued to be 19 our top goal to get some type of patent cross 20 license. 21 MR. BOIES: Better read the whole 22 question. And then again reincorporate it so 23 that it's clear for the record. 24 (Requested portion of the record was 25 read.) 5699 1 Answer: You keep, either 2 intentionally or unintentionally, trying to 3 confuse my goals for investing in the 4 relationship with the goals we had overall for 5 various dealings with Apple. 6 Certainly, the goals I had for 7 investing in the relationship, that I had to 8 start over and rethink because the investment 9 was to spend time with the CEO who had been 10 fired. 11 Question: Mr. Gates, neither in this 12 E-mail nor in any other document that either of 13 us is aware of do you make that distinction 14 that you're making now; correct? 15 Do you understand the question I'm 16 asking? 17 Answer: This document does not say 18 that my goals for dealing -- does not state my 19 goals for dealing with Apple up here. 20 It states my goals in investing in the 21 Apple relationship, so there's a clear 22 distinction right there in that document. 23 Question: Mr. Gates, this document 24 deals with a proposed deal that you made to top 25 Apple executives; correct? 5700 1 Answer: That's only one part of what 2 is in the document. There's a part where it 3 talks about -- you never mentioned it, but the 4 first goal is maintain our applications share 5 on the platform. That's something I'm doing in 6 investing in the Apple relationship and that's 7 not related to the deal that's given -- the 8 proposed deal that's discussed below in the 9 E-mail, so those are clearly two separate 10 things. 11 Related, but separate. 12 Question: What I think I've done is I 13 think I have mentioned the first goal a number 14 of times. 15 Answer: I don't think so. 16 Question: I think it's been read 17 about three times in the record and the record 18 will show it. 19 Answer: Okay. It's a point of 20 disagreement. 21 Question: My question, Mr. Gates, has 22 to do with what your goals were, what your 23 stated goals were. 24 Now, you say here, I have two key 25 goals in investing in the Apple relationship, 5701 1 one of which is to get Apple to embrace 2 Internet Explorer technology in some way. 3 Did that continue to be a goal that 4 you had after 1996? 5 Answer: It wasn't a goal in investing 6 in the Apple relationship in terms -- in the 7 sense I meant it here. 8 It was a goal for our overall dealing 9 with Apple. One of many. 10 Question: Okay. Was it a key goal? 11 Answer: I'm not sure what you mean by 12 key goal. It was a goal. 13 Question: What I mean by key goal is 14 what you meant by key goal in your June 23, 15 1996 E-mail, Mr. Gates. 16 Answer: That's about investing in the 17 Apple relationship, which meant spending time 18 with Gil Amelio, so I don't know why you can 19 take the word out of there and apply it to a 20 completely different context. 21 Question: Well, sir, when you say a 22 completely different context, let's be clear 23 about what we're talking about. 24 The completely different context that 25 you're talking about is the difference between 5702 1 investing in the Apple relationship and doing a 2 deal with Apple. Is that what you're saying? 3 Answer: No. We have goals for our 4 general dealings with Apple, which came to a 5 deal -- we actually reached a deal in either 6 late July '97 or early August. 7 But there's a separate thing of what 8 was that deal, what we were able to achieve, 9 what we were trying to achieve when we were 10 dealing with the previous management and what 11 I'm trying to do in terms of spending my time 12 investing in the Apple relationship. 13 Question: And what you're saying is, 14 it is your testimony under oath, that although 15 you can't recall actually having sent this 16 E-mail, you're confident that when you wrote 17 this and referred to investing in the Apple 18 relationship, you meant only what you expected 19 to get out of spending time with the Apple 20 executives; is that your testimony? 21 Answer: Yeah. I was explaining why I 22 was spending time with Gil Amelio. 23 Question: And that's all you meant to 24 be saying here is your testimony? 25 Answer: That's what -- in reading 5703 1 this, that's what I believe I was trying to 2 communicate to the recipients of the E-mail. 3 Question: All right, sir. 4 Let me ask you to look at a document 5 previously marked as Government Exhibit 370. 6 This purports to be an E-mail, and the 7 second item on the E-mail is an E-mail from 8 John Ludwig to Don Bradford dated August 21, 9 1997. 10 And the subject is conversations with 11 BillG last night. 12 And the BillG referred to there is 13 you; correct, sir? 14 Answer: Yes. 15 Question: And it begins, I was at the 16 exec staff meeting last night. 17 Can you explain for the record what 18 the exec staff meeting was? 19 Answer: He is referring to a regular 20 get-together four times a year of the Microsoft 21 executive staff. 22 Question: And he goes on to say that, 23 there were three interesting exchanges with 24 Bill and the whole group about Apple. 25 Do you see that? 5704 1 Answer: I see it. 2 Question: And number one is, quote, 3 Bill's top priority is for us to get the 4 browser in the October OS release from Apple. 5 We should do whatever it takes to make this 6 happen. If we are getting shut out, we should 7 escalate to Bill. You should make sure that we 8 are engaging deeply with Apple on this one and 9 resolving any and all issues, closed quote. 10 Do you recall conveying to your 11 executive staff in or about August of 1997 that 12 your top priority was to get Microsoft's 13 browser in the October OS release from Apple? 14 Answer: No, I don't recall that. 15 Question: The top E-mail, which is 16 from Don Bradford to a number of people dated 17 August 21, 1997, and is also on the subject of 18 quote, conversations with BillG last night, 19 closed quote, says that Mr. Bradford and 20 someone else, Mohan Thomas, quote, will take 21 the lead on working out the Apple bundle deal, 22 closed quote. Do you see that? 23 Answer: Yes. 24 Question: Did you instruct your 25 executive staff in or about August of 1997 to 5705 1 work out a, quote, Apple bundle deal, closed 2 quote? 3 Answer: Well, I think this is post 4 the August agreement, late July or early August 5 agreement we reached with Apple. 6 And I think there were some 7 circumstances under which they would include or 8 bundle IE with some of their shipments. I 9 think that's what that's referring to. 10 Question: And is that what your 11 present recollection is that you told your 12 executive staff in August of 1997? 13 Answer: Well, I don't recall 14 specifically what I said to the executive staff 15 about Apple, but it appears Ludwig took out of 16 that that he was supposed to make sure that 17 whatever outs that Apple had under the previous 18 agreement for not shipping our technology, that 19 we avoided those being a problem that prevented 20 them from shipping our technology. 21 Question: Well, Apple wasn't 22 prohibited from shipping your technology in 23 August of 1997, was it, sir? 24 Answer: No. I actually think if we 25 -- I don't know the Apple agreement, I haven't 5706 1 read it, but I think there is something in 2 there that if we got certain things done and if 3 there were no problems and it passed tests and 4 we were ready in time, that they would actually 5 affirmatively include some of our technology in 6 various OS releases. 7 And this appears to be a discussion 8 about whether or not we're going to be able to 9 meet the requirements on us related to that. 10 Question: It is clear that getting 11 the browser in the October OS release from 12 Apple was something that you, Bill Gates, and 13 Microsoft wanted; correct, sir? 14 Answer: Yes, that's something that we 15 wanted. 16 Question: Okay. The last sentence of 17 the second paragraph says, Bill was clear that 18 his whole goal here is to keep Apple and Sun 19 split. He doesn't care that much about being 20 aligned with Apple. He just wants them split 21 from other potential allies. 22 And that relates to Java, does it not, 23 sir? 24 Answer: I don't have a direct 25 recollection, but if you read the sentence in 5707 1 front of it, that paragraph seems to relate to 2 Java runtime. 3 Question: Now, do you have a 4 recollection of telling your executive staff in 5 or about August 21 that your whole goal with 6 respect to Apple related to Java runtime was to 7 keep Apple and Sun split? 8 Answer: No. 9 Question: Who was at this executive 10 staff meeting? 11 Answer: Probably members of the 12 executive staff. 13 Question: And who were they? 14 Answer: It's about 40 to 50 people. 15 I doubt you want to take the time for me to 16 guess. 17 We generally get about 70 percent 18 attendance. Looking at this document, I think 19 it's very likely that I was there and John 20 Ludwig was there, but as to the rest of the 21 executive staff, I'd just be guessing. 22 It's very rare for us to have 23 nonexecutive staff members at those meetings, 24 although sometimes it happens. 25 Question: Is Mr. Ludwig somebody who 5708 1 you believe is an honest and competent person? 2 Answer: In general, yes. 3 Question: Do you have any reason to 4 believe that he would make up anything about 5 what your statements were? 6 Answer: No. 7 Question: Let me ask you to look at a 8 document that has been previously marked as 9 Government Exhibit 371. The portion I'm 10 particularly interested in is in the second 11 E-mail that is in this exhibit, which is on the 12 first page. 13 And it is an E-mail from you to Paul 14 Maritz and others dated January 22, 1998. 15 Did you send this E-mail on or about 16 January 22, 1998? 17 Answer: I don't remember doing so, 18 but I have no reason to doubt that I did. 19 Question: The next to last sentence 20 says, quote, I think we can gain a lot of share 21 with IE on Mac if we do some modest things, 22 closed quote. 23 Why were you interested in January, 24 1998, in increasing IE's share on Mac, as you 25 describe it? 5709 1 Answer: I'm not sure what I was 2 thinking in particular when I wrote this mail, 3 but I can -- sitting here now, I can give you 4 some reasons that I think I would have had for 5 saying that. 6 Question: Okay. Would you do so, 7 please? 8 Answer: Well, the use of IE on 9 Macintosh was beneficial to us in terms of the 10 APIs we had there and the content HTML 11 extensions that we had there. 12 And when you go to people who do 13 content, being able to say to them that those 14 extensions are popular not only with PC users, 15 but Mac users, it makes it easier to convince 16 the content person to take unique advantage of 17 the innovations that we had made in HTML as 18 well as some of the innovations we had made in 19 how the browser was structured. 20 Question: I want to be sure I 21 understand your answer. You mentioned APIs and 22 you mentioned the HTML extensions. 23 Are those two different things? 24 Answer: Yes, sir. 25 Question: Okay. And am I correct 5710 1 that the broader distribution of the APIs is 2 something that makes writing to those APIs more 3 attractive to independent software writers? 4 Answer: If users are choosing to use 5 the software that those APIs are present in, it 6 makes it easier to convince software vendors to 7 write to those APIs. 8 Question: Let me ask the question 9 this way. Why were you interested in having 10 Apple distribute your APIs? 11 Answer: Well the key issue wasn't 12 about distribution at all. The key issue was 13 usage share by Mac users of the various 14 browsers that were available on the Macintosh. 15 Question: Why were you interested in 16 having the usage share of Mac users of your 17 APIs increase? 18 Answer: You -- that question is 19 nonsensical. 20 Question: Okay. You were asked 21 earlier why you wanted to increase your shares 22 of IE on Mac, do you recall that? 23 Answer: Yes. 24 Question: And am I correct that you 25 said that there were two reasons, one dealt 5711 1 with APIs and one dealt with HTML extensions? 2 Answer: Yeah. I've thought of a 3 third reason since then, but that's right. 4 Now there might be three or four. 5 Question: Why don't you tell me the 6 one that you're thinking of and we'll see if 7 it's the same one Mr. Heiner is thinking of. 8 Answer: Well, I talked earlier about 9 having traffic out of IE is always of value. 10 Question: So those are the three 11 reasons that you can think of now; is that 12 correct? 13 Answer: Those are the three reasons 14 that are among the good reasons that raising 15 usage share of IE on Macintosh was a positive 16 thing for Microsoft. 17 Question: I'd like to know the other 18 reasons that you can think of now, if there are 19 other reasons. 20 Answer: That's all I can think of 21 right now. 22 Question: Okay. Why does increasing 23 IE share on Mac help you with respect to APIs? 24 Answer: Because the Mac IE had APIs. 25 Question: And how does having that 5712 1 help Microsoft? 2 Answer: Because those APIs are in 3 common with some Windows APIs. 4 Question: And why does that help 5 Microsoft? 6 Answer: If we do things that make our 7 APIs in Windows more attractive, it helps us in 8 increasing the volume of Windows that we 9 license. 10 Question: Are you saying that 11 increasing IE share on Mac will help increase 12 the number of Windows that you license? 13 Answer: Yeah. I went through the 14 chain of logic that explains that to you. I 15 don't know if you misunderstood some part of 16 it. 17 Question: Well, all I'm trying to do 18 is get your answers on the record because if I 19 begin to tell you what I think about your 20 answers, we'll be here all day. 21 So am I correct that it is your 22 testimony here that increasing your share of IE 23 on Mac will increase the distribution of 24 Windows? 25 Answer: I don't know what you mean by 5713 1 distribution of Windows. 2 Question: The usage of Windows. 3 Answer: No. The number of copies 4 that we license. 5 Question: Will that be increased? 6 Answer: Through the indirect factors 7 that I explained to you, yes, there is a 8 positive effect there. 9 Question: So that by increasing your 10 share of IE on Mac, you would expect to 11 increase the number of copies of Windows that 12 you would license? 13 Answer: Yes, increasing our usage 14 share over time we think will help us to 15 increase the number of copies Windows will 16 license. 17 Question: Does increasing IE's share 18 on Mac make it more likely that content 19 providers will want to use IE? 20 Answer: I don't know what you mean by 21 content providers using IE. Content providers 22 use servers. They don't use clients. 23 Question: Do you know what content 24 providers are? 25 Answer: Yes. 5714 1 Question: Give me an example of a 2 content provider. 3 Disney? 4 Answer: Disney. 5 Question: Disney would be a content 6 provider. 7 Disney is an important content 8 provider; correct, sir? 9 Answer: Now you're going to have to 10 give me some context. 11 Question: Without me giving you some 12 context, you can't answer the question as to 13 whether Disney is an important content 14 provider; is that your testimony under oath? 15 Answer: Important in what sense? 16 Question: Important in the everyday, 17 common usage sense of what important means. 18 Actually, I think probably the word 19 content providers was not used, but the word 20 content was used by the witness and I think it 21 was used in the context of answering the 22 question. 23 Answer: If you're actually 24 interested, it's the use IE where you seem to 25 be confused about what content providers do. 5715 1 There is no question about what 2 content provider means. When you say use IE, 3 it's people who view content who use IE. 4 Question: Right. And in order for 5 somebody to view content through IE, that 6 content has to be put someplace to begin with; 7 right? 8 Answer: Yes. 9 Question: And one of the things that 10 Microsoft has tried to do is it has tried to 11 convince content providers to put content 12 places and in a way so that it was more 13 attractive to view that content using IE than 14 with Netscape's browser; correct, sir? 15 Answer: It's not the places that make 16 it attractive. It's the way they use the HTML. 17 Question: What you've tried to do, 18 what Microsoft has tried to do, is get content 19 providers to display information in a way that 20 would make it more attractive to a user to view 21 that content using IE than using Netscape 22 Navigator; correct, sir? 23 Answer: No. We tried to get them to 24 author it in a way that they exploit our HTML 25 extensions, author. 5716 1 Question: And is the effect of that 2 to make it more attractive for users to view 3 the content using IE than Netscape Navigator? 4 Answer: It totally depends on what 5 they do -- what Netscape Navigator does with 6 HTML extensions and what that content provider 7 does with those HTML extensions. 8 Question: Let me ask what I think is 9 a simple question. 10 Has Microsoft made an effort to get 11 content providers to agree to display 12 information in a way that makes that 13 information more attractive when viewed by the 14 then existing Internet Explorer than if viewed 15 by the then existing Netscape browser? 16 Answer: Our efforts have been focused 17 in getting them to author so that it looks good 18 in Internet Explorer. These people are 19 authors. They don't do display, they do 20 authoring. 21 Question: Let me try to use your 22 words and maybe that will move it along. 23 Have you tried -- has Microsoft tried 24 to get content providers to agree to, in your 25 words, author information and data in a way so 5717 1 that that information and data is more 2 attractive to users when viewed through the 3 then current version of Internet Explorer than 4 when viewed through the then current version of 5 Netscape's browser? 6 Answer: Our attempts to convince 7 people to author using our extensions is not 8 relative to Netscape. It's just a question of 9 can we convince them to use our extensions. 10 And yes, we have endeavored to 11 convince them to use our extensions, but that 12 doesn't say anything about what they're doing 13 or how that stuff looks in Netscape. 14 Question: Are you saying that your 15 effort to convince content providers to use 16 your extensions was unrelated to what the 17 effect would be on Netscape? 18 Answer: The effect on Netscape would 19 be indirect. 20 Our intent in doing that was to 21 increase the popularity of our products. 22 Question: Was part of your objective 23 also to decrease the popularity of Netscape 24 products? 25 Answer: Our intent was to increase 5718 1 the popularity of our products. 2 Question: I'm asking now a different 3 question and the answer may be simply no, but 4 I'd like to have an answer to my question, 5 which is that in addition to trying, as you say 6 you were trying to do, to increase the 7 popularity of your products, were you also 8 trying to decrease the popularity of Netscape 9 products? 10 Answer: All of our effort was aimed 11 at making our product more popular. 12 There may have been an indirect effort 13 in terms of their people choosing our product 14 over other people's products, but the focus is 15 on making our product more attractive. 16 Question: Did you enter into 17 agreements with content providers that limited 18 the ability of those content providers to make 19 their content more attractive when viewed 20 through Netscape's then current browser? 21 Answer: I'm not familiar with 22 agreements that we had with content providers. 23 Question: You're not familiar with 24 them at all, is that what you're saying? 25 Answer: I know that we had some, so 5719 1 I'm familiar with their existence. I've never 2 read one. I've never seen one. I've never 3 negotiated one. 4 Question: Have you ever discussed 5 with anyone the substance of what's in them? 6 Answer: What I know about them is 7 that they -- they're related to the efforts to 8 convince people to take advantage of extensions 9 we've done that make those extensions 10 worthwhile to end users. 11 Question: My question now is whether 12 you've ever discussed the substance of what's 13 in those agreements with anyone. And if you 14 have -- 15 Answer: To the degree I just 16 described them, yes. Beyond that, no. 17 Question: With whom did you have 18 those discussions? 19 Answer: Oh, I would have been in 20 meetings with various people. You know, Brad 21 Chase, Paul Maritz, Brad Silverberg in a 22 certain period of time. 23 Question: And did they ever tell you 24 that these agreements with content providers 25 limited what the content providers could do 5720 1 with Netscape? 2 Answer: I don't think so. 3 Question: Do you know, as you sit 4 here now, whether any of the agreements that 5 you entered into, Microsoft entered into with 6 content providers over the last three years 7 limited what those content providers could do 8 with Netscape? 9 Answer: I know that when I was going 10 to testify in Washington, D.C., in the senate, 11 that Netscape or someone was raising these 12 content provider agreements in an effort to 13 create some controversy around them. 14 And so I was given like a paragraph or 15 two summary. And there were about 40 issues in 16 general there, but one of the issues was 17 related to those agreements. 18 And so there may have been something 19 in those paragraphs about the agreements beyond 20 what I knew about them earlier. 21 Question: But you don't recall the 22 substance of that now, is that what you're 23 saying? 24 Answer: Well, I can tell you there 25 was something about in a period of time a 5721 1 certain class who is on our channel bar, they 2 could appear on competitive channel bars, but 3 if they -- they could only pay us. There was 4 something like that. 5 Question: That's an interesting one 6 for you to focus on. 7 Can you think of any reason why you 8 would want content providers to agree that they 9 would not pay Netscape any money? 10 Answer: I know that we had hopes that 11 the channel bar would get some usage and we 12 wanted to work with some content providers to 13 show off the channel bar. 14 And I can't give you the reasoning 15 behind any part of the ICP agreement because I 16 wasn't involved in those. 17 MS. CONLIN: Your Honor, this would be 18 a good time. 19 THE COURT: Very well. We'll take a 20 recess for 15 minutes. 21 Remember the admonition given earlier. 22 You can leave your notebooks here. 23 (A recess was taken from 9:44 a.m. 24 to 10:05 a.m.) 25 THE COURT: Everyone else may be 5722 1 seated. 2 You may commence. Thank you. 3 (Whereupon, the following video 4 resumed playing to the jury.) 5 Question: But what I'm asking you now 6 is whether you, as you sit here now, can think 7 of any legitimate reason why Microsoft would be 8 getting content providers to agree not to pay 9 Netscape? 10 I'm not talking about getting them to 11 try to use your channel bar. I'm talking about 12 getting them to agree not to pay Netscape. 13 Answer: You'd have to ask somebody 14 else why they put that in the agreement, unless 15 you're asking me to speculate wildly. 16 Question: Well, I don't know whether 17 it would be wild speculation or not, but what 18 I'm asking you whether you, as you sit here 19 now, as the chief executive of Microsoft, can 20 think of any legitimate reason for Microsoft 21 getting content providers to agree not to pay 22 Netscape? 23 Answer: I'm not aware of any broad 24 prohibition against paying Netscape for 25 anything. 5723 1 I think there was something about 2 relative to the channel bar, we want some of 3 the premier partners, which was a very small 4 number, to talk about their work with us. 5 And it would have been embarrassing if 6 all those same people were in the same 7 relationship with Netscape in that time period. 8 Question: In your answer in which you 9 said that you thought you recalled some of the 10 things that you were told in preparation for 11 your hearing testimony, you were the one, were 12 you not, just a few minutes ago who said that 13 you recalled that there was some provision that 14 even if the content provider was on another 15 channel bar, they couldn't pay for it? Do you 16 recall saying that just a few minutes ago? 17 Answer: Uh-huh. 18 Question: You've got to say yes so 19 the reporter -- 20 Answer: Yes. 21 Question: Now, that's what I'm asking 22 about. 23 What I'm asking is whether you can 24 think of any legitimate reason why Microsoft 25 would get a content provider to agree not to 5724 1 pay Netscape? 2 Answer: I can guess about that if you 3 want. 4 Question: What I'm asking is not 5 whether you can guess why you did it because we 6 could all guess maybe why you did it. 7 What I'm asking is whether you can 8 think of any legitimate reason that would 9 justify doing that? 10 Answer: Sure. 11 Question: What? 12 Answer: Well, someone might have 13 said, gee, it would be embarrassing if all 14 these same people appeared in Netscape's 15 equivalent in that time period. Let's have 16 them agree not to appear at all. 17 And then someone else might have said, 18 no, let's not be that restrictive. Let's just 19 make it less likely they will appear by saying 20 that they won't pay Netscape to appear. 21 Question: But if you're going to let 22 them appear, why would you try to stop them 23 from paying to appear? 24 Answer: It lowers the probability 25 that they will appear. 5725 1 Question: And why does it do that, 2 sir? 3 Answer: Because there's lots and lots 4 of content providers. And so in the channel 5 bar, these gold or premier or platinum -- I 6 forget the terminology -- slots, there's only 7 visually, at least in the way we did it, room 8 for about five or six of those. 9 And so if you have a contract that 10 says that they won't take money from Netscape 11 to appear on their channel bar, given the broad 12 universe of content providers that are out 13 there, it's very likely that Netscape will 14 choose to pick people who do pay them to be in 15 their channel bar and therefore, you've lowered 16 the probability that all of the people who 17 appear in yours also appear in Netscape's. 18 Question: So that precluding people 19 from paying was an indirect way of trying to 20 make sure that they didn't appear on Netscape's 21 channel bar; is that right? 22 Answer: No. Now you've changed 23 things. I've told you I don't know why the 24 provision was put in there. 25 You asked me if I could think of any 5726 1 set of reasoning behind it, and which I did, 2 and then you changed and asked me a question 3 about the history, which again I can't talk to 4 you about the history. 5 Question: And I don't mean to be 6 asking just about the history. What I mean to 7 be asking is whether you, as the chief 8 executive officer at Microsoft -- and you 9 testified yesterday about some practices that 10 you thought were consistent and some practices 11 that you thought were inconsistent with company 12 policy. 13 And is it consistent with company 14 policy, let me approach it this way, to get 15 companies like content providers to agree not 16 to pay competitors, is that consistent with 17 company policy if that was done? 18 Answer: Well, our company policy is 19 that when we're doing agreements, we rely on 20 the expertise of our law and corporate affairs 21 department to look at those and make sure that 22 they're appropriate. 23 That's one of the things that's done 24 in agreements like that. 25 Question: Well, other than whatever 5727 1 your lawyers tell you that you can do, which I 2 don't want to ask about because I think they 3 will probably object that it's privileged, do 4 you have a company policy that addresses the 5 issue of whether it is appropriate for 6 Microsoft people to enter into agreements that 7 limit companies from doing business with 8 Microsoft's competitors? 9 Answer: There is no general policy 10 that covers that area. 11 As I said, the very competent staff we 12 have is involved in reviewing agreements we 13 reach. 14 Question: Did you ever have any 15 conversations with anyone about whether or not 16 they could deal with a competitor of Microsoft? 17 Answer: That's open ended enough that 18 I'm not sure what you mean at all. 19 Question: I mean to keep it open 20 ended as an initial question and then if you 21 say no, then I don't have to go through it, but 22 if you say yes, then I go through who you met 23 with and what you said. 24 (Requested portion of the record was 25 read.) 5728 1 Answer: I'd say the answer is 2 probably yes because, for example -- 3 Question: If the answer is yes, 4 then -- 5 Answer: No. I want to make -- I 6 think I should give an example so you 7 understand how I've interpreted your question. 8 Question: Could you give me a 9 specific example? 10 Answer: Yes. IBM is a competitor of 11 ours and people have said to me, should we fly 12 out and meet with IBM on this topic. And I've 13 said in some cases yes, we should and in some 14 cases no, we shouldn't. 15 So that's a case where I was giving 16 people advice on whether they should deal with 17 a competitor of Microsoft. 18 Question: Were these people within 19 Microsoft? 20 Answer: People -- yes. 21 Question: Okay. Now, have you ever 22 had any personal conversations with anyone 23 other than a Microsoft employee as to whether 24 that person's company could or should deal with 25 a competitor of Microsoft? 5729 1 Answer: Well, in terms of should, I 2 might have said to somebody that -- 3 Question: No, no. I'm not asking 4 what you might have said. What I'm asking is 5 what you remember doing. 6 I'm trying to move this along. I'm 7 trying to stay as concrete as I can and I'm not 8 asking you to speculate about what you might 9 have done. 10 Answer: Okay. I know -- 11 Question: I'm asking what you 12 remember doing. 13 Answer: I know concrete cases where 14 I've told customers that I think picking our 15 product as opposed to a competitor's product is 16 in their best interests and so they should pick 17 our product. And in that sense, yes. 18 Question: Have you told people that 19 if they pick your product, they can't use a 20 competitor's product? 21 Answer: If there's a technical issue 22 about how things won't work together, possibly. 23 But, otherwise, no. 24 Question: Do you know a Mr. Poole who 25 works at Intuit? 5730 1 Answer: No. 2 Question: You do not? 3 Answer: No. I think you're confused. 4 Question: You may be right, but all I 5 need to do is get your testimony down and then 6 people can judge for themselves. 7 So it is your testimony that you do 8 not know anyone who works at Intuit who is 9 named Mr. Poole. 10 Do you know somebody at Microsoft who 11 deals with Intuit who is named Mr. Poole? 12 Answer: Yes. It's quite distinct. 13 Question: Yes. The distinction 14 actually is at the heart of what I'm going at, 15 sir. 16 What is Mr. Poole's first name? 17 Answer: Will. That's at least what 18 he goes by. 19 Question: And what has Mr. -- what is 20 Mr. Will Poole's title? 21 Answer: I have no idea. 22 Question: You have dealt directly and 23 personally with Mr. Poole, have you not, sir? 24 Answer: Not until very recently. 25 Question: When was the first time 5731 1 that you dealt directly and personally with 2 Mr. Poole? 3 Answer: Well, if you mean was he ever 4 on an E-mail that I went back and forth on, 5 that probably goes back -- that could be any 6 time in the last few years. 7 In terms of actually being in a 8 meeting that Will was in, I think that's quite 9 recent. 10 Question: When? 11 Answer: Which? 12 Question: Both. 13 Answer: I said in terms of E-mail, 14 that would be the last couple years. How can I 15 be more concrete than that? I answered the 16 question. 17 Question: I don't know. Can you be 18 more concrete than the last couple years? 19 Answer: No. 20 Question: Okay. Now, when with 21 respect to the meeting? 22 Answer: I don't think I was in a 23 meeting that he was in until maybe two or three 24 months ago. 25 Question: Did you ever have a 5732 1 discussion with Mr. Poole, either orally or 2 through an E-mail, in which you told Mr. Poole 3 what the conditions were pursuant to which 4 Microsoft would give Intuit access to a 5 position on the active desktop? 6 Answer: There may have been mail on 7 that general topic, but I don't remember any 8 specific mail. 9 Question: Did you have any 10 discussions with Mr. Poole, apart from E-mail? 11 Answer: No. 12 Question: Did you tell Mr. Poole in 13 words or in substance that Intuit could get 14 access to a position on the active desktop only 15 if it would agree not to deal with Netscape? 16 Answer: There may have been some 17 discussion about whose browser technology 18 Intuit chooses to integrate its products with. 19 There certainly wasn't anything 20 broadly about dealing with Netscape. 21 Question: Let me try to be as precise 22 as I can. 23 Did you tell Mr. Poole in words or in 24 substance that if Intuit wanted to have access 25 to a position on the active desktop, Intuit 5733 1 would have to agree to use Microsoft's browser 2 technology and not use Netscape's browser 3 technology? 4 Answer: I don't remember that 5 specifically, but I do know that we were, in 6 various time periods, endeavoring to get Intuit 7 to choose the component ties to IE technology 8 as the way that Quicken -- the default way that 9 Quicken would bring up a browser. 10 In fact, they've always supported both 11 browsers at all times. 12 Question: My question to you is 13 whether you told Mr. Poole, either orally or 14 through E-mail, that in order for Intuit to get 15 access to a position on the active desktop, 16 Intuit would have to agree not to use the 17 Netscape browser technology? Did you tell 18 Mr. Poole that orally or through E-mail? 19 Answer: I know we were talking with 20 Intuit about using IE as the default browser 21 because of our technology. 22 So, in that sense of being a default, 23 we were trying to get them to favor IE, but I 24 don't remember any specific thing beyond that. 25 Question: So is it your testimony 5734 1 that you do not remember telling Mr. Poole in 2 words or in substance that if Intuit was to 3 have access to a position on the active 4 desktop, Intuit would have to agree not to use 5 the Netscape browser technology? 6 Answer: Intuit has supported the 7 Netscape browser technology at all times and I 8 never thought there was any chance of avoiding 9 them supporting the Netscape browser 10 technology. 11 I did think there was a chance that we 12 would become the default and I was hoping we 13 could convince them that it made sense for them 14 to make us the default. 15 Question: The default browser? 16 Answer: That's right. 17 Question: I understand that that's 18 what you said and I do want to explore that, 19 but I want to first be clear that it is your 20 testimony that you never told -- or at least 21 you don't recall ever telling Mr. Poole in 22 words or in substance that in order to get 23 access to a position on the active desktop, 24 Intuit would have to agree not to deal with 25 Netscape or not to use the Netscape browser 5735 1 technology? 2 Answer: I don't remember using those 3 exact words. 4 Question: How about substance? 5 Answer: In terms of substance, my 6 desire to get us to be the default did imply a 7 favorable position for us relative to other 8 browsers. 9 Question: Is it fair to say that your 10 position with respect to wanting to become the 11 default browser for Intuit meant that the 12 Microsoft browser would have a more favorable 13 position, but it would not preclude Intuit from 14 dealing with Netscape; is that correct? 15 Answer: That's right. 16 Question: Okay. Now, I want to 17 follow up on that issue, but before I do, I 18 want to be absolutely certain that I have your 19 testimony now clear. 20 And that is, leaving aside the issue 21 of becoming the default browser, did you ever 22 tell Mr. Poole in words or in substance that in 23 order for Intuit to have access to a position 24 on the active desktop, Intuit would have to 25 agree not to deal with the Netscape or not to 5736 1 use the Netscape browser technology? 2 Did you ever communicate that to 3 Mr. Poole in words or in substance? 4 Answer: You can't leave out the idea 5 of the default browser. It's nonsensical to 6 say did you do that, but leaving out the notion 7 of the default browser. 8 The substance of us being the default 9 browser is that that's a favorable position for 10 our browser. 11 So what you've just asked me is 12 nonsensical. 13 Question: Does making Internet 14 Explorer the default browser preclude Intuit 15 from dealing with Netscape? 16 Answer: In a specific way, yes. 17 Question: In what way? 18 Answer: Any deal that relates to them 19 being the default browser. 20 Question: Other than a deal that 21 involves them becoming the default browser, 22 does it preclude Intuit from dealing with 23 Netscape? 24 Answer: Not necessarily. 25 Question: So that Intuit could make 5737 1 Internet Explorer its default browser but still 2 deal with Netscape with respect to Netscape's 3 browser; correct? 4 Answer: Intuit at all times has 5 supported the Netscape browser. 6 Question: Now, I think it has to be 7 clear from what you've just said that it is 8 your view that becoming the Netscape -- 9 becoming the default browser does not preclude 10 Intuit from dealing with Netscape completely in 11 terms of browsers. Is that fair? 12 Answer: Well, it was the issue that 13 would have been of the most interest to us. 14 Question: I'm not asking what the 15 interest was that you had or what the issue was 16 that was of most interest to you. 17 What I'm asking is whether, aside from 18 the issue of the default browser, have you ever 19 told Mr. Poole in words or in substance that in 20 order for Intuit to get access to a position on 21 the active desktop, Intuit would have to agree 22 not to deal with Netscape or not to use the 23 Netscape browser technology at all? 24 Answer: That question doesn't make 25 sense to me. 5738 1 If you say that somebody is not the 2 default, you're certainly affecting how they 3 deal with you on the browser. 4 Question: Would you explain what you 5 mean by that? 6 Answer: We wanted to convince Intuit 7 to make us the default browser. 8 Question: And making you the default 9 browser, does that preclude them from dealing 10 with Netscape at all in terms of browsers? 11 Answer: Not in every respect, no. 12 Question: Okay. Not in every 13 respect. 14 Did you ever tell Mr. Poole in words 15 or in substance that if Intuit was going to 16 obtain access to a position on the active 17 desktop, Intuit would have to stop supporting 18 the Netscape browser? 19 Answer: Well, supporting can mean a 20 lot of different things. I know that -- 21 Question: I know when you mean when 22 you said it. 23 Answer: I never expected at any time 24 that they would not support the Netscape 25 browser in terms of running with it, working 5739 1 with it, supporting it, and all those things. 2 In terms of did I use that specific 3 word, no, I don't -- I don't have a 4 recollection. But, you know, support can mean 5 quite a few things. 6 Question: What I'm not doing right 7 now is asking what you meant by support. What 8 I'm asking you is whether you told Mr. Poole 9 that. 10 Do you understand the distinction? 11 Answer: Did I use those words? 12 Question: That you told Mr. Poole -- 13 Answer: See, if you're going to ask 14 me did I use the exact words, you can ask me 15 that question. Or if you're going to ask me if 16 I said something like that, that's okay, but I 17 have to actually understand what the words -- 18 what you mean by the words. 19 Question: Let's take it one step at a 20 time. 21 Did you tell Mr. Poole that if Intuit 22 was to have access to a position on the active 23 desktop, Intuit would have to stop, quote, 24 supporting, closed quote, or could no longer, 25 quote, support, closed quote, the Netscape 5740 1 browser? 2 Answer: What does it mean when you 3 keep going in and out of quotes like that? 4 Question: It means you used the word 5 supporting or you used the word support. 6 Answer: Whether I said what? 7 Question: Well, whether you told 8 Mr. Poole that if Intuit was to have a position 9 on the active desktop, that Intuit would have 10 to agree to stop supporting or could no longer 11 support, that is, you used the word support, 12 the Netscape browser? 13 Did you do that, sir, in E-mail 14 communications or orally or in any other form 15 of communications to Mr. Poole? 16 Answer: I don't remember using those 17 words, if that's the question. 18 Question: Do you remember whether or 19 not you used those words? 20 Answer: No. 21 Question: What, if anything, did you 22 tell Mr. Poole -- 23 Answer: I'm not sure if I told 24 Mr. Poole or Mr. Chase or Todd Nielson or who, 25 but I'm sure I communicated that the kind of 5741 1 support Intuit had been giving where Netscape 2 was the default browser, that I didn't see that 3 as consistent with agreeing with them -- for 4 them to be featured on the active channel bar. 5 Question: I think that goes to what 6 you were saying before, which is that you 7 wanted Microsoft's browser to become the 8 default browser? 9 Answer: That's right. 10 Question: Now, what I'm trying to do 11 is ask whether you went beyond that in talking 12 to Mr. Poole. 13 Did you say to Mr. Poole that if 14 Intuit is going to get access to a position on 15 the active desktop, Intuit had to do something 16 more than simply make IE the default browser? 17 Answer: That was my goal there, which 18 of course would imply a change in how they'd 19 been supporting Netscape as the default 20 browser. 21 Question: Right. I understand that 22 you said you wanted IE to be the default 23 browser and that inevitably means that Netscape 24 can't be the default browser because you can 25 only have one default browser; right? 5742 1 Answer: Right. 2 Question: Now, what I'm now asking 3 is, did you go beyond that and say to Mr. Poole 4 that if Intuit was going to get access to a 5 position on the active desktop, Intuit would 6 have to do something more than simply make IE 7 the default browser? 8 Answer: I don't think so. 9 Question: Did you ever say that to 10 Mr. Chase or to anyone else? 11 Answer: I don't think so. 12 Question: Or communicate it in E-mail 13 or some other communication? 14 Answer: I included that. So, no, I 15 don't think so. 16 Question: I thought you might have 17 included it, but I wasn't sure, so I wanted to 18 be clear. 19 MS. CONLIN: This is the afternoon 20 session of August 28, 1998. 21 THE COURT: Very well. 22 Question: In connection with Intuit, 23 Mr. Gates, insofar as you were aware, was there 24 any effort to get Intuit to agree that Intuit 25 would not promote Netscape's browser? 5743 1 Answer: I'm not aware of any -- 2 anything specifically related to promotion. 3 As I said, I didn't deal with them 4 directly. You could say that -- ask them not 5 to support Netscape as their standard supported 6 browser. It's a change in their promotion of 7 Netscape. 8 Question: Yes, I take that point. 9 Let me make the question a little more 10 precise. 11 Other than an attempt to get Intuit to 12 make Internet Explorer into its default 13 browser, did Microsoft make any effort, that 14 you're aware of, to get Intuit not to support 15 or advertise Netscape's browser? 16 Answer: It's kind of a strange 17 question because Intuit never would have 18 specifically advertised someone's browser. 19 So I don't know what -- what do you 20 mean by promotion when you give that example? 21 Question: Well, I'm really just 22 asking you for what Microsoft did. 23 And if you don't understand the 24 question, Mr. Gates, you can tell me and I will 25 rephrase the question. 5744 1 Answer: Isn't that what I just did? 2 Question: Saying that you didn't 3 understand the question? 4 Answer: Uh-huh. 5 Question: Okay. Let me put another 6 question to you. 7 Did Microsoft, insofar as you were 8 aware, try to get Intuit to agree not to enter 9 into any kind of marketing or promotion 10 agreements with Netscape? 11 Answer: I don't know. 12 Question: Did you have discussions 13 with anyone concerning what Microsoft was 14 trying to get from Intuit? 15 Answer: I might have sent E-mail 16 about it at some point. 17 Question: Do you remember the content 18 of that E-mail? 19 Answer: No. 20 Question: Do you remember anything at 21 all about the content of that E-mail? 22 Answer: Well, I don't know that it's 23 an E-mail either. I said I might have sent 24 E-mail. It may have been many E-mails. So no, 25 I don't remember anything beyond the fact that 5745 1 there may have been E-mail about this, and I 2 may have made my views about the subject known. 3 Question: Let me ask you to look at a 4 document that has been previously marked as 5 Government Exhibit 376. 6 This purports to be an E-mail dated 7 April 17, 1997 from Brad Chase to you and some 8 other people, which is forwarding on an E-mail 9 of earlier in the day on April 17 from Mr. Will 10 Poole to Brad Chase. The subject of both 11 E-mails is Intuit terms agreed. 12 Do you see that? 13 Answer: Well, it's just a forward, 14 yeah. 15 Question: Do you recall receiving 16 this E-mail? 17 Answer: No. 18 Question: Do you have any doubt that 19 you received a copy of this E-mail? 20 Answer: No. 21 Question: There are -- 22 Answer: I don't have any reason to 23 doubt. I don't know that I received the 24 E-mail. I don't have any reason to doubt it. 25 But since I don't remember it -- 5746 1 Question: Did you ever see this 2 E-mail before? 3 Answer: I don't remember ever seeing 4 it. 5 Question: Under the heading Intuit 6 obligations, it says, bundle IE3, Quicken in 7 parenthesis, and IE4, in parenthesis other 8 products. 9 Do you see that? 10 Answer: Uh-huh. 11 Question: Were you told in April 1997 12 that Intuit had agreed to bundle IE3 and IE4 13 with its products? 14 Answer: I don't remember that 15 specifically. 16 Question: Farther down on -- under 17 Intuit obligations, there is an obligation that 18 reads, quote, not enter into marketing or 19 promotion agreements with other browser 20 manufacturers for distribution or promotion of 21 Intuit content. 22 Do you see that? 23 Answer: Uh-huh. 24 Question: Were you told in words or 25 in substance in or about April of 1997 that 5747 1 Intuit had agreed not to enter into marketing 2 or promotion agreements with other browser 3 manufacturers for distribution or promotion of 4 Intuit content? 5 Answer: I don't remember being told 6 that. 7 Question: Do you have any reason to 8 doubt that you were told that? 9 Answer: In the sense that one of the 10 E-mails that may have come into my mailbox 11 might have related to that, I don't -- I don't 12 doubt it. 13 Certainly wasn't something that could 14 have been very significant to me because I 15 don't have a recollection of it. 16 Question: The last Intuit obligation 17 that is listed here is, quote, create 18 differentiated content area for Intuit channel 19 that is available only for IE users, closed 20 quote. 21 Do you see that? 22 Answer: Uh-huh. 23 Question: Were you told in words or 24 in substance in or about April of 1997 that 25 Intuit had agreed with Microsoft that Intuit 5748 1 would create a differentiated content area for 2 Intuit's channel that would be available only 3 to IE users? 4 Answer: I don't remember being told 5 that nor do I understand what it means. 6 Question: Have you ever had any 7 discussions with anyone within Microsoft about 8 the possibility of content providers creating 9 content area that would only be available to IE 10 users? 11 Answer: I don't -- no. I don't 12 understand that. I mean, it -- if the URL was 13 there, you can get to it. 14 Question: So what you're saying is 15 that this obligation that Intuit said to have 16 taken on is an obligation that you don't 17 understand at all what it means. Is that what 18 you're telling me? 19 Answer: No. I'm saying these words 20 that are on this piece of paper, I don't 21 understand what they mean. 22 Question: Do you understand the 23 concept? 24 Answer: I don't know what it means. 25 Question: Okay. 5749 1 Did you ever ask Mr. Poole what it 2 meant? 3 Answer: Nope. 4 Question: Did you ever ask Mr. Chase 5 what it meant? 6 Answer: No. 7 Question: Did you ever ask anybody 8 what it meant? 9 Answer: Those words, no. 10 Question: Or the concept that is 11 described by those words? 12 Answer: I don't understand those 13 words. So it's hard for me to relate to the 14 concept. I don't understand the words. 15 Question: Let me be sure that I 16 understand what you don't understand. 17 Are you telling me that you don't 18 understand what it would mean for Intuit to 19 create a differentiated content area -- 20 Answer: That's in quotes. 21 Question: Yes. -- for the Intuit 22 channel that would be available only to IE 23 users? 24 Answer: I'm not sure what they mean 25 by that. 5750 1 Question: Do you have any idea what 2 they mean by that? 3 Answer: No, it's confusing to me. 4 Question: Let me ask you to look at a 5 document that has been previously marked as 6 Government Exhibit 372. 7 This is an E-mail to you from Ben 8 Slivka dated April 14, 1997. 9 And the subject is, quote, Java review 10 with you, closed quote. 11 Did you receive this E-mail in or 12 about April of 1997, Mr. Gates? 13 Answer: I don't remember. 14 Question: The E-mail begins that the 15 author is working with Paul Maritz to set up a 16 two- to three-hour review for you on your Java 17 efforts. 18 Do you see that? 19 Answer: On our Java efforts. 20 Question: On Microsoft's Java 21 efforts. 22 Answer: No. I think it's Ben 23 Slivka's group. 24 Question: And he is a Microsoft 25 group; right? 5751 1 Answer: Yes. He's part of Microsoft 2 but not all of Microsoft. 3 Question: So you would interpret this 4 is that he is working with Paul Maritz to set 5 up a two- to three-hour review for you of part 6 of Microsoft's Java efforts, but not all of 7 Microsoft's Java efforts; is that what you're 8 saying? 9 Answer: Yeah. The work his group is 10 doing. 11 Question: The work his group is doing 12 on Java; right? 13 Answer: Right. 14 Question: Okay. 15 And he lists what he describes as some 16 pretty pointed questions that you, Mr. Gates, 17 had about Java. 18 Do you see that? 19 Answer: Well, I'm not sure those are 20 the pointed questions. It says, I want to make 21 sure I understand your issues/concerns. 22 Question: Well, that's actually the 23 last part of a sentence that begins, quote, 24 when I met with you last, you had a lot of 25 pretty pointed questions about Java, so I want 5752 1 to make sure I understand your issues/concerns. 2 That's what the sentence says; 3 correct, sir? 4 Answer: Right. 5 Question: And when Mr. Slivka says I 6 met with you last, he's talking about you, 7 Mr. Gates; correct, sir? 8 Answer: Yes. 9 Question: And when he says, you had a 10 lot of pretty pointed questions about Java, 11 he's again talking about you, Mr. Gates; 12 correct? 13 Answer: Right. 14 Question: And then he lists what he 15 refers to as a start. 16 1. What is our business model for 17 Java? 18 2. How do we wrest control of Java 19 away from Sun? 20 Do you see that? 21 Answer: Uh-huh. 22 Question: Sometime prior to April 14, 23 1997, had you conveyed to Mr. Slivka that one 24 of your pointed questions about Java was, 25 quote, how do we wrest control of Java away 5753 1 from Sun? 2 Answer: I don't think I would have 3 put it that way. 4 Certainly was an issue about the 5 popularity of Sun's runtime APIs versus our 6 runtime APIs. 7 Question: Is it your testimony that 8 you didn't raise the question of how do we 9 wrest control of Java away from Sun with 10 Mr. Slivka? 11 Answer: I'll say again, I doubt I 12 used words like that, but there certainly was 13 an issue of the popularity of our runtime APIs 14 versus their runtime APIs. 15 Question: Just so that the record's 16 clear, I'm not asking you about whether there 17 was a question about the popularity of your 18 runtime APIs or their runtime APIs. 19 What I'm asking is whether you told 20 him in words or in substance that you wanted to 21 know how Microsoft could wrest control or get 22 control of Java away from Sun? 23 Answer: I don't remember anything 24 about control as a word or in substance, but 25 there was an issue about the popularity of our 5754 1 runtime APIs versus Sun's runtime APIs. 2 Question: I take it you know 3 Mr. Slivka? 4 Answer: Uh-huh. 5 Question: You've got to answer yes or 6 no audibly so the reporter can take it down. 7 Answer: Yes. 8 Question: And you believe him to be a 9 person of competence and integrity? 10 Answer: Yes. 11 Question: Do you have any reason to 12 believe that he would have misstated what you 13 told him when you met with him last before 14 April 14, 1997? 15 Answer: In no way does this purport 16 to be a restatement of things I said to Ben 17 Slivka. 18 Question: Well, Mr. Gates, what this 19 memorandum says is, quote, when I met with you 20 last, you had a lot of pretty pointed questions 21 about Java, so I want to be sure I understand 22 your issues and concerns. 23 Here's a start, can you please add any 24 that I'm missing? 25 And then he lists six, the second of 5755 1 which is, how do we wrest control of Java away 2 from Sun? 3 You see that in the exhibit, do you 4 not, sir? 5 Answer: Uh-huh, yes. 6 Question: Let me ask you to look at a 7 document that has been previously marked as 8 Government Exhibit 373. 9 It's a one-page exhibit and the second 10 item on the page is a message from you to Paul 11 Maritz dated June 16, 1997, on the subject of 12 quote, Java schism, closed quote. 13 Did you send this message, Mr. Gates? 14 Answer: I don't remember it, but I 15 don't have any reason to doubt that I did. 16 Question: What did you mean by quote, 17 Java schism, closed quote? 18 Answer: Well, I think the E-mail 19 speaks for itself. 20 Question: The E-mail may very well 21 speak to itself or for itself, but what I want 22 to know is -- 23 Answer: I could have written a mail 24 that says, a point that is important to me is 25 to have pure Java applications that do a lot 5756 1 have to ship a full runtime instead of being 2 able to count on the runtime being shipped with 3 the operating system, and so on. 4 Question: Maybe my question wasn't 5 clear. 6 What I'm trying to get you to do is to 7 tell me what you meant by the term Java schism. 8 Answer: It's a heading for this piece 9 of E-mail. 10 The E-mail is the communication, not 11 the heading. 12 Question: I understand that, sir. 13 But what I'm asking is, you chose the heading, 14 did you not, sir? 15 Answer: It appears I typed that. 16 Question: Right. And why did you 17 choose this heading for this memo? What were 18 you meaning to convey by the term Java schism? 19 Answer: Exactly what I put into the 20 message. 21 Question: Well, sir, what did you 22 mean by schism? 23 Answer: It explains that in the 24 message. 25 Question: I'm asking you to explain 5757 1 it in your words what you mean by the word 2 schism. 3 Answer: I'm drawing a distinction 4 between pure Java apps and where they get their 5 runtime bits. 6 Question: And is that the schism that 7 you're referring to? 8 Answer: That's what this E-mail is 9 about, and that's -- I titled it Java schism 10 when I wrote that E-mail. And the question is, 11 how do pure Java applications get their runtime 12 bits? 13 Question: What is on the two sides of 14 the schism, Mr. -- 15 Answer: The bits you get from the 16 browser, the bits you get elsewhere. 17 And the mail couldn't be clearer. 18 It's asking about two sources of the bits. You 19 can get bits from the browser. You can get 20 bits somewhere else. 21 Question: Okay. 22 Now, where else can you get the bits? 23