6604 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 XXV 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., January 5, 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 6605 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 RICHARD M. HAGSTROM 7 MICHAEL E. JACOBS Attorneys at Law 8 Zelle, Hofmann, Voelbel, Mason & Gette, LLP 9 500 Washington Avenue South Suite 4000 10 Minneapolis, MN 55415 (612) 339-2020 11 STEVEN A. LAMB 12 Attorney at Law Zelle, Hofmann, Voelbel, 13 Mason & Gette, LLP 550 South Hope Street 14 Suite 1600 Los Angeles, CA 90071 15 (213) 895-4150 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 6606 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 ROBERT A. ROSENFELD KIT A. PIERSON 7 Attorneys at Law Heller Ehrman, LLP 8 333 Bush Street San Francisco, CA 94104 9 (415) 772-6000 10 BRENT B. GREEN Attorney at Law 11 Duncan, Green, Brown & Langeness, PC 12 Suite 380 400 Locust Street 13 Des Moines, IA 50309 (515) 288-6440 14 15 16 17 18 19 20 21 22 23 24 25 6607 1 STEVEN J. AESCHBACHER Attorney at Law 2 Microsoft Corporation One Microsoft Way 3 Redmond, CA 98052 (425) 882-8080 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6608 1 (The following record was made out of 2 the presence of the jury at 8:29 a.m.) 3 MR. TULCHIN: Mr. Holley will address 4 this, but I want to give the Court a copy of 5 the alert we sent to Mr. Lamb last night and 6 Mr. Holley can explain this to you. 7 THE COURT: The mail delivered it 8 already to him? 9 MR. HOLLEY: It went via e-mail, Your 10 Honor. 11 THE COURT: I'm just teasing. 12 MR. HOLLEY: The wonders of 13 technology. 14 So, Your Honor, we're back on the 15 question of whether Mr. Alepin can in the 16 course of his testimony publish demonstrative 17 exhibits to the Jury that contain legal 18 conclusions in light of the Court's ruling 19 yesterday. 20 On an example of this is attached as 21 the letter -- to the letter as Exhibit A, which 22 is a slide in which was used during 23 Mr. Alepin's testimony about the bundling or 24 tying. 25 And Your Honor will notice on the 6609 1 lower right-hand corner there, there's an icon 2 which says tying and bundling and has two boxes 3 held together by chains. 4 Those icons are not new. If you look 5 at Exhibit D, you'll see that this is a slide 6 from Ms. Conlin's opening statement. And there 7 on the first row, second from the left, is this 8 tying and bundling icon. 9 Now, in this context, it's important 10 to bear in mind what it is that Ms. Conlin told 11 the jurors about what these icons mean. And 12 I'm quoting now from the trial transcript, page 13 2653 at line 17 to 2654, line 1. 14 Ms. Conlin said, now, let me talk to 15 you about Microsoft's illegal tactics, the 16 things that Microsoft does that destroy 17 competition. What are the illegal tactics that 18 restrict competition and harm consumers? We 19 have created some icons for you. 20 These are graphical representations. 21 They are among the things that you will not 22 have in the Jury room. They're only for the 23 purpose of identifying and helping you to 24 remember what these tactics are. 25 I will talk about what they mean as we 6610 1 go along, but here are these graphical icons 2 and representations. Here are the things we 3 say Microsoft did to destroy competition. 4 And then with respect to this 5 particular icon, tying and bundling, Ms. Conlin 6 said the following at page 2654, line 7 to 10. 7 Tying and bundling, putting products 8 together in a way that leveraged the monopoly 9 power and the operating system into other 10 markets. 11 And, Your Honor, there are similar 12 icons that appear on other slides that 13 apparently the Plaintiffs intend to use with 14 the Jury this morning. 15 And this is precisely, Your Honor, 16 what the Court said yesterday that the 17 Plaintiffs are not entitled to do. 18 Ms. Conlin told the Jury in the 19 section of the opening I just quoted that these 20 icons are anticompetitive actions by Microsoft 21 that destroyed competition and that they are 22 illegal. 23 It is their lexicon. They created it. 24 They created the icons. They asked the Jury to 25 bear them in mind and associate them with 6611 1 illegal behavior. 2 And it's not appropriate in light of 3 the Court's ruling yesterday for Mr. Alepin to 4 be using these very anticompetitive/illegal 5 icons in the course of his testimony. 6 Thank you, Your Honor. 7 THE COURT: Mr. Lamb? 8 MR. LAMB: Thank you, Your Honor. 9 Obviously, Mr. Alepin has not referred 10 at all to the icon. 11 With the Court's indulgence, if I 12 could approach. 13 THE COURT: Sure. 14 MR. LAMB: I want to hand you a copy 15 of a stipulation that the parties entered into 16 in relation to demonstrative evidence, which we 17 touched on briefly yesterday. 18 But if you'll note, we entered into a 19 stipulation whereby we agreed to set forth 20 objections in a timely manner. 21 Again, I don't think it's contested 22 that those objections were not set forth in a 23 timely manner. Again, this is another attempt, 24 we believe, to just simply disrupt the 25 presentation of evidence. 6612 1 I don't intend to have Mr. Alepin 2 refer at all to the icon. The icon is simply a 3 useful graphic. It conveys an idea. His idea 4 as he set forth regarding bundling and tying 5 clearly relates to the technology. 6 There will be exhibits today, 7 Microsoft exhibits from Microsoft employees, 8 which will specifically use the term bundling 9 in a technological sense. And Mr. Alepin will 10 describe that. 11 Another icon relates to vaporware. 12 Vaporware is actually something that is defined 13 by the Microsoft computer dictionary. 14 Again, this is just an icon that 15 conveys an idea. And it is not necessarily 16 attributable, as Mr. Holley would suggest to, 17 quote, icons are anticompetitive, end quote. 18 That is not what Mr. Alepin's 19 testimony is, and, in fact, that is a 20 misstatement of really the opening statements 21 by Ms. Conlin. 22 She didn't say the icons are 23 anticompetitive. That was what she was trying 24 to convey at that particular time. 25 MR. HOLLEY: Your Honor, obviously, we 6613 1 couldn't object about their violation of the 2 Court's order until the order was entered. 3 That doesn't make any sense. 4 But as of yesterday afternoon, it was 5 quite clear that Mr. Alepin's testimony had to 6 be limited. He was not to offer legal opinions 7 and he was not including ones, but whether 8 Microsoft's conduct was anticompetitive in an 9 antitrust sense. 10 I read to the Court what Ms. Conlin 11 said in opening about the purpose of these 12 icons. If they're devoid of meaning, Your 13 Honor, what are they doing on these 14 demonstratives? 15 They're only there for one reason, 16 because the Plaintiffs know that the Jury saw 17 them in opening and they're hoping that they 18 associate what Mr. Alepin is saying with 19 Ms. Conlin's assertion that certain things are 20 illegal. 21 Your Honor, it's quite transparent 22 here. And the effort to avoid what's going on 23 isn't very persuasive. These icons should not 24 be shown to the Jury. 25 THE COURT: I don't see in the 6614 1 exhibits that I've been given that there's any 2 further use of that icon. 3 MR. LAMB: There is no further use of 4 that icon. The only other icon they object to, 5 I believe, is vaporware and then the icon that 6 is FUD, fear, uncertainty, and doubt. And then 7 I believe they also object to the icon, which 8 is an API, which simply shows a switch and a 9 shadow. That's nothing to do with an illegal 10 tactic. That's a technological term. 11 And really what Ms. Conlin said, we're 12 talking about conduct and tactics. 13 Her opening statement is an opening 14 statement about what she believes the evidence 15 will show. 16 MR. HOLLEY: I couldn't agree more, 17 Your Honor, and that's why this is so 18 prejudicial. 19 What Ms. Conlin said in her opening 20 was not evidence, but she did encourage the 21 Jury to associate these little pictures with 22 what she said were illegal and anticompetitive 23 acts. 24 So if you look at page 9, for example, 25 Your Honor, of the latest slide deck, with the 6615 1 heading Microsoft handicaps development, there 2 is the vaporware icon. 3 In opening, Ms. Conlin told the Jury 4 that vaporware was illegal and that it was 5 anticompetitive. 6 On page 14, there is a reference to 7 the term coined by Mr. Alepin's former employer 8 end all fear, uncertainty, and doubt. 9 Ms. Conlin in her opening told the 10 Jury that FUD was illegal and anticompetitive. 11 On page 29 there is a reference to 12 undocumented APIs. Ms. Conlin said in her 13 opening that undocumented APIs were illegal and 14 anticompetitive. 15 And I believe, Your Honor, that there 16 is one more. 17 THE COURT: Are you looking at the 18 exhibit, the demonstrative? 19 MR. HOLLEY: I believe, Your Honor, 20 I'm looking at the ones that we got at 21 approximately 30 minutes after midnight this 22 morning. 23 If Your Honor does not have those -- 24 THE COURT: I have the ones that you 25 guys gave me yesterday. 6616 1 MR. HOLLEY: I'm sorry, Your Honor. 2 There's a superseding set that we got early 3 this morning. 4 MR. LAMB: I have another copy, Your 5 Honor. 6 May I approach? 7 THE COURT: Yes. Thank you. 8 MR. HOLLEY: No, Your Honor. Just for 9 clarity, there is an icon on page 2 of the new 10 set, which is the tying and bundling one that 11 I've already discussed. 12 I referenced a page 9, which is the 13 vaporware icon. 14 Page 14, which is the FUD icon. 15 And page 29, which is the undocumented 16 API icon. 17 And I think that's the last of them. 18 But in each of these instances, Your 19 Honor, there's nothing technical about those 20 icons. They are, as Ms. Conlin said in 21 opening, icons for you, graphical 22 representations. They're only for the purpose 23 of identifying and helping you to remember what 24 these tactics are. Here are the things we say 25 Microsoft did to destroy competition. 6617 1 That's what they're for. They have 2 nothing to do with computer science. 3 THE COURT: Mr. Lamb? 4 MR. LAMB: Your Honor, I believe what 5 he said here are the things that we believe 6 Microsoft did, vaporware. There are exhibits 7 regarding vaporware. 8 Mr. Alepin will testify about the 9 impact on technology of vaporware. FUD, fear, 10 uncertainty and doubt, there are exhibits that 11 we have, Microsoft exhibits, that specifically 12 refer to fear, uncertainty, and doubt. 13 There are Microsoft employees that 14 talk about using fear, uncertainty, and doubt 15 and the impact of the technology in that 16 relationship. 17 In addition, undocumented APIs. 18 Undocumented APIs. There's no -- there's no 19 legal violation of undocumented APIs. 20 Undocumented APIs is the event. If we're going 21 to contend that it's illegal later, that's 22 really whether or not we can claim that the 23 event occurred. The event occurred, and this 24 is simply descriptive of the event. 25 I mean, under that theory, nothing 6618 1 that Ms. Conlin or Mr. Hagstrom used in slides 2 in their presentation on opening should ever be 3 able to be used, and the same for Mr. Tulchin, 4 in presentation to the Jury, because there 5 might be some connection, you know. 6 I think the Jury is a lot smarter than 7 that, and they understand what's happening. 8 And I think the Court has made it very clear 9 what Mr. Alepin's testimony will and will not 10 be. And he's not going to render a legal 11 opinion. 12 MR. HOLLEY: Your Honor, I don't mean 13 to belabor this, but the Jury is very smart. 14 Many of them will remember these 15 icons. They will remember what they were told 16 they mean. And what they were told they mean 17 is the things that the Plaintiffs say Microsoft 18 did to destroy competition and that the tactics 19 were illegal. 20 Now, if Mr. Alepin wants to talk about 21 his view about the technical aspects of whether 22 a particular interface in an operating system 23 should be documented or not, under the Court's 24 ruling of yesterday, he is entitled to do that. 25 He is not entitled to opine about 6619 1 whether or not that is a violation of the Iowa 2 Competition Law or whether it is pro or 3 anticompetitive. 4 But these icons are infused with 5 exactly that significance. That is what 6 Ms. Conlin invited the Jury to conclude 7 whenever they saw these icons. 8 She's trying to create an association. 9 I give her credit. It's a very nice tactic, 10 but it is not consistent with the Court's 11 order. 12 THE COURT: Very well. 13 Anything else? 14 MR. LAMB: No, sir. 15 MR. HOLLEY: No, Your Honor. 16 THE COURT: I think I'm going to allow 17 you to use the vaporware since it is defined by 18 the Defendant itself. 19 Fear, uncertainty, and doubt on page 20 14, that icon -- 21 MR. LAMB: Your Honor? 22 THE COURT: Yeah. 23 MR. LAMB: Again, I have specific 24 Microsoft exhibits that reference fear, 25 uncertainty, and doubt. 6620 1 THE COURT: Correct. The icon itself, 2 can that be erased, but leave the other part? 3 Just the icon? 4 MR. LAMB: The icon can be erased. 5 THE COURT: Okay. And you are not 6 using Number 2, I assume? 7 MR. LAMB: I am not using Number 2 8 again. 9 THE COURT: Okay. That's fine. 10 MR. LAMB: And you want us to erase 11 the icon FUD on 14? 12 THE COURT: Vaporware is okay. 13 MR. HOLLEY: And, Your Honor, just for 14 clarity, the one on page 29 entitled 15 undocumented APIs, does the Court have a view 16 on that one? 17 THE COURT: 29? 18 MR. HOLLEY: Yes, Your Honor. 19 THE COURT: Hang on. 20 Yeah, you can remove the icon, but 21 leave the rest of it. That's fine. 22 Okay? 23 MR. LAMB: Okay. Can we do that real 24 quickly to make sure we've done it? 25 THE COURT: Sure. 6621 1 MR. LAMB: Darin, can you make sure 2 when you've done it. 3 You've done it? You are good. 4 THE COURT: Wow, you are good, Darin. 5 Can I bring the Jury? That's fast. 6 MR. HOLLEY: Wonders of PowerPoint, 7 Your Honor. 8 MR. LAMB: One other thing. What is 9 the Court's preference regarding the easel 10 versus the white board versus the location? 11 THE COURT: If it's something -- if it 12 needs more room, we can use the white board, 13 but try to use the easel if we can. Okay? 14 MR. LAMB: Okay. And, again, can we 15 set this up over there? 16 THE COURT: Yeah, that's fine. Or you 17 could put -- 18 MR. LAMB: I'm going to need to take 19 this down. Do you know how it comes apart? 20 MR. HOLLEY: Don't pinch your fingers. 21 MR. TULCHIN: Yeah, be careful. 22 THE COURT: And, Mr. Lamb? 23 MR. LAMB: Yes. 24 THE COURT: I've got some colored 25 markers. I put them on Ms. Conlin's -- but you 6622 1 can use them if you want. 2 MR. LAMB: Pardon me? 3 THE COURT: Those colored markers I 4 got for you. 5 And if you want to move that closer 6 for the Jury to see, you can do that too. 7 MR. LAMB: Is that going to be okay? 8 THE COURT: That's okay. Can you guys 9 see it? Can you put it at an angle or 10 something? 11 MR. TULCHIN: We'll switch seats and 12 that will be fine. 13 MR. LAMB: How's that? 14 MR. HOLLEY: Yeah. I'll scoot over 15 and I'll see it. That's fine. 16 (The following record was made in the 17 presence of the jury at 8:47 a.m.) 18 THE COURT: Mr. Alepin. Sir, you are 19 still under oath. 20 THE WITNESS: Thank you. 21 RONALD ALEPIN, 22 called as a witness, having been previously 23 duly sworn, testified as follows: 24 MR. LAMB: Would you put up slide 7, 25 Darin? 6623 1 DIRECT EXAMINATION (CONT'D) 2 BY MR. LAMB: 3 Q. Okay. Good morning, Mr. Alepin. 4 A. Good morning. 5 Q. When we broke yesterday, you were in 6 the middle of a discussion regarding an 7 exhibit, Exhibit 5735. 8 MR. LAMB: Can you pull that up, 9 Darin? Highlight the -- yeah, thank you. 10 Q. And you were explaining this phrase, 11 clone their client technology early and often 12 (full embrace strategy). 13 Do you recall that, sir? 14 A. I do, yes. 15 Q. Okay. And at that point in time, you 16 were challenged that you had just made that 17 phrase up, embrace, extend, and extinguish. 18 Do you recall that? 19 A. Yes, I do. 20 MR. LAMB: Okay. I'd like to call up 21 Exhibit 2403, please. 22 Can you go on 2403 to the heading? 23 Q. Can you tell the Jury who those people 24 are? 25 A. There are John Ludwig, Brad 6624 1 Silverberg, Ben Slivka, Thomas Reardon, Darrell 2 Reuben, Paul Maritz, Chris Jones. I forget who 3 Victor S. is, but that's the names of 4 executives within the Microsoft organization 5 including the head of Windows desktop operating 6 system, Brad Silverberg and his superior Paul 7 Maritz. 8 Q. Okay. And what's the subject of this 9 particular memo, sir? 10 A. The subject is a response to anti-Java 11 strategy memo. 12 Q. Okay. 13 A. Or reply. 14 Q. And this is dated September 4th, 1995; 15 right? 16 A. Yes. 17 MR. LAMB: Can you highlight the first 18 sentence, Darin, some additional thoughts? 19 Q. Okay. Can you read that for us? 20 A. Some additional thoughts. These are 21 all based on my conclusion that Java is already 22 here, and we need to move down the 23 embrace/extend path. 24 Q. Okay. And now, again, for the Jury, 25 what does embrace mean in this context as used 6625 1 by Microsoft employees? 2 A. It's used to indicate a strategy where 3 Microsoft will embrace the standards or the 4 specifications and interfaces of another 5 company's software. 6 Q. Okay. And what does extend refer to? 7 A. Once the specifications have been 8 embraced, then Microsoft will extend them and 9 add additional interfaces proprietary to 10 Microsoft. 11 Q. Okay. When you say add additional 12 proprietary interfaces that are Microsoft's, 13 what impact does that have technologically to 14 other ISVs and OEMs? 15 A. Well, the result is or the impact is 16 that what was once sort of community 17 development property, the work of the industry 18 and industry participants is appropriated 19 essentially, is taken over by Microsoft. 20 And then Microsoft takes it and with 21 its proprietary extensions, makes it 22 essentially unavailable on a going-forward 23 basis to the industry participants who were 24 responsible for first developing the 25 specifications and the standards. 6626 1 Q. Okay. And when Microsoft makes those 2 APIs unavailable to certain ISVs and OEMs, 3 what's the impact to those ISVs and OEMs of 4 their ability technologically to create 5 products? 6 A. It reduces their ability to create 7 products, especially products that will 8 interoperate with Microsoft's products. 9 Q. Okay. Thank you, sir. 10 MR. LAMB: Darin, could you go right 11 above paragraph 2 and highlight that for us? 12 Q. Okay. Do you see the section there, 13 sir, where it says there are a bunch of 14 options, but the answer really revolves around 15 our company strategy. Given that we don't 16 think Java is going to be around or that we 17 don't want to encourage it, we should figure 18 out a way to have our browser sniff the applet 19 tag in HTML (Java object) then prompt the user 20 to fetch the runtime from Sun. 21 Do you see that, sir? 22 A. I do. 23 Q. Can you tell that jury, what does that 24 mean? When it references our browser, what is 25 that referring to? 6627 1 A. Our browser is the Microsoft Internet 2 Explorer. 3 Q. Okay. And when it says sniff the 4 applet tag in HTML, tell the Jury what that 5 means. 6 A. Well, what that means is to identify a 7 particular markup language identifier that 8 would indicate that this is a Java applet. 9 Q. Okay. And then where it says then 10 prompt the user to fetch the runtime from Sun, 11 what does that mean? 12 A. That means that the user would be 13 asked if he wanted to go and get the Java 14 runtime software, the Java Virtual Machine from 15 Sun and install it on the user's computer. 16 MR. LAMB: Okay. Go down to the 17 bottom paragraph, Darin. Very bottom 18 paragraph. 19 And then if you can highlight the 20 second page and add paragraph 3 underneath 21 that. 22 Can't do that on the same screen? 23 Okay. 24 All right, it can be done. We have 25 the technology. 6628 1 Q. All right. Do you see there where it 2 says one strategy is to jump on the Java 3 bandwagon and try to take control of the class 4 libraries and runtime? What are class 5 libraries? 6 A. Well, I mentioned before in 7 yesterday's conversation that there were these 8 subroutines. Sometimes they were referred to 9 as DLLs. I think I used the term distributed 10 link libraries. 11 Another manifestation of the same 12 idea, another way of approaching the same idea 13 of taking subroutines and making them available 14 is something called the runtime and class 15 libraries. They are the equivalent, if you 16 will, of subroutines in the Java world. 17 Q. Okay. Is that something you could 18 diagram for the Jury so they can see what a 19 Java Virtual Machine does? 20 A. Sure, I can do that. 21 MR. LAMB: Permission of the Court? 22 THE COURT: You may. 23 MR. LAMB: Does this matter whether 24 it's on white board? I don't know what the 25 Court's preference. 6629 1 THE COURT: Why don't you use the 2 easel. Can you use the easel, please? 3 THE WITNESS: I'll try. I have a 4 tendency to slide down the easels. 5 THE COURT: Slide? 6 THE WITNESS: Slide. My handwriting 7 goes, you know, like this. 8 MR. LAMB: There's some markers in the 9 back there. 10 THE WITNESS: Thank you. 11 A. All right. So before we talked about 12 an operating system and we had applications in 13 it and we might have had middleware in here, 14 and these would be tied to a particular 15 platform. 16 So this would be -- for example, this 17 application would be linked to -- and I believe 18 I used the term locked into the Windows 19 platform. 20 In 1993 and 1994, the folks at Sun 21 Microsystem came up with this idea of putting 22 between the operating system and the 23 applications a virtual machine. So these. 24 In Sun's Java world, these 25 applications were known as applets. And the 6630 1 idea was that you would download them from the 2 Internet and you would make them so they could 3 run on your machine. 4 But they would run inside something 5 called a virtual machine that would insulate 6 the application from any dependencies on the 7 operating system. 8 So essentially you could take -- 9 Q. Hold on a second there. When you say 10 insulate the applications from the operating 11 system, technologically, what's the impact of 12 that? 13 A. That meant that the applications were 14 portable and that the same application could be 15 downloaded from a website and run on a 16 Macintosh computer or on a Windows computer or 17 on a Linux computer without any change. 18 Q. So the operating system didn't matter? 19 A. The operating system didn't matter, 20 that's correct. 21 Q. Go ahead, sir. 22 A. So the Java Virtual Machine was 23 responsible for maintaining all of the local 24 information, information about the operating 25 system that their JVM -- that's a shorthand 6631 1 word for Java Virtual Machine -- that the JVM 2 was responsible for managing all of the local 3 interfaces to the operating system, but the 4 application used only the interfaces available 5 from the Java Virtual Machine. 6 Those same interfaces were available 7 on every system that Java Virtual Machine would 8 run on. And there were, I believe, more than 9 30 different computer platforms that the Java 10 Virtual Machine software could run on. 11 And that meant that you could download 12 an application from a website, Java 13 application, and could run on 34 different 14 computers without you having to recode the 15 application or -- a term that I used 16 yesterday -- without you having to port the 17 application by changing the APIs and making 18 other changes. 19 Q. Okay. You can go ahead and take your 20 seat again, sir. It goes in the back. 21 Sir, referring again to the exhibit, 22 Exhibit 2403, paragraph 3 there, it says, we 23 should consider support for Java as a platform. 24 As a company, we have two options for embracing 25 and extending Java. 6632 1 Do you see that phrase, again, 2 embracing and extending; right? 3 A. I do. 4 Q. And does it mean the same thing that 5 it meant earlier, in your mind? 6 A. Yes. 7 Q. Okay. 8 MR. HOLLEY: Your Honor, objection. 9 On November 9th of 2006, the Court 10 issued a ruling on motions in limine where the 11 Court said no witness -- 12 MR. LAMB: Your Honor, this is a 13 speaking objection. 14 MR. HOLLEY: Your Honor, I just need 15 to state the basis of my objection. 16 THE COURT: Let's take it outside the 17 presence of the jury. 18 (The following record was made out of 19 the presence of the jury at 9:01 a.m.) 20 MR. HOLLEY: Your Honor, on the 9th of 21 November of 2006 in response to Microsoft's 22 motion in limine to preclude plaintiffs' 23 experts from testifying about Microsoft's 24 corporate intent objective and knowledge the 25 court stated generally no expert or witness can 6633 1 testify about an individual's intent or state 2 of mind. And it seems to me, Your Honor, what 3 Mr. Lamb is seeking to do is get Mr. Alepin to 4 testify about what he thinks Microsoft intended 5 when Microsoft's witnesses can say that, but 6 Mr. Alepin doesn't have any expertise in 7 deciding what Microsoft wanted to do or what 8 its motives were. This is what I sometimes 9 refer to as the intentologist expert where 10 somebody gets up on the stand and looks at a 11 bunch of documents and says, "I say that person 12 intended x." Well, how does he know? And 13 that's exactly why we filed this motion, and I 14 believe that the Court properly ruled that 15 experts are not allowed to testify about 16 Microsoft's intent or state of mind. 17 THE COURT: Well, isn't he testifying 18 as to what the language means? 19 MR. HOLLEY: But it means -- his 20 interpretation of what Microsoft intends when 21 they says embrace or extend. It's different in 22 my mind than saying -- he's already testified 23 that embrace means, you know, clone everything 24 somebody does, and extend means add priority 25 extensions that aren't available to other 6634 1 people. So he's already said that. He's 2 already said what embrace and extend mean. 3 And Mr. Lamb can correct me if I'm 4 wrong, but if he believed that the question was 5 then asking him what about what he believed 6 Microsoft intended by using that phrase, and 7 that's not something that he can say. 8 THE COURT: Was that the question? 9 MR. LAMB: That was not the question. 10 The question was: "What did it mean to you?" 11 And he had already testified about general 12 industry meaning and, frankly, you know, having 13 been challenged about this issue, we're going 14 to go over two more exhibits that refer to 15 this. He's going to talk about it. 16 And we're going to go over trial 17 testimony where someone from another company 18 recounted a conversation with Paul Maritz, who 19 is a senior executive at Microsoft, where Paul 20 Maritz told him exactly what embrace, extend 21 and extinguish mean. 22 MR. HOLLEY: Well, I don't think we're 23 going to do that or at least I'm going to 24 object because he's not an expert on that 25 testimony. 6635 1 Mr. Maritz testified that he never 2 said that there is no finding by Judge Jackson 3 about who is telling the truth about that 4 conversation. And Mr. Alepin can't tell this 5 jury that Steve McGeady said something. If 6 Steve McGeady wants to come here and repeat 7 that testimony, we can cross-examine him, but 8 it's not proper for Mr. Alepin to start 9 referring to things that happened in U.S. v. 10 Microsoft in reading things from the transcript 11 to the jury. 12 The Court's order of yesterday said 13 he's not allowed to opine about findings, 14 conclusions and determinations in other 15 lawsuits. 16 MR. LAMB: Your Honor, he's not. He's 17 an expert. He's reviewed documents. He's 18 reviewed exhibits. He's reviewed testimony. 19 He's entitled to rely on them, hearsay or not. 20 And if counsel wants to impeach him on that, 21 then go and done. That's his entitlement to do 22 that, but he cannot restrict the testimony just 23 because he thinks it's bad for Microsoft. 24 MR. HOLLEY: That's not the basis for 25 my objection, Your Honor. He's here as an 6636 1 expert based on his experience in the computer 2 industry. So he can talk about his 3 understanding of what technological terms mean, 4 but he's not an expert on whether Paul Maritz 5 told McGeady at Intel that somebody was going 6 to engage in embrace, extend and extinguish. 7 Yesterday Mr. Alepin honestly testified he's 8 never seen that formulation in any Microsoft 9 document. I've never seen it. There is no 10 Microsoft document that says embrace, extend, 11 extinguish. That's a really relevant fact, 12 which we'll obviously be entitled to tell the 13 jury about. But why should this man who is not 14 here as the walking National Enquirer of the 15 computer industry get up on the stand and tell 16 the jury that some guy who they say is coming 17 to testify in this case said something in a 18 prior lawsuit? That's not his expertise. 19 MS. CONLIN: Maybe we should do one at 20 a time, Your Honor. 21 Right now what is pending before the 22 Court is a question that already was posed by 23 Mr. Lamb, which in our opinion is clearly 24 proper, and then perhaps we should move on to 25 the other issue. 6637 1 THE COURT: I think that's a good 2 idea. I'm going to allow him to state what he 3 believes the language means to him as he reads 4 it. 5 MR. LAMB: That is all I asked him, 6 sir. 7 MR. HOLLEY: But is the Court 8 intending to adhere to the November 9th ruling 9 that Mr. Lamb is not entitled to ask Mr. Alepin 10 what Microsoft's intent or state of mind was 11 based on his reading of Microsoft's internal 12 documents? 13 THE COURT: He can say what it means 14 to him. For instance, if he says he's planning 15 to kill somebody, he can say that sounds like 16 they're planning to kill somebody if it says 17 that. 18 MR. HOLLEY: Well, the problem with 19 that, Your Honor, in this context is that 20 Mr. Alepin doesn't know whether, you know, Ben 21 Slivka is a comic or Chris Jones is trying to 22 be funny. I mean, he doesn't know anything 23 about these documents. He's sitting here 24 reading them cold trying to decide. 25 THE COURT: On the plain face of it, 6638 1 the way it's stated and the way I understand 2 the terms extend and embrace, this is what it 3 appears to say. What it means to me. 4 MR. HOLLEY: What it means to me. 5 THE COURT: But not whether or not, 6 you know, what they intended, you're right. 7 MR. LAMB: Your Honor, I strongly urge 8 us to go back out so we don't keep the jury 9 waiting any longer. One final comment. What 10 is going on here is counsel keeps asking for a 11 series of advisory opinions about evidence we 12 haven't offered, questions we haven't asked and 13 it's all designed to disrupt the flow of his 14 testimony and it is improper. 15 THE COURT: He can say what it means. 16 MS. CONLIN: Your Honor, one other 17 thing, I've never seen a lawyer read from a 18 ruling of the court on a motion in limine as a 19 part of the motion in limine. As I recall, 20 generally speaking, you never refer to the 21 motions in limine. You refer to Court's 22 orders, but reading from a motion in limine? 23 Unbelievable. 24 MR. GREEN: If you have to object, I 25 don't think it's improper. 6639 1 MS. CONLIN: You don't have to do it 2 to object. You object on the basis of the 3 Court's ruling. 4 THE COURT: You can just object. If 5 we have to take it up outside the presence of 6 the jury, we will. 7 (The following record was made in the 8 presence of the jury at 9:08 a.m.) 9 THE COURT: Please rephrase the 10 question. 11 BY MR. LAMB: 12 Q. Again, Mr. Alepin, that phrase 13 embracing and extending Java in paragraph 3 of 14 this exhibit, what did that mean to you? 15 A. That meant that Microsoft would adopt 16 Java. That is to say, adopt the interfaces. 17 And then it would add extensions proprietary to 18 Microsoft. 19 Q. Okay. And what is the impact on other 20 developers of the addition of those extensions? 21 Would you explain that to the Jury? 22 A. Well, the use of those proprietary 23 extensions, those proprietary Microsoft 24 extensions to the Java Virtual Machine APIs 25 would lock the application or the applet to the 6640 1 Windows computer. Meaning that those applets 2 would only run on or with a Windows computer. 3 Q. Okay. With the Court's permission, 4 could you get down and show on the diagram that 5 you have what the impact of the addition of 6 those applications would have? 7 A. Excuse me, the addition of those 8 applications programming interfaces? 9 Q. Yes, APIs. 10 THE COURT: Speak loudly, please. 11 THE WITNESS: I'm sorry. 12 A. Okay. So here is our Java Virtual 13 Machine. Here are the interfaces between the 14 applet or the application and the Java Virtual 15 Machine interfaces including -- just, for 16 example, allocate memory for me, get input from 17 the keyboard, those kinds of operations. 18 And what Microsoft extensions would do 19 would be to add additional interfaces. Would 20 add some additional interfaces not available on 21 the other virtual machines that were on other 22 platforms. 23 When the application developer used 24 those APIs, that meant that the applet would 25 only run on the Windows platform. Those kinds 6641 1 of functions would be unique to Windows and 2 would lock the applet into the Windows 3 platform. 4 Q. Okay. Thank you, sir. 5 This e-mail, Exhibit 2403, then goes 6 on to say that there's a couple options. 7 One, we take control of it and add 8 Windows specific classes. 9 Do you see that, sir? 10 A. Yes. 11 Q. And explain to the Jury what that 12 would entail, that option. 13 A. That's the description of what I was 14 just saying. 15 Q. Okay. 16 A. So adding the Windows specific 17 classes -- classes are subroutines or the 18 equivalent of subroutines. They're application 19 programming interfaces, which would be specific 20 to the Windows platform. 21 Q. Okay. And then the second object is 22 we, quote, sandbox, end quote, it, slow it 23 down, and restrict it to a particular domain, 24 betting that we can bring our technology to 25 bear quickly enough to minimize the impact. 6642 1 Technologically, what does that mean 2 sandbox it, slow it down, restrict it to a 3 particular domain? 4 A. It means, as a technical matter, 5 relegating Java's applicability to a specific 6 type of environment or purpose so that it 7 would, for example, be not a general purpose 8 solution for the development of applications. 9 Q. Okay. And then it goes on to say 10 while I would like to pick two, my personal 11 feeling is that we should strongly consider 12 one; namely, fully supporting Java and 13 extending it in a Windows/Microsoft way. 14 Do you see that? 15 A. I do. 16 Q. And, again, extending it in a 17 Windows/Microsoft way, does that have the same 18 meaning, in your mind, as it did the way you've 19 testified earlier? 20 A. It does. 21 Q. Okay. And is that something that 22 you've seen in a number of Microsoft documents 23 used by a number of Microsoft employees? 24 A. Yes. 25 MR. LAMB: Would you pull up Exhibit 6643 1 5803, please? Okay. 2 If you could go to the from/to line. 3 Q. Who's this from? 4 A. This is from Bill Gates. 5 Q. And who's Bill Gates, sir? 6 A. He's the CEO, founder of Microsoft. 7 Q. And who is it to? 8 A. I think was the CEO and still is the 9 founder of Microsoft. 10 Q. Okay. Who is this e-mail to? 11 A. It's to Nathan Myhrvold. 12 Q. Okay. And, again, this is dated 13 September 30th, 1996. 14 The subject, what is the subject, sir? 15 A. The subject is Java runtime becomes 16 the operating system. 17 Q. Who is Mr. Mhryvold? 18 A. Nathan Mhryvold was one of the most 19 senior executives at Microsoft. 20 Q. Okay. Why don't we go to the very 21 first paragraph. 22 And this is Mr. Gates saying I am 23 worry a lot about how great Java/Javabeans and 24 all the runtime work they are doing is and how 25 much excitement this is generating. I am 6644 1 literally losing sleep over this issue since 2 together with a move to more server based 3 applications, it seems like it could make it 4 easy for people to do competitive operating 5 systems. 6 Do you see that, sir? 7 A. I do. 8 Q. Okay. What does the phrase more 9 server based applications mean? 10 A. Well, one of the great potentials for 11 the Internet is that you can create 12 applications that run on a server computer, 13 like a web server or run partially on a web 14 server and partially on your desktop so that 15 there is a cooperative application that can 16 provide some of the nice responsiveness of a 17 local based application with some of the larger 18 capacity features of servers. 19 Q. And is this one of the many e-mails 20 that you reviewed in order to help form your 21 opinions here? 22 A. One of the many. 23 Q. Okay. Now, as you read this in order 24 to form your opinions, do you see where it says 25 I am worry a lot? 6645 1 A. I do, yes. 2 Q. Okay. And does that tell you that 3 Mr. Gates is conveying, at least as you review 4 it, a concern? 5 A. Well, this is a concern that was 6 widespread among Microsoft employees. 7 Q. Okay. And can you tell the Jury, in 8 your opinion, what you view Mr. Gates is 9 conveying the concern to be? 10 A. Well, the concern that Microsoft 11 documents, Microsoft employees discusses the 12 potential that Java had as a technology or as a 13 platform, in particular, to become an operating 14 system and to make it possible to replace the 15 current operating system, the current Windows 16 operating system. 17 Q. It technologically threatened the 18 Windows operating system platform? 19 A. That's correct, yes. 20 Q. Okay. 21 MR. LAMB: Darin, if you could go down 22 about midway in this document where it says I 23 think that the risk of Sun. 24 Q. Sir, that says, I think, that the risk 25 of Sun really taking the OS franchise away from 6646 1 us is much lower than the risk that they 2 cheapen the entire business. 3 They are so hell bent to give things 4 away, and there is so much cross-platform 5 fervor, that it will be hard for them or others 6 to harness this energy toward a single 7 platform. 8 In the limit, they can make the web 9 totally OS agnostic, but there will still be 10 other things that motivate one platform versus 11 another. 12 And, again, what is Sun? 13 A. Sun is Sun Microsystems. They started 14 off as a workstation and had a server company. 15 They had an operating system that -- and still 16 do -- that was based on Unix. Unix was one of 17 the operating systems I put up on the quadrant 18 yesterday. 19 Q. Okay. Mr. Alepin, the term the OS 20 franchise, what does that mean? 21 A. The OS franchise is the Windows -- 22 well, the OS franchise is the operating system 23 platform. 24 Q. You understand Mr. Gates to be 25 referring to Windows? 6647 1 A. The Windows, of course, yes. 2 Q. Okay. And, again, Sun created Java; 3 right? 4 A. Uh-huh. Yes. 5 Q. Okay. Now there's another phrase -- 6 and I believe you said what it meant yesterday, 7 but if you could go over it again, I would 8 appreciate it -- cross-platform. 9 Do you see where it says there is so 10 much cross-platform fervor? 11 A. I do. 12 Q. What does cross-platform mean? 13 A. Cross-platform is -- refers to the 14 ability of applications to run on different 15 platforms without any effort. 16 This was something that emerged as a 17 result of looking at the potential for the 18 Internet and looking at applications like 19 Netscape's browser and Sun's Java. 20 It created the potential for users to 21 -- an independent software vendors to start 22 thinking in terms of one application across all 23 of the hardware and software platforms out 24 there. 25 Q. And, Mr. Alepin, technologically 6648 1 speaking, cross-platform versus single platform 2 is more beneficial for ISVs and OEMs; correct? 3 MR. HOLLEY: Objection, Your Honor. 4 Leading. 5 THE COURT: Sustained. 6 Q. What is the impact of cross-platform 7 in relation to ISVs and OEMs as compared to 8 single platform? 9 A. Well, there is a significant reduction 10 in the cost of development of software. And 11 this shows itself in several ways, but the 12 first of which is that if you have a platform, 13 a cross-platform application, you develop it 14 once and you can run it anywhere. 15 That was the tag line, if you will, of 16 Sun's Java, is write once, run everywhere. 17 The second reduction in cost for an 18 independent software vendor is that the 19 developers only have to learn one platform, one 20 set of interfaces, one way in which to program 21 in order to be able to write programs that run 22 on a variety of platforms. 23 So if you think of, let's say, a 24 vendor like -- independent software vendor like 25 Intuit, if it wanted to make an application 6649 1 that ran on Windows and ran on the Mac, it 2 might have to have two teams of developers, 3 each of which were knowledgeable in the 4 interfaces and the design requirements for 5 applications that run on the Mac and run on 6 Windows, or if it was using cross-platform 7 development tool kit and environment, it would 8 only need to do that once. 9 Q. And what is the impact of 10 cross-platform versus single platform on the 11 common user, the end user, in relation to their 12 ability to download these applets and utilize 13 them? 14 A. Well, when applets are cross-platform, 15 it expands the number of applications that are 16 available to you so you can go to a website. 17 And if you have a Linux computer or a 18 Macintosh computer or a Windows 3.1 computer, 19 you can get an application and it will run. 20 You don't have to either select a 21 specific application or hope that the 22 independent software vendor or the website 23 created the application for your platform. So 24 it would increase the number of applications 25 available to you. 6650 1 MR. LAMB: Darin, if you could go down 2 to the last two paragraphs and highlight those. 3 No, the one below that. 4 Q. Mr. Alepin, Mr. Gates goes on to say, 5 this is not to say that Java is unimportant. 6 It is very, all caps, important, paren, just 7 don't lose sleep, exclamation point, close 8 parens. 9 I think that you are focusing on the 10 wrong, quote, kind, end quote, of threat. We 11 are in danger of losing a new market, which 12 will grow at a pace which is very rapid indeed. 13 This would be a tragedy to have happen 14 to us, but it is different than a direct 15 assault on our core asset. And our response 16 must also be different. The obvious things to 17 do are, colon. 18 Now, when Mr. Gates refers to the core 19 asset, what piece of technology, in your mind, 20 is he referring to? 21 A. Well, the core asset is the operating 22 system. It's the Windows -- at this time it's 23 the Windows operating system. 24 Q. Okay. 25 MR. LAMB: Darin, could you go to the 6651 1 second page under the top paragraph 1? It goes 2 down a couple lines. 3 Q. Do you see there where it says, one, 4 provide our own means of dramatically improving 5 web pages. Continue to, quote, embrace and 6 extend, end quote, both at the level of new 7 Java tools, like J plus plus, and our broader 8 browser strategy. 9 Do you see that, sir? 10 A. Yes. 11 Q. Okay. And based on your experience in 12 the industry and based on your review of all 13 the documents, what is your understanding of 14 the meaning to you of the phrase, quote, 15 embrace and extend, end quote, as Mr. Gates 16 uses it here? 17 A. It's to copy and adopt the interfaces 18 from others and to extend them in proprietary 19 and unique ways. 20 MR. LAMB: Could I have Exhibit 5906? 21 Can we do the to/from line. 22 Q. This is from Aaron Contorer. 23 Do you see that? 24 A. Yes, I do. 25 Q. Do you know who that was or is? 6652 1 A. I believe he was in the developer 2 tools organization. 3 Q. Okay. You need to speak up, sir. I 4 apologize. I'm really loud. You're really 5 quiet. Okay. 6 A. Yes. 7 Q. We're getting there. 8 A. All right. 9 Q. Okay. And it's to who? 10 A. It's to Bill Gates. 11 Q. Okay. Now, again, if we could go to 12 the first paragraph where it says, the first 13 two paragraphs that starts with today. 14 It says, today we face the largest 15 threat Microsoft has faced since the success of 16 Windows. 17 For the first time there is a really 18 credible threat to our position as the leading 19 platform for ISVs to write to. 20 Windows faces challenges in satisfying 21 end users and IT organizations, but we have a 22 lot of smart work underway to address these 23 problems. 24 By contrast, we are not executing on a 25 strategy that lets us maintain our leadership 6653 1 position as the people who define the platform 2 for ISVs. 3 Owning this platform is the Microsoft 4 asset. It is the difference between growing to 5 twice our current size in the future, or 6 shrinking to much less than the role we enjoy 7 today. 8 Do you see that, sir? 9 A. I do. 10 Q. Okay. And when Mr. Contorer refers to 11 owning this platform is the Microsoft asset, 12 when he refers to the Microsoft asset and the 13 platform, what is your understanding of that 14 terminology? 15 A. Well, it's the -- as I referred to 16 yesterday, the platform that we speak of is the 17 set of programming interfaces that in this 18 particular case here would be Windows. 19 Q. Okay. 20 MR. LAMB: If you could go to the next 21 two paragraphs, Darin. 22 Q. This memo goes on to Mr. Gates to say, 23 there are three possible ways to address the 24 threat of the Java platform. 25 One is to do nothing and gradually die 6654 1 as others innovate around us. 2 The second is to join the parade of 3 people who are saying, quote, let's kill 4 Microsoft and share their market among us, end 5 quote. Good for everyone else, but reducing us 6 to the much smaller role of a common software 7 company like Lotus or Borland, or even 8 Symantec. 9 That's a great way to make all our 10 stock options worth zero, even if we would not 11 technically be out of business. 12 The third choice is to make major 13 innovations to our platform so people still 14 prefer to write to us instead of some tepid 15 cross-platform Java layer. This is our only 16 real option. 17 Okay. Again, the platform, what's the 18 reference to, as you understand it? 19 A. The Windows platform. 20 Q. Okay. And of those three options, 21 based on your review of all the evidence, what 22 option do you believe Microsoft took? 23 A. It took the embrace and extend option. 24 Q. Okay. It goes on to say, for over 25 half a year, I have been upset that some people 6655 1 at Microsoft are apparently working hard on 2 plan two to destroy the value of the Windows 3 API. 4 Do you see that? 5 A. Yes. 6 Q. Okay. What does that mean, the value 7 of the Windows API from a technology point of 8 view? 9 A. Well, the ability to own and to extend 10 the application programming interface and keep 11 the applications that independent software 12 vendors have developed locked into the Windows 13 platform is the thing of considerable value. 14 MR. LAMB: If you could go to the next 15 page, Darin. 16 And if you could highlight the last 17 two lines of the first paragraph under 18 switching costs to the end of the paragraph 19 that starts extend. Right there. All right. 20 Thank you, sir. 21 Q. Okay. Do you see there, it says there 22 is a name for this, colon, it is called, in 23 caps, embrace, and, again in caps, extend. 24 Do you see that, sir? 25 A. I do. 6656 1 Q. Okay. And when you read that based on 2 all your training and experience in the 3 industry and based on all the documents that 4 you've reviewed, what do you understand the 5 phrase embrace and extend to mean? 6 A. It means to adopt the interfaces and 7 standards and other specifications of another 8 platform or software product. 9 And extend means to add interfaces or 10 specifications to that platform and have those 11 extensions be unique and proprietary to the 12 Windows platform. 13 Q. Okay. And the next paragraph says, 14 embrace means we are compatible with what's out 15 there so you can switch to our platform without 16 a lot of obstacles and rework. 17 You can switch from someone else's 18 Java compiler to ours; from someone else's web 19 server to ours, et cetera. Customers love when 20 we do this (as long as we don't spend our 21 energy embracing extra standards no one really 22 cares about). Our competitors are not so sure 23 they like it because they prefer us to screw 24 up. 25 In there, what does that mean 6657 1 embracing extra standards no one really cares 2 about? 3 A. Well, some standards can run into the 4 thousands of pages and deal with exotic 5 environments and exotic conditions, and there's 6 a -- one needs to be careful that one doesn't 7 spend a lot of time doing a lot of work for 8 special circumstances that are unlikely to 9 arise in the normal course of running some 10 software. 11 So you don't want to copy everything. 12 The idea is to copy the most specifications 13 that represent the most cases. 14 Q. And then the next paragraph says, 15 extend means we provide tremendous value that 16 nobody else does. 17 So, A, you really want to switch to 18 our software, and B, once you try our software, 19 you would never want to go back to some 20 inferior junk from our competitors. 21 Customers usually like when we do 22 this, since, by definition, it's only an 23 extension if it adds value. 24 Competitors hate when we do this 25 because, by adding new value, we make our 6658 1 products much harder to clone. 2 This is the difference between 3 innovation and just being a commodity like dot 4 com where suppliers compete on price alone. 5 Nobody builds or sustains a business 6 as successful as Microsoft by producing trivial 7 products that are easy to clone. That would be 8 a strategy for failure. 9 Do you see that, sir? 10 A. I do. But I think it's like corn. 11 Q. Like what? 12 A. Like corn. 13 Q. Oh, like corn? 14 A. A commodity like corn. 15 Q. You're right. We're in Iowa. I 16 should see that. I apologize. Okay. 17 A. I'm sorry. 18 Q. No. That's all right. 19 From a technological point of view, 20 what is it you understand he is saying? 21 A. He's saying that extend means that you 22 add additional functionality that would draw 23 developers to the platform, the extended 24 platform. 25 Q. But that additional functionality, how 6659 1 does that adversely impact other ISVs, OEMs, 2 and other end users? 3 A. Well, it makes it harder for them, 4 especially if the interface information isn't 5 disclosed or it is very closely tied to other 6 Microsoft proprietary technology. 7 It makes it very difficult for the 8 rest of the independent software community to 9 take those extensions and make them available 10 to users on other platforms. 11 Q. And is it necessary, in your opinion, 12 technologically for Microsoft to add this 13 innovation and not disclose the APIs? 14 MR. HOLLEY: Objection, Your Honor. 15 THE COURT: Overruled. You may 16 answer. 17 A. No. 18 Q. Why not? 19 A. It's not necessary to -- not to 20 disclose interfaces. There's not -- there's 21 not a technical reason for not disclosing 22 interfaces. 23 Q. Okay. Thank you, sir. 24 Now, in developing your opinions here 25 yesterday and today, you've reviewed a lot of 6660 1 documents; right? 2 A. I have, yes. 3 Q. And you've reviewed depositions; 4 right? 5 A. Yes. 6 Q. And you've reviewed trial testimony; 7 correct? 8 A. Yes. 9 Q. And you've relied on them; correct? 10 A. Yes. 11 Q. Okay. And, in part, in relation to 12 your opinions here yesterday and today, you 13 reviewed the testimony of a Steven McGeady, an 14 Intel executive; correct? 15 A. Yes, I did. 16 Q. McGeady, I'm sorry. M-c-G-e-a-d-y. 17 I'm sorry. I apologize. 18 A. Yes. 19 Q. I'd like to read some of that 20 testimony. It's March 31st, 2004. And it 21 starts: 22 Question: Let me ask you about the 23 November 7th, 1995, Oregon meeting. 24 First, is there any reason that that 25 meeting, in particular, stands out in your 6661 1 head, in your mind or your head? 2 Answer: Well, at that particular 3 meeting -- 4 MR. HOLLEY: Your Honor, I'm sorry to 5 interrupt Mr. Lamb, but this is a subject that 6 I think we need to address at the sidebar for 7 the reasons that I explained earlier. 8 THE COURT: Very well. 9 (The following record was made out of 10 the presence of the jury at 9:35 a.m.) 11 THE COURT: All right. Back on the 12 record. 13 MR. HOLLEY: So this seems to move 14 squarely presenting with collateral estoppel 15 problem we've been discussing. Steve McGeady 16 testified at the Microsoft trial. Judge 17 Jackson made certain findings about that 18 testimony, not including a finding, by the way, 19 about whether or not the testimony he's about 20 to read is true or false. 21 THE COURT: So there's no collateral 22 estoppel. 23 MR. HOLLEY: But there are conclusions 24 which the jury has been read about the 25 interaction between Microsoft and Intel 6662 1 relating to Java and Netscape, and those are 2 preclusive. And why are they entitled to 3 bolster them by talking about things that 4 McGeady said that underlie Jackson's findings. 5 It's purely going to the same issues that are 6 covered in the findings that have been read to 7 the jury and they've been told they have to 8 accept. 9 THE COURT: Which findings do they 10 bolster? 11 MR. HOLLEY: They bolster the findings 12 that Microsoft intimidated Intel and sought to 13 close down the Intel -- it's called IAL, the 14 Intel Laboratories -- 15 MS. CONLIN: Intel Architectural 16 Laboratories. 17 MR. HOLLEY: Thank you. It's scary 18 when she's telling me what the evidence is 19 supposed to say. It shows how much -- 20 MS. CONLIN: I just love do it too. 21 MR. HOLLEY: She's learned a hell of a 22 lot. Anyway, they go to the findings about 23 threatening Intel and seeking to stop Intel 24 development of software. They go to the 25 findings about whether Microsoft sought to 6663 1 persuade Intel not to support Java, sought to 2 persuade Intel not to support Netscape 3 Navigator, and this meeting at which McGeady 4 claims that Maritz said, you know, if you 5 embrace, extend and extinguish was a center 6 piece of the testimony about what Microsoft did 7 to try to persuade Intel not to support Java 8 and not to support Netscape. 9 So it's all dealt with in those 10 findings of fact. It's facts that underlie 11 those findings, and the effort is to bolster 12 the findings. I mean, we obviously suffer from 13 having those findings read to the jury. And as 14 we've said before, that is a strategic choice 15 that the plaintiffs made. They obviously get 16 great benefit from having the jury sitting 17 there with a notebook full of findings, but it 18 doesn't seem fair having that have happened, 19 which, obviously, we live with, to then be able 20 to go behind the findings and talk about the 21 testimony that was in front of Judge Jackson. 22 MS. CONLIN: As the Court points out, 23 there was no finding on this issue or anything 24 close to this issue. And in addition, as we 25 discussed during the opening when we are 6664 1 offering these kinds of materials on other 2 issues such as intent and willfulness, then 3 they're perfectly admissible and permissible. 4 And, of course, using this kind of testimony 5 with an expert is also permissible, whatever 6 the status of the testimony may be because it's 7 the thing upon which he relies in reaching his 8 conclusion. 9 MR. HOLLEY: But that puts them in a 10 difficult conundrum, Your Honor, because if it 11 goes to intent, Microsoft's corporate intent, 12 they are not allowed to have Mr. Alepin testify 13 about Microsoft's corporate intent. So it must 14 be bolstering because it can't be intent and 15 willfulness because he's not entitled to 16 testify about that. 17 MR. LAMB: He can certainly testify as 18 to intent and willfulness on a technological 19 basis, number one. Number two -- if I could 20 finish. 21 MR. HOLLEY: Well -- 22 MR. LAMB: Number two, when counsel 23 makes these speaking objections and personally 24 attacks an expert and says things like he just 25 made that up, we're entitled and indeed should 6665 1 clearly be allowed to explain to the jury why 2 he did that. We're talking about about 12 3 lines of testimony. 4 THE COURT: Read it to me. 5 MR. LAMB: Sure. 6 Well, at that particular meeting where 7 Paul Maritz -- and Paul Maritz is a senior 8 executive at Microsoft -- was in attendance, we 9 had a very frank discussion about the Internet, 10 about Microsoft's strategy and their strategy 11 and in particular towards Netscape and some 12 other competition. And Paul and some of the 13 other attendees made some fairly colorful 14 statements that stick out in my memory. 15 Question: What did Mr. Maritz say 16 that stands out in your memory? 17 Answer: Well, it was a long meeting. 18 There were two phrases that are easy to 19 remember. One was that it was Microsoft's plan 20 to cut off Netscape's air supply. Keep them by 21 -- by giving away free browsers, Microsoft is 22 going to keep Netscape from getting off the 23 ground. 24 And the other phrase, quote, cut off 25 air supply, end quote is one, perhaps, that at 6666 1 least sticks out clearly in my memory. 2 And the other phrase that sticks out 3 clearly in my memory was about, well, I don't 4 -- I won't characterize it, but the description 5 of Microsoft strategy as, quote, embrace, 6 extend, extinguish, end quote. It was kind of 7 a plan that public strategy of love and embrace 8 and extend, the notion that they would embrace 9 Internet standards, extend them presumably in 10 compatible ways that others wouldn't follow and 11 thereby extinguish the competition. 12 THE COURT: What is your question 13 going to be to the witness? 14 MR. LAMB: My question is -- I've 15 already asked him, did you review it and did 16 you in part rely on it when you made the 17 statement which you made which is embrace, 18 extend and extinguish which counsel attacked as 19 having made up. 20 MR. HOLLEY: Your Honor, Mr. Alepin, 21 whatever his expertise, is not here to call 22 pieces from prior cases and tell the jury what 23 they mean. 24 There was a hotly contested debate in 25 the Microsoft case in front of Judge Jackson 6667 1 about whether either of those statements was 2 ever made. 3 And if Mr. McGeady does come here, I 4 will look forward to going through all of that 5 with him again because, you know, that's the 6 appropriate time to try to get this sort of 7 evidence in front of the jury. We will have 8 the same sort of collateral estoppel objection. 9 But letting Mr. Alepin recite trial testimony 10 in order to attribute bad motives to Microsoft 11 is not proper. 12 MR. LAMB: Your Honor, how can it be 13 fair? I apologize. How can it be fair for 14 counsel to say he made it up? You can't talk 15 about it. You can't deal with it. We will 16 deal with it later. 17 THE COURT: Well, I think it's 18 rehabilitative as to the objection because the 19 objection was basically a form of impeachment 20 almost of the comments made. I think that is 21 rehabilitative. So I think it's not 22 substantive evidence, but it goes to the 23 credibility of the witness. 24 MR. HOLLEY: Just to be clear, Your 25 Honor, my objection was that the words he used 6668 1 did not appear in the document, but I accept 2 the Court's ruling. 3 THE COURT: He said made it up. 4 MR. HOLLEY: Well, it wasn't in the 5 documents. 6 THE COURT: Okay. I'll let you do 7 that. 8 (The following record was made in the 9 presence of the jury at 9:43 a.m.) 10 THE COURT: You may continue. 11 MR. LAMB: Thank you, Your Honor. 12 Q. Before I read the testimony, I want to 13 just get a couple things straight in terms of 14 people. 15 Stephen McGeady, who was he? 16 A. He was an employee of Intel 17 Corporation. 18 Q. Okay. And Paul Maritz, who is he? 19 A. Paul Maritz was the head of 20 Microsoft's -- I believe the head of 21 Microsoft's development organizations. 22 Q. And, again, you've got to speak up a 23 little bit because you make me sound like I'm 24 yelling. 25 A. I put the microphone out of harm's way 6669 1 during the sidebar. 2 Q. Okay. Thank you. 3 Now, this is from the transcript. 4 Question: Let me ask you about the 5 November 7th, 1995 Oregon meeting. 6 First, is there any reason that that 7 meeting in particular stands out in your head, 8 in your mind or your head? 9 Answer: Well, at that particular 10 meeting where Paul Maritz was in attendance, we 11 had a very frank discussion about the Internet, 12 about Microsoft's strategy and their strategy 13 in particular toward Netscape and some other 14 competition. 15 And Paul and some of the other 16 attendees made some colorful statements that 17 stick out in my memory. 18 Question: What did Mr. Maritz say 19 that stands out in your memory? 20 Answer: Well, it was a long meeting. 21 There were two phrases that are easy to 22 remember. 23 One was that it was Microsoft's plan 24 to cut off Netscape's air supply. Keep them by 25 by giving away free browsers, Microsoft was 6670 1 going to keep Netscape from getting off the 2 ground. 3 And the other phrase, quote, cut off 4 air supply, end quote, is one perhaps that 5 really sticks out clearly in my memory. 6 And the other phrase that sticks out 7 clearly in my memory was the rather -- well, I 8 won't characterize it, but the description of 9 Microsoft strategy as, quote, embrace, extend, 10 extinguish, end quote. 11 It was kind of a plan their public 12 strategy of love and embrace and extend, the 13 notion that they would embrace Internet 14 standards, extend them presumably in compatible 15 ways that others wouldn't follow and thereby 16 extinguish the competition. 17 And, again, Mr. Alepin, is that 18 testimony in part what you relied on yesterday 19 when you made the comment about embrace, 20 extend, and extinguish? 21 A. Yes. 22 MR. LAMB: Your Honor, I think it's 23 probably break time. 24 Am I right or wrong? 25 THE COURT: Well, I'll agree with you. 6671 1 MR. LAMB: Okay. Thank you, Your 2 Honor. 3 THE COURT: We'll take a 10-minute 4 recess. 5 Remember the admonition previously 6 given. Leave your notebooks here. 7 (A recess was taken from 9:46 a.m. 8 to 10:04 a.m.) 9 THE COURT: I was inquiring of the 10 jury. She had a book and I just wanted to make 11 sure it wasn't a technical book. 12 Thank you. 13 MR. LAMB: Is it safe, Your Honor? 14 THE COURT: It's safe. It has nothing 15 to do with this. 16 MR. LAMB: Okay. 17 THE COURT: Go ahead. 18 MR. LAMB: Thank you, sir. 19 BY MR. LAMB: 20 Q. Mr. Alepin, I've put Exhibit 5906 back 21 up and you've got the from/to line there. I 22 don't know if I asked you this. 23 Aaron Contorer, what position did he 24 have at Microsoft, as you understood it? 25 A. He had a couple of positions, but I 6672 1 believe at this time he was the -- 2 Q. Microphone, speak up. 3 A. It's the microphone. 4 Q. My fault. Go ahead. 5 A. No. He had several positions, I 6 believe, at Microsoft, but at this time I think 7 he was the technical assistant to Bill Gates, a 8 role that -- an advisory role. 9 Q. Okay. In relation to technology, how 10 important is that role? 11 A. It's important. It's an important 12 role. Eyes and ears kind of responsibilities 13 about technology and merging opportunities, 14 that kind of thinking. 15 Q. Thank you, sir. 16 MR. LAMB: Darin, could you put up 17 Finding of Fact 175, please. 18 Q. This is one of the finding of facts 19 that I'm going to read. 20 Finding of Fact 175. 21 No technical reason can explain 22 Microsoft's refusal to license Windows 95 23 without Internet Explorer 1.0 and 2.0. The 24 version of Internet Explorer 1.0 that Microsoft 25 included with the original OEM version of 6673 1 Windows 95 was a separable, executable program 2 file supplied on a separate disk. 3 Web-browsing thus could be installed 4 or removed without affecting the rest of 5 Windows 95's functionality in any way. 6 The same was true of Internet Explorer 7 2.0. Microsoft, moreover, created an easy way 8 to remove Internet Explorer 1.0 and 2.0 from 9 Windows 95 after they had been installed by the 10 code, add/remove panel. 11 This demonstrates the absence of any 12 technical reason for Microsoft's refusal to 13 supply Windows 95 without Internet Explorer 1.0 14 and 2.0. 15 Sir, my question to you is the phrase 16 separable, executable program file, what does 17 that mean? 18 A. That means that the Internet Explorer 19 application program was supplied on a separate 20 disk much the same way that the -- again, plug 21 for Intuit -- the Quicken program would have 22 been supplied. 23 Q. And then the add/remove panel, what 24 does that refer to? 25 A. Add/remove panel, I mentioned that 6674 1 yesterday, but what that is is a facility 2 within the Windows software product that you 3 navigate to from the start menu. And it allows 4 you to see the programs you've got installed on 5 the computer and to, in some instances, repair 6 them or, in other instances, to remove them 7 from the computer. 8 So it's called the add/remove program 9 or add/remove feature of the Windows program. 10 Q. Okay. We're going to double back a 11 little bit to what we were talking about 12 yesterday. 13 And you will recall some of your 14 testimony related to Microsoft's claims that 15 some of the things that we were talking about 16 were innovative. And I'd like to turn now to 17 -- 18 MR. HOLLEY: Objection, Your Honor. 19 Form of the question. 20 MR. LAMB: I'll rephrase. 21 THE COURT: Thank you. 22 Q. I'd like to turn now to active 23 desktop. 24 MR. HOLLEY: Object to the form. 25 MR. LAMB: Can we get the next slide, 6675 1 please? 2 MR. HOLLEY: Sorry. Are you done? 3 Object to the form of the question, 4 Your Honor. 5 THE COURT: Overruled. 6 Proceed. 7 MR. LAMB: The next slide, Darin. 8 Okay. 9 Q. Before I do this, though, sir, in 10 relation to Microsoft's employment of Java and 11 use of Java, when you testified about 12 Microsoft's Java interface extensions -- 13 A. Yes. 14 Q. -- do those interface extensions tie 15 the applets or applications to the Windows 16 operating system? 17 A. They tie them. Another phrase is they 18 bind the applications or they lock them into 19 the Windows platform. That's correct. 20 Q. Okay. Thank you, sir. 21 Now, turning to active desktop. 22 What's active desktop or what was active 23 desktop? 24 A. Excuse me. Active desktop was a 25 feature of Windows, Windows 98 that allowed 6676 1 users to place content on a desktop. 2 That content would be taken from a 3 website. 4 Q. Okay. And was this innovative? Was 5 this new? 6 A. It was new to Microsoft's software, 7 yes. 8 Q. Okay. I apologize. 9 Technologically, in terms of the 10 industry, was this concept new? 11 A. It was a concept that Netscape had 12 described to be available in its forthcoming 13 software. 14 Q. Okay. 15 A. Browser software. 16 Q. And what was the impact of active 17 desktop in relation to the operating system? 18 A. Well -- I'm sorry. I don't quite 19 understand it. 20 Q. Okay. I'm trying to find out if 21 active desktop -- was active desktop bundled or 22 tied to the operating system? 23 A. It was tied to the operating system 24 and bundled. 25 Q. Okay. And bundled. Okay. 6677 1 How was it bundled? 2 A. It was in the same box. 3 Q. Okay. How was it tied? 4 A. It was used by other components of 5 Windows software package. 6 Q. What do you mean it was used by other 7 components of the Windows software package? 8 A. Well, if we think about the 9 relationship between different components of 10 the system, one component making a call to or 11 requesting the use of services from another 12 component is what I was referring to by relying 13 on. 14 So that there are multiple components 15 in a system. Components are another way of 16 describing maybe functionality or features. 17 And one feature of the system relied on the 18 active desktop. 19 Q. Okay. With the Court's permission 20 perhaps you could draw that, how that works. 21 MR. LAMB: Is that okay, Your Honor? 22 THE COURT: Yes. Make sure you talk 23 loud. You got your mike? 24 THE WITNESS: Can I try it? 25 THE COURT: Sure, try it. 6678 1 A. Are we ready? How's that? Is it 2 loud? No. It makes no difference? Oh, good. 3 So, in simple terms, if you have a 4 system that is comprised of many components, if 5 you put a connector or if you make use of an 6 interface that is provided by different 7 components, that's component A, component B, C, 8 D, E, F. 9 If you place a request from component 10 A to component B, you've created a dependency 11 between component A and component B. 12 Then component B has to be there in 13 order for component A to work. That's what I 14 mean by a reliance on. In this particular 15 case, there were reliances on the active 16 desktop component by other components in the 17 system. 18 Q. Okay. Perhaps, sir, if you could draw 19 operating system, Internet Explorer, show us 20 where active desktop was and how it interacted 21 with the operating system. 22 A. Well, we go back to the diagrams, the 23 kernel in the center. And there is a piece of 24 the operating system component -- component of 25 the operating system product called the 6679 1 graphical user interface. Sometimes we call 2 that a shell. 3 Operating systems like Unix or Linux 4 can have a variety of different shells. The 5 shell is what you see on your screen. Again, 6 thinking about the desktop metaphor, that is 7 sometimes referred to as a shell. It's what 8 you see. 9 Linux and Unix can have a variety of 10 different shells and make those available to 11 the user. 12 In earlier days there were different 13 shells available for Windows as well. 14 Here, what happened was Microsoft made 15 changes to the graphical user interface such 16 that it created a dependency on the Internet 17 Explorer, a technology component, as well as 18 connections between these components and the 19 core functionality in the operating system. 20 Q. When you say it created dependencies, 21 what do you mean by that? 22 A. Well, it made -- going back to this 23 diagram here, it caused that one component to 24 rely on the functionality made available by 25 another component. 6680 1 Q. Okay. And was it necessary to do 2 that? Was it necessary to tie and bundle 3 active desktop in order to get that 4 functionality? 5 A. No, it was not. It was a technical 6 matter. It was not -- 7 Q. Where is active desktop? 8 A. Active desktop was a -- it's a set -- 9 it's a functionality that is available in 10 several of the components. 11 Q. Okay. So you can't draw it separately 12 because it's -- 13 A. That's correct. 14 Q. -- embedded in all that stuff? 15 A. Yes. It updated several components of 16 the system. 17 Q. In order for it to be functional, did 18 it have to be embedded in all that stuff? 19 A. No. 20 Q. Okay. Thank you. 21 MR. LAMB: Could we get the next 22 slide, please? 23 Q. Now, I want to shift gears a little 24 bit and talk about concept vaporware, the term 25 vaporware. 6681 1 In the industry, what does vaporware 2 mean, sir? 3 A. Well, vaporware is basically 4 nonexistent products, nonexistent software or 5 hardware products. 6 Q. Okay. What do you mean by that? 7 A. Well, it means software that doesn't 8 exist yet and might not ever exist. 9 Q. Okay. From a technological 10 perspective, how is vaporware used? 11 A. From a technological perspective, the 12 user community and the independent software 13 development community thinks about their 14 development plans both in terms of the present 15 functionality, the products that are available 16 today, as well as thinking about tomorrow and 17 where things are going. 18 So there is the idea that if you tell 19 developers that something is coming, that 20 there's a new platform that's going to be 21 available in a couple of months or a year, a 22 new product, then you should develop for that 23 product, even though that product isn't going 24 to be available for a long time. 25 What you do is you consume what is 6682 1 sometimes referred to as developer band width; 2 that is, the developers are thinking about and 3 working with and planning on developing 4 products for this technology that is not yet 5 announced or available, but simply talked about 6 as a future technology. 7 Q. Okay. And from a technological 8 perspective, how does the employment of 9 vaporware affect the common end user, the 10 consumer, the user of the PC? 11 A. Well, it gets the idea out that 12 there's a new product coming and that the 13 comparisons that people might normally wait to 14 see from the trade press, which computer should 15 I buy, what operating should I buy. There is 16 talk about waiting for the next product from 17 this company or that company. 18 In this particular case, wait until 19 Microsoft's DOS -- new version of DOS comes out 20 before making a decision. 21 So in our trade press, if the 22 vaporware has been successful and the trade 23 press, for example, has taken the idea, they 24 will recommend that decisions be deferred and 25 that people should wait until the new version 6683 1 of the software is out because it's going to be 2 great or it's going to do this or it's going to 3 do that. So there's a freezing effect on 4 potential acquisitions or potential purchases. 5 Q. Okay. 6 MR. LAMB: Could I get the next slide, 7 please? 8 Q. Does Microsoft have a definition for 9 vaporware, sir? 10 A. Yes. 11 Q. What is it? 12 A. It's on the slide up here. It comes 13 from the Microsoft press -- Microsoft computer 14 dictionary, the fifth edition. 15 It's software that has been announced, 16 but not released to customers. 17 Often it is software that it imagined 18 or in the minds of the marketing department and 19 not really a product that is within reach or 20 grasp of the store shelves or of people to 21 purchase. 22 Q. Okay. 23 MR. LAMB: Get the next slide, please. 24 Q. The Microsoft computer dictionary, the 25 fifth edition? 6684 1 A. Yes. 2 Q. How long has that been in press, do 3 you know? 4 A. Oh, I think I got -- the first copy I 5 used in maybe 1993, but maybe '91 is an earlier 6 edition. The fifth edition is maybe in '97 or 7 '98, I think. 8 Q. Okay. And in your experience and 9 based on your review of documents in relation 10 to this case, in your opinion, does Microsoft 11 employ vaporware? 12 A. I think the answer to that is yes. 13 Q. Okay. 14 A. In particular, the second sentence of 15 the definition. 16 Q. Which is? 17 A. The sarcastically existing in the 18 minds of the marketing department. 19 Q. And what is the impact on technology 20 when Microsoft employs that vaporware? 21 A. Well, Microsoft is a large company. 22 And lots of independent software vendors are 23 interested in what Microsoft's next product is 24 going to do. 25 So preannouncements of software 6685 1 technology that Microsoft might make will cause 2 the developers and the developer community to 3 focus their attention on the next Microsoft 4 product. 5 Q. Okay. 6 MR. LAMB: Could we have Exhibit 0411 7 underscore A, please, Darin? 8 Okay. There we go. Could you 9 highlight the to, from, and date line for us, 10 please? Can you get a little bit bigger? 11 Okay. 12 Q. Can you tell who this is from? 13 A. This is from Nathan M. or Nathan 14 Mhryvold. 15 Q. And again who was Nathan Mhryvold? 16 A. He was a senior executive at 17 Microsoft. 18 Q. Okay. And who is it to? 19 A. Bill G., that would be Bill Gates, 20 Brad Si, that would be Brad Silverberg. 21 Q. Who's Brad Silverberg? 22 A. Brad Silverberg was the head of the -- 23 I think the head of the desktop OS group at 24 that time. Recently hired -- I believe 25 recently hired into Microsoft from Borland. 6686 1 Q. Okay. Who's the next person? 2 A. Jeremy Bu. I'm -- 3 Q. You don't know that name? 4 A. No. 5 Q. Who's the next person? 6 A. Joachim Kempin. He was the head of 7 the OEM group. 8 Q. Next person? If you can tell. 9 A. I can't tell. 10 Q. What about the next person? 11 A. Paul Maritz. Paul Ma. 12 Q. Okay. And who, again, is Paul Maritz? 13 A. He was Brad Silverberg's boss. The 14 head of development. 15 Q. And the next person? 16 A. Riscpe. I believe that's a mailing 17 group within Microsoft. There were several 18 subscribers to the Riscpe. 19 Q. And the last Steve B., is that Steve 20 Ballmer? 21 A. That is. 22 Q. And who is Steve Ballmer? 23 A. Steve Ballmer was the -- I think at 24 that time he may have been the head of the -- 25 he was a senior executive of Microsoft. He's 6687 1 now the president, I believe. 2 Q. Okay. And the subject line is SPARC, 3 S-P-A-R-C, MIPS, M-I-P-S, and Compaq; correct? 4 A. Yes. 5 Q. Okay. Can you explain to the Jury 6 what SPARC is? 7 A. SPARC is the name that is given to 8 Sun's microprocessor architecture. 9 Q. Okay. What does that mean? 10 A. What does that mean? Well, yesterday 11 I talked a lot about Intel and Intel and AMD, 12 and they make a chip that -- they make chips 13 that are compatible with the X86 architecture. 14 X86 meaning it's sort of code name for 15 processor family, a family of microprocessors 16 that was the first one used in IBM's PC, the 17 8088 and 8286 used in the IBM PCAT and the 18 Compaq 386 and 486. 19 And today those are the survivors in 20 the Pentium and other Core 2 Duos. 21 So SPARC is like that family of 22 microprocessors, but not X86. Different 23 architecture. 24 Q. Okay. X86 is Intel? 25 A. X86 is Intel. 6688 1 Q. Okay. And then what we hear about now 2 is the Pentium and Progeny after that; right? 3 A. That's today, yes, from Intel. 4 Q. But SPARC was Sun's model of that? 5 A. Sun was incompatible with different 6 architecture for the design of microprocessors. 7 Q. Okay. And what did MIPS stand for? 8 A. MIPS was yet another different 9 architecture for the design of microprocessor 10 brains for -- in MIPS' case, for workstations 11 particularly. 12 MR. LAMB: Okay. Darin, if you could 13 go to the first couple of paragraphs and 14 highlight that for us. 15 Well, I don't know if we can read this 16 or not. 17 Q. Do you know what the nature of this 18 e-mail was about? 19 A. It was discussing, I believe, the 20 strategic alternatives for Microsoft with 21 respect to the workstation market. 22 Q. Okay. In relation to the workstation 23 market? 24 A. That's correct. 25 Q. Okay. 6689 1 MR. LAMB: If we could go back to the 2 screen, Darin, because the screen shows a 3 blowup of this Exhibit, 411A. 4 Q. Okay. So this is the e-mail from 5 Nathan Mhryvold to Bill Gates dated October 6 1st, 1990. And it says the purpose of 7 announcing early like this is to freeze the 8 market at the OEM and ISV level. 9 In this respect, it is just like the 10 original Windows announcement. This time we 11 have a lot better development team, so the time 12 between announce and ship will be a lot 13 smaller. Nevertheless, we need to get our 14 message out there. 15 We certainly do need to follow this 16 announcement up with a good demo in six to 17 eight months when the SDK ships, but 18 preannouncement is going to give Sun a real 19 problem. 20 Do you see that? 21 A. I do. 22 Q. Okay. And why do you believe that 23 this is vaporware? 24 A. Well, it's a strategic decision to 25 freeze the market as opposed to supply 6690 1 information that's necessary to plan and work 2 with the product. 3 Q. Okay. Well, technologically speaking, 4 what does it mean to freeze the market at the 5 OEM and ISV level? 6 A. Well, this perhaps requires a little 7 explaining on what workstations -- 8 Q. Sure. 9 A. Back in this time frame, there were 10 PCs, of course, and PCs were popular for most 11 business users and for most home users, but the 12 processing power of the PC wasn't enough to 13 handle engineering applications like 14 computer-aided design and other stuff. 15 So there was a separate kind of 16 computer that you could buy that was called a 17 workstation. And companies like Apollo, which 18 was purchased by HP, and Sun and MIPS and 19 Silicon Graphics were in the business of 20 selling those kinds of workstations to 21 engineering organizations and universities. 22 Microsoft was at the time considering 23 entering the market for these workstations. 24 And to do that it would need OEMs, people who 25 would -- companies that would build workstation 6691 1 computers that would use Microsoft's operating 2 system software. 3 And they would need independent