9281 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 XXXIV 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 7:59 a.m., January 19, 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 9282 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 LINDSEY A. DAVIS THOMAS DARDEN 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 ROBERT J. GRALEWSKI, JR. Attorney at Law 13 Gergosian & Gralewski 550 West C Street 14 Suite 1600 San Diego, CA 92101 15 (619) 230-0104 16 KENT WILLIAMS Attorney at Law 17 Williams Law Firm 1632 Homestead Trail 18 Long Lake, MN 55356 (612) 940-4452 19 20 21 22 23 24 25 9283 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY SHARON L. NELLES 3 Attorneys at Law Sullivan & Cromwell, LLP 4 125 Broad Street New York, NY 10004-2498 5 (212) 558-3749 6 STEPHEN A. TUGGY Attorney at Law 7 Heller Ehrman, LLP 333 South Hope Street 8 Suite 3900 Los Angeles, CA 90071-3043 9 (213) 689-0200 10 DAVID E. JONES Attorney at Law 11 Heller Ehrman, LLP One East Main Street 12 Suite 201 Madison, WI 53703-5118 13 (608) 663-7460 14 BRENT B. GREEN Attorney at Law 15 Duncan, Green, Brown & Langeness, PC 16 Suite 380 400 Locust Street 17 Des Moines, IA 50309 (515) 288-6440 18 RICHARD J. WALLIS 19 Attorney at Law Microsoft Corporation 20 One Microsoft Way Redmond, WA 98052 21 (425) 882-8080 22 23 24 25 9284 1 (The following record was made out of 2 the presence of the jury.) 3 THE COURT: Where are we? 4 MR. CASHMAN: Good morning, Your 5 Honor. Michael Cashman for Plaintiffs. 6 We're continuing with appeals on 7 Richard Dixon. 8 As an initial matter -- may I 9 approach, Your Honor? 10 THE COURT: Sure. 11 MR. CASHMAN: I'm handing the Court 12 yet another case on this issue, which I have 13 located. 14 This case is called CIGNA Fire 15 Underwriters Company versus McDonald and 16 Johnson, Inc., 86 F. 3rd 1260. 17 This is a First Circuit case from 18 1996. 19 The pertinent language, Your Honor, is 20 on the Westlaw page 10 under the headnote 12. 21 This is a case in which the -- one of 22 the chief executives or high-ranking executives 23 of the McDonald and Johnson Company was 24 testifying about damage that had been done to 25 his company. 9285 1 And the Defendant in this case, or I 2 should say CIGNA objected to that evidence on 3 speculation and hearsay, and as the Court can 4 see, those objections were overruled. 5 The reason I'm bringing this case to 6 the attention of the Court today is because it 7 emphasizes the point that I've been making with 8 respect to the individual Dixon appeals; that 9 the individual's testimony went to credibility 10 and not its admissibility and that it was 11 subject to rigorous cross-examination and that 12 CIGNA could introduce its own witnesses to 13 contradict the testimony provided by the -- 14 this high-ranking business executive. 15 And that's exactly what has happened 16 in the case of Mr. Dixon and others when he's 17 providing testimony about his personal 18 knowledge. 19 Microsoft had full opportunity to 20 cross-examine, and they did cross-examine. 21 Now, next in the hope to expedite 22 this, may I approach, Your Honor? 23 THE COURT: Sure. 24 MR. CASHMAN: I've tried to make it 25 easier for the Court by on each of Plaintiffs' 9286 1 appeals putting the testimony at issue in one 2 place and summarizing our arguments -- 3 Plaintiffs' arguments about why each of the 4 appeals should be granted. In essence, why the 5 testimony is personal knowledge and is not 6 hearsay. 7 We were, I believe, on Appeal Number 8 15. 9 THE COURT: That's correct. That's 10 what I have in my notes. 11 MR. CASHMAN: Since I have -- since 12 I'm losing my voice a little bit and since 13 I'm -- 14 THE COURT: I hope you're not -- are 15 you getting ill? 16 MR. CASHMAN: I hope not. 17 THE COURT: I hope not either. 18 MR. CASHMAN: Since our argument is 19 summarized there about why this testimony is 20 not hearsay, I won't reargue it. 21 I just wish to note that in these 22 argument summaries that I've provided, I have 23 emphasized why the testimony is not hearsay or 24 why there's not a lack of personal knowledge or 25 lack of foundation. 9287 1 I do want the record to be clear that 2 in the event that any of this testimony by 3 Mr. Dixon could arguably be deemed as hearsay, 4 Plaintiffs believe that it would still be 5 admissible even under the Callahan exception, 6 the state of mind exception, or the residual 7 exception for the reasons that I've previously 8 stated under the State versus Rojas case in 9 Iowa. 10 Next, Your Honor, may I approach one 11 more time? 12 THE COURT: Sure. 13 MR. CASHMAN: Here, I've included the 14 testimony that's at issue in Microsoft's 15 appeals of Mr. Dixon's testimony. 16 And the first three on the first page 17 of what I've just handed to the Court are 18 rulings by the Special Master. 19 In these instances, the Special Master 20 overruled Microsoft's objections to the same 21 kind of testimony that we've been looking at in 22 previous days, and I think the Court can see 23 that there's no substantive difference in the 24 kind of testimony that the Special Master 25 allowed and which Microsoft is appealing, and 9288 1 consequently, it's our view that not only 2 should this testimony that's on Microsoft 3 appeals one, two, and three be permitted, but 4 for the same reason, all the 18 appeals by 5 Plaintiffs should be granted and the Special 6 Master and Microsoft's objections there be 7 overruled. 8 I further want to point the Court now 9 to the last four pages of what I've just handed 10 up on Microsoft's Dixon appeals of testimony, 11 and I've grouped the -- the reason there are 12 four pages, these really fall into four 13 categories of testimony. 14 And the Court will recall that the 15 other day I was inclined to withdraw our 16 objections to these various pieces of 17 testimony. 18 As I've explained on each of these 19 sheets, the testimony at issue by Mr. Dixon 20 which Microsoft wants to designate is virtually 21 the same kind of testimony that they're 22 objecting to; that is, knowledge that Mr. Dixon 23 gained from various other sources. 24 It highlights, Your Honor, that there 25 -- that this is a matter of Mr. Dixon's 9289 1 personal knowledge and that Microsoft is 2 talking out of both sides of its mouth when it 3 objects to some of our testimony, but wishes to 4 designate other testimony that is functionally 5 equivalent. 6 And as we've explained over the prior 7 days, we think Microsoft's position is just 8 wrong, and if the Court agrees with us and 9 overrules Microsoft's objections on Plaintiffs' 10 18 appeals, then Plaintiffs have no problem 11 with their objections to Microsoft's 12 designations being overruled. 13 That would be the consistent approach 14 to this kind of testimony. 15 So just to put a little bit finer 16 point on it, Microsoft appeals four, five, and 17 six. 18 You can see this is testimony about 19 one of the exhibits that is at issue here, 20 Plaintiffs' Exhibit 33, and I have a copy of 21 that and the other exhibit at issue, Your 22 Honor, if I may approach. 23 THE COURT: Yes. Thank you very much. 24 45A. 25 MR. CASHMAN: I've given the Court 9290 1 45A, Defendant exhibit, and Plaintiffs' Exhibit 2 33. 3 Plaintiffs' Exhibit 33 relates to the 4 testimony that's at issue in Microsoft appeals 5 four, five, and six. 6 And as you can see, this isn't a 7 letter written by Mr. Dixon nor is it a letter 8 directly to Mr. Dixon, and yet Microsoft 9 questioned Mr. Dixon about this, about the 10 contents of this exhibit. And again, that's 11 knowledge he's gaining from another source. 12 And under Microsoft's interpretation, that 13 would seem to be hearsay. 14 Plaintiffs think that's wrong. But if 15 that's what the position is, then the approach 16 should be consistent. 17 I think that the inconsistency in 18 Microsoft's position is even more dramatically 19 demonstrated in their appeal of Number 8, if 20 the Court will turn the page. 21 This is testimony that Microsoft wants 22 about a contract that Microsoft had with 23 Samsung and Mr. Dixon's testimony about it. 24 So they want to designate testimony 25 that says question -- by Microsoft -- do you 9291 1 recall at the end of 1990 that Samsung's 2 contract with Microsoft is expiring? 3 Answer: Yes. 4 They go on, did you make sales effort 5 to try and get Samsung to sign up with DRI? 6 The answer is, we had ongoing 7 discussions with them, no question. 8 And then the question is about issues 9 that Samsung raised during those discussions. 10 Now, to me, that's all personal 11 knowledge. There's no out-of-court statement 12 there. That's not hearsay. But under 13 Microsoft's interpretation of lack of personal 14 knowledge and lack of foundation and hearsay, 15 this testimony is the same kind of thing that 16 they're objecting to. 17 So it just doesn't make sense. 18 If we turn to Appeal Number 9, Your 19 Honor, Microsoft's Appeal Number 9. 20 THE COURT: Okay. 21 MR. CASHMAN: This is testimony that 22 Microsoft wants to designate about Defendant's 23 Exhibit 45A. 24 And I think again this is pretty 25 dramatic. I mean, this 45A attaches a contract 9292 1 in Korean, and they ask Mr. Dixon about it, and 2 they asked where he obtained his knowledge 3 about alleged serious technical problems that 4 he's communicating about with Simon Lucy, and 5 under their interpretation of the lack of 6 personal knowledge and lack of foundation and 7 hearsay, issues that they've articulated them, 8 this testimony certainly would be inadmissible. 9 Again, Plaintiffs think that's the 10 wrong-headed approach and that this testimony 11 is really cross-examination about personal 12 knowledge that Mr. Dixon has as a high-ranking 13 business executive at DRI. 14 Lastly, Your Honor, turning to their 15 appeals on 11 and 12, this is testimony where 16 they ask Mr. Dixon, did Microsoft drop its 17 prices significantly in the period after March, 18 1991? 19 Well, how would Mr. Dixon have gained 20 that knowledge? 21 You know, under the theory that 22 Microsoft articulates, all this testimony would 23 be inadmissible. And we think that's just 24 plain wrong. But if that is the position that 25 is adopted, then this testimony has to be 9293 1 stricken for the very same reasons that 2 Microsoft has argued. 3 Now, backing up more in the global 4 context, Your Honor, Plaintiffs again think 5 Microsoft's arguments on these issues as it 6 relates to Mr. Dixon are just way off base and 7 that they would constitute a clear error of law 8 if this evidence that the Plaintiffs wish to 9 have read from the testimony of Mr. Dixon is 10 not permitted, and we don't want the record to 11 be inundated with that kind of -- with that 12 kind of error. 13 Under Microsoft's interpretation, just 14 to point out why it's so absurd, if they put 15 Mr. Gates on the stand, he wouldn't be able to 16 testify about anything that he knows as a 17 result of interactions with the people in his 18 own company. 19 He could never say Microsoft did this 20 or we knew that or we did this because that 21 information would be based on things that he 22 gathered either from interacting with people in 23 his company or with customers. 24 That's where a huge portion of 25 Mr. Gates' knowledge would obviously come from, 9294 1 and that's so clearly incorrect that it 2 highlights why all the testimony by Mr. Dixon 3 that we've been discussing should be admitted. 4 And just one last note because I know 5 Mr. Tuggy loves his 1913 Howell case and the 6 Frunzar case, those just are wholly 7 inapplicable because they're -- the courts 8 thought they saw a -- an out-of-court statement 9 by a declarant. There was a statement by an 10 identifiable out-of-court declarant. That's 11 not the case here. 12 If you'll look back at Mr. Tuggy's 13 1913 case, all they were talking about is an 14 identifiable single statement by one Mr. 15 Mandelbaum. One clearly identifiable statement 16 that the testimony was about and where the case 17 turned on whether that statement by Mr. 18 Mandelbaum was true or not. 19 That's not the case with any of this 20 testimony in Dixon. 21 In the Frunzar case, it was -- I mean, 22 if we went and looked at the cases surrounding 23 that Frunzar case, an uninsured motorist 24 coverage case, that's a unique area of the law 25 as it relates to whether -- or in how uninsured 9295 1 motorist coverage is established. 2 But, again, there was a statement, a 3 single identifiable out-of-court statement by a 4 gentleman by the name of Mr. Kilgore, and that 5 the truth of that statement, out-of-court 6 statement by Kilgore was the crux of that 7 entire case, how it would be resolved. 8 Here in all this testimony at issue by 9 Mr. Dixon, there is no statement, there's no 10 statement by an identifiable person, and none 11 of his testimony turns on the truth of an 12 out-of-court statement by that person. 13 There just is no statement, no 14 out-of-court oral assertion. 15 So this is not a case of hearsay. 16 This is a case of personal knowledge by 17 Mr. Dixon gathered through well-recognized, 18 appropriate means, and it's reliable, it's 19 trustworthy. Microsoft had full and fair 20 opportunity to cross-examine. 21 When their case comes, I assure the 22 Court that Microsoft has -- is presenting a lot 23 of evidence, or will be attempting to present a 24 lot of evidence to rebut the kind of testimony 25 that's properly provided by Mr. Dixon. 9296 1 So Plaintiffs submit that all of their 2 appeals should be granted; that is, Microsoft's 3 objections overruled, in which case that also 4 takes care of Microsoft's objections for the 5 reasons I've explained. 6 Thank you. 7 THE COURT: You say the Court should 8 grant their appeal or deny their appeal? 9 MR. CASHMAN: It should grant 10 Plaintiffs' appeal; that is, overrule 11 Microsoft's objections. 12 THE COURT: Mr. Tuggy? 13 MR. TUGGY: Yes, Your Honor. 14 In the five remaining minutes, I'd 15 like to address the next in order, which is 16 336, line 11, through 337, line 1. 17 If I may, I'd like to combine it with 18 the next one, which is 337, 2 to 21, because 19 those two segments of testimony deal with the 20 same issue. 21 As to both segments of testimony, the 22 Special Master Justice McCormick sustained 23 Microsoft's hearsay objection and that ruling 24 should be itself sustained and the appeal 25 denied. 9297 1 The testimony beginning at 336, line 2 11, starts with the question where the examiner 3 asks Mr. Dixon, did you run into any occasions, 4 sir, where Microsoft allegedly, according to 5 your customers, were telling them that they 6 would -- Microsoft would make sure that there 7 would be incompatibility between DR-DOS and 8 Microsoft applications? 9 So the question is, Mr. Dixon, did 10 your customers tell you that Microsoft told 11 them that Microsoft would make sure that there 12 would be incompatibility between DR-DOS and 13 Microsoft applications. It's just rank 14 hearsay. 15 The answer by the witness is, yes, 16 there were several circumstances of that where 17 customers told me what Microsoft told them. 18 This is being offered for the truth of 19 what Microsoft told the customers. 20 The customers' statements to Mr. Dixon 21 which are being reported here in his testimony 22 are hearsay and inadmissible. 23 In addition, in the earlier part of 24 Mr. Dixon's examination where Microsoft is 25 cross-examining Mr. Dixon, Mr. Dixon testified 9298 1 at page 58 of his deposition, lines 2 to 13 -- 2 this is 58, lines 2 to 13. 3 There the question was asked, have you 4 ever heard anyone from Microsoft tell a 5 customer or tell anybody that Windows would not 6 run on DR-DOS? 7 Answer: I've never heard anybody from 8 Microsoft say that, no. 9 Question: Have you seen that in any 10 Microsoft documents? 11 Answer: Not that I recall. I mean, 12 there may have -- I mean, there have been 13 documents, but I don't remember. 14 So he has no personal knowledge of a 15 statement by Microsoft to this effect. He has 16 seen no Microsoft documents saying that this 17 occurred. He's never witnessed it himself. 18 He's just reporting what customers told him. 19 Under Howell versus Mandelbaum, 20 Frunzar and Ruby versus Easton, his testimony 21 is clearly inadmissible hearsay. 22 The next section of this testimony is 23 where Mr. Dixon recounts what he says occurred 24 with an OEM or a company called Twin Head. 25 And he reports about Twin Head's 9299 1 alleged conversations with Microsoft, and he 2 becomes specific at page 337, beginning at line 3 6. 4 And in that segment of testimony 5 Mr. Dixon testifies there was a Microsoft 6 salesperson who led that account. His name was 7 Richard Novatny. And Mr. Novatny subsequently 8 left Microsoft and interviewed for a job with 9 our company Digital Research. 10 Okay. So this is a person who is not 11 employed by Microsoft at the time of the 12 statements we're about to encounter. 13 Line 9. With one of our executives, 14 in fact, our president Richard Williams -- 15 THE COURT: You think that 6 through 16 10 is hearsay? 17 MR. TUGGY: The fact that there was a 18 Microsoft salesperson who met with Mr. Dixon -- 19 Mr. Williams, no, that fact is not hearsay, but 20 he's just giving background for the hearsay. 21 THE COURT: Okay. 22 MR. TUGGY: With one of the 23 executives, in fact, our president Richard 24 Williams. 25 And in the discussions with Mr. 9300 1 Williams, Novatny relayed the story of how he 2 won the Twin Head account. And the way that he 3 did that was that he brought in the Windows 4 product manager and explained to Charles Chin 5 and the Twin Head executive staff that they 6 would guarantee that Windows would not work 7 with DR-DOS. 8 And he goes on to say more of what 9 Mr. Novatny said, not while employed by 10 Microsoft, but by -- during the course of an 11 interview with Mr. Williams, who apparently 12 relayed that information to Mr. Dixon. 13 So here we have hearsay within hearsay 14 within hearsay. 15 There's -- this statement that 16 Mr. Novatny made is not subject to any hearsay 17 exception. It's not an admission of Microsoft. 18 He's a former employee, in fact, seeking to 19 curry favor while interviewing for a job with 20 Digital Research. 21 And Mr. Dixon's testimony about 22 Microsoft supposedly making this incendiary 23 statement that it would make sure there would 24 be incompatibility between DR-DOS and Microsoft 25 applications is based on a statement by a 9301 1 former Microsoft employee during an interview 2 with Richard Williams which was later 3 communicated to Richard Dixon. 4 It's rank hearsay, and the Special 5 Master's rulings on both of these segments of 6 this particular testimony ought to be 7 sustained. 8 Mr. Cashman during his argument wants 9 to throw in Callahan with every one of these at 10 this point, and there's no state of mind 11 evidence here. This is just reporting on the 12 supposed statement by Microsoft. 13 He also wants to throw in the residual 14 exception. And, of course, it would be a 15 shocking result that a statement made during an 16 interview for a job has the requisite indicia 17 of trustworthiness to satisfy the residual 18 exception. 19 If that were the scope of the residual 20 exception, I submit that that exception would 21 completely swallow the rule against hearsay. 22 This is just classic rank hearsay, and 23 the Special Master's rulings on 336, 11; 337, 24 1; and 337, 2 to 21 should be sustained, the 25 hearsay rulings. 9302 1 I'm not sure what Mr. Cashman was 2 doing, whether he's completed his argument on 3 all of these or whether he had that long 4 opening statement and he wants to respond 5 individually. But I've completed my argument 6 on these two segments. 7 I will at the close of my argument on 8 Dixon recap the legal position that Microsoft 9 has, and I've just received this morning this 10 case that Mr. Cashman handed up, and it's just 11 on its face inapposite, and I can -- I'll point 12 that out here with the last minute I have. 13 THE COURT: Well, what's the 14 designations on page 5 of your rulings chart, 15 Mr. Cashman? 16 Are these further -- refers to page 17 341 of the transcript, 355 through 358. Is 18 this something that -- 19 MR. CASHMAN: The three designations 20 on page 5 are -- Microsoft made the same kind 21 of objections that we've been looking at -- 22 THE COURT: Are these Microsoft's 23 objections? 24 MR. CASHMAN: -- but Microsoft's 25 objections were overruled by the Special Master 9303 1 so Microsoft is appealing. 2 THE COURT: These are Microsoft's 3 appeals? 4 MR. TUGGY: Correct. 5 THE COURT: All right. 6 MR. TUGGY: So we just finished 16 and 7 17, rows 16 and 17 of the Plaintiffs' appeals, 8 and all we have left of the Plaintiffs' appeals 9 is 340, line 17, to 341, line 2. Do you see 10 that on page 4 of their -- 11 THE COURT: That's their appeal? 12 MR. TUGGY: Right. That's the last 13 one of their appeal. 14 And then on page 5 is Microsoft's 15 appeals, and as we will see when we go through 16 this, they're very different than what we've 17 been -- than the appeals that Plaintiffs have 18 made. 19 On the second appeal on page 5, 20 Microsoft has withdrawn that appeal. This is 21 the one for 355, line 25, and 356, line 3. 22 That's Appeal Number 2 on page 5. 23 THE COURT: How do you know that? 24 MR. TUGGY: How do I know what? 25 THE COURT: They withdrew that? 9304 1 MR. TUGGY: No, Microsoft withdrew the 2 appeal. 3 THE COURT: Oh, you withdrew the 4 appeal. 5 MR. TUGGY: Right. 6 THE COURT: I'm sorry. 7 MR. CASHMAN: Gets a little confusing. 8 MR. TUGGY: I have personal knowledge 9 of this one. 10 THE COURT: You withdraw this one? 11 MR. TUGGY: Yes. So there's two 12 appeals, Microsoft appeals, left. We have only 13 three total. 14 THE COURT: Okay. 15 MR. TUGGY: And then on page 6, this 16 is testimony Microsoft seeks to admit, and the 17 Plaintiffs have asserted the objection as 18 explained by Mr. Cashman, and I'm prepared this 19 afternoon to argue that, and then, you know, 20 these set of issues on Dixon will be completed. 21 THE COURT: And you're going to argue 22 one and three on page 5 also? 23 MR. TUGGY: Correct. 24 THE COURT: We'll do that at 3 25 o'clock. 9305 1 MR. CASHMAN: Thank you, Your Honor. 2 MR. TUGGY: Your Honor, I've been 3 discussing another witness with Mr. Gralewski, 4 and we have one issue left, and I had planned 5 with Mr. Gralewski to deal with that right at 6 the beginning this afternoon to clear that 7 witness out. 8 Mr. Holley will be arguing for 9 Microsoft, and rather than having Mr. Holley 10 sit all the way through the rest of Dixon, my 11 request is we finish up that witness, Mr. 12 Harris, and then we move back to Dixon and 13 finish him, the argument like 3:20. 14 MR. CASHMAN: That's fine, Your Honor. 15 THE COURT: Is that something I have 16 already had, Harris? 17 MR. TUGGY: No. Mr. Gralewski will 18 handle it. 19 MR. CASHMAN: We'll present the 20 information necessary for you to make the 21 ruling. 22 THE COURT: But it's short, I gather? 23 MR. CASHMAN: Right. 24 THE COURT: Just one. Great. Thank 25 you. 9306 1 MR. GREEN: Your Honor, just to 2 complete the oral argument we had yesterday on 3 the opt-out motion. 4 THE COURT: Oh, you've got those 5 things? 6 MR. GREEN: I want to just for the 7 record hand up the exclusion request forms we 8 have on the rest of the late -- quote, late 9 opt-outs, quote. 10 THE COURT: Thanks, Mr. Green. I 11 appreciate it. 12 MR. GREEN: I've served Plaintiffs by 13 E-mail with those, but I have a copy also. 14 THE COURT: Thank you very much. 15 MR. GREEN: Thank you, Your Honor. 16 MR. CASHMAN: May I have a minute to 17 change -- 18 (A recess was taken from 8:28 19 to 8:38 p.m.) 20 (The following record was made in the 21 presence of the jury.) 22 THE COURT: Everyone else may be 23 seated. 24 Mr. Cashman. 25 MR. CASHMAN: Thank you, Your Honor. 9307 1 I'd like to introduce the jury to my 2 colleague, Lindsey Davis. She's at the Zelle, 3 Hofmann firm also. 4 We'd like to resume -- Plaintiffs 5 would like to resume the testimony of Richard 6 Freedman. 7 (Whereupon, the following video was 8 played to the jury.) 9 Question: I hand you what I have 10 marked as Exhibit 952. And there is an E-mail 11 thread that begins at the bottom with a reply 12 from Brad Chase to Terri AN. 13 Do you happen to know who that is? 14 You are cc'd on it. 15 Answer: Yeah, a Terrianna, possibly. 16 I don't remember. 17 Question: On the next page, you will 18 see at the bottom of that page, there is a 19 message from Terri, and below that, there is a 20 Nancy SP. 21 Do you happen to know who Nancy SP 22 might be? 23 Answer: I don't remember. 24 Question: I'll ask you to take a look 25 at this E-mail to refresh yourself. 9308 1 It does indicate on the first page 2 that you were cc'd on the entire thread, right? 3 Answer: That's what it says. 4 Question: Okay. So if you'll start 5 with the last E-mail and read it and then work 6 backwards, and then I'll ask you some questions 7 about it. 8 Answer: Okay. 9 Question: Starting with the last 10 E-mail, and it looks to me like it was sent 11 June 14, 1991; is that correct? 12 Answer: Yes. 13 Question: So we're talking, this is 14 going to be approximately within a week of the 15 release of MS-DOS 5.0? 16 Answer: That's correct. 17 Question: And this first one from 18 Nancy SP, you say you don't know who she is? 19 Answer: No. 20 Question: Does it appear that she is 21 in product support? 22 Answer: Yes, it does. 23 Question: And as I understand product 24 support, correct me if I'm wrong, these were 25 people who manned telephone lines so that 9309 1 people can call in when they're having problems 2 with a software product that's been released by 3 Microsoft and Microsoft can try to help correct 4 the problem, correct? 5 Answer: That's correct. 6 Question: She says on the second 7 page, there is a comment, Why? It says, we're 8 currently hearing from numerous callers, 9 approximately 150 per day, who are experiencing 10 severe incompatibility with MS-DOS 5.0 to the 11 point that PSS is -- that's product support 12 services? 13 Answer: That is correct. 14 Question: -- is unable to get the 15 operating system to work successfully on their 16 machines. 17 Problems range from occasional hangs 18 to total lockups of their machines that require 19 the removal of hard drives in order to boot 20 from a floppy. 21 Does that refresh your recollection 22 that immediately following the release of 23 MS-DOS 5.0 there were numerous reports of 24 several incompatibilities -- severe 25 incompatibilities with that product? 9310 1 Answer: This mail is totally out of 2 context, which you obviously know. 3 First of all, this paragraph was 4 written by someone in product support. It was 5 not written by someone from product management. 6 So it is not my words and it's not Brad Chase's 7 words. 8 Question: Of course, it's not. 9 I'm asking if that refreshes your 10 recollection. 11 Answer: Now, it is certainly within 12 the realm of comprehension and possibility, 13 given the sales volume of MS-DOS 5, that there 14 were people having problems with the product. 15 And it is certainly conceivable that the scope 16 of the problems encompassed some of the things 17 that she said. That is certainly possible. 18 I don't know where the 150 a day comes 19 from, the calls weren't coded that closely, 20 from my memory, that they would actually be 21 able to track all of those things. 22 But the bottom line was, this product 23 was considered to be one of the all-time great 24 stable operating system releases ever, and 25 there is just no dispute about that. That is 9311 1 the case with this product. And the problems 2 that PSS had were a function of volume, sales 3 volume, that was the cause of the problem. 4 Question: Sales volume. 5 So if there was less volume, there 6 would have been less people reporting problems 7 because not too many people would have had the 8 product, right? 9 Answer: That is correct. 10 Question: But the fact that a lot of 11 people bought the product meant that a lot of 12 people had problems, correct? 13 Answer: I don't know what a lot means 14 and I don't know how many people did have 15 problems. No one actually knows the exact 16 number. And, obviously, with any software 17 product, some percentage of people are going to 18 have problems. 19 Question: Is that always a fact, no 20 matter what the software product, people are 21 always going to have problems with it, some 22 users will always have problems with the newly 23 shipped and released software product, correct? 24 Answer: Perhaps there are rare 25 exceptions, but I would say as a general fact, 9312 1 yes. 2 Question: And MS-DOS is no exception 3 to that, correct? 4 Answer: That is correct. 5 Question: And DR-DOS is no exception 6 to that? 7 Answer: That is also correct. 8 Question: So here we have someone 9 reporting 150 calls per day of severe 10 incompatibilities, and it's your testimony that 11 that is probably a mistake? 12 Answer: I don't believe that number. 13 I just don't. 14 Question: So this is again -- 15 Answer: I don't believe that number. 16 I just don't. 17 Question: This is, if you go back to 18 the first page, it says Nancy SP to Terry AN. 19 Answer: Right. 20 Question: Actually, let's look at 21 this this way, because it seems to me that 22 actually this E-mail, although you are not on 23 that thread, is actually being referred 24 directly to you because it says: Rich, Brad: 25 We like your response and feel comfortable 9313 1 using it when responding to very general 2 questions about MS-DOS 5. I'm looking at the 3 bottom of page 2. 4 Am I right in thinking that the little 5 thread above that from Terry AN where it is 6 CCing you and Brad Chase, she is inserting this 7 comment for your review when you look at the 8 rest of the message forwarded from Nancy SP? 9 Answer: I assume, yes. 10 Question: So this is being forwarded 11 to you for your direct comment and action, and 12 you have a report that there are 150 people per 13 day calling in with severe incompatibility, and 14 you don't know whether that number is correct, 15 whether it's too high, too low, and your 16 testimony is you didn't do anything to verify 17 that number one way or the other? 18 Answer: I don't remember what I did 19 to verify the number. 20 The other important point is, it's all 21 -- it's all a matter -- there is obviously no 22 black and white here. It's all a matter of 23 shades of gray. What is it as a percentage? 24 What's an acceptable percentage? I don't know. 25 Do you know what is an acceptable percentage? 9314 1 I don't think anyone knows what an 2 acceptable percentage is, but I would maintain 3 that whatever the right number was, it was 4 extremely low, extremely low as a percentage of 5 sales of this product. Extremely low. This is 6 150 -- the product sold hundreds of thousands 7 of units -- 8 Question: Actually sold millions of 9 units. 10 Answer: -- I'm talking about -- over 11 the life of the span of the product it sold 12 millions of units, but I'm talking about over 13 this time period. 14 I don't know what the exact number 15 was, but it was probably into six figures. So 16 that's a huge number, a huge number. No one 17 had ever sold that much software before in such 18 a short period of time. 19 So as a percentage, let's -- let's 20 suppose that this number is right. I don't 21 know if it is or not. Perhaps it's quite low 22 as a percentage. Perhaps it's vanishingly low. 23 Question: Perhaps, but perhaps it's 24 approximately 150 a day -- 25 Answer: Who knows? 9315 1 Question: -- of severe 2 incompatibilities? 3 Are you disagreeing that there were 4 severe incompatibilities with MS-DOS 5.0 for 5 some users? 6 Answer: I don't know if there were 7 severe incompatibilities or not. Certainly 8 some users had serious problems. What they 9 were due to, I don't remember. 10 Question: On the last page, going 11 back to this mail from the NCSP, there is a 12 sample response, and this is a sample response 13 and reply to it, what is phrased as a typical 14 question having to do with the Zenith PC and 15 whether they should do the MS-DOS 5.0 upgrade 16 or wait until Zenith does its own, you know, 17 slight modification of the 5.0 to release, 18 correct? 19 Answer: Correct. 20 Question: I can just read it into the 21 record if you want. 22 Typical question: I have a Zenith PC 23 with Zenith DOS 3.3 plus. Should I buy the 24 MS-DOS 5.0 upgrade or wait until Zenith comes 25 out with their version? What, if any, features 9316 1 will I gain or lose? Will the MS-DOS 5.0 2 upgrade even be compatible with my machine? 3 And the sample response, first 4 paragraph states: The MS-DOS 5.0 upgrade is 5 designed to be as generic as possible, meaning 6 that it is designed to work on as many 7 different machines as possible. The further a 8 machine strays from the standard PC 9 architecture, the more difficult it is for a 10 generic operating system to install properly. 11 Is that last sentence I read a correct 12 statement? 13 Answer: What? 14 Question: It says, is it true that 15 the further a machine strays from the standard 16 PC architecture, the more difficult it is for a 17 generic operating system to install properly; 18 is that correct? 19 Answer: That sounds correct. 20 Question: And that's going to be true 21 whether you're talking about MS-DOS or DR-DOS, 22 correct? 23 Answer: Or any other operating system 24 that runs on a PC. 25 Question: Of course, there are all 9317 1 sorts of different hardware configurations out 2 there in the market, correct? 3 Answer: That's correct. 4 Question: And the fact that an 5 operating system has been tested and beta 6 tested and released does not mean and there is 7 no representation by that corporation to mean 8 that it is going to work in every instance with 9 every hardware configuration, correct? 10 Answer: In terms of what is 11 represented by the corporation or not, I don't 12 know the details of that. 13 But I would certainly be surprised if 14 a product released -- an operating system that 15 was released worked 100 percent of the time in 16 every single time on every single machine. 17 That would be very surprising. 18 Question: Okay. Given that fact, do 19 you think it was fair for Microsoft to monitor 20 the DR-DOS CompuServe forum and report every 21 instance of incompatibility regardless of the 22 system configuration, release that to the media 23 and the OEMs? Do you think that's fair? 24 Answer: Monitoring the CompuServe 25 forum of products that compete against you is a 9318 1 standard competitive tactic. 2 Question: Of course it is. 3 But do you think it's fair to monitor 4 that forum and no matter what report of a 5 problem that DR-DOS was having with a 6 particular system configuration, you would pull 7 that together into what you term an ad smear -- 8 termed a smear sheet and release it to both 9 media and OEMs? Do you think that's a fair 10 tactic? 11 Answer: Your question is a gross 12 exaggeration. 13 Question: Did you not use the words 14 smear sheet? 15 Answer: Gross exaggeration. 16 I don't remember what terms I used. 17 We certainly monitored DRI's forum, and that 18 certainly sounds like that something we did. 19 And certainly the data that's on the forum is 20 relevant when you go to do your own testing. 21 This is all shades of gray. It's all 22 a matter of percentages, of frequency, of 23 severity. That's the whole point of a beta 24 test, and that's the -- and that's the whole 25 point of product support. It's all shades of 9319 1 gray. 2 And I would maintain from now until 3 next decade that MS-DOS 5 was a substantially, 4 dramatically more stable product than DR-DOS 5 5 or DR-DOS for that matter. 6 I mean, there is just no question 7 about it. I mean, it's -- I mean, it's so 8 patently obvious to me, having worked there. I 9 mean, it's clear, clear, clear, clear, clear, 10 clear. 11 Now, we're going to get into arguments 12 about if New York City probably has more cases 13 of hepatitis than Des Moines does because it 14 has more people. Does that mean it's a less 15 safe place to live? 16 Well, who really knows. It's all -- a 17 matter of percentages. Of course it's going to 18 have more. More people live there. 19 And that's what is generating these 20 numbers like 150 a day, whether that number is 21 accurate or not. 22 Question: Okay. I'm not referring to 23 the 150 calls per day. 24 Answer: I know exactly what you're 25 referring to. Okay. 9320 1 Question: Well, then let me get you 2 to answer the question about what I was 3 referring to, which was do you think it's fair 4 of Microsoft to monitor the DR-DOS forum and 5 put together -- pull together every instance of 6 incompatibility regardless of the system 7 configuration that's under review, pulling that 8 together into sheets to release to media and to 9 OEMs? 10 Answer: First of all, your question 11 is inaccurate. 12 Is it fair for us to monitor the 13 CompuServe forum and use the information in the 14 CompuServe forum as a basis for competitive 15 information that's handed out to our customers? 16 Yes, that's fair. 17 The phrasing of your question is 18 inaccurate. 19 Question: Which part of it? 20 Answer: I don't remember taking every 21 single negative thread. That would have been a 22 hell of a document. It would have been about 23 this thick, every single thread that ever 24 appeared to CompuServe and put it in a document 25 without verifying it, of course, and handed it 9321 1 out. 2 Question: And it was handed out. 3 What you pulled together was actually handed 4 out to media sources. 5 A DR-DOS bug sheet, that's what it was 6 called, wasn't it? 7 Answer: It's possible. 8 Question: It's possible, I mean, you 9 know, that it was true and it was handed out to 10 media types, correct? 11 Answer: It's certainly possible that 12 we put together a bug sheet of DR-DOSes. 13 Question: Are you embarrassed about 14 the fact -- 15 Answer: No, I'm not embarrassed at 16 all. 17 Question: Why don't you admit that 18 you did that? 19 Answer: No, but you're asserting that 20 I took every single thread that was posted for 21 what? A year? 22 Question: You tell me. How long did 23 you monitor -- 24 Answer: I don't remember. I don't 25 remember. It was eight years ago. 9322 1 Question: So you don't remember -- 2 Answer: If you have got the 3 documents, why don't you just show them to me. 4 Question: I'm trying to get you to 5 testify truthfully. 6 Answer: I am testifying truthfully. 7 It's fair for us to use 8 incompatibilities that are in a competitor's 9 product and hand it out to their customers. 10 Question: We're back on the record. 11 And turning our attention to Exhibit 953, which 12 I have just handed to you. 13 We were talking about DR-DOS bug 14 sheets that you prepared. And if you look at 15 the center of a very brief E-mail from Brad 16 Silverberg to you dated January 17, 1992, 17 subject, DR-DOS bug sheet. Mr. Silverberg 18 states, can't I get another copy, annotated? I 19 gave mine to byte. 20 What is byte? 21 Answer: I assume byte is Byte 22 magazine. 23 Question: Which is, please describe 24 for the jury what Byte magazine is, because 25 they may not be familiar with it. 9323 1 Answer: Byte is a computer magazine 2 for people who use personal computers. 3 Question: Who prepared the DR-DOS bug 4 sheet that Mr. Silverberg is referring to? 5 Answer: I don't remember. It was 6 probably me, but I don't remember. 7 Question: Did you give him another 8 copy, annotated, of the DR-DOS bug sheet? 9 Answer: I have no idea. 10 Question: Did it surprise you that he 11 had taken that and given it to Byte? 12 Answer: I don't really have a 13 reaction one way or another. It's possible. 14 Question: And you don't see a problem 15 with him doing that, do you? 16 Answer: No. 17 Question: And as far as you are 18 concerned, it would have been okay for Brad 19 Silverberg to also have given the exact same 20 DR-DOS bug sheet to PC Magazine, PC Week, 21 Computer World, Infoworld, and any other 22 computer magazine that he saw fit, correct? 23 Answer: I don't know what magazines 24 he gave it to. 25 Question: Do you think he gave it to 9324 1 more than Byte? 2 Answer: I have no idea -- your 3 question is -- I'll rephrase your question. 4 Do I have an objection with his 5 handing it out to computer magazines? And the 6 answer is no. 7 Question: And you don't know which 8 organization beyond Byte he gave it to? 9 Answer: No, I don't know. 10 Question: Are you familiar with the 11 term FUD? 12 Answer: Yes. 13 Question: Can you please describe 14 your familiarity with that term to the jury? 15 Answer: FUD is an acronym for fear, 16 uncertainty, and doubt. 17 Question: Let's focus on the MS-DOS 18 product line. 19 How did Microsoft use and implement 20 the tactic of FUD? 21 Answer: I don't remember. I mean, 22 you know, handing out bug sheets is obviously 23 one way for us to communicate that there are 24 problems with this product and that there are 25 legitimate concerns with it. 9325 1 Question: So one of the ways to do 2 that is to monitor the DR-DOS forum and pull 3 together these bug sheets and hand them out, 4 right, and that is how Microsoft goes about it, 5 at least one way of generating FUD? Correct? 6 Answer: Microsoft collects bugs about 7 a product and would disseminate them so that 8 people have a true impression of what the 9 product is about, that they may not know. 10 Question: And it's regardless of 11 whether it's a PC architecture that is straying 12 from the generic architecture that an operating 13 system may have been designed for, any bug is 14 okay for Microsoft to distribute, correct? 15 Answer: No, no. That's not true. 16 Question: Okay. Which bugs were okay 17 for Microsoft to collect and distribute? 18 Answer: Presumably, ones that are 19 repeatable, that would be a good start. 20 Question: What others? 21 Answer: Ones that are important, 22 perhaps. 23 Question: How could it be important 24 if it's not repeatable? 25 It seems to me like you're saying that 9326 1 there are some bugs that are repeatable and 2 there are others that are important. 3 Answer: Some bugs are minor and 4 they're repeatable. 5 Question: Okay. 6 Answer: For example, a string comes 7 up with one character that is wrong, the text 8 is misspelled in a help message. I don't 9 consider that to be -- it's a bug, but it's not 10 a bug of particular note. 11 Question: Is it your testimony that 12 as far as you are aware, Microsoft only ever 13 distributed repeatable major bugs about DR-DOS 14 products? 15 Answer: I have no idea. I don't 16 remember. 17 Question: How about you personally? 18 Answer: I don't remember. 19 Question: What bugs did you -- when 20 you pulled together this bug sheet, did you 21 include only major repeatable bugs? 22 Answer: I don't remember what I 23 distributed, to tell you the truth. 24 Question: So it very well could have 25 contained minor bugs, right? 9327 1 Answer: Could have? Maybe, maybe 2 not. I don't remember. 3 Question: The fear, uncertainty and 4 doubt is what Microsoft was trying to overcome 5 when going from 4.0 to 5.0, right? 6 Answer: Microsoft was really trying 7 to overcome inertia. 8 Question: Didn't we just look at a 9 document that actually said fear and pain of 10 upgrading? 11 Answer: Which is basically inertia. 12 People don't want to move. Either 13 they don't see a compelling benefit or they are 14 afraid to move. It's one of those two things. 15 Question: Perhaps it's a tautology. 16 If you create fear, uncertainty and doubt in 17 someone, they are less likely to make the 18 change, right? 19 Answer: That would seem to be a 20 perfectly reasonable statement, yes. 21 Question: And, therefore, you have 22 introduced inertia into the decision process, 23 correct? 24 Answer: Yes, you have. 25 Question: And that is what Microsoft 9328 1 is trying to do to the DR-DOS product line when 2 it's creating FUD, is to create inertia, fear 3 about going to the DR-DOS product? 4 Answer: Correct. 5 We wanted the true story told. That 6 was what we wanted. 7 Question: When Microsoft was 8 distributing these bug sheets and everything 9 else it did to create FUD, what you were trying 10 to do was to emphasize the inertia that's 11 already there about people's fear of upgrading, 12 correct? 13 Answer: The point of distributing -- 14 Question: Can you answer the question 15 yes or no, and I'll give you a chance to 16 explain? 17 Answer: Could you repeat the 18 question, please? 19 (Requested portion of the record 20 was read.) 21 Answer: Could I have that one more 22 time, please? 23 (Requested portion of the record 24 was read.) 25 Answer: Could I have that one more 9329 1 time, please? 2 (Requested portion of the record 3 was read.) 4 Answer: Well, the question has lots 5 of compound parts to it, so it's pretty 6 difficult for me to answer it the way you've 7 asked it. 8 Question: And as I stated at the 9 beginning, any time you have a problem with the 10 question, ask me to rephrase it and I will. 11 Answer: Please rephrase. 12 Question: Okay. Let's do this more 13 directly. 14 Can you go back to Exhibit 951, 15 please? 16 And this is your memo about the final 17 DOS RUP prerelease corporate accounts plan, 18 correct? 19 Answer: That is correct. 20 Question: And under the second 21 heading, Competition, the last sentence of that 22 first paragraph, to overcome the fear and 23 inertia in corporations, we must communicate 24 the message that the benefits in DOS 5.0 make 25 an overwhelming case for upgrading. 9330 1 My question to you, sir, is when 2 Microsoft engaged in its FUD tactics and 3 campaign against DR-DOS, what you were trying 4 to do was play to the fear and inertia in 5 corporations that already existed about making 6 an upgrade, correct? 7 Answer: The question presumes that 8 there was this massive campaign, right. 9 Question: You're denying that there 10 was a deliberate FUD campaign against DR-DOS? 11 Are you going to deny that? 12 Answer: This word FUD, obviously this 13 is the word on which this whole thing hinges, 14 obviously, and I said it before. 15 The reason we distributed bugs, which 16 we obviously did, was because DR-DOS was held 17 to a considerably lower standard than MS-DOS 18 was, and so we felt that we were well within 19 our rights to make known the fact that this 20 product had significant problems. 21 Question: The question, I believe 22 was, are you going to deny that Microsoft 23 engaged specifically in a FUD campaign against 24 DR-DOS? 25 Yes or no? 9331 1 THE WITNESS: Could you read back the 2 question? 3 (Requested portion of the record 4 was read.) 5 Answer: Yeah, I'll deny that. 6 Question: Okay. 7 Answer: We certainly -- we certainly 8 -- we certainly were out publicizing problems 9 with the product, but this term FUD campaign -- 10 Question: You have a problem with the 11 term FUD campaign? 12 Answer: Yeah. 13 Question: You have denied, Mr. 14 Freedman, that Microsoft engaged in a FUD 15 campaign against DR-DOS, correct? 16 Answer: Right. 17 Question: And I just want to make 18 sure that you're not limiting that denial 19 simply to its campaign when marketing MS-DOS 20 5.0, and do you recall whether Microsoft 21 engaged in that type of campaign with MS-DOS 22 6.0? 23 Answer: I don't recall. 24 Question: Okay. Let me hand you what 25 has previously been marked as Exhibit 77. This 9332 1 was marked and used in Mr. Chase's deposition. 2 And this is the MS-DOS 6 PR plan, 3 November 1992, prepared for you and Mr. Chase 4 by Waggener Edstrom, which I understand is 5 Microsoft's outside PR firm. 6 Now, it's called the Waggener Group, 7 right? 8 Answer: That's correct. 9 Question: Okay. And we'll just very 10 quickly, because I believe the jury is already 11 familiar with this document, on the first page 12 of text down at the bottom, competitive issues, 13 objectives: FUD DR-DOS with every editorial 14 contact made. 15 That was an objective, wasn't it, sir? 16 Answer: It says it here in the 17 document. 18 Question: Are you distancing yourself 19 from this document? 20 Answer: I didn't write it. 21 Question: Of course you're not, but 22 did you receive it and say, hey, whoa, that is 23 something that Microsoft wants to be involved 24 in? Did you say that? 25 Answer: I don't recall saying that. 9333 1 Question: And strategy is to position 2 new features of MS-DOS 6 while positioning 3 DR-DOS as a less stable product with poor 4 MS-DOS functionality. 5 And Microsoft then pursued that 6 strategy, correct? 7 Answer: I don't remember exactly how 8 this was implemented. 9 Question: Okay. The fourth point, 10 and it's on the next page, says develop key 11 DR-DOS FUD points for all press tours. 12 And that was done, wasn't it? 13 Answer: I don't remember. It's 14 certainly possible, but I don't remember. 15 Question: And following that, it 16 talks about all of the different press tours 17 that are going to be coming, doesn't it? 18 Answer: Yes, that is what it looks 19 like. 20 Question: When you received this 21 memo, did you talk with Brad Chase about it? 22 Answer: I don't remember. 23 Question: Did you read this memo when 24 you saw that it said one of the objectives was 25 FUD DR-DOS with every editorial contact made, 9334 1 did you go to Brad Chase and say, I really 2 don't think we should do that, that would be 3 wrong? 4 Answer: I don't remember. 5 Question: You were in favor of 6 Microsoft going out and giving FUD about DR-DOS 7 with every editorial contact made, weren't you, 8 sir? 9 Answer: I don't remember. 10 Question: Do you recall pulling 11 together smear sheets about DR-DOS products? 12 Answer: I don't recall -- I don't 13 remember the term smear sheet. I do remember 14 -- I do recall writing competitive reports on 15 the product. 16 Question: Okay, and -- but you don't 17 think that these competitive reports could be 18 accurately called a smear sheet? 19 Answer: I don't remember using the 20 term. 21 Question: Let me hand you Exhibit 22 954. This is from you to Mr. Chase, March 4, 23 1992, DR bug update. 24 First sentence, my tests are done and 25 I've been up on CompuServe. The new bugs that 9335 1 weren't in my original smear sheet are: Norton 2 backup can't restore. VDefend, the TSR from 3 Central Point Antivirus is incompatible. 4 Certain machines have serious problems with 5 floppy access time. 6 Does this refresh your recollection 7 that what you were doing in pulling together 8 were smear sheets about DR-DOS products? 9 Answer: No. Actually, it doesn't. 10 Question: Okay. It goes on to say 11 that the other bugs from the smear sheet have 12 been fixed. 13 Do you recall what bugs you might have 14 put in that first smear sheet? 15 Answer: I have no idea. 16 Question: Apparently they were 17 resolvable because -- by this time, Novell in 18 1992, Novell had bought the DR-DOS business, 19 right, do you recall that? I'll represent to 20 you that that concluded in the fall of 1991. 21 Answer: Okay. This was subsequent to 22 that. 23 Question: So Novell had -- I'm 24 assuming that your sentence means that Novell 25 had already fixed all of the bugs that you had 9336 1 identified in your first smear sheet, correct? 2 Answer: I assume, based on what it 3 says. 4 Question: And so you were looking for 5 other bugs to try to smear DR-DOS with, right? 6 Answer: I was looking for other bugs 7 for a smear sheet, that is what this says, yes. 8 Question: Okay. And some of the bugs 9 that you've come up with now are that certain 10 machines have serious problems with floppy 11 access time; that's what you state, correct? 12 Answer: Right. 13 Question: And you are going to 14 include that in a smear sheet for Mr. Chase, 15 right? 16 Answer: That is what it says. 17 Question: And if we can refer back to 18 exhibit -- I believe it was 953, was the E-mail 19 thread with several different messages. 20 952, I'm sorry. On the second page, 21 under the sample response, that second 22 sentence: The further a machine strays from 23 the standard PC architecture, the more 24 difficult it is for a generic operating system 25 to install properly. 9337 1 When you were first looking at 952, I 2 mean, you were saying this was not a problem. 3 This was a rock-solid MS-DOS 5.0 product and 4 the things that are being identified here 5 simply had to do with nonstandard PC 6 architecture, it's not a problem with MS-DOS 5. 7 It's a problem with the hardware, correct? 8 Answer: No, that is not what I said. 9 Question: Okay. 10 Answer: It's not clear what the 11 problem -- what the cause of the problem is. 12 It could be a software configuration problem. 13 It could be a hardware configuration problem. 14 It could be a problem with the product. It's 15 conceivable. It's certainly within the realm 16 of comprehension. 17 Question: What type of self-editing 18 did you do when you were coming up with your 19 smear sheets? 20 Answer: I don't remember. I'm just 21 looking at these. 22 I mean, the first one is -- seems to 23 be configuration independent. The second one 24 seems to be configuration independent, and the 25 third one, it could be configuration 9338 1 independent and it could be a bug in the 2 product. Who knows? 3 Question: You didn't investigate to 4 confirm one way or the other about that, did 5 you? 6 Answer: I don't remember what I did. 7 Question: Do you think that you 8 actually went to see if it was a hardware 9 problem as opposed to a DR-DOS problem? 10 Answer: It could have been either. 11 It could have been either. It's certainly 12 possible. 13 Question: You just don't know one way 14 or the other? 15 Answer: No, I don't. 16 Question: You conclude the final 17 paragraph: It's not enough for smear sheet 2. 18 I think we're back to where we were in the 19 pre-DR-DOS 6 days, which is perhaps we take one 20 of these and leak it to Spencer or Cringely. 21 Who is Mr. Spencer? 22 Answer: Spencer was a columnist for 23 PC Week. 24 Question: And who was Mr. Cringely? 25 Answer: He was a columnist for 9339 1 Infoworld. 2 Question: So prior to DR-DOS 6 days, 3 you all were leaking this kind of stuff to 4 columnists of very well-reknowned and highly 5 regarded media magazines, correct? 6 Answer: One, I don't remember. Two, 7 these are gossip columnists. These are rumor 8 columns. 9 Question: So you didn't want facts 10 being reported. You wanted rumors and gossip 11 to be reported about DR-DOS, is that what 12 you're saying? 13 Answer: No. 14 Question: Why are you leaking this 15 type of stuff to gossip columnists? 16 Answer: Because those are the kinds 17 of people who print these things. 18 Question: And that is who you wanted 19 to print stuff. 20 By gossip, I'm assuming that you don't 21 necessarily mean it's true and accurate, 22 correct, just gossip? 23 Answer: That is what -- like what 24 they print in their business, but our stuff, 25 this is accurate. I mean, it's factual stuff. 9340 1 Question: So what you were trying to 2 do was get buzz in the industry, rumors, 3 whispers, gossip, that DR-DOS was an unstable 4 product, right? 5 Answer: I don't remember. 6 Question: Why would you be looking -- 7 leaking it to gossip columnists if you didn't 8 want busy tongues to be wagging about it? 9 Answer: These columnists printed fact 10 on products. They printed a lot on our 11 products, and they printed a lot on everyone 12 else's products. It's a good place to get news 13 disseminated. 14 Question: You conclude, or keep them 15 in your hip pocket for your next press tour. 16 And by that I take it you mean next 17 time you're out talking with the media, give it 18 to them directly, right? 19 Answer: If it's appropriate, yes. 20 Question: If you don't like it, then 21 why would you leak it, then why wouldn't you 22 just issue a press release? 23 Answer: I don't see why you would 24 just issue a press release on something like 25 this, it doesn't warrant a press release. 9341 1 Question: It is not unusual that 2 DR-DOS 5.0 would come out and have bugs that 3 needed to be fixed, which were then fixed in 4 the ordinary course of business by DRI and 5 Novell, correct? 6 Answer: No. It's not unusual that a 7 product would release with bugs. The question 8 is the frequency and the severity of bugs, 9 which I stated earlier. 10 Question: And just to make sure I 11 understood correctly, MS-DOS 5.0 was the most 12 rock-solid product you have ever heard of and 13 there weren't any real serious bugs with it, 14 right? 15 Answer: The most rock-solid -- it was 16 considered rock-solid. 17 And the second part of your question 18 was? 19 Question: Did it have any severe bugs 20 that you were aware of? 21 Answer: I don't remember. 22 Question: I hand you what's been 23 marked as Exhibit 955. It is from you on 24 July 26, 1991, so we're looking six to eight 25 weeks after MS-DOS 5.0 released. 9342 1 And you are sending this to Bill 2 Gates, Mike Hallman, Steve Ballmer, Brad 3 Silverberg and some others. 4 So obviously the top people at 5 Microsoft are getting this report from you, 6 right? 7 Answer: Right. 8 Question: Do you think that you would 9 have included any mistakes in this document if 10 you're sending something to Bill Gates and Mike 11 Hallman, who was at that time president? Were 12 you in the habit of sending them mistaken 13 material? 14 Answer: Probably not. 15 Question: Okay. If you could refresh 16 yourself with this. There are several things 17 in it pulled together. I will represent to you 18 that this came to us stapled this way. Okay. 19 Answer: This is long. 20 Question: Just refresh yourself 21 generally. I can focus you on where I'm 22 talking, and you'll have as much time to look 23 at it as you want. 24 You took about ten minutes or so to 25 read through the document fairly and carefully, 9343 1 correct? 2 Answer: Right. 3 Question: Did you see any mistakes in 4 the document in your review? 5 Answer: I wasn't reading for 6 mistakes. 7 Question: Okay. Turning to the 8 second page of text, at the top it says tactic, 9 there is a column. 10 Answer: Right. 11 Question: Tactic, MS-DOS 5.0A. 12 Beside that description, fix frequent 13 and dangerous bugs about 20 in total. 14 Does that refresh your recollection, 15 that you believed there were about 20 frequent 16 and dangerous bugs in MS-DOS 5.0? 17 Answer: I guess so, if it's there. 18 Question: Okay. And MS-DOS 5.0A was 19 in fact a bug-fix release that you all 20 implemented a couple of months after MS-DOS 5.0 21 released, shipped, originally shipped, correct? 22 Answer: That's correct. 23 Question: You didn't change the 24 version number to 5.01 or 5.1, you simply fixed 25 the bugs that were in the product that went out 9344 1 in June 1991? 2 Answer: That is my memory. 3 Question: Now, if you'll turn a 4 little farther in there is an E-mail 5 MSC00044740, and it's from NaveenJ, N-a-v-e-e-n 6 J, which I believe is Naveen Jane Jain, June 7 24, 1991, right? And you're on the list of 8 recipients. 9 Following is an overview of the 10 problems that we have discovered after MS-DOS 5 11 release. The first one, Adaptec, ESDI 12 controller with speed storer driver. Data 13 loss. 14 Can there be a more serious problem 15 with an operating system than the one that 16 leads to data loss? 17 Answer: No. Data loss is serious. 18 Question: And the next one, BSR 19 systems, data loss. 20 So there are two instances of MS-DOS 21 5.0 leading to data loss, correct? 22 Answer: That's correct. It's all a 23 question of how frequent this -- these things 24 occur. 25 That is the crux of the matter. 9345 1 Question: Task swapper bug, potential 2 data loss, right? 3 Answer: That is right. Again, it's a 4 question of frequency. 5 Question: Well, the first two may or 6 may not be done frequently, but task swapper, 7 that is one of the features that you all 8 implemented in MS-DOS 5.0, right? That was one 9 of the big selling points? 10 Yes or no to that first. 11 Answer: Yes, it's a major feature, 12 but look at what we think is causing it. 13 Question: The first sentence, there 14 is a bug in DOS task swapper that could 15 potentially lead to data loss. And then it 16 explains two cases where it may happen. 17 And you're saying that those cases may 18 be rare? 19 Answer: Yes, they may be rare. 20 Question: I mean, did anybody write 21 back to Naveen and say, where the heck did you 22 get this list of stuff, this is a rock-solid 23 product and -- 24 Answer: Oh, I don't know. I doubt 25 it. 9346 1 Question: And then there is a setup 2 on a monochrome system, system hang. 3 Does that mean it just goes into an 4 endless loop and you have a blank screen? 5 Answer: Hang means the system stops. 6 Question: And you have to, what, 7 power down to reboot? 8 Answer: Typically. 9 Question: Load high and networks, 10 loss of functionality. 11 This, it says user is unable to load 12 any TSR in the UMB after running Net5. TSR is 13 a terminate and stay resident. 14 Answer: Right. 15 Question: What is an UMB? 16 Answer: Upper memory block. 17 Question: It goes on to say, this bug 18 would also show up in Banyan VINES and 19 Lantastik networks. 20 Banyan VINES and Lantastik networks 21 are pretty serious software products, aren't 22 they? 23 Answer: Yes. They were big products. 24 But again, you know, who knows exactly what 25 cases it happens in. 9347 1 Question: Exactly, you don't know one 2 way or the other? 3 Answer: I don't know. 4 Question: But just to bring it back, 5 that is, the same thing could be said about the 6 DR-DOS problems you were pulling together and 7 sending out smear sheets. You really don't 8 know how often it's happening and whether it's 9 significant or not, right? 10 Answer: When you have a software 11 problem, that generally happens all of the 12 time. 13 Question: And that is in fact like on 14 the DR-DOS CompuServe forum, that is what 15 people were doing, they were reporting problems 16 so that DRI and Novell could help them remedy 17 those problems, right? 18 Answer: That is correct. 19 Question: And Microsoft did the same 20 thing, right? 21 Answer: Right. 22 Question: And that is a reasonable 23 marketing tactic, right? 24 Answer: To use CompuServe to do 25 product support? 9348 1 Question: Right. 2 Answer: Yes. 3 Question: And if you look at the 4 second to last page, Naveen Jain is again 5 reporting some serious DOS 5 issues from PSS 6 June 20, 1991, and he lists six problems. I 7 think some of these we have already been over. 8 Problem number one, for instance, 9 AutoCad and extended memory, you have seen 10 that. 11 Problem two, EMM386, hanging machine 12 on boot. 13 What is EMM386? 14 Answer: It's a memory management. 15 Question: This is a problem that has 16 come up fairly frequently on a number of 17 systems. 18 So that is a repeatable problem, 19 right? 20 Answer: All of the problems here are 21 repeatable. Repeatable means that when you 22 bring the system into a lab, you can get it to 23 happen again. 24 These are all repeatable problems. 25 You can't fix it unless it's repeatable. 9349 1 Question: Is it still your testimony, 2 sir, that MS-DOS had no severe or serious bugs, 3 MS-DOS 5.0? 4 Answer: I don't remember what I said. 5 Obviously from this there are, you 6 know -- there were data loss bugs in the 7 product. 8 How often they happened, who knows? 9 Couldn't have been too often, though, because 10 otherwise it would have showed up much more 11 frequently, I assume, in the calls. 12 Question: Well, you were getting 13 about 120 calls a day, as I recall. From a 14 previous E-mail, actually 150 calls a day, 15 right? 16 Answer: No. It was 150 calls a day. 17 I don't remember what her phrasing was. It was 18 150 who were experiencing severe 19 incompatibility. 20 I don't know how she defines that. 21 This says we were getting 1300 calls a day in 22 total. 23 Question: So actually 1300 calls a 24 day with severe incompatibility? 25 Answer: No, no, no, no, no. 9350 1 This says we were getting 1300 calls a 2 day total. She says there were 150 a day on 3 severe problems. And again, I don't know how 4 she defines that or where the number comes 5 from. 6 Do you recall when DR-DOS 6.0 was 7 released? 8 Answer: September of -- must have 9 been September of '91, '91. 10 Question: Okay. That is my 11 indication too. I mean, I think that's 12 correct. 13 Did you or did anyone at Microsoft 14 frequently leak to a lot of the media the 15 problems that you all were having, that you all 16 were finding with DR-DOS 6.0? 17 Answer: I remember writing a report 18 based on problems we found on DR-DOS 6, and I'm 19 pretty certain it was distributed to the press. 20 Question: Okay. Do you recall 21 getting -- do you recall that tactic being 22 particularly effective? 23 Answer: No. No. 24 Question: You don't recall or -- 25 Answer: I don't remember. 9351 1 Question: Let me hand you what I have 2 marked as Exhibit 956. 3 On the second page towards the middle, 4 there is an E-mail from you to Brad Chase, 5 December 4, 1991, seen on DR forum. 6 I take it that means the DR-DOS 7 CompuServe forum? 8 Answer: I assume. 9 Question: You wrote, one of the DR 10 bigots said he had been contacted by three PC 11 publications recently because a rash of DR 6 12 bugs had been reported to them. One of them 13 was Paul Sherer -- didn't mention the other 14 two. He is one of those Microsoft conspiracy 15 theory guys and is convinced we're planting all 16 of those calls to the magazines. As if DR 17 really had no serious bugs. 18 Answer: I don't know what magazines 19 we spoke to. From this mail, it looks like we 20 didn't talk to all of them. I don't remember 21 what magazines were spoken to. 22 Question: It says, looks like your 23 trip might have had an effect. 24 You're writing that to Brad Chase. 25 What trip was that? That was a press tour, 9352 1 wasn't it? 2 Answer: Must have been a press tour. 3 Question: And by an effect, are you 4 stating that you believed the fact that he went 5 and visited some media persons led to reports 6 in the media about problems with DR-DOS? 7 Answer: Yeah, I assume that's what he 8 meant, yeah. 9 Question: Can you go back to the 10 previous page? 11 That first E-mail, the subject is PC 12 Week antDR story. It's also December 4, 1991. 13 You're not on this thread, but I just 14 want to ask you a question about it. 15 This was from W. Carrin, and that is 16 Carrin Greason from Waggener Edstrom; is that 17 right? 18 Answer: Yes, Carrin. I don't 19 remember her last name. 20 Question: To Brad Chase, Brad 21 Silverberg, Liz Sidnam and Steve Ballmer, 22 right? 23 Answer: Uh-huh. 24 Question: And it says at the 25 beginning, please see the made-to-order story 9353 1 in this week's PC Week by Paul Sherer. 2 And Sherer is, he's the gossip 3 columnist that you were talking about before? 4 Answer: No. Paul Sherer was just a 5 reporter. 6 Question: Okay. You had stated 7 before that he wrote a gossip column, right? 8 Answer: No, that was Spencer. 9 Question: Oh, I'm sorry. You're 10 right. You're right. 11 Then you got to, quote, apparently the 12 title of the article, utility woes bedevil 13 DR-DOS users seems to have come directly from 14 information and tips the MS-DOS team shared 15 with Paul. 16 Do you know what information and tips 17 were shared with Paul? 18 Answer: I don't recall. I don't 19 recall what it could have been. I mean, it 20 could have been the report I wrote. I don't 21 remember what it was. 22 Question: It continues on about he 23 got on CompuServe and looked at all that. 24 At the end of the mail, it says, 25 highly visible result from your recent press 9354 1 tour looks good. 2 I mean, this is the type -- when we 3 were looking about earlier FUD, DR-DOS with 4 every editorial contact made, that was in 5 regard to the MS-DOS 6.0 PR plan, right? 6 Do you recall that? 7 Answer: Yeah. That was from '92. 8 Question: Right. And this -- what is 9 being summarized here in this E-mail is the 10 type of result you wanted to get by indicating 11 you FUD DR-DOS with every editorial contact 12 made? 13 Answer: This report is from '92 and 14 this E-mail is from '91. 15 Question: Right. And what they 16 wanted in regard to MS-DOS 6.0 is this type of 17 result, this type of story being written by 18 media types, right? 19 Answer: Yeah, I assume. 20 Question: Because it worked for the 21 MS-DOS 5.0 PR plan, right? 22 Answer: I don't know what the MS-DOS 23 5 PR plan was. Obviously, it worked in this 24 particular case. 25 Question: And the E-mail that begins 9355 1 at the bottom, again, you're not copied on this 2 one, but I have a question for you about it. 3 It's from Brad Chase to Brad Silverberg. 4 Now, Brad Chase was your boss, right? 5 Answer: Right. 6 Question: And Brad Silverberg was 7 Brad Chase's boss, right? 8 Answer: Right. 9 Question: Okay. And this was also 10 written December 4, 1991. 11 And he writes, what do you think about 12 you or me sending this to Paul? By Paul, is 13 that Paul Sherer? 14 Answer: I assume. 15 Question: And then here is the 16 message that he proposes. Hey, Paul, how was 17 your Thanksgiving? Read your article on DR. 18 It reinforces how critical our beta test has 19 been to our success. 20 Naturally, I do take issue with two 21 points that I wanted to discuss with you. 22 We never had the flood of problems DR 23 is experiencing. The magnitude of problems 24 also cannot be compared. DR users are losing 25 data, having things not work, et cetera. 9356 1 Do you know whether this message was 2 ever sent to Paul Sherer? 3 Answer: I have no idea. I don't 4 know. 5 Question: 150 calls a day of serious 6 problems, 1394 calls per day is not a serious 7 issue for Microsoft? 8 Answer: It's all a function of 9 volume. It's all a function of frequency. 10 That's the crux of the matter. It's all a 11 matter of frequency. The sales rates of the 12 two products were just not comparable at all. 13 Question: DR users are losing data, 14 having things not work, et cetera. Most of our 15 questions were (are) about moving to one large 16 partition or the difference between extended 17 and expanded memory. 18 That's not true, is it? 19 Answer: No, that's true. 20 Question: Didn't we look at a 21 document that talked about data loss problems? 22 Answer: Yeah, but we haven't 23 established what the frequency of those 24 problems was. There's no data on what the 25 frequency of those problems was. It's all 9357 1 speculation. 2 Question: This doesn't talk about the 3 frequency, this talks about the magnitude. 4 Answer: No, it talks about the word 5 frequency. It uses the word most. Most is a 6 word of frequency. 7 Question: Did you ever have this type 8 of communication with someone in the media, 9 sending them an E-mail, something like this? 10 Answer: I don't recall. I just don't 11 remember. 12 Question: You might have, but you 13 don't know? 14 Answer: It's possible. 15 Question: Do you recall ever talking 16 with media people on the telephone? 17 Answer: All the time. 18 Question: All the time. 19 Did you ever make a comment to anyone 20 in the media that DR users were losing data? 21 Answer: I don't remember. 22 Question: You might have? 23 Answer: I don't know. 24 Question: If you had said to someone 25 in the media on the telephone, DR users were 9358 1 losing data, would you have qualified it by 2 saying, but you know what, MS-DOS users were 3 also losing data? 4 Answer: I don't know what I would 5 have said. 6 Question: You wouldn't have said 7 that? 8 Answer: It was a long time ago. 9 Question: You wouldn't have said 10 that, would you have, Mr. Freedman? 11 Answer: I don't know. I don't know 12 what I would have said. Again, it was a long 13 time ago. 14 Question: On this next page, that 15 first full paragraph, Mr. Chase writes, I also 16 seem to recall that this is the second article 17 where you refer to DR-DOS leapfrogging us in a 18 feature war. 19 Is it an accurate statement to say 20 that DR-DOS was ahead of the currently shipping 21 MS-DOS versions in terms of features? 22 Answer: Are you referring to DR-DOS 23 6? 24 Question: Let's talk about, first of 25 all, when MS-DOS 4.01 was shipping and DR-DOS 9359 1 shipped DR-DOS 5.0. 2 Between that time and June of 1990, 3 until June of 1991, was DR-DOS ahead in a 4 feature war? 5 Answer: Yes. DR-DOS had more 6 features. 7 Question: Okay. And then MS-DOS 5.0 8 came out in June of 1991, and three months 9 later, in September of 1991, DR-DOS 6.0 came 10 out, correct? 11 Answer: Right. 12 Question: And DR-DOS 6.0 from 13 September '91 until MS-DOS 6.0 shipped in March 14 of 1993, DR-DOS was again ahead of MS-DOS in 15 terms of features, correct? 16 Answer: Well, they had some features. 17 You know, they had some features that we didn't 18 have, sure. 19 Question: Okay. Did you think that 20 that was a problem for Microsoft from a 21 marketing perspective? 22 Answer: Is it a problem to have less 23 features than a competitor? 24 Question: Yes. 25 Answer: Yes, of course. 9360 1 Question: What kind of tactics apart 2 from actually shipping the product, what kind 3 of tactics come to mind to combat a competitor 4 that is ahead of you in a features war? 5 Answer: Well, the key thing you do 6 is, you point out other things that are 7 important to people other than features. 8 Question: Such as? 9 Answer: Compatibility. 10 Question: Do you also engage in FUD 11 to make sure that users don't go to the DR-DOS 12 version -- 13 MS. NELLES: Your Honor, may we 14 approach? 15 THE COURT: Stop, please. 16 (The following record was made out of 17 the presence of the jury at 9:43 a.m.) 18 MS. NELLIS: Your Honor, I'm not sure 19 what is going on, and I'm going to assume it's 20 by mistake and not by purpose, but throughout 21 the morning we've had a series of small errors 22 that I haven't raised. 23 But the first one happened back on 24 page -- it looks like 66 of the transcript, 25 where you may recall the witness was asking to 9361 1 have something read back and it looped several 2 times so it looked like he asked more times 3 than he actually did. And I didn't want to 4 disrupt the presentation, and I let it go. 5 We then had a moment on page 90 of the 6 transcript where material that was not supposed 7 to be played wasn't played, however, if you 8 notice, the plaintiffs have begun to play the 9 transcript at the bottom of the video. I have 10 no objection to that. I think it's perfectly 11 appropriate and it helps the jury. While they 12 took it out of the video clip, they left the 13 line in the transcript. 14 And I understand when putting these 15 things together, there are mistakes. Again, I 16 simply let it go. I thought it wasn't 17 important to disrupt the presentation, however, 18 it did raise my level of alert to watch what 19 was going on here, particularly because I 20 thought the first one was a little more 21 damaging than it looked what the witness was 22 doing. 23 Now we just had a moment and then I 24 had another situation on page 102 of the 25 transcript where it was read a little quickly, 9362 1 but material that was not to be shown, not 2 played, but again, scrolled through the 3 transcript on the bottom. 4 But now we just had a situation on 5 page 115 of the transcript where a question 6 that is not supposed to have been read, 7 particularly: "Do you also engage in FUD to 8 make sure you don't go to the DR-DOS version 9 that is ahead of Microsoft DS-DOS in terms of 10 features" was read. 11 Now again, perhaps this my error, but 12 my record shows that material was not supposed 13 to be in. And this was a situation where -- 14 and if it's a mistake, then my mistake, I 15 apologize, but there's been a series of errors, 16 and I simply wanted -- or potential errors, and 17 I wanted to make sure we're on page here, that 18 the presentation that is being done is correct 19 in terms of what was negotiated between the 20 parties because my records show that that 21 wasn't supposed to be in. 22 And I even have a note here that we 23 checked -- I don't know if it was Lindsey, and 24 that wasn't to be played, that was to be 25 clipped. 9363 1 So I don't want to break their 2 presentation, but there seems to be some 3 sloppiness in how this is going in. I very 4 much believe it is not intentional, but I would 5 ask that when we break, particularly over the 6 lunch, if we could get some effort here to make 7 sure that what is being played is what is 8 supposed to be played and that the transcript 9 that is being played at the bottom matches what 10 has been agreed would be shown to the jury. 11 MR. CASHMAN: Well, Your Honor, I 12 don't think there's been any mistakes up to 13 this point. I did notice that the scroll was 14 stuck for a moment at the point when the 15 witness said several times, "Could you rephrase 16 the question?" 17 MS. NELLIS: It looked like he asked 18 several times. 19 MR. CASHMAN: It wasn't -- the video, 20 I think, was correct, but the scrolling was 21 stuck for a second or two. And I indicated to 22 our technician Darin, and they corrected it 23 right away. 24 And little things like that are just 25 bound to happen in these kind of circumstances. 9364 1 The current instance, which I think 2 triggered Ms. Nellis' objection, I'm not sure 3 if that was a mistake or not, but in my clip 4 report it indicates there's two answers in a 5 row. So I think -- there may have been some 6 agreement that the question had to be 7 reinserted for that answer, but I don't know. 8 We can check on it. But again, I think just on 9 technical issues, sometimes little things like 10 this are bound to happen. 11 MS. NELLIS: I agree little things are 12 bound to happen, and that is why I haven't 13 mentioned most of the little things that have 14 happened. However, we have an instance, one, 15 where -- and I believe the video was replayed, 16 Mr. Cashman, not simply the scroll was stuck, 17 where it made it seem as if the witness was 18 asking the court reporter over and over again 19 to reread a question. 20 THE COURT: It did ask twice. 21 MS. NELLIS: Right, and it was played 22 three times. 23 THE COURT: Right. 24 MS. NELLIS: The second thing that 25 happened was that there was a line here that 9365 1 was by negotiation not to be out where there is 2 a slightly sarcastic question played for the 3 witness where a line of it is supposed to have 4 been clipped. It was appropriately clipped in 5 the video, but it was left standing, quite 6 plainly, the language, on the transcript. 7 Again, I'm not complaining about small 8 technical issues. I haven't raised them, but 9 that is a damaging thing to have happened. 10 And the third thing happens all the 11 time where we have questions and answers that 12 both parties agree should not be coming into 13 the jury. And Darin is wonderful. They've 14 done a great job of clipping this video so it 15 looks like a continuous presentation, and you 16 can do that so the answer follows from the next 17 answer and it's by agreement. But what they 18 did is inserted an objectionable question into 19 the presentation. I'm in no way suggesting it 20 was done intentionally, but we've had several 21 small issues that I have not raised. There 22 have been three that I think have been 23 damaging, and I would like some agreement that 24 there will be some effort made to make certain 25 that going forward that we're going to check 9366 1 for these kinds of issues because it is 2 damaging to Microsoft and it's not fair for 3 this to happen. 4 And I certainly don't want to jump up 5 and down and I won't jump up and down every 6 time a word is misspelled or there's a little 7 technical issue or we clipped a piece of 8 nondamaging testimony. But these were three 9 particularly important issues that shouldn't 10 have happened, and I'm not asking for an 11 instruction. I'm asking simply for a 12 commitment that we're going to take -- the 13 plaintiffs will take the time to look at this 14 and make sure it's going correctly. 15 THE COURT: Anything else? 16 MR. CASHMAN: Well, Your Honor, 17 plaintiffs have spent a tremendous amount of 18 time trying to make sure that this is accurate, 19 and I believe that it has been accurate. We'll 20 check into this one instance, and as we have 21 been trying to prevent any mistakes. And I 22 just want it known that these kinds of things 23 are bound to happen both ways. 24 Yesterday the Court will recall that 25 there was an instruction that the demonstrative 9367 1 for Mr. Apple was to be shown for no longer 2 than necessary, and Microsoft kept it up there 3 all the way throughout, even when the witness 4 wasn't testifying about was on the 5 demonstrative. And I didn't get up and raise 6 an issue right at the point -- at that point, 7 but it just goes both ways. And I know both 8 parties are going to work to try to prevent it, 9 but it happens. 10 MS. NELLIS: I agree, and I think both 11 parties should and will work together. I think 12 they've done a very good job, and I realize 13 these things are coming in late in the last 14 minute. I just think when three damaging 15 incidents happened, I had no choice but to stop 16 and raise it with plaintiffs so that we can see 17 if we can fix it going forward. I'll let it 18 go. 19 But I must respond to Mr. Cashman's 20 assertion about the Apple demonstrative. I was 21 at the Apple testimony when it came in in 22 Minnesota. I sat there. I watched my 23 colleague, Mr. Pepperman, draw that 24 demonstrative. It was -- as you go through the 25 testimony, it was absolutely clear every single 9368 1 time he put his hand to paper and wrote a 2 moment on it and what was shown tracked exactly 3 what was done in the Minnesota trial precisely. 4 And I must respond to the gratuitous comment, 5 but I won't say another word about it. 6 Thank you. 7 THE COURT: Anything else? 8 MR. CASHMAN: No, Your Honor. 9 THE COURT: All right. We're going to 10 take a recess. And maybe you can get together 11 with your technician and maybe if you want to 12 point out to Darin too anything else you found 13 going forward. 14 MS. NELLIS: Thank you, Your Honor. I 15 appreciate that. 16 THE COURT: I'll tell the jury we're 17 going to take a recess. 18 (The following record was made in the 19 presence of the jury.) 20 THE COURT: Thank you for your 21 patience, ladies and gentlemen of the jury, and 22 since it's about time we take a break, we're 23 going to take one right now for ten minutes. 24 Remember the admonition previously 25 given. So you get kind of a bonus break, and 9369 1 we'll get you in about ten minutes. 2 Okay. Leave your notebooks here. 3 (A recess was taken from 9:50 a.m. 4 to 10:07 a.m.) 5 THE COURT: I apologize for the delay. 6 The court reporters had a problem with their 7 realtime service, and they had to call them in 8 Illinois and see what's going on. 9 (Whereupon, the following video was 10 played to the jury.) 11 Question: Are you familiar with the 12 term vaporware? 13 Answer: Sure. 14 Question: Preannouncement? 15 Answer: Yes. 16 Question: Can you describe for the 17 jury what those terms mean? 18 Answer: I can des