12004 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 XLIV 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., February 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 12005 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 MICHAEL R. CASHMAN 7 Attorney at Law Zelle, Hofmann, Voelbel, 8 Mason & Gette, LLP 500 Washington Avenue South 9 Suite 4000 Minneapolis, MN 55415 10 (612) 339-2020 11 KENT WILLIAMS Attorney at Law 12 Williams Law Firm 1632 Homestead Trail 13 Long Lake, MN 55356 (612) 940-4452 14 15 16 17 18 19 20 21 22 23 24 25 12006 1 Defendant by: DAVID B. TULCHIN 2 JEFFREY C. CHAPMAN Attorneys at Law 3 Sullivan & Cromwell, LLP 125 Broad Street 4 New York, NY 10004-2498 (212) 558-3749 5 KIT A. PIERSON 6 Attorney at Law Heller Ehrman, LLP 7 333 Bush Street San Francisco, CA 94104 8 (415) 772-6000 9 BRENT B. GREEN Attorney at Law 10 Duncan, Green, Brown & Langeness, PC 11 Suite 380 400 Locust Street 12 Des Moines, IA 50309 (515) 288-6440 13 14 15 16 17 18 19 20 21 22 23 24 25 12007 1 RICHARD J. WALLIS STEVEN J. AESCHBACHER 2 Attorneys at Law Microsoft Corporation 3 One Microsoft Way Redmond, WA 98052 4 (425) 882-8080 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12008 1 (The following record was made in the 2 presence of the jury at 8:36 a.m.) 3 THE COURT: Everyone else may be 4 seated. 5 Members of the jury, we are going to 6 interrupt the videotape deposition that was 7 being played because we have a live witness 8 from out of town and we like to get witnesses 9 in and out of town. 10 So you may call your witness. 11 MS. CONLIN: It's that they love the 12 weather. 13 Yes, Your Honor. 14 The Plaintiffs call John Edwards. 15 THE COURT: Approach and be sworn, 16 sir. 17 JOHN EDWARDS, 18 called as a witness, having been first duly 19 sworn, testified as follows: 20 THE COURT: Please have a seat and if 21 you'd adjust the microphone so we can all hear 22 you, please. 23 MS. CONLIN: May I help him with the 24 desk, Your Honor? 25 THE COURT: You may. 12009 1 DIRECT EXAMINATION 2 BY MS. CONLIN: 3 Q. Tell us your name, please. 4 A. John Edwards. 5 Q. Mr. Edwards, where do you live? 6 A. Provo, Utah. 7 Q. What is your current occupation? 8 A. I'm the CEO of a company called Move 9 Networks. 10 Q. We'll talk about that in a minute, but 11 you were also an employee of Novell from 1988 12 until June of 1995; correct? 13 A. That is correct, 1988 to 1995. 14 Q. Okay. Tell us your educational 15 background. 16 A. I have a computer science degree and 17 MBA. 18 Q. Where did you get your degrees? 19 A. I got my computer science degree from 20 Brigham Young University, and the MBA from 21 Arizona State University. 22 Q. All right. And tell us what Move 23 Network, Inc., does. 24 A. Move provides a solution that allows 25 broadcasting of television signals on the 12010 1 Internet. 2 Q. Can you give us any more detail about 3 why yours is better than others? 4 A. It works. And we have a partnership 5 with some of the larger broadcasters, ABC, 6 Disney, and Televisa, which is the largest 7 Mexican and Spanish speaking broadcaster in the 8 world. 9 And it has the ability to stream for 10 hours and hours and hours without rebuffering 11 and without stopping and starting and having 12 problems. 13 Q. Okay. That will be nice. 14 How soon do you expect all of us to be 15 able to use that? 16 A. You can use it right now. You can go 17 to the Fox website and see all the video on it 18 and we are the providers of that video 19 solution. 20 Q. All right. When did you begin your 21 position with Move Networks, Inc.? 22 A. 2001. 23 Q. Prior to that, what did you do? 24 A. I was the CEO of I-Link. 25 Q. And what do they do? 12011 1 A. I-Link was also an Internet play. It 2 provided telecommunication telephone services 3 across the Internet for what's been called 4 voiceover IP and we started that company in 5 1996 and sought to be out there in the market 6 early and create new innovation in the area of 7 voice and fax services over an IP network, so 8 the Internet. 9 Q. Let's go backwards now to when you 10 graduated from college and tell us what you did 11 coming forward until today. 12 A. Well, I graduated from BYU and went to 13 work for Novell. That would have been in 1998. 14 I went in as the national marketing 15 manager for NetWare for Macintosh. So I 16 traveled the country and helped Macintosh users 17 understand that they had freedom of choice. If 18 they picked Macintosh desktop, that was fine 19 and we would support it. 20 I then went and became the product 21 manager of Network 386, then the product line 22 manager and then the director of marketing and 23 then the vice president of marketing, all over 24 the NetWare group. And then eventually was 25 asked to be the executive vice president of the 12012 1 desktop systems group. 2 Q. And when was that, Mr. Edwards? 3 A. 1992. 4 Q. Going back for a moment to the NetWare 5 product, tell the Jury, please, what NetWare 6 is. 7 A. We would have called NetWare a network 8 operating system. And all that meant is that a 9 desktop could share common disk storage, a 10 printer, a database, other kinds of network 11 services because of the operating system we 12 provided. 13 The purpose of that operating system 14 was to include all different kinds of desktops 15 in a common sharing environment. 16 So our -- I think the reason that 17 Novell was successful in that is because they 18 supported everything from DOS to OS/2 to Unix, 19 Macintosh, all the different types of choices 20 users were making at the desktop. 21 We allowed all of those to come 22 together and have a common communication 23 facility in a common sharing environment. 24 Q. Was Novell the market leader in 25 networking? 12013 1 A. Novell was the market leader in the 2 network operating system, and there are -- of 3 course, networking is a very broad market. And 4 there were lots of leaders in that market and 5 space, but for network operating systems, 6 Novell was the leader. 7 Q. And was the NetWare Novell's core 8 product? 9 A. It was. It was the core product of 10 their company. 11 Q. I want to focus for our purposes here 12 today on the time that you were executive vice 13 president of the desktop systems group. 14 And when did that begin? 15 A. April of 1992. 16 Q. Was that part of a reorganization that 17 got you into that job? 18 A. It was. 19 Q. All right. 20 MS. CONLIN: Would you, Darin, put up 21 the demonstrative exhibit that shows the 22 organizational table with Mr. Noorda at the 23 top. 24 There we go. 25 Q. All right. This is an organizational 12014 1 chart that shows you right in the middle. 2 And tell the Jury a little bit about 3 the organization of Novell under this new 4 strategy that took you to the desktop systems. 5 A. Well, as you can see, there are three 6 product groups with system at their name. The 7 desktop system group, the NetWare systems 8 group, and the interoperability systems group, 9 and so they were focused on things at the 10 desktop. 11 NetWare was still the network 12 operating system. And the interoperability 13 systems group was a set of products for 14 allowing Unix TCP workstations to work 15 together. 16 It was a market that we achieved 17 through the acquisition of Excelan. And then 18 we had acquired USL, which was the owner of 19 Unix and so that operating system group was 20 under Roel Pieper. 21 The corporate side, Mary Burnside ran 22 all of the common services, support sales as an 23 organization, education and training. 24 And then, of course, Jim Tolonen was 25 the CFO and David Bradford, the general 12015 1 counsel, and Darrell Miller was strategic 2 relations, which meant he spent a lot of time 3 in the market trying to understand the 4 ecosystem of all the companies that 5 participated in finding new opportunities for 6 us. 7 Q. How did you get this job having spent 8 all of your time previously in network? 9 A. I was asked. And after the 10 acquisition of DRI, Ray made the decision to 11 reorganize. 12 I really don't know all of the things 13 that led to that reorganization, but Ray called 14 Jan Newman in IN and promoted us. 15 Jan was the VP of engineering for the 16 NetWare systems group and I at the time was VP 17 of marketing for the NetWare systems group. 18 And Ray asked me if I would take over the new 19 group in the company. 20 Q. Were you replacing someone? 21 A. I was replacing Dick Williams, who was 22 the president, probably CEO as well, but 23 certainly the leader of DRI as we acquired it. 24 Q. What were your responsibilities as 25 executive vice president of desktop operating 12016 1 systems? 2 A. My responsibilities were to achieve 3 the strategic and tactical purposes of the 4 group which were, of course, to grow it, to 5 build the business. But to do it in a way that 6 accomplished the purposes for its acquisition, 7 which were to achieve a better networked DOS 8 operating system, to cause the marketplace to 9 continue to have alternatives and freedom of 10 choice at the desktop, which is -- we had 11 concern at the time that DOS users were being 12 prematurely abandoned. 13 And so we wanted to ensure and crop up 14 the DOS operating system in the market. And so 15 my goal was to achieve those purposes. 16 Q. What products were under your 17 jurisdiction? 18 A. Everything associated with how 19 desktops connected to the network operating 20 environment. 21 So we had a group in Monterey that 22 certainly was doing the DOS product -- Doctor 23 DOS as it sometimes was called or DR DOS. 24 There was the counterpart group in 25 England that was the engineering side of that 12017 1 group. We had the NetWare for Macintosh group 2 in Walnut Creek, California, and those were the 3 people who were creating everything that was 4 required to allow Macintosh to interface with 5 the OS. 6 There was the OS/2 group in Provo. 7 And, again, everything required to allow the 8 OS/2 operating system to connect to the 9 network. 10 And, then, the NetWare client which 11 was actually a small piece of code that allowed 12 the operating system to rather than getting 13 information off its most immediate disk to 14 allow it to redirect, as we called it, off to 15 the NetWare operating system to pull 16 information there seamlessly. 17 Q. When you use the word "client," it 18 means something different than when I do. 19 Tell the Jury exactly what a client 20 is. 21 A. On the -- call it a desktop or a 22 laptop, there is an operating system that runs 23 the hardware. And a client to me is a small 24 set of software that's placed on that desktop 25 to allow it to understand how to communicate 12018 1 with the network. 2 In a simple way, they might think of 3 that as a browser today, the browser and 4 associated protocol stack or communications 5 stack. 6 Back then, there weren't browsers of 7 that sort as popular. And so we had to create 8 plumbing. And it is kind of low-level plumbing 9 for connecting that desktop to a network. 10 Q. Let's put up Defendant's Exhibit 210A, 11 which is I believe your organization as you 12 took it over. You probably can't see, but up 13 in the corner it says April 1992. 14 Does this look like it looked when you 15 began your service as executive vice president? 16 A. Yes. 17 MR. TULCHIN: Your Honor, sorry to 18 interrupt. I wonder if I could be given copies 19 of the exhibits that are being used. 20 MS. CONLIN: Oh, I'm sorry. I'm not 21 into my rhythm yet. 22 Q. And your immediate -- you mentioned 23 Walnut Creek, Monterey, and Provo, and then you 24 had salespeople in various areas of the world? 25 A. Correct. 12019 1 Q. The second page of this exhibit 2 doesn't have any lines on it. Does it tell us 3 anything additional? It looks to me like -- do 4 you recognize that? 5 A. Yeah. It's just a breakdown of the 6 boxes that were on the former page, and I'm not 7 sure why it doesn't have lines. 8 Q. It's not some sort of free form 9 organization? It just doesn't have the lines 10 on it? 11 A. That's what I assume, yes. 12 Q. Toward the end of '93 or the early 13 part of '94, what happened with your career? 14 A. Ray asked me to take over the Appware 15 systems group. 16 Q. What is Appware? 17 A. Appware was a strategy for making it 18 easier for developers to write applications to 19 the network environment. 20 And so we had acquired a company 21 called Serious, which had software components 22 that made it really, really easy to write an 23 application that leveraged a database or 24 leveraged another network service. 25 Also in that group was the company's 12020 1 SDK, which is the software developer's kit, and 2 responsibility for proactively going after and 3 teaching the ISVs, the independent software 4 vendors -- a lot of acronyms in this industry 5 -- how to develop software. 6 Q. At that time did you have any 7 continuing responsibility for DR-DOS or then 8 Novell DOS? 9 A. No. 10 Q. Did you continue to consult as asked? 11 A. I did. The group was moved under 12 Richard King, and we responded to inquiries, 13 but we were no longer running the product 14 strategy for that group or that product. 15 Q. How long did you remain as the 16 executive VP of Appware? 17 A. About a year. 18 Q. Then what? 19 A. Then I was asked to become the 20 executive vice president of strategic 21 marketing. 22 At Novell I spent a lot of time 23 presenting to customers and to the market, and 24 so they put me in a position where I could do 25 that full time. 12021 1 I could present in the place of Ray or 2 Bob or others when an executive was called on, 3 and they didn't want to travel, but they 4 thought it was fine for me to travel. 5 Q. Did you travel in that job? 6 A. I traveled a great deal. 7 Q. And when did you leave that job? 8 A. In June, July of '95. 9 Q. And what next? 10 A. Took a little time off. Got to know 11 my family again since I was traveling so much. 12 And Ray called and asked if I would 13 come and work for him again in a little company 14 called Coresoft. And the open doc group was a 15 set of engineers at IBM and Apple, and actually 16 at WordPerfect at one time, that were creating 17 a competitive standard to the Microsoft object 18 linking and embedding. 19 This is a lot of technology, but it's 20 how software components called and worked with 21 each other. 22 When the industry had migrated to 23 object linking embedding, we had all these 24 wonderful open doc engineers, and Ray wanted to 25 find a way to allow them to continue to 12022 1 innovate. And he asked if I would come take 2 that group and help them do that, and so I did. 3 Q. And Ray is Ray Noorda? 4 A. Thank you. Ray is Raymond Noorda. 5 Q. And what did Coresoft do? 6 A. Most of the time spent there was in 7 product development. 8 We looked at applications like a 9 mortgage loan application, and we said how 10 could that application be built faster by using 11 reuseable components. 12 Much like if I were trying to build 13 something quickly with Legos as opposed to pour 14 all of the plastic myself. 15 And so we -- in fact, we talked 16 internally, it was Legoware. And it was real 17 quick ways to pull together objects that could 18 be reused. 19 And the emphasis was a lot on 20 telecommunication telephony. How do I handle 21 telephone applications in the conjunction of 22 those. In other words, how do I put together 23 more networking capabilities into common 24 vertical applications. 25 Q. Were you the CEO of Coresoft? 12023 1 A. I was the president, CEO of Coresoft, 2 yes. 3 Q. How long were you there? 4 A. I was there until April of '96. So 5 less than a year. 6 Q. Where did you go from there? 7 A. I-Link. 8 Q. And that's -- we've talked about that. 9 A. Correct. 10 Q. As the Internet telephone company? 11 A. Voiceover IP service for allowing the 12 Internet to become a highway for voice and fax 13 traffic. 14 Q. Before the merger of DRI and Novell, 15 were you familiar with DRI's product, DR-DOS? 16 A. I was. I had been a user of DR-DOS. 17 Prior to coming to Novell, I worked as a 18 technical coordinator for Brigham Young 19 University's PC environment. 20 And my job was to go out and show the 21 departments technology, new technology and how 22 it worked. And I was actually the technical 23 coordinator for Apple and for Apple Macintosh 24 products on campus, and the technical 25 coordinator for PC products. 12024 1 So, in that role, I tried lots of 2 software because somebody was bound to ask me 3 how does this work. And I used it there, and I 4 continued to use it on home systems when I left 5 Brigham Young University. 6 Q. All right. Over the weekend, we put 7 together a timeline to help guide us in our 8 discussion. 9 MS. CONLIN: Would you put that up, 10 please, Darin? 11 MR. TULCHIN: Your Honor, may we 12 approach on this? 13 THE COURT: You may. 14 (The following record was made out of 15 the presence of the jury at 8:57 a.m.) 16 MR. TULCHIN: Good morning, Your 17 Honor. I'll try to be brief on this. 18 A time line as a demonstrative, of 19 course, to the extent it reflects events that 20 the witness is capable of testifying about and 21 has firsthand knowledge of is perfectly 22 appropriate. And we've used time lines as 23 demonstratives with witnesses in the past. 24 This time line has many entries -- six 25 or eight -- prior to the time that this witness 12025 1 took over the desktop operating group at Novell 2 and has entries concerning events that he has 3 no knowledge of. In fact, in his deposition he 4 was quite clear about that. 5 So, for example, the third entry, 6 August 7, 1990, this is not his testimony that 7 is being referenced there. Likewise, the six 8 events in 1991 come at a time and pertain to 9 matters that he knows nothing about. 10 MS. CONLIN: On the contrary. 11 MR. TULCHIN: July 19, 1991, Gates 12 calls Novell's CEO Ray Noorda and suggests 13 Microsoft and Novell explore a merger. 14 Well, Mr. Bradford testified about 15 that. He had knowledge of it. But this 16 witness testified at deposition that he did not 17 have any involvement with DR-DOS or the desktop 18 operating systems group prior to April of '92. 19 And using this time line is a way not to 20 demonstrate for the jury events as to which 21 this witness will be testifying but a way, 22 instead, of preventing argument. 23 MS. CONLIN: This is ridiculous to me. 24 First of all, there is no question 25 about any of these dates, and they do play a 12026 1 role here. It's for the purpose of 2 establishing when particular events happened so 3 that the jury has context in which to view 4 them. 5 In fact, Mr. Edwards attended some of 6 the meetings in connection with the merger 7 discussion between Novell and Microsoft. He 8 was not asked about that at his deposition, but 9 that, in fact, is the case. 10 There is just nothing on this, Your 11 Honor. The release of Windows, really not 12 contested. 13 MR. TULCHIN: No. We don't contest 14 that, Your Honor. 15 MS. CONLIN: There is no date on here 16 that is contested. And the purpose of the 17 exhibit is to give the jury context. He was 18 there at Novell. He was fully aware of the 19 merger, and he was fully aware of the product. 20 And then, Your Honor, when he took 21 over the product, of course, he had to look at 22 the history of the product both within and 23 without Novell. So this is just form over 24 substance to the nth degree. 25 MR. TULCHIN: Your Honor, it's not the 12027 1 release dates of products. It's argument -- 2 for instance, next to July 19, 1991, I view 3 that as plaintiffs' argument. This witness had 4 nothing to do with that phone call; likewise, 5 the AARD code in December when he was 6 blissfully going about his job in another 7 section of the company. 8 The witness testified that in April of 9 '92 when he took over, he had very little 10 knowledge of anything that had gone on 11 concerning DR-DOS. 12 I'm happy to cross on that or to voir 13 dire on it, but the time line should not be 14 used to present argument. And the August 7th 15 entry, for example, 1990, I don't know what 16 that has to do with this witness. I just 17 don't. 18 MS. CONLIN: That's Cutlass. He was 19 asked about it. You asked -- or someone asked 20 him about the Cutlass project. That's what 21 that is, and he was shown that document when he 22 took over. There's nothing on this that is 23 even contested. 24 THE COURT: Did you prepare this? 25 MS. CONLIN: He and I prepared it 12028 1 together over the weekend, Your Honor. 2 THE COURT: Well, I suggest you 3 establish a foundation before you explain to 4 the jury as to whether or not he prepared a 5 time line, how it was done, and how he had 6 knowledge of these things. 7 MS. CONLIN: All right. 8 THE COURT: Then offer it as a 9 demonstrative. 10 MR. TULCHIN: Thank you, Your Honor. 11 (The following record was made in the 12 presence of the jury at 9:02 a.m.) 13 THE COURT: Please continue. 14 MS. CONLIN: Thank you, Your Honor. 15 BY MS. CONLIN: 16 Q. Mr. Edwards, take a look at the 17 timeline that's in front of you. It's been 18 marked Plaintiffs' Exhibit 10058A. 19 The first entry is your date of 20 employment; correct? 21 THE COURT: Do you have a copy of it? 22 MS. CONLIN: May I approach, Your 23 Honor? 24 THE COURT: Here. 25 THE WITNESS: Okay. Thank you. 12029 1 A. Could you state that again, I'm sorry? 2 Q. Yes, of course. 3 We are going to go entry by entry 4 here. 5 The first entry, that's when you 6 became employed; correct? 7 A. That's correct. 8 Q. And the second entry is the date that 9 Windows 3.0 is released. 10 At the time that Windows 3.0 was 11 released, you were in the software industry; 12 correct? 13 A. I was. I was in the industry. 14 Q. And that's a date that we actually 15 looked up; correct? 16 A. Yes. 17 Q. August 7th, 1990, is an entry having 18 to do with a Cutlass project. Do you recall 19 that? 20 A. I didn't know much about the Cutlass 21 project, but this date rings true to me. 22 Q. All right. Was it over by the time 23 that you took over the desktop systems? 24 A. It was. 25 Q. All right. 12030 1 A. I heard only about it anecdotally and 2 after the fact. 3 Q. As a part of your introduction to your 4 responsibilities on the desktop, did someone 5 provide you with a report or did you have 6 discussions with someone about the Cutlass 7 project? 8 A. I did. 9 When I first visited Monterey, 10 California, beautiful place, and to try to 11 understand what my new role was, there was a 12 gentleman there by the name of Phil Balma, who 13 had apparently worked closely on that project. 14 And he gave me a half an hour, 45-minute 15 rundown on what it was all about. 16 Q. Then the next entry is June 11th, 17 1991. Microsoft ships MS-DOS 5.0. 18 Again, you were in the industry at the 19 time and familiar with the events going on 20 around you? 21 A. I was. 22 Q. The next entry is July 17th, 1991. 23 Were you aware that Novell announced 24 its proposed merger with DRI on that date? 25 MR. TULCHIN: Objection, Your Honor. 12031 1 This is leading and I don't think the right way 2 to establish foundation. 3 THE COURT: Sustained. 4 Q. Look at the entry in connection with 5 the merger. Tell us whether -- tell us whether 6 or not you were aware of that. 7 A. I was aware of the announcement of the 8 merger with DRI on July 17th because I heard it 9 along with the rest of the company and had an 10 executive call me to brief me about it, 11 particularly Darrell Miller. 12 Q. Were you also aware of the next entry? 13 A. The next entry is Gates calls Novell's 14 CEO Raymond Noorda and suggests Microsoft and 15 Novell explore merger. Yes, I was. 16 Q. How did you become aware of that? 17 A. Ray told me about this call and about 18 their conversations. 19 Q. And did you participate in those 20 discussions? 21 A. I did not at this time. I 22 participated in future meetings between Ray and 23 Bill Gates, Mr. Gates, later in the year. 24 Q. All right. So you were -- what role 25 did you play, Mr. Edwards, in those discussions 12032 1 when you went along? 2 A. Ray Noorda had a tendency to take me 3 with him so that I could help as another mind 4 to understand the strategy, understand what 5 might be appropriate to do, understand the 6 technology and how it worked and if the 7 proposals would make business or sense at a 8 product level. 9 Ray was wonderful at understanding it 10 from a market strategy level. The best I've 11 seen. 12 But in terms of guidance on the 13 product details, he tended to take myself or a 14 couple of other people with him to most of 15 these types of meetings. 16 Q. And the date of the shipment of DR-DOS 17 6.0, were you aware that that had occurred? 18 A. I was there. I was at the company. I 19 was, again, the vice president of NetWare. 20 And when you belong in the operating 21 system group, it's really important to 22 communicate with every other group, at least 23 casually or to understand their products 24 because you were going to be responsible to 25 make them all work together. So I was aware of 12033 1 it and aware that they had shipped their 2 product. 3 Q. And then the date for the completion 4 of the merger, were you present and conscious 5 of that? 6 A. I was conscious at the time and I was 7 present at the time, and I was aware that the 8 merger was completed. 9 Q. All right. And then the next entry of 10 December 21, 1991, is that something that we 11 discussed over the weekend and talked about 12 various documents in connection with that 13 entry? 14 A. It was. 15 Q. Were you aware after you took over the 16 desktop that there were various problems with 17 with the Windows 3.1 beta and the DR products? 18 A. I was experiencing it realtime. The 19 answer to the question is yes. 20 I was experiencing that realtime 21 through feedback from original equipment 22 manufacturers, OEMs, and through large 23 customers we were working with. I was aware 24 that they were struggling with it. 25 MR. TULCHIN: Objection to the extent 12034 1 this testimony is hearsay, Your Honor. 2 THE COURT: Overruled. 3 Q. You may -- are you done? 4 A. Yeah, I think that's my answer. 5 MS. CONLIN: Your Honor, at this time 6 may I display Plaintiffs' Exhibit 10058A? 7 THE COURT: Any objection? 8 MR. TULCHIN: I wonder if I may just 9 have a moment of voir dire, Your Honor. 10 THE COURT: You may. 11 VOIR DIRE EXAMINATION 12 BY MR. TULCHIN: 13 Q. Mr. Edwards? 14 A. Yes. 15 Q. If I may ask you a question or two. 16 A. Certainly. 17 Q. It is the case, is it not, that prior 18 to April of 1992, April of 1992, you were not 19 working in the desktop operating systems group 20 at Novell; correct? 21 A. Prior to April of 1992, I was not 22 working -- that was not my primary mission or 23 goal or form of employment. 24 Q. No, I didn't ask you about your 25 primary role. I'm not confining this to 12035 1 primary or secondary. I wonder if you could 2 answer this question. 3 I thought I understood you to say in 4 answer to questions from Ms. Conlin that before 5 April 1992, you did not work in the desktop 6 operating systems group at Novell. 7 Is that correct? 8 A. That is correct. 9 Q. And is it also correct, sir, that you 10 didn't have much, if anything, to do with the 11 DR-DOS product until the time you took over 12 that group in April 1992? 13 A. I think that that's accurate. 14 What I would have had to do with it 15 is, as I explained, working with that group to 16 understand what their plans were and to help 17 them maintain compatibility with NetWare. But 18 not specifically on their product plans or 19 their strategies. 20 MR. TULCHIN: Nothing else, Your 21 Honor. 22 THE COURT: You may display it. 23 MS. CONLIN: Thank you, Your Honor. 24 There we go. Good. 25 DIRECT EXAMINATION (CONT'D) 12036 1 BY MS. CONLIN: 2 Q. Mr. Edwards, I want to ask you to look 3 in front of you at a document that is your 4 declaration. Do you see it? It's long. 5 MS. CONLIN: May I approach the 6 witness, Your Honor? 7 THE COURT: Yes. 8 MR. TULCHIN: Your Honor, again, if 9 there's a document in front of the witness, can 10 I be given a copy? 11 THE COURT: Please do. 12 Q. Mr. Edwards, is this a document that 13 you prepared? 14 A. Yes, it is. 15 Q. And did you prepare it at or near 16 January 15th, 1993? 17 A. Yes. 18 Q. Were the events that you record in 19 this document fresh in your mind at the time 20 that you prepared it? 21 A. Yes, they were. 22 Q. How did you go about preparing this 23 document? 24 A. I visited with the in-house general 25 counsel of the company as well as an external 12037 1 attorney and members of the product group in 2 pulling together data and understandings we had 3 concerning DR-DOS in market and our struggles 4 with the Microsoft practices in the channel. 5 Q. Did you prepare this document with 6 care and based on the documents and records of 7 Novell? 8 A. I did. 9 Q. Does it correctly record the facts and 10 circumstances as you then knew them to be? 11 A. It does. 12 Q. Is it necessary for you to refer to 13 this declaration to testify fully and 14 accurately? 15 A. It would certainly be helpful to do 16 so, yes. 17 Q. All right. And within the document 18 there are various facts and figures, including 19 lots of reference to dollar figures and the 20 like. 21 Without the document, could you 22 provide the Jury with that information from 23 your memory? 24 A. I can provide sketches of it, but it's 25 been 15-plus years, so it's been a long time. 12038 1 So it would be more helpful to have that. 2 Q. Is it necessary for you to have it to 3 testify fully and accurately? 4 A. Yes. 5 MS. CONLIN: Your Honor, we would not 6 offer this document as past recollection 7 recorded, that's the purpose of the foundation, 8 but I would like permission of the Court to 9 permit the witness to refer to the document in 10 the course of his testimony because it is past 11 recollection recorded, an exception to the 12 hearsay rule under Iowa Rule of Evidence 5.803 13 Subsection 5. 14 MR. TULCHIN: We object, Your Honor. 15 This has been the subject of prior litigation 16 and has been ruled inadmissible. 17 And using the document in the manner 18 that I think Ms. Conlin is suggesting is not 19 proper recollection refreshed. 20 And what it is is this witness, in 21 effect, testifying to an inadmissible document 22 by using it as a substitute for his 23 recollection. 24 THE COURT: The witness may use it to 25 refresh recollection, but he may not read from 12039 1 it and it must be shown only in the procedure 2 used for refreshing recollection. 3 MS. CONLIN: All right, Your Honor. 4 Q. Let's go back -- 5 MR. TULCHIN: Your Honor, I'm sorry to 6 interrupt. 7 Is it correct that this witness ought 8 not to have the document in front of him 9 throughout his testimony? 10 THE COURT: That is correct. 11 MR. TULCHIN: But instead be shown 12 portions only when necessary? 13 THE COURT: That is correct. 14 MR. TULCHIN: Thank you, Your Honor. 15 MS. CONLIN: May I approach, Your 16 Honor? 17 THE COURT: You may. 18 Q. When you took over the desktop 19 systems, did you review the records of DRI and 20 the records of the company after it became a 21 part of Novell? 22 A. I did. I went to the group in 23 Monterey. I lived there for some period of 24 time, couple weeks, away from home, and 25 interviewed the people and looked at the 12040 1 trailing couple of quarters of financials. 2 Spent most of my time trying to 3 determine a strategy to move forward. There 4 were coordination efforts to do because we had 5 people that were now working together that 6 hadn't before. But I did review with them 7 their activities in the market and their plans. 8 Q. Did you do that with the other aspects 9 of the company? Did you go to England, for 10 example? 11 A. I went to England and did a very 12 similar thing there. I met with a group, some 13 of which -- some of whom I was meeting for the 14 very first time, and talked about what I felt 15 would be the direction of the group as I 16 understood it and talked to them about -- and 17 reviewed their plans. And principally in 18 England was the engineering team. The business 19 team for the most part was in Monterey. 20 Q. Did you at the time that the merger 21 was occurring, did you ascertain the reasons 22 why Novell and DRI merged? 23 A. I did. I developed very quickly -- a 24 week before I was asked to take over the group, 25 a week to ten days, Ray took me to the Monterey 12041 1 offices and not in the capacity of you're going 2 to take over this group, but in the capacity of 3 help me understand what you think about this 4 group. 5 And so I'd had a little bit of 6 preparatory time to build my own personal view 7 of the world. And that was really important 8 because when I was asked to take over the 9 group, I had to then pull together a strategy 10 very quickly. 11 Q. All right. What were the reasons that 12 Novell wanted to merge with DRI? 13 A. I think the overriding reason was to 14 build, you know, a revenue and a product 15 opportunity in the marketplace. 16 But any time you have that, there's 17 always a strategy that you're trying to 18 achieve. 19 And the number one strategy was to 20 build more networking capabilities into the DOS 21 operating environment, which means we wanted to 22 simplify how it integrated with a network. 23 We wanted to deliver management tools 24 to help large customers in particular, as well 25 as small, manage and keep the cost down for 12042 1 having a PC. A lot of people would tell us 2 that it cost more to own it than it did to buy 3 it. 4 It was also to continue this theme we 5 had in the company of freedom of choice. We 6 felt that Microsoft was prematurely abandoning 7 the DOS market and that there was a good 8 section of customers that really were happy 9 with what they had. 10 And we wanted to make sure that 11 someone was going to provide an operating 12 system to that market and wouldn't force them 13 to buy new hardware and to buy new applications 14 prematurely. 15 And then we could see a strategy 16 unfolding in the marketplace with what I call a 17 tying strategy where Microsoft seemed to us to 18 be trying to link together their networking 19 with Windows and DOS and their applications in 20 ways that we felt were very threatening to 21 innovation in the industry. 22 So prevent the tying, provide 23 alternatives, freedom of choice, provide a 24 better network to DOS, all under the common 25 umbrella of build a successful product. 12043 1 Q. You mentioned freedom of choice. 2 Before you took over the desktop 3 systems, was there some marketing opportunity 4 that you developed? 5 A. Yes. We developed a campaign called 6 freedom of choice. 7 People knew us in the marketplace as 8 not only the network operating system, but the 9 operating system that would allow -- we were 10 Switzerland. 11 We could allow everybody to work 12 together in a way that was helpful. We said 13 you make the choice of the desktop you want, 14 we'll support it and integrate it to networking 15 services. 16 And that common umbrella for that 17 strategy and that marketing campaign was 18 freedom of choice. 19 Q. So this was not a new theme for the 20 company? 21 A. It was not a new theme for the 22 company. It's a theme that had been in 23 existence at the time and a theme that we 24 continued to build on over the next few years 25 as well. 12044 1 Q. At the time of the merger of DRI and 2 Novell, was DR-DOS supported by NetWare? 3 A. DR-DOS was supported by NetWare. As I 4 recall, it was on the list of compatibility 5 applications and/or services. And it was 6 supported by the product. 7 Q. What were the advantages to DRI 8 joining Novell? What were DRI's advantages? 9 A. Bigger presence in the marketplace 10 that Novell provided, which included broader 11 relationships with original equipment 12 manufacturers, OEMs. 13 Novell had great presence in those 14 accounts because they were working with us on 15 our network operating system, additional 16 financial resources to carry on a very 17 difficult campaign in the market against the 18 market monopoly. And additional resources in 19 terms of people and expertise. 20 Q. In the course of time that you ran the 21 desktop systems and the DR-DOS Novell DOS 22 product and in looking at the history of the 23 company, did you ever find any indication that 24 DRI was anything less than completely 25 forthright in terms of its presentation in 12045 1 connection with the merger? 2 A. I never found any indication that 3 there was less than complete forthrightness in 4 connection with the merger. I didn't -- I 5 certainly didn't know of anything. 6 I was not involved much in the 7 conversations that occurred at merger time, but 8 I did not become aware, nor was I aware then, 9 of any misinformation or miscommunication. 10 Q. Let's talk about when you walked into 11 your position, which we think is about April 12 3rd? 13 A. April 3rd. 14 MR. TULCHIN: Objection, leading, Your 15 Honor. 16 There's no such testimony. 17 THE COURT: Overruled. 18 Go ahead. 19 A. I walked into -- I became an executive 20 vice president in the company in the first part 21 of April, approximately April 3rd. 22 Q. And what were your expectations, 23 Mr. Edwards? What did you think would happen 24 with DR-DOS? 25 A. I felt like we had an opportunity in 12046 1 the market to grow it, to grow the revenues 2 associated with that product, and to deliver it 3 at an accelerated pace in the marketplace. 4 I felt like we could champion the 5 cause of those users who wanted to remain in a 6 very simple current location they were at, 7 which was a DOS operating system with DOS 8 applications and things that worked for them. 9 I noticed that the revenue for the 10 companies had been growing. And I felt like we 11 could accelerate their growth because of what 12 Novell would bring to the table are their 13 ability to get to top tier OEMs and the ability 14 to leverage our market presence. 15 We had a great reputation for 16 technical excellence and for looking after the 17 customer and supporting them well. 18 So I felt like we could build the 19 revenues and build a small fraction of a base 20 in a desktop operating system world. 21 Q. What do you mean by a small fraction? 22 A. Well, at the time, my estimates, as I 23 recall, were that we could be in the 24 neighborhood of 7, 10 percent of the market 25 potentially. 12047 1 Microsoft was clearly the dominant 2 player, the controlling player in the 3 marketplace. There's no question about that. 4 I don't think we had any visions that 5 we were going to unseat that. We just felt 6 like there was a collection of users that would 7 like the fact that we were going to give them a 8 longer life and a longer opportunity to use 9 their current investment. 10 So a small percentage of the 11 marketplace, probably somewhere 7, 10 percent. 12 Maybe higher if we got -- if we were really 13 good. 14 Q. All right. What had DR-DOS's sales 15 been in the preceding two fiscal years? 16 A. I believe in 1990, the total sales was 17 somewhere around 15 million. In '91, it was 18 growing and had achieved 30 million. 19 Our initial estimates were that we 20 could be 60 to 80 million if we got lucky, some 21 of it being optimistic. We learned very 22 quickly those were optimistic numbers, but we 23 felt that there could be significant growth. 24 Q. What did you estimate the installed 25 base of DR-DOS was? 12048 1 A. About 5 million users. 2 Q. Where was the growth occurring, in 3 what channel? 4 A. The growth was occurring was in the 5 retail channel, so -- and this was one thing 6 that I appreciated, was that they were getting 7 people who had received a computer with an 8 operating system to install a brand-new 9 operating system. 10 Now, certainly, these were probably 11 power users, but that is no small effort to do 12 that. That's a big effort. And so I was 13 impressed by that. 14 I was impressed that some of the 15 features they had in that product, better 16 memory utilization, the ability to get twice or 17 more capacity out of your disk storage, those 18 kinds of things, the security services, those 19 kinds of things were powerful enough that 20 people were willing to uninstall an operating 21 system and reinstall another one, which is not 22 a small thing. So I was impressed. 23 Q. All right. In terms of the growth in 24 the retail channel in '91, was -- is there some 25 measure that software vendors used in terms of 12049 1 how their sales are going in the retail 2 channel, top 15, whatever lists? 3 A. Yes. There were constant reportings 4 of what are the top 10, the top 20 applications 5 being sold to customers. 6 And DR-DOS was, I think, at one time 7 top 15. They were always in this group of 8 applications that were doing very well in the 9 marketplace. 10 Q. What Microsoft product was in the 11 market -- what Microsoft operating system 12 product was in the market when you took over in 13 April of 1992? 14 A. The predominant product in the 15 installed base at that time as I recall was the 16 DOS 4 service. 17 DOS 5 had been announced, but the 18 predominant users that were there at the time 19 were using MS-DOS 4, 4.1. 20 Q. All right. Let's see, and I hope I 21 have on there when MS ships MS-DOS 5.0, June 22 11th, 1991. 23 A. Correct. 24 Q. But you're saying that even though 25 MS-DOS 5.0 was in the market, many people were 12050 1 still using 4? 2 A. Yeah. I think the installed base was 3 around 4. Microsoft had come out with MS 5. 4 It was gaining traction and accelerating, but, 5 just looking at an installed base, I would say 6 that a good share of people were still in the 7 process of considering an upgrade, a change. 8 Q. What was the predominant issue for 9 users at the time that you took over? 10 A. Well, the users certainly would be 11 segmented into at least a couple of groups. 12 Customers using products at their home 13 or personally and corporate users using it in 14 larger businesses. 15 And the corporate user side, the cost 16 of ownership or how difficult it was to 17 upgrade, to maintain, to invest in new 18 technology, that was something we heard over 19 and over again as their biggest issue. 20 On the user, it was just make it 21 simpler. Give me something that's simpler to 22 use and that doesn't cause me to incur 23 additional incremental costs. 24 Across both groups was the issue that 25 was beginning to be prominent, which was 12051 1 networking. How do I get beyond my own island 2 of information, island of technology, how do I 3 connect it to the world and connect it to 4 everything out there? 5 I really felt like the seeds of the 6 Internet were being planted right about then 7 and networking was becoming a more significant 8 issue in the market. 9 Q. What was your idea about what the DOS 10 should focus on? What had been the technology 11 improvements? 12 A. I felt like we should focus on making 13 it a better networked operating system. We 14 should put networking services in it. We 15 should create an ability for users to leverage 16 it in a network space. 17 On a pure DOS operating system basis, 18 things like a better ability to run 19 application, memory management, a better 20 ability to increase how much you could store on 21 your disk, disk compression technologies was 22 important, but my view was those, plus the key 23 ingredient of linking it up to the network and 24 creating good interface between it and the 25 network were really key. 12052 1 Q. How did you intend to go about growing 2 your business? 3 A. I felt the most important thing was to 4 get out to large OEMs and OEMs in general and 5 take advantage of the way products, network and 6 desktop operating systems come to a market. 7 We were principally in the retail 8 space, and that was great and they were having 9 some success, but the long-term success had to 10 be based upon getting to the OEMs and getting 11 them to take a percentage of their machines. 12 That way we could have customers 13 receiving machines that already had the 14 operating system installed and as opposed to 15 always having to receive a machine and go to a 16 store and buy a product and then install it. 17 And so it was really key to get large 18 OEMs to begin to use and to sell a percentage 19 of their hardware, a percentage of their 20 systems with DR-DOS included in them. 21 Q. You mentioned top tier. How is the 22 OEM space organized? 23 A. Well, I always in my mind put it into 24 at least three buckets. And the top tier were 25 the DEC and the HP and Compaq, NEC, companies 12053 1 like that that had not only just market 2 presence or large numbers of customers, but 3 were known for technology leadership, were 4 known for an ability to lead the market and put 5 new innovation out there and people would trust 6 and accept it. 7 There was a second tier of providers 8 that pretty well followed the top tiers, but 9 they were there in the second tier, not so much 10 because they had technology or market 11 leadership, but because they had large volumes 12 of Acer or, really, in some ways Olivetti. 13 Companies that were really important to the 14 marketplace, but I didn't classify them as true 15 leaders. 16 And then there was a third tier, which 17 were a lot of small OEMs that could be putting 18 together identical office package and they 19 would load things on it with a couple of 20 applications and bundle it and sell it into the 21 marketplace, what we called vertical 22 application bundling, or they were just selling 23 to smaller businesses. 24 And they were just leveraging the 25 growth in the industry overall. They weren't 12054 1 leaders. They tended to come and go, go in and 2 out of business a lot. 3 So they were a very expensive customer 4 to service. You could spend a lot of time 5 educating them and training them on your 6 product only to have them go out of business 7 and start all over again with somebody else. 8 And so it was really key to me in 9 order to succeed long term to participate on 10 some bases with the top tier OEMs. 11 Those were the ones that could give 12 credibility to our product in the marketplace. 13 Those are the ones that could take advantage of 14 new innovation we would have and deliver it to 15 end users. 16 And by getting a few of those, others 17 would follow. And then that would 18 simultaneously increase the retail presence 19 because -- this is a communication cycle that 20 gets involved in momentum. Some units ship out 21 into the marketplace. The users see that, the 22 press sees that. They comment on it. The 23 retail channel has a positive view of it. 24 And you've got to get that whole 25 ecosystem working in order for you to be able 12055 1 to sustain a long-term presence in an operating 2 system market. 3 Q. Can you estimate for the Jury what the 4 share is, the market share is of what you say 5 are, like, the top two tiers? 6 A. Well, I think at one time, there were 7 probably 50 percent of the distribution into 8 the marketplace was delivered by the top 20, 25 9 OEMs. It was a significant number. 10 I believe somewhere in the year I took 11 over, there were approximately 10 million new 12 DOS shipments. I think it was 9 something, 9 13 million. And at least half of those came from 14 the top 20, top 25 providers. 15 And I think that in that same time 16 frame, just to give you some basis for 17 judgment, I think there were approximately 8 18 million new PCs that shipped. 19 And so if you're looking at, well, 20 there's 9 or so million DOSes sold into the 21 market and 8 million PCs, you can see that the 22 incremental million had to do with probably 23 what was being purchased in retail. 24 The vast majority was coming with an 25 operating system would be my estimation. 12056 1 And so you wanted to be a part of the 2 bigger group in order to lay the foundation for 3 succeeding in the market overall. 4 Q. Are there differences in costs between 5 selling your product retail and selling it 6 through OEMs? 7 A. There are significant differences 8 because -- when you go to an OEM market, you 9 might go to a business like Compaq or Dell -- 10 Compaq isn't there anymore, I guess, having 11 been acquired by HP. 12 You go into Dell. They have a very 13 automated system for building the computer and 14 then loading software on it. And you would 15 provide them what we call the disk master or 16 gold disk. 17 They would get that plus some 18 documentation, typically electronically. They 19 would take that, load it up into their systems, 20 and then could stamp copies of operating 21 systems down the assembly line on the PCs. 22 So the material cost, the cost of 23 buying the document or the cost of those things 24 were significantly lower. 25 In the retail channel, you had to get 12057 1 costs that were magnified in a number of ways. 2 You had the physical goods cost 3 because either you are using back then 4 sometimes floppy disks or CD-ROMs to load the 5 software on. Then you had a physical manual. 6 You had to design a package for the box and 7 shrink wrap it. 8 You had the marketing costs associated 9 with creating the demand, creating a reason for 10 you to know that there was a better DOS out 11 there, and then to go to a store and buy it. 12 So the friction in the market was 13 substantially greater in the retail versus the 14 OEM market. 15 Q. What was the total installed base for 16 DOS operating systems in this time frame, '92 17 -- '91, '92, '93? 18 A. Oh, you know, I don't know that I 19 recall what the total number was. 20 Q. Let me see if I can help you. 21 A. Well, that would be wonderful. 22 Q. All right. I'm showing you your 23 declaration, paragraph 84. 24 MS. CONLIN: May I approach, Your 25 Honor? 12058 1 THE COURT: Yes. 2 Q. If you would read that, and when 3 you're done you can hand it back to me and I 4 will go sit down and then you can tell us. 5 Did that refresh your recollection? 6 A. It certainly does. 7 Q. All right. 8 A. I read it and I wrote it, so -- 9 100 million was probably -- was the 10 total market size in the '91-'92 time frame, 11 and so it's a very significant base of 12 computers. 13 Q. Do you recall how many new copies of 14 the DOS were sold in 1992? 15 A. New copies of DOS, somewhere around 16 9.4 million new, I believe. 17 Q. I misunderstood. Let me look back at 18 this. 19 MS. CONLIN: May I approach, Your 20 Honor? 21 THE COURT: You may. 22 Q. In that same paragraph, Mr. Edwards, 23 for the purpose of refreshing your 24 recollection, see if you can see what the total 25 shipments were. 12059 1 A. This says 24 million new copies of DOS 2 so. 3 MR. TULCHIN: Your Honor, I object to 4 what it says. It's either his recollection has 5 been refreshed by reading this or it hasn't 6 been. Just reading from an inadmissible 7 document is inappropriate. 8 THE COURT: Sustained. 9 Did you refresh your recollection? 10 THE WITNESS: You know, I don't 11 remember the numbers very well at that time. 12 So I don't have a good recollection of what the 13 new shipment numbers were sitting here today. 14 MS. CONLIN: Well, as past 15 recollection recorded, Your Honor, he can refer 16 to his document and review it and tell the Jury 17 what the document said at the time that he was 18 fully aware of what the numbers were. 19 THE COURT: Show it to him again. 20 MS. CONLIN: Thank you, Your Honor. 21 May I approach, Your Honor? 22 THE COURT: You may. 23 Q. And at the time that these numbers 24 were fresh in your memory, Mr. Edwards, what 25 did you record as the number of new copies sold 12060 1 in 1992? 2 MR. TULCHIN: Same objection, Your 3 Honor. 4 THE COURT: Overruled. 5 You may answer. 6 A. 24 million. 7 Q. All right. 8 MS. CONLIN: May I approach, Your 9 Honor? 10 THE COURT: You may. 11 Q. At the time that you took over, what 12 was your view of what DR-DOS might be able to 13 sell, do in the fiscal year of '93? 14 And tell the Jury what the fiscal year 15 was. 16 A. Well, the fiscal -- typically 17 companies will operate on a -- well, not 18 typically, but a fiscal might be January 19 through December. 20 Novell had a year end on October 31st, 21 and I believe that DRI had a year end on 22 September 30th or the end of September. 23 So in speaking of that in terms of 24 fiscal year then, for the combined -- for what 25 I would have viewed this, I would have taken on 12061 1 quickly the Novell view of the world. 2 And for me the first quarter would 3 have ended at the end of January, and in April 4 when I took over the company or took over the 5 desktop systems group, we would have been in 6 the second quarter of the year. 7 Our initial estimates -- and viewing 8 the plans that the product teams had at the 9 time was in the 60, 67 million target for that 10 year. 11 I was very optimistic that we could do 12 even more than that in terms of revenue 13 opportunity for the product. 14 Simply because I believed with the 15 addition of Novell's presence in these larger 16 OEM companies, we had great relationships with 17 them, an ability to call on them and get a 18 meeting and have them sit down and take our 19 thoughts seriously, I felt like we could 20 capture a small percentage of this rapidly 21 growing marketplace. 22 Q. Were the projected sales -- or were 23 there budgeted projections for sales by 24 quarter? 25 A. There were. 12062 1 Q. And have you prepared or did you 2 prepare in connection with your declaration a 3 chart to illustrate what budgeted and projected 4 sales were for each quarter of 1992, fiscal 5 '92? 6 A. I did. 7 MS. CONLIN: Your Honor, at this time 8 the Plaintiffs would offer Plaintiffs' Exhibit 9 10055. 10 Q. Mr. Edwards, is Plaintiffs' Exhibit 11 10055 the DR-DOS 1992 sales forecast by 12 quarter? 13 A. Yes. 14 MR. TULCHIN: We object to this, Your 15 Honor, and I wonder if we could have a sidebar? 16 THE COURT: Okay. 17 (The following record was made out of 18 the presence of the jury at 9:45 a.m.) 19 MR. TULCHIN: Your Honor, here is the 20 problem with this exhibit. This is a chart 21 prepared for this declaration which was 22 submitted to the FTC. The declaration is legal 23 argument. It was submitted to the FTC in 1993 24 by Novell as part of an effort that Novell was 25 making to try to convince the FTC to take 12063 1 action against Microsoft on a title of, I 2 believe, five different subjects. 3 Eventually, the Department of Justice 4 took over the investigation after the FTC 5 declined to take any action -- the vote was two 6 to two -- and it was necessary for a majority 7 to agree to proceed to take action. 8 But this chart is not a business 9 record, and, of course, neither is the 10 declaration. The chart comes from, I believe, 11 Your Honor, paragraph 7, page 5 of the 12 declaration. The designation was litigated 13 before the Special Master who decided that this 14 was not admissible. And this chart, had it 15 been a business record of Novell, had it 16 existed somewhere in the files of Novell as 17 part of its normal business operations, of 18 course, would be admissible. But as far as I 19 know, the chart does not exist in the business 20 records of Novell. It was prepared for 21 purposes of the argument that Mr. Edwards and 22 Mr. Bradford and Novell made to the FTC. 23 And so this chart and a number of 24 others that I think are coming, there are two 25 or three other charts in this declaration that 12064 1 I believe Ms. Conlin intends to ask this 2 witness about, they are not business records. 3 They are part of a document that was excluded. 4 I don't recall if they appealed that. No, they 5 didn't appeal the ruling of the Special Master 6 to the Court. 7 And all we're doing now is trying to 8 get in through the back door something that is 9 within the purview of the Palmer case, a 1943 10 decision by the U.S. Supreme Court written by 11 William Douglas. This is not a proper business 12 record at all. It is hearsay. Again, if there 13 were such a document within Novell's files and 14 that document was in the possession of the 15 plaintiffs or Microsoft in this case because it 16 had been produced in response to a subpoena, we 17 would be in a different situation and this 18 would be admissible. But as far as I know, 19 it's not. 20 MS. CONLIN: Your Honor, let me first 21 address the issue that Mr. Tulchin has often 22 brought to the Court and the Court has often 23 overruled. 24 The fact is that the Special Master 25 process was designed for pretrial kinds of 12065 1 objections. I've laid a proper foundation for 2 this document as past recollection recorded, 3 something that could not be done before the 4 Special Master. That's thing one. 5 Thing two is I have laid a proper 6 foundation for this document under Rule 1006. 7 What is in the Novell records are these budget 8 projections. This is simply a diagrammatic 9 display of what the projections were for the 10 year 1992. He had indicated that those records 11 were used for the purpose of preparing this 12 chart. And how that chart was used is not 13 really material to the issue of whether or not 14 this is a useful piece of evidence for the jury 15 to have for the purpose of considering 16 Mr. Edwards' testimony. And I've laid the past 17 recollection recorded foundation. I have laid 18 the foundation appropriate for the 19 admissibility of this chart under Iowa Rule of 20 Evidence 5.1006. 21 And Mr. Tulchin is right, I think 22 there are two or three more charts of this kind 23 that were prepared by Mr. Edwards there, the 24 books and records of Novell at the time and 25 this kind of diagrammatic portrayal is 12066 1 explicitly and sufficiently admitted and 2 indicated as admissible under Rule 1006. 3 THE COURT: As he testified, I don't 4 recall him testifying yet that he prepared 5 these from the documents from Novell. 6 MS. CONLIN: I think he said that in 7 connection with the preparation of the 8 declaration. I can lay a specific foundation 9 if the Court desires for each of these 10 exhibits. 11 MR. TULCHIN: Your Honor, I don't 12 think that takes care of the problem entirely. 13 A couple of things, if I may. 14 What is useful for the jury, of 15 course, that's a nice way of thinking about 16 evidence, but there are rules about hearsay 17 that apply even when a document might be 18 useful. That isn't the end of the inquiry. 19 This isn't past recollection recorded 20 because this witness by definition has no 21 recollection of these numbers. He wasn't even 22 working in the group at the time that these 23 sales were apparently made. 24 But, again, if this were really a 25 business record, that would be one thing. This 12067 1 chart doesn't appear and the numbers from which 2 the chart were prepared apparently don't appear 3 in Novell's records. Neither side has them and 4 nothing was produced to us in response to the 5 subpoena that I believe Novell received in 6 1998. 7 So, Your Honor, this is part of a 8 document that by definition is legal argument 9 made to the FTC. And this chart and the ones 10 that follow it were part of an effort made to 11 get the FTC to do to Microsoft legally what 12 Novell couldn't do in the marketplace. 13 Again, the Department of Justice and 14 Microsoft eventually agreed in the '94 consent 15 decree that the per processor licenses would no 16 longer be used. But this legal brief, you 17 know, is masking in terms of a declaration that 18 was prepared at Novell by Novell's lawyers in 19 large part. If this were based on business 20 records and we had the evidence that that were 21 so, it would be commended. But there is 22 actually nothing that indicates that this is a 23 reflection of Novell's business records. 24 For example, in the declaration 25 itself, the witness doesn't provide any source 12068 1 for this information. There is a chart later 2 on, on page 21, which I think Ms. Conlin is 3 probably coming to. And that chart, again, 4 like this one, doesn't contain any source 5 information. It doesn't say that this comes 6 from a particular file or record of Novell. 7 It's just part of the argument. So I don't 8 think it's past recollection recorded. By 9 definitions these numbers could not be his 10 recollection, and it's just pure hearsay. 11 MS. CONLIN: Microsoft does have the 12 business records of Novell on which this was 13 based. They got them in 1996 or '97 in 14 connection with the Caldera case. I don't know 15 what they did with them; but, nonetheless, Your 16 Honor, this is perfectly permissible and 17 appropriate under the rules of evidence. 18 And Mr. Tulchin's arguments with 19 respect to the purpose to which the document 20 was put is totally immaterial. That's not the 21 purpose for which we are offering it to the 22 jury. We are offering it to the jury. It's 23 just numbers. You know, it's calculations. 24 It's what they expect to sell. 25 And the next one coming up, Your 12069 1 Honor, is the sales that -- from the sales of 2 the actual product for the four quarters of 3 1992 in a comparison of that in their budget. 4 And I don't recall exactly what the 5 next one is -- perhaps Mr. Tulchin does -- but 6 these are documents that we believe that the 7 jury would find useful and that we believe are 8 admissible under the 1006. 9 MR. TULCHIN: One small point, Your 10 Honor. 11 There was a subpoena to Novell in the 12 Caldera case. It might have been before 1998. 13 I was under the impression it was 1998, but I 14 just want it to be clear that all the documents 15 that Novell gave to Microsoft in response to 16 that subpoena were turned over to the 17 plaintiffs in this case. So we have nothing 18 any different than they do. 19 MS. CONLIN: I'm not suggesting 20 otherwise. You just said you didn't have the 21 records. I say you do. 22 MR. TULCHIN: If there's a record -- 23 Ms. Conlin has a business record of Novell that 24 contains these numbers or this chart, that's 25 what should be used, not something from this 12070 1 argumentative declaration. 2 MS. CONLIN: There's nothing 3 argumentative about this. This is just 4 numbers. 5 THE COURT: Well, my feeling is that 6 any type of chart such as this and by what was 7 contained in it, she's going to have to 8 establish foundation, how this was prepared, 9 what he used to prepare it, for what purpose, 10 obviously for sales forecasts, I guess. 11 The argument Mr. Tulchin is making in 12 regard to the chart itself, I think that goes 13 rather to weight rather than to the 14 admissibility of the chart. 15 I understand fully his argument 16 concerning declaration. I agree with him 17 totally on that. However, with this I think 18 you can establish, by proper questioning, lay a 19 foundation for the chart he prepared himself, 20 but you're going to have to go through how it 21 was done, how it was prepared, where he got the 22 numbers, what he used to do it. And then at 23 that time when you introduce it, the Court will 24 rule on its admissibility. 25 As far as any other things from that 12071 1 designation, I tend to agree with defendant on 2 that. So you've got to establish and I think 3 the argument really goes to weight rather than 4 admissibility. 5 Clearly on cross-examination the 6 defendant will be allowed to delve into how -- 7 you know, whether he was given information to 8 the FTC and to show to a jury that maybe the 9 numbers, even though he says were taken from 10 business records, that somehow maybe they're 11 not reliable based on his bias or prejudice 12 against Microsoft. 13 So on that basis, if you can establish 14 a foundation, I can see how it could be 15 admissible. But right now there is no 16 foundation, none. 17 MS. CONLIN: I'll lay the foundation, 18 Your Honor. 19 MR. TULCHIN: Thank you, Your Honor. 20 THE COURT: Thank you. 21 (The following record was made in the 22 presence of the jury at 9:58 a.m.) 23 THE COURT: Ladies and gentlemen, it's 24 time for a break. 25 Please remember the admonition 12072 1 previously given. Leave your notebooks here. 2 We'll be in recess for approximately 3 ten minutes. 4 All rise. 5 (A recess was taken from 9:58 a.m. 6 to 10:16 a.m.) 7 THE COURT: Everyone else may be 8 seated. 9 Mr. Edwards, be seated. You are still 10 under oath. 11 MS. CONLIN: May I approach the 12 witness, Your Honor, with the desk? 13 BY MS. CONLIN: 14 Q. Mr. Edwards, looking at the document 15 in front of you which has been marked 16 Plaintiffs' Exhibit 10055, how was that graph 17 prepared? 18 A. This was a projection of sales for 19 1992. And it would have been prepared by 20 meeting with the financial group inside of 21 Novell, the sales team, the product team, and 22 then estimating based upon their projections 23 what the total group projection, in DR-DOS in 24 this specific case projections would look like. 25 Q. And is projecting sales something 12073 1 that's done as an ordinary part of the business 2 of Novell? 3 A. I would say an ordinary part of 4 Novell's business and any business is trying to 5 make estimate of what the next year's sales 6 will achieve. 7 Q. What is the utility for the business 8 of making that estimate? 9 A. Sizing of the business. Deciding how 10 many people we can hire. Deciding what 11 resources to expend. Deciding -- once you set 12 these goals, then you have to determine a 13 strategy for executing on them. 14 And so it allows you to align all of 15 the resources of the organization in a way that 16 is directed at achieving the goals that you 17 set. 18 Q. This was a document that was included 19 in your declaration, Mr. Edwards. And was it 20 prepared just for the declaration or was it a 21 part of the -- prepared by Novell for its 22 internal use and then used by you as a part of 23 your declaration because it already existed? 24 A. This was prepared by the desktop 25 systems group for its use in the business. I 12074 1 used it in my declaration because it had 2 existed and it was the plan we had for running 3 the business. 4 Q. What records did you use to prepare 5 this? 6 A. Last year's -- the year previous 7 sales, the momentum coming up into the trailing 8 couple of quarters, our estimation of market 9 sizing and where the market was going, how 10 successful we felt we could be in approaching 11 OEMs, approaching the retail market. 12 So there is a planning process that 13 can happen in a week or two, or it can happen 14 as an ongoing process. I tended to do it in 15 kind of an ongoing way, making updates as 16 necessary. 17 Q. Now, you came in the second quarter; 18 correct? 19 A. That's correct. 20 Q. And did this already exist or were you 21 a participant in its preparation? 22 A. The plans already existed for that 23 year, but I also then went and assisted in 24 adjusting the numbers based upon my overview of 25 their plans. 12075 1 MS. CONLIN: Your Honor, at this time 2 the Plaintiffs would offer 10055. 3 MR. TULCHIN: I don't think a proper 4 foundation has still been laid, Your Honor. 5 This witness is testifying as to what 6 would have happened and not that these reflect 7 documents that were business records at Novell. 8 THE COURT: It's admitted. 9 Continue. 10 MS. CONLIN: Okay. There it is. 11 Q. And this is your projected sales for 12 fiscal year 1992. And what were you projecting 13 for the first quarter? 14 A. You know, a little more than 15 -- 15 between 15 and 16 million. 16 Q. And for the second? 17 A. Between 16 and 17 million. 18 Q. And then 17 for the third? 19 A. 17 for the third quarter, and for the 20 fourth quarter approximately 18, or 67 million 21 for the year. 22 Q. All right. How was DR-DOS seen in the 23 marketplace, Mr. Edwards, at the time you took 24 over the product? 25 A. I think it was seen by its users as a 12076 1 superior product. There was a strong following 2 of I will call them the power user base. 3 Q. What does that mean, power user? 4 A. More advanced users. Users that 5 wanted to get every benefit out of the hardware 6 they had. 7 They were sort of into -- you might 8 have called them techie types. They were 9 really into having the best possible facility 10 with their computer, and there was a strong 11 commitment by them. And the product group was 12 targeted at them. 13 There had to be enough incremental 14 features to motivate somebody to effectively 15 get rid of the DOS they had that had come on 16 their machine and upgrade it to something new. 17 And so they were going after that marketplace. 18 It was a well received product. 19 Q. When you took over and replaced 20 Mr. Williams, did you meet with Mr. Williams? 21 A. I did. I met with him. I did not 22 spend significant time with him. He gave me a 23 brief review and said good luck, and that was 24 about it. 25 Q. Why did he leave? 12077 1 A. I'm not sure why he left, actually. I 2 could -- I don't have any personal knowledge of 3 why specifically he left. 4 The rumor at the time was that he just 5 got tired of the fight, but I really don't know 6 why he left. 7 Q. All right. When you took over in 8 April, what was the state of the integration of 9 Novell and DRI? 10 A. DRI was still a separate unit. When I 11 took over, they had, for example, their own 12 corporate counsel that was not a part of the 13 attorney group as a part of Novell. They had 14 their own sales organization that was not 15 merged. They had their own technical team that 16 was not a part of the umbrella strategy. They 17 had the individual HR director that was not a 18 part of the general human resources. 19 So they were a separate, distinct 20 entity. 21 Q. What did you do? 22 A. I wanted to integrate them. I began 23 pulling people together and systematically 24 started the process of making those people, the 25 legal group, the HR group, the support group 12078 1 report into the common fabric of the company 2 where they could receive common guidance over 3 those principles. 4 We still coordinated their efforts, 5 but they were no longer reporting to me. 6 So as an example, the sales team 7 started to report to Joe Marengi, who at the 8 time was VP of sales. The support team started 9 working and reporting into the support group. 10 Linnet Harlan, who was the legal 11 counsel, we had her move and report into the 12 general counsel's office, David Bradford's 13 group. HR, et cetera. 14 So we started to merge the company, 15 which left me with directing the product 16 strategy and the market strategy for that 17 group. And the support infrastructure 18 supporting us generally, it was my view that 19 that would be a stronger approach to the 20 marketplace and would give us an ability to 21 achieve our goals more successfully. 22 Q. Did you accomplish integration? 23 A. I think we accomplished a fair amount 24 of integration. I mean, I think that we 25 integrated it completely within the company and 12079 1 you can always do better, but I thought we did 2 a pretty good job at it. 3 Q. About how long did it take you 4 accomplish the integration? 5 A. Well, it went on for six months. I 6 mean, it's -- there's two sides to it. 7 One side is saying you now report to a 8 new manager. The other side is getting the 9 organization to adopt to a new way of working 10 where they're not coming back and listening to 11 the former manager for instructions, but now 12 they're actually being a part of the new team. 13 And it sometimes takes some time to 14 get teams to work together and become one. 15 And so I don't think there was a point 16 in time I can say, okay, it was all done then, 17 but my estimation would be about six months we 18 were pretty successful at getting it 19 integrated. 20 Q. What was the state -- at the time you 21 took over, were the merger talks between 22 Microsoft and Novell over? 23 A. Yes, for the most part. I mean, I 24 didn't hear -- I'd heard rumors and Ray had 25 told me about his meeting in San Francisco. 12080 1 MR. TULCHIN: Objection to the rumors, 2 Your Honor. It's hearsay. 3 THE COURT: Sustained. 4 A. Okay. I believe they were completed, 5 and I believe that's one of the reasons that 6 Ray did not give me any objection to starting 7 the integration process. 8 Q. When you took over, what was the 9 morale of the DR-DOS folks? 10 A. I think the morale was excitement on 11 the part of they felt they had a good product, 12 but I think they were tired. They needed a new 13 lift and a new strategy. 14 They had been frustrated for some time 15 about their ability to succeed, particularly in 16 the OEM space, which everyone in the group 17 believed was the absolute core and most 18 critical thing that had to be done. 19 Q. In terms of the sales, when you took 20 over the sales of DR-DOS, what was happening? 21 A. So the efforts we took to sell were 22 promotional campaigns. We were trying to -- we 23 were doing press tours to explain to the 24 marketplace. I didn't do press tours, but I 25 sent Toby and Birdie, Toby Corey and the PR 12081 1 assistant on press tours. 2 The sales organization was really 3 split in two halves. People who were looking 4 at the retail market, which was all about 5 what's the packaging of the product and what 6 are the end caps or the end of the aisle 7 promotions look like, those kind of things, and 8 then the OEM sales team. And that team, in my 9 estimation, was really focused on this third 10 tier OEM group, a lot of very, very small 11 companies. 12 And had some presence, but not an 13 orchestrated presence at going after the major 14 OEMs in the marketplace. 15 Q. Did you change that? 16 A. I did. I immediately put forth a 17 strategy that said our chief goal from a sales 18 perspective was to get in front of those 19 largest OEMs to leverage the presence that 20 Novell had and the relationships we had with 21 people like Compaq and HP and Dell and Olivetti 22 and NEC. Those kinds of very large or semi 23 large OEMs, we had to get out and get in their 24 offices and present our strategy and our 25 products. 12082 1 Q. Were the sales of DR-DOS in April of 2 1992 going up or going down or staying the 3 same, I guess? 4 A. You know, from a quarter over quarter 5 perspective, as I recall, the sales in the 6 second quarter -- which in April, we would have 7 been nearing the end -- had taken overall an 8 upward stream on an entire quarter basis. 9 But the trending particularly in the 10 mid part of April and onward, was down. So the 11 total number quarter over quarter was higher, 12 but the trending in the group was we were 13 already experiencing, I think, struggles in the 14 marketplace with respect to adoption of our 15 product given the climate in the market. 16 Q. What was that climate? 17 A. There were really -- the inability of 18 our team to work with OEMs and present to them 19 a product that they felt like could be 20 supported with Windows, there was a general 21 feeling that they had that our product was 22 superior technically, strong technically, but 23 that Microsoft was too powerful and would not 24 allow our product to support Windows. 25 Therefore, that was the first reason 12083 1 that they couldn't really move forward. Not 2 necessarily the most important, but one of two 3 or three reasons. 4 The second that we found is that in my 5 going out into the marketplace, I discovered 6 per CPU pricing arrangements and found 7 generally people telling me that it would be -- 8 MR. TULCHIN: Objection to the 9 hearsay, Your Honor. 10 THE COURT: Sustained. 11 Q. When you say people, do you mean -- 12 who do you mean people? 13 A. Executives I met with at OEM 14 companies. 15 Q. And were they telling you this in your 16 sales meetings with them? 17 A. That's correct. They were telling me 18 as I would present to them the product, as our 19 team would present the product -- 20 MR. TULCHIN: Same objection, Your 21 Honor, if the witness is about to describe the 22 conversations. 23 MS. CONLIN: Your Honor, we offer this 24 testimony pursuant to McElroy and Callahan. 25 THE COURT: Objection sustained. 12084 1 Q. In your discussions with the OEMs, did 2 you seek from them and get from them reasons 3 for the decisions that they were making? 4 A. We did. 5 Q. And in connection with those 6 decisions, were those decisions to go with the 7 Microsoft product usually -- well, I guess 8 always, the Microsoft rather than yours? 9 A. Their decisions were to remain with 10 the Microsoft product, MS-DOS. 11 Q. And what reasons were you given for 12 those decisions? 13 MR. TULCHIN: Same objection. 14 THE COURT: Overruled. 15 You may answer. 16 A. I was told that they -- it was 17 economically infeasible for them to move 18 forward because of what was described as per 19 CPU or per processor licensing. 20 I was told that it was impossible to 21 move forward because they were, they felt, 22 threatened that Microsoft would retaliate if we 23 were -- if they paid too much attention to us. 24 And I was told that the 25 incompatibility fear they had moving forward 12085 1 with Windows 3.1 gave them great concern and, 2 therefore, they couldn't move forward. 3 I would always respond with you can 4 see that we're technically competent. We can 5 fix those problems. 6 And the answer was always, and very 7 consistently, Microsoft will not let you fix 8 those problems. They are going to move the 9 target to ensure that you are not compatible. 10 That's our belief. That was their 11 communication to me. 12 MR. TULCHIN: Your Honor, I move to 13 strike the entire answer under Frunzar as 14 inadmissible hearsay. 15 THE COURT: Overruled. 16 Continue. 17 MS. CONLIN: Thank you, Your Honor. 18 Q. How many OEMs do you think you 19 visited, Mr. Edwards? 20 A. In the time frame from April through 21 September, I would say 30 OEMs. 22 Q. And who would go with you on these 23 trips out to these OEMs? 24 A. There was usually somebody 25 representing the appropriate sales team. 12086 1 If I was in Europe, it would be the 2 sales personnel responsible for that count of 3 the territory. 4 If it was in the U.S., it would be the 5 salesperson in the U.S.. 6 The other people attending, dependent 7 upon the nature of the meeting, I brought 8 people like John Constant or the technical side 9 of our group with me if I felt like the issues 10 were going to be predominantly technical. 11 In some meetings such as with HP and 12 with DEC, and with Compaq, and with Dell, Ray 13 Noorda came with me or other executives. Ray 14 Noorda and other executives came with me. 15 Q. I know it's been a long time and there 16 are many meetings you don't remember the 17 specifics of, but some you do. And I want to 18 talk about those. 19 Let's first try to recreate for the 20 Jury, insofar as you can -- you've mentioned 21 Dell. You've mentioned Compaq. You've 22 mentioned HP. 23 Can you think of as many of the 24 others -- of the other OEMs that you visited in 25 this time frame between April and September of 12087 1 1992? 2 A. We visited Opus. We visited ICL. We 3 visited Vobis and Viglen. We visited with 4 Packard Bell, Southern California, Olivetti. 5 We visited with NEC. There was a 6 company out of the Netherlands. I always 7 wanted to think of them as the Tulip company. 8 I don't think that's their name. We visited 9 with them. Pardon me for not knowing the name. 10 Q. I think it was Tulip. 11 A. Is it Tulip? We visited with those 12 people. That's a summary set of the people we 13 visited with. 14 They were a combination of -- the top 15 goal is if I could get myself and Ray or an 16 executive in at an executive level to any of 17 these companies. It was my goal. 18 So we met with Palmer at DEC and we 19 met with Michael Dell at Dell. And we met with 20 Eckert Pfeifer at Compaq. And those were all 21 president CEO level people of those large 22 companies. 23 With HP we met with Robert 24 Frankenberg, who is not a top tier executive, 25 but over that business unit. He was the 12088 1 general manager of that business unit. Mr. 2 Harris I think is his name out of Opus. 3 So, I mean, those were the kinds of 4 people we met with. And that's a flavor. 5 Some of them we would go into -- we 6 also went into Japan during that time frame 7 because we had a special purpose -- I mean, we 8 had a version of DR-DOS that had double byte 9 character support. It was kind of early on to 10 have that. 11 And that was important because in the 12 kanji languages, you have to represent the 13 graphical characters with more than a single 14 byte of information. And it just means you 15 have to technically do something to support 16 that. 17 And so we met with, you know, Korean 18 and Japanese OEMs there. I was definitely a 19 platinum elite traveler and spent a lot of time 20 and a lot of nights on the road. 21 Q. Did you meet with IBM? 22 A. We did meet with IBM. My role with 23 IBM in that year kind of was two part. 24 I had gone into IBM earlier in the 25 year, just with my NetWare VP of marketing hat 12089 1 on, not necessarily involved at IBM with the 2 DOS, per se, but coming in as a network expert. 3 We met later in the year with the 4 folks at IBM from more with my desktop systems 5 hat on. 6 Q. Is there an OEM called Apricot? 7 A. Apricot. I always called them Apricot 8 and got in trouble. Over there, it's Apricot. 9 We met with Apricot in England. 10 Q. LNX? 11 A. LNX is another company that we met 12 with, and so, yeah. 13 And there's probably -- you know, 14 there's 30, 35 of them. So I'm trying to 15 remember as many as I can. 16 Q. Where was LNX? 17 A. We met LNX in -- I can't remember 18 where we met with LNX. 19 Q. Is it English or European? 20 A. I think it's English. We met with 21 them somewhere in the UK trade show area. 22 And we went to a large trade show 23 there in the spring, early summertime that we 24 met with several of them. 25 But that usually led to more in-person 12090 1 meetings at their corporation. And we would be 2 in a meeting with anywhere from five to 15 3 people representing their entire product group 4 that would be wanting to put input into the 5 process. 6 Q. Did you meet with Siemens? 7 A. We did meet with Siemens and another 8 -- anothe