7700 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 XXIX 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation, ) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 7:59 a.m., January 11, 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 7701 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 MICHAEL R. CASHMAN 8 Attorneys at Law Zelle, Hofmann, Voelbel, 9 Mason & Gette, LLP 500 Washington Avenue South 10 Suite 4000 Minneapolis, MN 55415 11 (612) 339-2020 12 STEVEN A. LAMB Attorney at Law 13 Zelle, Hofmann, Voelbel, Mason & Gette, LLP 14 550 South Hope Street Suite 1600 15 Los Angeles, CA 90071 (213) 895-4150 16 ROBERT J. GRALEWSKI, JR. 17 Attorney at Law Gergosian & Gralewski 18 550 West C Street Suite 1600 19 San Diego, CA 92101 (619) 230-0104 20 KENT WILLIAMS 21 Attorney at Law Williams Law Firm 22 1632 Homestead Trail Long Lake, MN 55356 23 (612) 940-4452 24 25 7702 1 Defendant by: DAVID B. TULCHIN 2 STEVEN L. HOLLEY JOSEPH E. NEUHAUS 3 Attorneys at Law Sullivan & Cromwell, LLP 4 125 Broad Street New York, NY 10004-2498 5 (212) 558-3749 6 ROBERT A. ROSENFELD KIT A. PIERSON 7 Attorneys at Law Heller Ehrman, LLP 8 333 Bush Street San Francisco, CA 94104 9 (415) 772-6000 10 STEPHEN A. TUGGY HEIDI B. BRADLEY 11 Attorneys at Law Heller Ehrman, LLP 12 333 South Hope Street Suite 3900 13 Los Angeles, CA 90071-3043 (213) 689-0200 14 BRENT B. GREEN 15 Attorney at Law Duncan, Green, Brown & 16 Langeness, PC Suite 380 17 400 Locust Street Des Moines, IA 50309 18 (515) 288-6440 19 20 21 22 23 24 25 7703 1 RICHARD J. WALLIS STEVEN J. AESCHBACHER 2 Attorneys at Law Microsoft Corporation 3 One Microsoft Way Redmond, CA 98052 4 (425) 882-8080 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7704 1 (The following record was made out of 2 the presence of the jury at 7:59 a.m.) 3 THE COURT: Mr. Holley, are you ready? 4 MR. HOLLEY: Yes, Your Honor. 5 THE COURT: Proceed. 6 MR. HOLLEY: So pursuant to the 7 Court's instruction, I'm going to describe the 8 sort of testimony I intend to elicit from 9 Mr. Alepin first on the subject of product 10 preannouncements. 11 As the Court is aware, Plaintiffs are 12 claiming that Microsoft engaged in a practice 13 known as vaporware, and that is a legal theory, 14 the most prominent example being a case in the 15 Seventh Circuit called MCI against AT&T. 16 And the notion is that you announce a 17 product when there is no such product and 18 you're basically just lying that you have 19 something in the pipeline when you don't. 20 The standard practice in the industry, 21 particularly in the case of operating system 22 vendors -- and the record is replete with 23 evidence about this -- is that everyone 24 preannounces their products for a variety of 25 reasons. 7705 1 One reason is that so they can get 2 feedback from people in the industry about 3 whether the operating system they're planning 4 on developing is what their customers want. 5 And they need to get that feedback early in the 6 development process so that they can respond to 7 the feedback. 8 The second reason they do it is 9 because they have to test these products quite 10 extensively before they are commercially 11 released, and it isn't practical to do the sort 12 of testing that needs to be done without 13 disclosing the existence of the product. 14 And, thirdly, they do it because they 15 have an entire, what has been referred to as an 16 echo system, of companies, both hardware and 17 software companies, that develop compatible 18 products that work with their operating system. 19 And in order to give those people lead 20 time that they need in order to introduce their 21 products contemporaneously with the new 22 operating system, operating system vendors, not 23 just Microsoft, everybody, preannounces their 24 products so that these compatible products can 25 be in the market at the same time. 7706 1 In this context, I intend to lay a 2 foundation that Mr. Alepin relied upon articles 3 that have appeared in various publications and 4 his general knowledge of vaporware lists, 5 products that have been in vapor, as they say, 6 for months and months and months. And those 7 products are not Microsoft products. They are 8 from Lotus and IBM and other vendors. 9 And then I intend to show him -- first 10 establish a foundation that he sought to review 11 the relevant prior testimony from people at 12 other companies about product preannouncements 13 and why they did it, and then show him some 14 prior testimony which is inconsistent with his 15 testimony about Microsoft's practices. 16 So that's what I intend to do, Your 17 Honor, on vaporware. 18 Then moving on to FUD -- there are 19 other things I'm going to ask about vaporware 20 but that are not relevant to our current 21 discussion. 22 Then moving on to the notion of FUD, 23 again, as Your Honor is aware, there are strict 24 legal standards applicable to FUD claims. 25 Actually, the way they are referred to 7707 1 is product disparagement, and there are very 2 few cases in this area, but what they require 3 is quite clear. 4 You need to show knowing falsity of 5 statements that are made at the time and you 6 have to show knowing falsity at the time the 7 statement was made. 8 As I said the other day, companies 9 have a First Amendment right under a line of 10 cases starting with Central Hudson Gas to make 11 statements about competitors' products. A 12 commercial speech, it's constitutionally 13 protected. 14 There is a very, very narrow band of 15 conduct that the antitrust laws prescribe for 16 obvious reasons, because people have First 17 Amendment rights to engage in comparative 18 advertising. 19 So, in that context, I intend to 20 elicit from Mr. Alepin his knowledge that IBM 21 in the context of the competition between OS/2 22 and Windows 3.1 ran ads in general circulation 23 publications talking about faults in Windows. 24 These are not, you know, Mr. Reiswig 25 running around doing demos. These are ads that 7708 1 appear in magazines like PC Week and PC World 2 telling customers that if they ran OS/2, they 3 could avoid the general dreaded protection 4 fault and their system would not crash. That's 5 IBM's word. 6 I also intend to show Mr. Alepin, 7 after laying the foundation, that he reviewed 8 whatever evidence in the record he thought was 9 relevant to his testimony about FUD; internal 10 IBM documents from the same time period, the 11 competition between OS/2 and Microsoft's 12 operating systems referring to FUD campaigns, 13 in those terms. These are IBM documents using 14 an IBM term FUD to describe what it was that 15 IBM is doing. 16 I also then intend to show that DRI 17 engaged in the same sorts of comparative 18 advertising that Microsoft engaged in. 19 So that is what I intend to do in the 20 area of FUD. 21 There is one other subject, Your 22 Honor, that I intend to go into this morning 23 that, based on Your Honor's instruction 24 yesterday, I need to inform the Court about. 25 In seeking to bolster the credibility 7709 1 of this witness, the Plaintiffs have given 2 great prominence to his role as an advisor to 3 the U.S. Department of Justice in 1993, '94, 4 and '95. 5 And Mr. Hagstrom mentioned this in 6 opening in describing Mr. Alepin to the Jury. 7 He said he was the principal advisor to the 8 U.S. Department of Justice in 1993 and 1994. 9 And then Mr. Lamb elicited quite 10 extensively testimony from Mr. Alepin in 11 seeking to qualify him as an expert about his 12 role as the personal advisor to Ann K. Bingaman 13 when she was the Assistant Attorney General in 14 charge of the antitrust division. 15 The clear purpose of this testimony 16 was to have this jury believe that Mr. Alepin 17 is more worthy of credence because of his 18 association with a government agency, which as 19 the Jury knows from the collateral estoppel 20 ruling, at some point brought a case against 21 Microsoft. And there are certain findings from 22 that case that have been given collateral 23 estoppel effect. 24 Now, the Plaintiffs filed a motion in 25 limine to prevent Microsoft from referring to 7710 1 matters in the government case, meaning the 2 1998 government case, that the government 3 either lost on or elected not to pursue. 4 The Plaintiffs could have brought, but 5 did not, a motion in limine seeking to preclude 6 Microsoft from talking about the 1994 7 government case. 8 There is no motion in limine and no 9 ruling on Microsoft's use of evidence from the 10 1994 government case. 11 In deposition testimony, both in this 12 case and in the MDL proceeding previously, we 13 elicited testimony from Mr. Alepin that all of 14 the evidence that he reviewed in reaching the 15 conclusions that he has described in this case 16 was available to the United States Department 17 of Justice in 1993. 18 We have also elicited testimony from 19 him -- and, of course, this is true -- that 20 Mrs. Bingaman told Judge Sporkin at a hearing 21 in 1993 that she had done an exhaustive 22 investigation, looked at millions of pieces of 23 paper -- her phrase was blood bled, which is 24 the only time I've ever heard that in my life, 25 but she said that they worked around the clock. 7711 1 They did everything they could conceivably do. 2 They brought the only case they had, and they 3 did not bring a claim on vaporware. They did 4 not bring a claim on FUD, and they did not 5 bring a claim on intentional incompatibilities. 6 Now, maybe in normal circumstances 7 what the government chose not to do would not 8 be relevant, but the Plaintiffs have opened the 9 door extremely widely, Your Honor, by trying to 10 bolster the credibility of this witness by 11 associating him with the Justice Department. 12 And having done that, they are 13 burdened by what the Justice Department 14 decided. And the Justice Department decided 15 not to bring, because they couldn't -- that's 16 what Mrs. Bingaman told Judge Sporkin -- they 17 couldn't prove these claims. 18 And our cross-examination would be 19 seriously impeded if the Jury does not find out 20 that the claims that are being sold to them by 21 Mr. Alepin, he also attempted to sell to 22 Mrs. Bingaman and she refused to bring them. 23 So those are the three points that we 24 have for this morning, Your Honor. 25 THE COURT: Any response? 7712 1 MR. WILLIAMS: Your Honor, if I may. 2 Kent Williams for the Plaintiffs. 3 MR. HOLLEY: Your Honor, just 4 consistent with our normal practice, this is 5 Mr. Lamb's witness. And as I understood 6 Mr. Lamb's lecture the other day, he is the 7 lawyer who is supposed to be addressing these 8 matters. 9 That role was violated yesterday 10 afternoon because Ms. Conlin was speaking, but 11 it was my understanding that when someone's 12 handling a witness, they deal with the issues 13 relating to that witness. 14 We should not have multiple lawyers 15 arguing these points, Your Honor. 16 MR. WILLIAMS: Two responses to that, 17 Your Honor. 18 First of all, if there's been any 19 violations, the prime violator has been 20 Microsoft. 21 I've been in court. I've read the 22 transcripts time and time again. Mr. Tulchin 23 has jumped into arguments. These two very 24 capable counsel have tag teamed us repeatedly 25 throughout the course of these proceedings. 7713 1 Secondly, Your Honor, the issues that 2 are implicated by the offer of proof I suppose 3 is what Mr. Holley was attempting to do there. 4 The issues that are raised by that 5 offer implicate many other witnesses, many 6 other topics that, as Your Honor is aware, I 7 have spoken to extensively. 8 And with Your Honor's leave, I would 9 like to address those issues. 10 THE COURT: Very well. Proceed. 11 MR. WILLIAMS: Thank you, Your Honor. 12 The first point that Mr. Holley said 13 he wanted to get into is vaporware, which 14 characterized as a legal theory. 15 Of course, Mr. Alepin has not been 16 offered to provide any legal opinions; that 17 what he's talking about is factual. 18 The basic premise for Mr. Holley's 19 offer is that vaporware is a standard practice 20 in the industry. 21 That's what he's trying to establish 22 with this witness. 23 And, Your Honor, that's only relevant 24 to whether Microsoft in either acquiring or 25 maintaining a monopoly did so through willful 7714 1 conduct, in the words of the Grinnell decision. 2 And willful means essentially whether they did 3 it with anticompetitive conduct. 4 And in determining whether the conduct 5 was anticompetitive, the courts have given us a 6 guidance on that. That authority has been 7 provided to Your Honor by both sides. 8 It means through conduct -- and this 9 is, again, in the words of the Grinnell case -- 10 that was through the competitive conduct rather 11 than through growth or development as a 12 consequence of a superior product, business 13 acumen or historic accident. 14 And the jump cite there is 384 U.S. at 15 570 to 571. 16 So the question, Your Honor, is what 17 conduct is anticompetitive and what conduct is 18 not. 19 And what Microsoft seems to be saying 20 is that it's somehow probative to the issue of 21 whether conduct is anticompetitive or not if 22 other companies are doing the same thing. 23 And, Your Honor, vaporware, to use the 24 term broadly, when engaged in by other 25 companies is not the same thing. It simply 7715 1 isn't. 2 The vaporware that Mr. Alepin 3 discussed in his direct testimony was a very 4 specific type, and it had a very specific 5 foundation. 6 And that foundation was set forth in 7 Microsoft documents where the purpose for the 8 vaporware that he was talking about was to 9 freeze the market. 10 And the purposes that Mr. Holley just 11 listed were much different. They were to get 12 feedback back from customers. They were to 13 enable testing of the product, and they were to 14 give a system of companies with compatible 15 products lead time to develop compatible 16 products with the new product that's coming 17 out. 18 None of those purposes were the 19 purposes that Mr. Alepin was talking about when 20 he talked about vaporware. 21 Now, freezing the market -- and this 22 is very important, Your Honor, because this 23 gets into the distinctions between the cases 24 that the parties have cited to you. 25 Microsoft has cited to you cases 7716 1 talking about conduct by other companies where 2 the conduct truly was similar. 3 Most of the cases that they cited had 4 to do with pricing, cutting prices, similar 5 behavior. And it only becomes anticompetitive 6 when the prices get cut too far and then it 7 becomes predatory. 8 So a predatory pricing or a predatory 9 pricer, if you will, would say we're just doing 10 what everybody else does. We're cutting our 11 prices. 12 And, yes, that's true, except when it 13 gets over to the level of being 14 anticompetitive. 15 In our case, vaporware as used by 16 Microsoft did become anticompetitive. It 17 wasn't simply going out there and preannouncing 18 your product in order to have an orderly 19 process for other companies to develop 20 compatible products. 21 What they did is froze the market. 22 And, Your Honor, when courts step back 23 and look at what's anticompetitive, they ask, 24 okay, is the company at issue taking action 25 that would cut into their short-term profits in 7717 1 order to adversely affect a competitor. That's 2 what they're thinking about. 3 They are thinking about in 4 distinguishing competitive from anticompetitive 5 conduct. It's, essentially, are you hurting 6 yourself, you, the defendant, by doing this, 7 and the reason you are doing it is to 8 disadvantage a rival. 9 That's right out of the Verizon case, 10 Your Honor, which I believe Microsoft cited to 11 you. I don't have the jump cite right now, but 12 I can provide that to you, Your Honor. But 13 that's the sort of thing they look at. 14 In the case of vaporware, Microsoft's 15 monopoly position becomes very important. And 16 there's a very important distinction from other 17 companies that do it because Microsoft had, in 18 the case of DRI, an 80 percent market share in 19 the early 1980s -- or 1990s, excuse me. 20 So when they are talking about 21 freezing the market, they're talking about 22 freezing 80 percent of the market. Because 23 that's a part of the market that Microsoft 24 controlled. And in that part of the market, 25 that 80 percent, Microsoft isn't just freezing 7718 1 the little smidgin that DRI is trying to 2 exploit and break open. They're freezing the 3 entire thing. That's 80 percent of the market. 4 And what they're freezing, then, are 5 all the sales of all the existing Microsoft 6 operating systems out there. That's what 7 they're freezing in order to at the same time 8 freeze the little bit that they don't have. 9 That's why it's different. 10 When DRI -- if they did arguably 11 engage in vaporware, and if they arguably did 12 it to freeze the market, which there is no 13 evidence to support whatsoever, there hasn't 14 been any. 15 And the offer of proof that Mr. Holley 16 gave wasn't for that purpose, but even if they 17 could, what are they trying to freeze? They're 18 trying to keep their existing little smidgin 19 of, what, 5, 10, 15 percent of the market. 20 And, Your Honor, that is not 21 anticompetitive. Affecting 15 percent of the 22 market, that's not even market power, much less 23 monopoly power. 24 So that's why Microsoft's monopoly 25 position becomes very important and is very 7719 1 significant and is a qualitative difference 2 between what Mr. Holley is going to try to 3 imply is the same or similar conduct. 4 And, Your Honor, under Rule of 5 Evidence 5.403, we would submit that is unduly 6 prejudicial and confusing because by eliciting 7 the testimony from Mr. Alepin, the testimony 8 being, yes, other companies engage in 9 vaporware, without explaining these qualitative 10 distinctions, which he has been prohibited from 11 making, he's not entitled to talk about the 12 markets or competition or the market effects of 13 any of his conduct, so he can't explain it. 14 So by just simply eliciting from him 15 whether, yes, other companies generally engage 16 in vaporware, it creates a misleading 17 impression on the Jury that, oh, well, what 18 Microsoft was doing must have been okay. 19 And, Your Honor, that is not the case. 20 And when Microsoft did it and the way 21 they did it and the reason they did it, it was 22 anticompetitive. 23 Moving on to FUD, Your Honor. 24 Mr. Holley essentially reduced the 25 concept of FUD to a product disparagement 7720 1 claim. That simply is not the case and is not 2 the law. 3 There are two types of conduct that 4 qualify for willfulness under the law. 5 Willfulness, again, being anticompetitive. 6 There's conduct that is just 7 anticompetitive in its own right. When a 8 monopolist does it, the conduct is 9 independently anticompetitive. 10 Examples are, you know, exclusive 11 dealing, exclusive relationships, cutting off 12 access to a necessary facility, sort of 13 stand-alone antitrust violations that the 14 courts say are just illegal in and of their own 15 right. And those qualify as willfulness. 16 But in addition to that, there's other 17 conduct that isn't by itself illegal, but can 18 be illegal, can be anticompetitive -- not 19 illegal, but can be anticompetitive when done 20 by a monopolist. 21 And those are the cases that we 22 discussed and that we had in our brief that we 23 handed up to Your Honor on December 12th. 24 And that's how FUD is. FUD doesn't 25 have to in and of itself make out a product 7721 1 disparagement claim in order to qualify as 2 anticompetitive conduct. 3 When done by a monopolist and when 4 done the way Microsoft did it and when it had 5 the effect that it had when Microsoft did it, 6 it is anticompetitive. 7 And that's relevant, Your Honor, 8 because when they talk about other companies 9 engaging in FUD where it didn't have that 10 qualitative effect, it's not the same thing. 11 It's not similar conduct. 12 Let me give an example. I'll use the 13 two that Mr. Holley used. OS/2 and DR-DOS. 14 With respect to DR-DOS, Your Honor, 15 and OS/2, for that matter -- I suppose we can 16 talk about them together -- what Microsoft did 17 was try to raise questions about those two 18 operating systems. 19 They didn't just raise questions about 20 their stability and their qualities and the 21 different functions and do sort of this 22 side-by-side comparison that Mr. Holley talks 23 about in terms of advertising. It wasn't just 24 simply advertising. 25 What they did, what they set out to do 7722 1 and what they were effective at doing was 2 convincing the public that if you buy these 3 products, you're throwing into doubt, into 4 question your ability to use thousands of 5 applications out there that are written to the 6 Microsoft platform. That's the qualitative 7 difference. 8 They were essentially attempting to 9 render -- they weren't just talking about 10 different features and different qualities and 11 things like that. They were saying -- they 12 were basically saying not only will your 13 existing platform be worse than ours, if you 14 have DR-DOS or OS/2, you will be unable to 15 reliably use thousands of other products out 16 there. 17 That's the qualitative difference. 18 In the case of DR-DOS and OS/2, it was 19 not the same thing. 20 They did not set out -- they could not 21 say that if you use MS-DOS or if you use 22 Windows, you won't be able to use thousands of 23 programs written to the Microsoft platform. 24 That's the qualitative difference. 25 And it's a real difference and a significant 7723 1 one, Your Honor, because Microsoft, because of 2 its position as a monopolist, controlled 80 3 percent of the market in the early 1990s, had 4 thousands of programs being written to it, 5 which has already been established was a 6 barrier to entry. And they exploited that with 7 the use of FUD to lock out these two 8 competitors. 9 So it was not the sort of side-by-side 10 comparison that Mr. Holley is making it out to 11 be. 12 If these companies had been on a level 13 playing field, that would be one thing. But 14 that wasn't the case. 15 Microsoft was able to use to its 16 advantage the fact that it did hold a monopoly 17 in these markets. 18 And, again, Your Honor, under Rule 4 19 -- under Evidentiary Rule 4.03, this is a 20 distinction that is, if not brought out to the 21 Jury, is a distinction that would be 22 misleading. 23 One moment, Your Honor, I'm sorry. 24 Now, we are not saying that Microsoft 25 cannot put on evidence and cannot contest 7724 1 whether or not these actions were competitive 2 or anticompetitive. I'm talking about 3 vaporware and FUD. We aren't saying that. 4 They can put on Microsoft witnesses to 5 talk about their reasons for engaging in FUD, 6 their reasons for engaging in vaporware and 7 what those effects were. 8 But for them to try to draw this link, 9 a link that has not been made and cannot be 10 made and cannot be made with this witness, Your 11 Honor, because he didn't do it in his direct, 12 didn't come close to it in his direct, and 13 isn't allowed to do it, wasn't allowed to do it 14 in his direct, Your Honor, they can't draw that 15 link here, a link they are trying to make to 16 other companies' conduct. 17 And what it does, Your Honor -- Mr. 18 Holley talking about opening the door, which I 19 will also get to in a moment -- what that does, 20 what it should do, Your Honor, is if he is 21 allowed to do it, is they open the door for us 22 to get into, okay, what are these qualitative 23 differences for this witness as an industry 24 participant. 25 Why isn't the FUD that Microsoft 7725 1 engaged in the same as the FUD that DRI engaged 2 in or that IBM engaged in? What were these 3 differences? What was the difference, in 4 effect, Your Honor? 5 And we submit to you that you really 6 start running far afield because we can't 7 forget the fact that it's Microsoft's conduct 8 that's at issue here. It's not the conduct of 9 IBM. It's not the conduct of DRI. It's 10 Microsoft. It's their conduct that's at issue. 11 And if we are going to make this case 12 be about what other companies were doing, other 13 companies that were in starkly different 14 circumstances than Microsoft, this case is 15 going to get into an area that's going to take 16 on an entire life of its own. 17 One moment, Your Honor, please. 18 Finally, Your Honor, with respect to 19 the third point that Mr. Holley mentioned was 20 the notion that we somehow opened the door to 21 Mr. Alepin talking about claims that Department 22 of Justice considered, but decided not to 23 pursue. 24 That is simply false, Your Honor. 25 There's absolutely no authority whatsoever for 7726 1 an expert testifying as to his credentials and 2 the background of his work to then get into 3 this other client that he had, what their legal 4 reasoning was, how they weigh the evidence in 5 deciding what claims to pursue and what claims 6 not to pursue. 7 Mr. Holley's correct that we didn't 8 bring a motion in limine on the DOJ actions and 9 activity that preceded the government case, 10 Your Honor, because, frankly, we thought 11 there's no way that they would ever try to 12 argue that that was in any way whatsoever 13 relevant to what's happening here. 14 But the same principles that were 15 addressed in our motion in limine on the prior 16 government action apply here, even more so, 17 Your Honor. We're talking now about legal 18 decisions that were made over a decade ago. 19 I would also point out, Your Honor, my 20 cocounsel has apprised me of the fact that 21 Microsoft tried to get into Mr. Alepin's work 22 with the DOJ back in the day in the MDL 23 proceeding. 24 And the issue that this position 25 raised if he were to -- if Mr. Holley were 7727 1 allowed to question Mr. Alepin on this, it 2 would erase work product issues with the DOJ. 3 He's not at liberty to talk about 4 them, Your Honor, and, in fact, the Department 5 of Justice opposed Microsoft's efforts in the 6 MDL case to get into that specific information 7 in the MDL case, Your Honor. 8 And so having this sprung on us 9 without proper briefing, we think, is improper 10 and that request in particular by Mr. Holley 11 should be denied. 12 Your Honor, with your leave, 13 Ms. Conlin informed me that there is one matter 14 she would like to address -- oh, I'm sorry. 15 On that last point, Your Honor, 16 Ms. Conlin reminds me that Your Honor has 17 already ruled that Mr. Alepin is not permitted 18 to get into legal opinions and legal theories. 19 So to have him testify about legal 20 decisions that were made by the Department of 21 Justice and somehow be impeached on that seems 22 to us entirely improper, wouldn't require any 23 briefing at all, in fact. 24 There's already a ruling. Microsoft 25 asked for it and got it and now they are 7728 1 seeking to escape the effect of the ruling that 2 they themselves sought. 3 And, Your Honor, again, one last 4 point, and I'm sorry for taking up so much 5 time, but this is an important issue that's 6 going to permeate others. 7 The existence of monopoly power and 8 the effect of that and in putting the actions 9 of an industry participant into that context is 10 critical because Mr. Alepin talked about a lot 11 of other companies. He talked about Be. He 12 talked about Suse and Linux -- or Linux, excuse 13 me. He talked about DRI and IBM. 14 But the distinction, again, Your 15 Honor, is that they are not Microsoft. They do 16 not have a monopoly. They do not have monopoly 17 power. 18 And unless Microsoft is prepared to 19 allow Mr. Alepin to get into why those 20 distinctions matter, then, Your Honor, we 21 believe it would be misleading to the Jury to 22 elicit that testimony, the testimony that Mr. 23 Holley seeks to elicit. And it would be 24 prejudicial. 25 And so, therefore, we ask that he be 7729 1 prevented from eliciting that testimony. 2 MR. HOLLEY: May I respond, Your 3 Honor? 4 THE COURT: Yes. 5 MR. HOLLEY: Let's take the last point 6 first. 7 In a case called State against Munro, 8 M-u-n-r-o, 295 N.W. 2d 437 at 446 to 447, the 9 Supreme Court of this state said that when 10 counsel makes a tactical choice to create an 11 inference to help his client, he opens the door 12 to rebuttal by adversary. And that's obviously 13 correct, Your Honor. That's the law of Iowa. 14 At the trial transcript, page 6424, 15 line 17 to 6425, line 4, the following 16 testimony was elicited from Mr. Alepin. 17 Quote, subsequently, I was retained by 18 the Assistant Attorney General. The Department 19 of Justice has an Attorney General who was 20 Janet Reno at the time, and there are a number 21 of other divisions within the department, one 22 of which is the antitrust division. And Ann 23 Bingaman was the Assistant Attorney General. 24 And she hired me to be her consultant 25 in some proceedings that the -- in September of 7730 1 1994 and again in 19- -- at the beginning of 2 1995 when there was another investigation that 3 the department undertook of different Microsoft 4 practices. 5 So that testimony was elicited. There 6 was only one purpose for that, which was to 7 bolster this man's credibility in the eyes of 8 the jury. 9 Now, the notion that there is some 10 work product objection is wrong, and I'm going 11 to make the following offer of proof. I'm 12 going to read the testimony of Mr. Alepin from 13 the MDL case. 14 My partner, Mr. Steinberg, asked him 15 the question. 16 Question: You understand that the 17 government of the United States of America 18 investigated a number of the very same 19 allegations that you pursue in your report; 20 isn't that correct? 21 Answer: That's correct. 22 Question: They investigated vaporware 23 allegations; correct? 24 Answer: That's correct. 25 Question: They investigated FUD 7731 1 allegations? 2 Answer: That's correct, yes. 3 Question: They investigated 4 intentional incompatibility allegations? 5 Answer: That's correct. 6 Question: They investigated 7 integration allegations that Microsoft had 8 improperly bundled utilities into its operating 9 system? 10 Answer: We heard from industry 11 participants that -- industry participants, I 12 should have said. 13 Question: They investigated the AARD. 14 The government investigated the AARD code; 15 correct? 16 Answer: Yes. 17 Question: And it investigated the 18 claims that Microsoft should have disclosed the 19 beta of its products to its competitors; 20 correct? 21 Question -- answer from Mr. Alepin: 22 Yes. 23 Question: And for all of those 24 claims, except for the licensing practices, the 25 government sought no enforcement action against 7732 1 Microsoft; correct? 2 Answer: That's correct. 3 This testimony was given. No 4 objection was made by the U.S. Department of 5 Justice. It is in the record of this case. 6 And I am entitled, Your Honor, to 7 impeach Mr. Alepin because they opened the door 8 to this testimony. 9 Now, let's return to the question of 10 vaporware and FUD. And I'm attentive to the 11 fact that we are keeping the Jury waiting, 12 which I am sorry about. 13 The Trace X Chemical case, which is 14 the leading case in the Eighth Circuit Court of 15 Appeals is dead against the position that 16 Mr. Williams is asserting. 17 Because what the Eighth Circuit said 18 in that case is that conduct engaged in by 19 other companies in the ordinary course of 20 business cannot be anticompetitive. 21 That's what the Eighth Circuit said. 22 Now, Your Honor will remember that we 23 argued over and over and over again in the 24 context of the preliminary instructions 25 precisely the points that the Plaintiffs are 7733 1 seeking to reargue today. 2 Mr. Williams is asserting two 3 propositions, both of which Mr. Hagstrom tried 4 to get the Court to embrace, and both of which 5 the Court properly rejected. 6 The first assertion is that somehow 7 behavior engaged in by a monopolist is 8 different from behavior engaged in by every 9 other company in the marketplace. 10 And Your Honor will probably recall 11 that Plaintiffs at every opportunity sought to 12 get that instruction inserted into the 13 preliminary jury instructions, and the Court 14 properly refused to do it. 15 The other instruction that they are 16 now seeking to reargue was what I call the 17 monopoly broth instruction or the pile it all 18 up and squint at it instruction. 19 And as Your Honor will recall, 20 Mr. Hagstrom repeatedly asked the Court to 21 advise the Jury that conduct which is not 22 independently anticompetitive can somehow 23 magically become anticompetitive when it's 24 aggregated with other conduct. 25 That is not what the instructions to 7734 1 the Jury say. 2 So we're back to the issue that I was 3 addressing yesterday, Your Honor. 4 Instruction Number 8, which is in the 5 instructions to this jury, tells them that they 6 have to make the difficult distinction between 7 aggressively pro-competitive conduct on the one 8 hand and anticompetitive conduct on the other. 9 It is a difficult distinction to draw. 10 There are lots of courts of appeals that have 11 some difficulty with this question. 12 And the reason why the Jury needs to 13 hear evidence about what is ordinary business 14 practice in this industry is because 15 Instruction Number 8 tells them that they have 16 to determine whether Microsoft's conduct is 17 consistent with competition on the merits and 18 whether it makes business sense but for 19 whatever adverse effect it might have on 20 competitors. 21 There is no way for the Jury to make 22 that determination without knowing what people 23 in this business do. 24 So the Plaintiffs are asking the Court 25 to cabin in Microsoft's evidentiary 7735 1 presentation and prohibit us from putting on 2 the very evidence that the Jury needs to hear. 3 So, Your Honor -- and I really do want 4 to wrap this up, if the only question on the 5 table this morning was whether this evidence is 6 consistent or inconsistent with Instruction 7 Number 8. 8 And the Court's prior in limine 9 motion, this notion that Mr. Williams is 10 asserting for the first time this morning that 11 this violates 4.03 of the Rules of Evidence is 12 an entirely new argument and not one they've 13 ever made before and one that's, frankly, 14 completely without merit. 15 If they want to argue in summation 16 about the weight to be given this evidence, 17 they are free to do that, and they are free to 18 seek to draw the distinction between what 19 Microsoft did and what these other companies 20 did. 21 My view is that it will be legally 22 irrelevant, but if they want to argue that, I 23 guess they can. 24 And the final instructions to the 25 Jury, I presume, will be consistent with 7736 1 Instruction Number 8, which tells them that 2 they can look at what everybody else did and 3 look at what Microsoft did and decide whether 4 Microsoft's conduct is consistent with 5 competition on the merits and whether it makes 6 business sense. 7 But to seek to preclude us from even 8 introducing evidence on this point when they 9 opened the door on direct by having this man 10 testify about vaporware and FUD and suggest, 11 although, you know, presumably he didn't offer 12 opinions about the economic effect, but he's 13 certainly suggested that there was some 14 impropriety on his big chart, which is now 15 facing the wall, he had a check mark next to 16 FUD, FUD, FUD, FUD, vaporware, vaporware, 17 vaporware. 18 And the clear goal of that was to 19 persuade the Jury that there was something 20 wrong with those things. 21 Fine. That was his testimony on 22 direct. We must be, within the Iowa case law, 23 permitted to impeach that testimony. 24 Thank you, Your Honor. 25 THE COURT: Very well. 7737 1 The Court's going to find that on 2 cross you may get into what is the common 3 practice in the industry. 4 The practice described as being done 5 by a particular competitor or a company must 6 not have been found to be illegal, unlawful, or 7 constituting anticompetitive conduct by that 8 particular company or competitor. 9 No legal opinions will be allowed from 10 the witness. 11 The 1994 government case matter you 12 wish to get into is hereby denied. You wanted 13 to get into the credibility not of this 14 witness, but, rather, of the government and 15 what the government did or did not do based 16 upon matters which this witness probably had no 17 knowledge whatsoever. 18 As a prosecutor, there are several 19 reasons why or why not you go forward with a 20 case. This is clearly -- will be confusing to 21 the Jury. It's not within the scope of the 22 direct examination of Mr. Alepin. It is hereby 23 denied. Defendant is precluded from doing 24 that. 25 The Plaintiffs will be allowed to show 7738 1 any differences between the Defendant doing the 2 business practice common in the industry versus 3 other competitors, including the relative size 4 of the competitors versus Microsoft as that is 5 a qualitative difference. 6 MR. HOLLEY: Your Honor, can I make 7 just one additional record, which is that 8 Mr. Alepin was asked at his MDL deposition 9 whether he was present in the courtroom when 10 Mrs. Bingaman made her statements to Judge 11 Sporkin, and he said that he was. 12 He testified that he was an active 13 participant in the decisions about whether or 14 not to bring these claims. And I want it to be 15 clear for the record that what Mrs. Bingaman 16 said, because she was being pressed. 17 I mean, you can ask about whether 18 there are separation of powers issues in this 19 regard, but she was being pressed by Judge 20 Sporkin under the Tunney Act to explain her 21 prosecution tutorial discretion and why she 22 exercised it the way she did. And what she 23 said in no uncertain terms was that she brought 24 the only case she could prove. 25 So I appreciate what Your Honor is 7739 1 saying about prosecutorial discretion, but in 2 this case there is no doubt about why the 3 government did what it did. 4 I just want to make that record, Your 5 Honor. 6 THE COURT: No, you can't. 7 MR. HOLLEY: No, for purposes of the 8 transcript. Obviously, not to the Jury. 9 I appreciate the Court's ruling. I 10 just for the record of this case I wanted to 11 make that. 12 THE COURT: Oh, I'm sorry. 13 MR. HOLLEY: I'm not saying I'm going 14 to -- 15 THE COURT: Okay. I got confused. 16 Sorry. 17 MR. HOLLEY: I'm sorry, Your Honor. 18 MR. TULCHIN: Your Honor, could I 19 raise a separate issue? It's just very briefly 20 a scheduling issue? 21 THE COURT: Yeah, go ahead. 22 MR. TULCHIN: A couple of weeks ago, 23 Your Honor, the Court said that on Friday, 24 January 12th, which now is tomorrow, the Court 25 would hear argument about evidentiary issues, 7740 1 objections that Microsoft has to Plaintiffs' 2 exhibits. 3 Earlier this week I believe it was, 4 the Plaintiffs said that they wanted to proceed 5 with the Jury and with evidence tomorrow 6 because Mr. Constant, who was going to be their 7 next witness, was here from England. 8 And, of course, we are sensitive to 9 the convenience of witnesses. We hope that the 10 Plaintiffs are sensitive to the convenience of 11 our witnesses when our turn comes. 12 But as it turns out, Mr. Constant -- 13 we were told late last evening, Mr. Constant 14 has now returned to England. He went back last 15 night for his own reasons. So we don't -- he's 16 not here and he will not be testifying 17 tomorrow. 18 And, under the circumstances, it seems 19 to me that perhaps we ought to return to Plan A 20 and have that evidence day tomorrow. Of 21 course, subject to the Court's desires and 22 convenience. 23 MS. CONLIN: Well, Your Honor, if I 24 may speak to that. 25 Mr. Constant went home to England 7741 1 because it was clear that he was not going to 2 be able to complete his testimony this week, 3 and there's a long weekend. And he has a 4 business to run. 5 So what I would expect to happen, 6 however, given what's going on in the courtroom 7 this morning is that Mr. Alepin will need to be 8 continued tomorrow. So -- 9 THE COURT: Yeah. I want to get this 10 witness done, so continue with that. 11 On the motion to strike yesterday that 12 was argued at the end of the day, based upon 13 material elicited transcript pages -- I believe 14 it's 7537 through 7541 -- I may be wrong on 15 that -- regarding Findings of Fact 173, 174, 16 177, 192, and Conclusions of Law 4.5, the 17 motion to strike is hereby denied. 18 Okay. 19 MR. WILLIAMS: Thank you, Your Honor. 20 MS. CONLIN: Thank you, Your Honor. 21 MR. LAMB: Your Honor, could I have 22 one point of clarification before we break? 23 THE COURT: Sure. 24 MR. LAMB: You said that the Defendant 25 can introduce evidence regarding others and 7742 1 their relative size. Does that mean that they 2 have to lay a proper foundation? 3 THE COURT: I said Plaintiffs. 4 MR. GREEN: Plaintiffs. 5 MR. LAMB: Oh, I thought you said 6 Defendant. I apologize. 7 THE COURT: Okay. 8 (A recess was taken from 8:43 a.m. 9 to 8:49 a.m.) 10 THE COURT: Are we ready for the Jury? 11 MR. HAGSTROM: Your Honor, we've got 12 one other quick matter we think should be 13 discussed before the Jury comes in. 14 THE COURT: Okay. Go ahead. 15 MR. CASHMAN: Your Honor, I understand 16 that yesterday Mr. Holley used some trade press 17 in his cross-examination of Mr. Alepin. 18 Plaintiffs submit that should not be 19 permitted. And I'm going to direct the Court's 20 attention to the Iowa Practice Guide, the 2006 21 practice guide, under 57052. And I'm going to 22 quote the pertinent language that Plaintiffs 23 believe applies to the situation. 24 That is, a party conducting a 25 cross-examination of an expert witness should 7743 1 not be allowed to use the questioning as a 2 vehicle for the admission of unreliable and 3 inadmissible evidence to strengthen its own 4 case under the guides of scrutinizing facts and 5 data underlying the expert witness opinion. 6 THE COURT: What page are you on? 7 MR. CASHMAN: That's on page 632 of 8 the Iowa Practice Guide. 9 THE COURT: Okay. 10 MR. HOLLEY: And, Your Honor, I would 11 just point out -- 12 MR. CASHMAN: I'm not finished yet, 13 Mr. Holley. 14 MR. HOLLEY: Oh, I'm sorry, 15 Mr. Cashman. I thought you were. 16 MR. CASHMAN: I'm sorry. The Iowa 17 Practice Guide cites a case called Bryan versus 18 John Bean Division of FMC. The cite of that 19 case is 566 F. 2nd 541. It's a Fifth Circuit 20 case from 1978. 21 I have a copy which I'll hand up to 22 the Court, and I've got the pertinent 23 provisions of the case highlighted for the 24 Court's reference. Unfortunately, I only have 25 one copy. 7744 1 The Plaintiffs submit that this case 2 is right on point to what Mr. Holley is trying 3 to do when he uses trade press to cross-examine 4 Mr. Alepin. 5 But the case really highlights the 6 importance of the need that the evidence being 7 used have a sufficient guarantee of reliability 8 so that the hearsay rule is not circumvented. 9 Here, trade press, especially trade 10 press articles where Microsoft and Mr. Holley 11 has failed to establish that Mr. Alepin 12 reviewed the specific portion of the article 13 that Microsoft is attempting to use, and 14 actually relied on that specific passage, 15 cannot be used because there is no guarantee of 16 trustworthiness. 17 The Court will recall that the Special 18 Master and the Court on several occasions has 19 ruled that trade press is hearsay and that it 20 lacks foundation. 21 So here to permit cross-examination 22 with inadmissible trade press would undermine 23 those rulings. 24 So the Plaintiffs submit that Mr. 25 Holley should not be permitted to use these 7745 1 articles to cross-examine Mr. Alepin. 2 In particular, I note that there's one 3 passage in the Bryan case, which I handed up 4 which said that hearsay evidence by other 5 experts -- and here that would purportedly be 6 the trade press authors that Microsoft has in 7 the articles that they are attempting to use -- 8 cannot be used unless they were -- and if I had 9 the case, I'd quote the particular provision, 10 but unless the testifying expert, here 11 Mr. Alepin, bases opinion on that specific 12 trade press article or testified directly from 13 one of those articles. 14 And as the Court knows, that hasn't 15 happened, and Mr. Holley hasn't laid that kind 16 of foundation for the use of those articles. 17 So for all those reasons, that kind of 18 cross-examination should not be permitted. 19 Thank you. 20 THE COURT: Thank you. 21 I agree with what you stated. 22 However, the trade press article that was used 23 by Mr. Holley, which I reversed my ruling on -- 24 I reviewed the transcript. 25 The transcript did state or Mr. Alepin 7746 1 stated that he did rely upon the trade press, 2 and, therefore, that's why I allowed him to use 3 it in that particular case. 4 The Court did not mean by a blanket 5 rule to say that he may use trade press 6 articles all the time. It was my recollection 7 from the transcript upon me reading it, that he 8 said that he normally relied upon it and it was 9 unclear -- because I don't have it in front of 10 me right now -- but that's the reason I did it. 11 MR. CASHMAN: Your Honor, just for the 12 purpose of the record at least. 13 THE COURT: Is this going to be 14 something that's going to take a long time 15 because -- can I tell the Jury to come back at 16 10? 17 MR. CASHMAN: Pardon me, Your Honor? 18 THE COURT: Is this something that is 19 going to take long? Should I tell the Jury to 20 come back at 10 or what? 21 MR. CASHMAN: No, this is not going to 22 take long. 23 I just want to note that I believe 24 Mr. Alepin said that he reviewed some trade 25 press. I don't believe his testimony was that 7747 1 he reviewed the specific article in question. 2 And, more importantly, he didn't say that he 3 relied on that specific article. 4 That's what the Bryan case requires, 5 that the testifying expert would actually have 6 had to rely on that specific article. And I 7 don't believe the testimony of Mr. Alepin was 8 that he relied on that specific article. 9 THE COURT: All right. 10 MR. CASHMAN: Thank you. 11 THE COURT: Okay. I have to look at 12 it again then. 13 Recess. 14 (A recess was taken from 8:56 a.m. 15 to 9:31 a.m.) 16 THE COURT: I've considered the 17 objection made by the Plaintiffs in this 18 matter. I have reviewed the record again. 19 I'm satisfied that the witness did 20 state he relied upon the trade press in this 21 particular circumstance. 22 However, I would note that you can't 23 just -- the proper foundation was established 24 in this particular instance regarding a trade 25 press article. 7748 1 I do agree with Mr. Cashman in regard 2 to the rule in Iowa, and the Defendant and 3 Plaintiffs would have to abide by proper 4 foundation to do that, which would be to show 5 that the article was read and either the 6 witness relied upon it or upon reading decided 7 not to rely upon it and they could go into why 8 he decided not to. 9 Anything else on that? 10 MR. HOLLEY: Your Honor, just for the 11 record, Microsoft would note that we believe 12 the law on this subject is different; that it 13 is permissible to cross-examine an expert using 14 hearsay to establish the proposition that if 15 the expert witness had reviewed that hearsay 16 which was similar to the hearsay on which the 17 expert admits that he or she relied, that that 18 review of similar hearsay would have altered 19 the opinions that the expert gave. 20 And authority for that proposition, 21 among other cases, but one we could find 22 immediately is a case called Wheeler against 23 State of Texas, a 2002 decision by the Texas 24 Criminal Court of Appeals, which is applying 25 the same line of authority that Mr. Cashman is 7749 1 relying on, John Bean Division of FMC 2 Corporation against Midland Ross. 3 So just for the record, that is 4 Microsoft -- 5 THE COURT: Cite, please. 6 MR. HOLLEY: Yes, Your Honor. It is 7 67 S.W. 2nd 879. And the discussion, the 8 relevant discussion, Your Honor, appears at 9 page 884 and crossing into page 885. 10 THE COURT: Okay. Thanks. 11 MR. HOLLEY: Thank you, Your Honor. 12 THE COURT: I appreciate that. 13 MR. CASHMAN: Your Honor, just for the 14 record, Plaintiffs obviously believe that their 15 objection should have been granted because they 16 submit that Mr. Alepin did not testify that he 17 read this specific article. 18 And Plaintiffs would have requested or 19 do request that a curative instruction be given 20 to the Jury. And at least for the record, I'd 21 like to read our proposed instruction, which 22 is, ladies and gentlemen, you will recall that 23 the Court instructed you to disregard an 24 exhibit and the testimony Mr. Holley elicited 25 from Mr. Alepin. 7750 1 The exhibit is what is referred to as 2 trade press. Magazine and newspapers and 3 similar articles are hearsay. They are 4 unreliable unless a proper foundation for 5 reliability is demonstrated by other proper 6 evidence. It was not done, so the evidence is 7 stricken. 8 That's our proposed instruction. 9 MR. HOLLEY: Well, Your Honor, that's 10 a little bizarre since the Court has -- the 11 ruling is the opposite, which is that the 12 motion to strike which was initially granted 13 has been denied, and the Court has given me 14 explicit permission to return to Defendant's 15 Exhibit 3165, which I intend to do. 16 And this morning Plaintiffs have 17 sought to reargue this, and the Court has just 18 issued a ruling denying that motion. 19 So the instruction would be 20 inconsistent with the Court's order of 21 yesterday and the order that was just issued 22 from the bench, Your Honor. 23 MR. CASHMAN: Nothing further, Your 24 Honor. 25 THE COURT: Anything else? 7751 1 MR. CASHMAN: No. 2 THE COURT: Go get the Jury. 3 (The following record was made in the 4 presence of the jury at 9:37 a.m.) 5 THE COURT: Before we begin, a couple 6 things I want to talk to you about. 7 One, I note that yesterday the Chief 8 Justice of the Iowa Supreme Court, Justice 9 Ternus talked about improving jury service. 10 And one of the things that she was going to ask 11 the legislature to do was to raise your pay, 12 but I wanted to just give you a portion of what 13 she said, and I just wanted to tell you how 14 much we appreciate your work here. 15 Each year, thousands of Iowans from 16 many walks of life take time away from your 17 families and lives to fulfill this important 18 civic function. They are essential to our 19 justice system and they are truly unsung 20 heroes. And nothing could be more true than 21 that. 22 And the other thing we are going to 23 work on is to try to get a new courthouse for 24 our courts, which would make it more convenient 25 and you notice our jury room is not very big. 7752 1 We have you in close quarters. I apologize for 2 that. 3 You are in close quarters a lot and we 4 are going to be together a long time. I don't 5 know how long. And you are going to be 6 together a long time, there's 12 of you, so 7 whenever possible, you know, we'll try to make 8 you more comfortable. 9 Anything we can do more, let Carrie 10 know. We'll try to do it. Please also respect 11 each other's personal space between jurors in 12 case, you know, they want to be apart from one 13 another in there, that's fine. We'd like to 14 make sure that there's proper respect for that 15 also. 16 Also, every week I know I've told you 17 about the admonition, but I intend to on 18 Fridays or before to reread the admonition 19 every week just to make sure that you're aware 20 of that. 21 In regard to the testimony, there was 22 a part of testimony of Mr. Alepin that I 23 ordered stricken from the record concerning an 24 article or trade press magazine. That order is 25 hereby reversed and restored to the record. 7753 1 You may consider it. 2 Anything further before we begin? 3 MR. HOLLEY: Your Honor, I just think 4 to avoid confusion, with the Court's permission 5 I would like to read the questions and answers 6 from the section that were stricken so that 7 it's clear what testimony is we're talking 8 about. 9 Would the Court permit me to do that? 10 THE COURT: Go ahead. 11 MR. HOLLEY: Okay. So starting on 12 page 7282 of the transcript -- and I'm just 13 going to read the questions and answers. 14 Question: I'd like you to look -- to 15 take a look, if you would, sir, at what's been 16 marked as Defendant's Exhibit 3165. 17 And first we're going to look at the 18 first page just so we can identify what it is. 19 This is a PC Magazine issue and it relates to 20 make Java work for you. 21 And I'm particularly interested in the 22 article that begins on page 137, and we're 23 going to now move to that. I guess we're not. 24 Have you seen this before, sir, this 25 article? 7754 1 Answer: I have been a subscriber to 2 this magazine since the first edition, so I 3 receive -- I have a garage full of PC Magazine. 4 Question: That's probably not what 5 the fire department wants to hear. 6 Answer: We won't tell them then, will 7 we? 8 Question: So you're aware that there 9 was this article entitled Java environments 10 that compared different Java runtime 11 environments? 12 Answer: I'm sure I was aware of it at 13 the time, yes. 14 Question: Okay. I'd like to direct 15 your attention, sir, to page 139, which is two 16 pages in. And here it says that based on the 17 testing that PC Magazine has done, the editor's 18 choice award for virtual machines goes to 19 Microsoft; is that correct? 20 Answer: That's correct. 21 Question: And one of the attributes 22 that Microsoft's Java Virtual Machine had that 23 made it the editor's choice was how compatible 24 it was with cross-platform applets; is that 25 right? 7755 1 Answer: I'm not seeing the 2 cross-platform reference in this particular 3 highlight. 4 Question: Okay. Well, would you 5 agree, would you not, sir, that if you wrote an 6 applet in Java and you didn't call upon any of 7 the Microsoft specific extensions in the 8 Microsoft programming tools, that Java applet 9 would be cross-platform; right? 10 Answer: Subject to some other 11 limitations, that's correct, yes. 12 Question: Now, I would like to turn 13 -- and the pagination of this article is very 14 strange, but from -- at the bottom of 146, it 15 starts talking about the Microsoft Java Virtual 16 Machine, and let me -- let the guys catch up 17 with me. 18 Can you highlight the whole thing 19 there, Chris? Thank you very much. 20 So now we're talking about different 21 JVMs on different operating systems. And what 22 it says down here is that our testing shows 23 that Microsoft's Java environment is clearly 24 the fast test with Windows NT slightly 25 outpacing Windows 95. And that's consistent 7756 1 with your earlier testimony that this was a 2 very fast Java Virtual Machine; correct, on 3 Windows? 4 Answer: That's very fast. Yes, 5 relatively speaking, yes. 6 And that's the end of the testimony 7 that was stricken and is now back in the 8 record. 9 RONALD ALEPIN, 10 called as a witness, having been previously 11 duly sworn, testified as follows: 12 CROSS-EXAMINATION (CONT'D) 13 BY MR. HOLLEY: 14 Q. Good morning, Mr. Alepin. I should 15 have said that earlier. 16 Can you look again, sir -- 17 MR. HOLLEY: And may I approach the 18 witness, Your Honor? 19 Q. I'd like you to take a look again, 20 sir, if you would at Defendant's Exhibit 3165, 21 which is what the earlier testimony was about. 22 And in particular I want to focus on the bottom 23 of page 146, which then carries on to 150. 24 Are you with me, sir? Just tell me 25 when you're there. 7757 1 A. I'm on 146, yes. 2 Q. Okay. So there is a section of this 3 article entitled Microsoft Windows 95, Windows 4 NT; correct? 5 A. Yes. 6 Q. And that's a discussion of the test 7 results as they related to Microsoft's Java 8 Virtual Machine. Is that your understanding? 9 A. Can I -- I'll read it. 10 Q. Yes, sir, please do. 11 A. Thank you. 12 Q. And just so you know, my questions 13 will focus on the text that begins Microsoft 14 Windows 95/Windows NT, and then carries across 15 the bottom of the next page below the chart 16 entitled compatibility. So that's -- yes, sir, 17 those three small paragraphs across the bottom? 18 A. And after that, does it continue? 19 Because there's -- it's an incomplete sentence 20 on page 150. 21 Q. Feel free to read as much of it as you 22 want. I think you'll see, sir, that on page 23 151, the subject changes to the JVM and 24 Netscape communicator. 25 But I don't want to constrain your 7758 1 reading. 2 A. Okay. Thank you. 3 MR. LAMB: Well, I object to the 4 extent that this is not a complete article. 5 This is a partial article that's been cut and 6 pasted. 7 THE COURT: Overruled. 8 He may read it to himself. 9 A. Yes, I've read it. 10 Q. Okay. Thank you. 11 So I'd like to direct your attention, 12 Mr. Alepin, to the sentence which begins at the 13 bottom of page 146, and then apparently there 14 were some advertisements, and it carries over 15 to 150. 16 And the sentence is Microsoft's 17 environment under both platforms turned in a 18 compatibility success rating of 70 percent. 19 Windows 95 and Windows NT each fail to 20 run only one applet. This score is almost 17 21 percent better than those of the Sun 22 environments. 23 Sir, in forming your views about 24 Microsoft's actions in relation to Java, did 25 you take account of the fact that Microsoft's 7759 1 JVM in testing had been determined to be more 2 compatible with cross-platform Java applets 3 than Sun's own Java Virtual Machine? 4 A. This scoring and mechanism varies over 5 time. So as different releases of the software 6 are made available, the scores on compatibility 7 changed over time. 8 At this point in time, the score 9 apparently is in favor of Microsoft's 10 compatibility. 11 Q. Okay. I appreciate that 12 clarification, but my question to you, sir, 13 was: Did you take into account in forming your 14 opinions about what Microsoft did at this time, 15 in this same time period, because that was, 16 after all, the time period you were talking 17 about, wasn't it, sir? 18 Did you take into account that 19 Microsoft's JVM ran more cross-platform applets 20 than Sun Microsystems own JV? 21 A. I took, I think, different information 22 into account concerning the compatibility of 23 Microsoft's JVM or interoperability of 24 Microsoft's JVM. 25 There is a suite of interoperability 7760 1 test programs that Java -- that Sun and the 2 Java community published. 3 THE COURT: Sir, could you speak into 4 the microphone? The Jury is having trouble. 5 THE WITNESS: I'm sorry. 6 A. There was a suite that Sun provides 7 that is the measure of interoperability and 8 compatibility both beyond interoperability and 9 less than -- less interoperable. 10 So I believe I considered the scores 11 that were reported on Microsoft's 12 cross-platform interoperability against the 13 test suites and not in particular the test 14 suite that Ziff Davis, the publisher of PC 15 Magazine had produced. 16 Q. Okay. In choosing the Sun test suite 17 over the independent Ziff Davis test suite, did 18 you look at testimony in the record, including 19 e-mails from Mr. Kannegaard at Sun, about how 20 the test suite was rigged to cause Microsoft's 21 JVM to fail? 22 A. Is there a particular time that you 23 have in mind? 24 Q. Yes, the same time period. The same 25 time period that we're talking about in this 7761 1 article and that you were talking about in your 2 direct testimony. 3 Did you look at internal Sun 4 Microsystems e-mails about changes made to the 5 test suites with the intention of causing the 6 Microsoft virtual machine to fail? 7 A. I'd have to see them. 8 Q. Okay. But my question to you, sir, 9 is: Did you look? Did you look for Sun 10 internal e-mails on that topic? 11 A. I looked for information that I 12 thought was relevant to the issues on which 13 I've testified, including the performance of 14 the Sun -- of the Sun Java Virtual Machine and 15 the Microsoft virtual machine. 16 My particular interest in this here, 17 of course, was, in this time frame was as a 18 developer trying to achieve the best possible 19 performance and the best possible 20 interoperability for the products that I was 21 working on. 22 And the standard for developing that 23 and measuring that was the Java test suite. 24 And the products I was working on were targeted 25 at the Windows platform and the -- and the Sun 7762 1 SPARC platform and other mainframe platforms. 2 Q. Okay. I'd like to ask you a slightly 3 different question than the one you just 4 answered. 5 I don't want to know about what you 6 were doing at Fujitsu at the time. I want to 7 know what you did to prepare to come to testify 8 here today, or this past week. 9 In urging the Jury to accept the Sun 10 test suite over an independent test suite by 11 Ziff Davis, did you think it was important to 12 investigate internal Sun documents, which are 13 part of the discovery record of this case, 14 which talk about changes made to the test 15 suites to deal with the Microsoft virtual 16 machine? 17 A. Let me first deal with the nature of 18 the Ziff Davis test suite. 19 In our industry the trade press tries 20 to provide information that's useful to the 21 readers, but, unfortunately, there's an awful 22 lot of technology and they need help to be able 23 to write articles and understand technology. 24 And oftentimes vendors provide 25 reviewer's guides and other material that seems 7763 1 to help the trade press create an article or 2 create a test suite that could be used for 3 their purposes. 4 And there might be in some instances 5 -- I don't want to say bias, but it might be 6 more targeted to one particular vendor's 7 product, the author of the reviewer's guide, 8 than it would be to other platform or other 9 vendors' products. 10 So with respect to the independent 11 test suite, I don't wish to suggest that it 12 wasn't independent. It just may have had its 13 origins from one vendor. 14 The second portion of the -- of the 15 question was did I review or consider the Sun 16 material. 17 And I reviewed, I'm certain -- I'm 18 sure I reviewed Sun material with respect to 19 this particular -- with respect to the 20 performance and interoperability of Microsoft's 21 virtual machine. 22 Q. Okay. Two things I'd like to follow 23 up on in response to that. 24 Do you recall me asking you yesterday, 25 and I'm at page 7281 of the transcript, 7764 1 starting at line 14, in forming your opinions 2 in this case, to some extent you relied on the 3 trade press; correct? 4 And then apparently we were talking on 5 top of one another. You said were we finished? 6 And the question was, I cut you off and I 7 apologize. I'm happy with the question I asked 8 you. 9 Answer: The trade press is a source 10 of information about current events, and I did 11 rely on it. 12 And that's correct, you did, sir, rely 13 on trade press in forming opinions that you've 14 delivered in this case? 15 A. I rely on trade press for -- to find 16 out that events have taken place, and then I -- 17 if they contain the press release from the 18 vendor making the announcement, I can go -- 19 they only contain a reference to the press 20 release, I'll go to the website of the vendor 21 to determine what the vendor is saying. 22 If they contain an interview with the 23 person, then I can read the interview with the 24 person. 25 If they contain a reference to or a 7765 1 summary of an analyst's report, I can use the 2 link that's in the trade press to go and read 3 the article for myself. 4 But, I mean, I -- the trade press is 5 kind of like a -- for me, it's kind of like 6 someone that says go and look at other pieces 7 of information in order to form an 8 understanding. 9 I don't get my understandings about 10 what's going on from the trade press -- my 11 analysis of what's going on from the trade 12 press. I get my awareness of things happening 13 that I need to perfect an understanding on. 14 Q. Okay. On that theory, did you explore 15 the following statement which appears in 16 Defendant's Exhibit 3165? 17 And I'm now on page 151. 18 The vendor -- and this is a reference 19 to Microsoft -- has also added a slew of 20 proprietary features that are invaluable to 21 Java developers committed to Java for Windows 22 as a platform. 23 For instance, Microsoft's application 24 foundation classes are a set of user interface 25 components also supported in the new Macintosh 7766 1 environment that make development easier than 2 the standard AWT. 3 And the AWT is the Sun technology; 4 right? 5 A. Right. And if I could, I think I gave 6 you a translation of the AWT, which it was -- 7 it's actually the abstract windowing tool kit. 8 Q. Okay. So we were both wrong on that 9 one. 10 A. That's -- and I apologize. 11 Q. Okay. I appreciate the clarification, 12 sir. 13 So let's go back to what it says here. 14 It says that Microsoft's application 15 foundation classes are a set of user interface 16 components also supported in the new Macintosh 17 environment that make development easier than 18 with standard AWT. 19 In addition, Microsoft's J direct 20 makes direct calls to end any Win32 DLL -- and 21 that's any dynamically linked library -- in 22 Windows. Is that the correct understanding of 23 what that means? 24 A. DLL is a dynamic linked library. 25 Q. Okay. -- including the operating 7767 1 system far easier than in JNI or even RNI. 2 So what this is saying is that the J 3 direct technology in Microsoft's visual J++ 4 makes it easier to call Windows functions than 5 either the remote -- I'm not even going to go 6 into them -- but the JNI or RNI native code 7 interfaces that we talked about the other day; 8 right? 9 MR. LAMB: Objection. Lacks 10 foundation. Relevance. Hearsay. 11 THE COURT: Overruled. 12 He can answer. 13 A. That's what the article is saying, 14 that it makes it easier to make direct calls 15 that would depend on the Windows operating 16 system than the other mechanisms. 17 Q. Now, did you explore through other 18 evidence in this case, or other evidence 19 available to you as an expert, these 20 statements, which is that from the standpoint 21 of someone seeking to write an application in 22 Java on Windows, the tools that Microsoft 23 provided were invaluable because they made the 24 process much easier? 25 A. Well, I explored the tools that 7768 1 Microsoft provided in connection with my then 2 current assignments. 3 Q. All right. I'd like to -- that was a 4 minor diversion, which I had to deal with. 5 I'd like to now turn back to where we 6 were yesterday afternoon. And I want to move 7 on to a new topic, and you'll be happy to know 8 we are nearing the end of this. 9 And that topic is something you 10 referred to on direct examination, and you 11 referred to something called vaporware. 12 Do you recall that, sir? 13 A. I do. 14 Q. Now, you would agree with me, would 15 you not, Mr. Alepin, that not all 16 preannouncements of software products under 17 development are what you would call vaporware? 18 A. That's -- announcements of pending 19 products are not necessarily vaporware, that's 20 correct. 21 Q. And, in fact, you have testified 22 previously that there are legitimate reasons to 23 tell the market about a product that is under 24 development well in advance of its release, is 25 that not correct, sir? 7769 1 A. Well, in advance of its release. 2 There are legitimate reasons to do that. 3 Q. Okay. And one reason why vendors of 4 new software products preannounce them is in 5 order to get feedback about whether the product 6 that they're designing is what their customers 7 want; correct? 8 A. Well, if we could just for -- if we 9 could split up preannounce and announce just so 10 it's clear. 11 Announcing would be announcing when 12 the availability of a product. This October 13 17th we are announcing the availability of the 14 products. 15 So preannouncing is -- just to be 16 clear here -- that it's announcing that we are 17 going to be delivering -- we are going to be 18 developing a new product. That's what I'm 19 taking the word preannouncement as opposed to 20 announcement just so it's clear. 21 Q. That's what I have been intending. 22 And I'm glad you clarified that because I want 23 us to be talking about the same thing. 24 A. All right. And now there -- there are 25 reasons why you would preannounce a product 7770 1 having to do with making sure the fit and 2 finish, if you will, of what you're developing 3 is what your customers want. That is the case, 4 yes. 5 Q. Well, isn't exactly what I said that 6 you want to tell your prospective customers 7 that this is the feature set of your new 8 product and you want to get their feedback 9 about whether it's a good idea? And in this 10 connection -- 11 MR. HOLLEY: May I approach the 12 witness, Your Honor? 13 THE COURT: Yes. 14 Q. I'd like you to take a look at what 15 you said in July of 2006. And this is on page 16 132, line 25, to page 133, line 6. 17 And if you could tell me when you've 18 had an opportunity to get there and look at 19 what I'm talking about. 20 A. Can I just -- 132 line? 21 Q. 132, 25, which is the very last line 22 on page 132, carrying on to 133, line 6. 23 A. I see it, yes. 24 Q. Okay. So I asked you the question why 25 do people talk about new versions of their 7771 1 products in advance of when they're available 2 for use? 3 Answer: Well, in the context of what 4 we were doing, we would want to know whether 5 people thought that this was a valuable idea. 6 Do you think we should develop this? 7 So we could get feedback from customers saying 8 I think that's a good idea. 9 And that is correct, is it not, sir? 10 One of the reasons why a software developer 11 preannounces a product is in order to get 12 feedback to ensure that the features that they 13 are planning is, in fact, what their customers 14 want. 15 A. Well, I don't -- here we are not 16 talking about preannouncement. We are talking 17 about our future plans. 18 And I thought the context in which 19 this was taking place was just that particular 20 point, that we don't have a -- we haven't 21 announced Version 7. We haven't said anything 22 about Version 7. 23 What we're thinking about doing is 24 these following things, and so we'll talk to 25 the users in order to develop a list of 7772 1 features which we believe we can build and 2 looking at the technology and whatever, this is 3 what we think we can build. And that becomes 4 input into the process of building the product. 5 And so in the context here, we talked 6 to our customers. We talk to our customers all 7 the time, but that particular phase of talking 8 to the customers is trying to set or get a 9 handle on what they need. 10 Q. Okay. And it is your experience, is 11 it not, sir, that when you are in a business of 12 serially releasing improved versions of your 13 product, that when you go to the customers to 14 talk to them about what they want in Version X 15 plus 1, they know that you are building X plus 16 1, don't they? 17 A. Well, they know that you're building X 18 plus 1 and X plus 2 and X plus 3. I mean, 19 that's their -- that's presumably the 20 understanding that we have with our customers, 21 is that we're going to -- there's a lot of 22 things that they want. And we're trying to 23 figure out what's most important across the 24 broadest community of users. 25 Q. And this process of generating 7773 1 feedback from prospective customers you said 2 previously is particularly important in the 3 case of operating systems; is that right? 4 A. It's important in large complex 5 systems. It's important in -- I mean, it's an 6 important process, yes. There are a lot of -- 7 there are a lot of stakeholders, yes. 8 Stakeholders being people with an interest. 9 Q. And they have an interest because they 10 are either writing hardware device drivers to 11 plug their components into PCs or they are PC 12 manufacturers and they want to know what kind 13 of machines to build, or they are software 14 developers who are trying to figure out what 15 services they can get from the new operating 16 system; correct? 17 A. Those are some of them, yes. 18 Q. Now, another reason why an operating 19 system vendor would want to preannounce a 20 product which is still under development is to 21 give all those stakeholders, as you described 22 them, sufficient time to develop compatible 23 products so that their products can get to 24 market roughly contemporaneously with the new 25 operating system; is that right? 7774 1 A. I think there are two actual phases in 2 that, the first of which where you collect 3 information. And you really don't want your 4 stakeholders, if you will, to spend money on 5 investing on stuff that isn't really imminent. 6 In the normal course of business, you 7 collect requirements and you have to decide 8 what you're ultimately going to try and do. 9 And during that particular portion of 10 the talking, you're not encouraging someone to 11 go out and build something dependent upon the 12 suggestion -- their own suggestion, perhaps, 13 that you include this feature in the system. 14 Q. Okay. But there is a second phase in 15 which -- well, before the commercial release of 16 the product, you start giving beta test 17 versions of your product to these stakeholders 18 so that they can start the process of 19 developing compatible hardware and software so 20 that they are in the market roughly at the same 21 time the new version of the operating system 22 is; correct? 23 A. The beta process being -- that's where 24 there's -- where you've got some flesh on the 25 bone, where you've actually got something that 7775 1 is the result of both the planning from 2 requirements, customer requirements, your own 3 internal requirements, the product and 4 technological advancements. 5 Once you've got all of that sort of 6 out, you've got the framework for the product 7 and you put some meat on the bones in terms of 8 the functionality, the community can build 9 their products to or adapt their products to, 10 yes, that's correct. 11 Q. Okay. Now, you've been involved in a 12 number of software projects over the years, 13 have you not? 14 A. I have. 15 Q. And you are familiar, are you not, 16 with the fact that sometimes expectations about 17 when one of those projects is going to be 18 completed turn out to be more optimistic than 19 perhaps they ought to have been? 20 A. Yes. 21 Q. Okay. In fact, sometimes software 22 projects run into technical problems and are 23 delayed for substantial periods of time; right? 24 A. That is the case. There are projects 25 that don't come in on time and on budget. 7776 1 We like to think that we can do a 2 better job, and there's a particular discipline 3 within the IT software development field that 4 tries to do a better job of -- or tries to help 5 people do a better job at forecasting both cost 6 and delivery. 7 Q. But despite the existence of those 8 sorts of tools, people still miss projected 9 release dates in software projects sometimes by 10 very substantial margins; correct? 11 A. Some projects are missed by a little. 12 Some, a few, are notorious. 13 Q. In forming your opinions in this case 14 on the subject of vaporware, did you have 15 occasion to look at either evidence in the 16 record of this case or other evidence that 17 related to how late products in the PC software 18 industry have been over the years? 19 A. I did. 20 Q. Okay. In particular, you're familiar, 21 are you not, with an official PC letter vapor 22 list that was published periodically about how 23 late some products were? 24 A. I believe there was such a list. 25 Q. Well, did you consider that list in 7777 1 its monthly iterations in forming your views in 2 this case about vaporware? 3 A. I'm not sure what you mean by 4 consider. 5 Q. Well, in the first instance, did you 6 look back at those official PC letter vapor 7 lists in the work you did in this case? 8 A. I'm a little -- I'm not sure what -- I 9 haven't heard the official PC -- if you could. 10 Q. Sure. What I -- 11 A. I'm aware of the vapor list, and I 12 just don't think of it in terms of the official 13 vapor list. 14 Q. Well, it's not really fair to not show 15 you what I'm talking about, so why don't we do 16 that. 17 And in the first instance, I just want 18 you to tell me whether you remember -- excuse 19 me, I just need to get one thing for Mr. Lamb. 20 MR. HOLLEY: May I approach the 21 witness, Your Honor? 22 THE COURT: You may. 23 A. Thank you. 24 Q. Mr. Alepin, when you look at what's 25 been marked as Defendant's Exhibit 3125 and 7778 1 tell me if this December 8, 1988 PC letter with 2 a vapor list on the second page is among the 3 documents in the record of this case that you 4 reviewed? 5 A. Not this document, no. 6 Q. Okay. You did -- and so I'll take 7 that back from you, sir, unless you want to 8 read it. 9 MR. HOLLEY: May I approach the 10 witness, Your Honor? 11 THE COURT: You may. 12 MR. HOLLEY: Thank you. 13 Q. But I take it from your prior 14 testimony that you did review similar lists 15 that had been created about how late various 16 products were? 17 A. Yes. 18 Q. And the products on those lists were 19 from a variety of software developers, 20 including IBM, Lotus, Borland, and WordPerfect; 21 correct? 22 A. I believe that at various times 23 various companies would be on the list, 24 probably including some of those companies. 25 Q. Do you recall, sir, that one of the 7779 1 most notoriously late products in the history 2 of the PC business was Version 3 of Lotus 3 1-2-3? 4 THE WITNESS: Excuse me. I have -- 5 there's a nail that's sticking out of the chair 6 and I think I've just -- 7 MR. HOLLEY: That's not good. 8 THE WITNESS: Do you have a claw or 9 something to take the nail out? Not of my leg, 10 but it just -- 11 THE CLERK: At the next break, I 12 can -- 13 MR. HOLLEY: Can we put a piece of 14 tape over that or something? 15 THE WITNESS: There are two or three 16 of them that are now sticking up. 17 THE COURT: We'll take care of it. 18 Ladies and gentlemen of the jury, 19 we'll take a brief recess to take care of this 20 problem. 21 Remember the admonition previously 22 given. 23 (A recess was taken from 10:17 a.m. 24 to 10:25 a.m.) 25 THE COURT: Did you want the last 7780 1 question read back or -- 2 MR. HOLLEY: I must confess, Your 3 Honor, I lost my train of thought. So if the 4 last question -- 5 THE COURT: The court reporter will 6 read the last question back, please. 7 (Requested portion of the record 8 was read.) 9 A. I was aware -- excuse me, I was aware 10 that Lotus was significantly delayed, yes. 11 Q. Almost two years delayed, sir? 12 A. I'm not sure when you -- counting from 13 when to when? 14 Q. Well, from -- an almost two-year delay 15 from when they said Lotus 1-2-3 Version 3 would 16 be available and when they actually got it into 17 the marketplace. 18 A. I don't remember now the exact amount 19 of time. 20 Q. Now, in forming your views in this 21 case about vaporware, and in particular about 22 Lotus 1-2-3, did you have occasion to review 23 the testimony from Lotus employees on this 24 topic? 25 A. I've read lots of Lotus testimony, 7781 1 lots of developer testimony and testimony from 2 executives over the past 12 -- 3 Q. And in particular -- I didn't mean to 4 cut you off. 5 A. Sorry. Over the past 14 years or so. 6 Q. And did you review the testimony of 7 Steven Crummey of Lotus on this topic of 8 vaporware and product preannouncements? 9 A. I'd have to see it in order to refresh 10 my recollection. 11 Q. But you did try to in the evidence -- 12 in the record, review testimony from other 13 companies in the industry that you thought was 14 relevant to the views you've expressed here 15 about vaporware; correct? 16 A. Absolutely, yes. 17 Q. I'm going to play you a piece of the 18 deposition transcript of Mr. Crummey from 19 Lotus, and then I have a question for you. 20 (Whereupon, the following video was 21 played to the jury.) 22 Question: Did Lotus -- what was 23 Lotus' policy about preannouncing products? 24 Answer: I think, to be fair, in that 25 time frame, everybody preannounced. Microsoft 7782 1 preannounced. Borland preannounced. Everybody 2 did -- IBM preannounced, and Lotus 3 preannounced. That was kind of common 4 behavior. 5 (Whereupon, playing of video 6 concluded.) 7 BY MR. HOLLEY: 8 Q. And that's consistent with your 9 knowledge of the industry, is it not, that in 10 the time frame that you testified about, which 11 is in the early 1990s, everybody in the 12 software business was preannouncing their 13 products for the reasons that we talked about 14 earlier; correct? 15 A. That once feature sets had been 16 determined and there was a product or a -- the 17 product that you were planning to ship, yes. 18 Q. Okay. And did you also consider this 19 testimony from Mr. Crummey on the subject of 20 vaporware? 21 (Whereupon, the following video was 22 played to the jury.) 23 Question: What's your understanding 24 of the term vaporware? 25 Answer: It's when you announce 7783 1 something to the market, a product, with some 2 specifics and give a date, and then miss that 3 date by a lot. 4 Question: Now, would you consider the 5 delay that Lotus had with version 3.0 of this 6 DOS product, was that vaporware or not? 7 Answer: I don't consider that 8 vaporware. And the reason I don't is there was 9 a plan to announce and ship on a certain date. 10 I think what happened -- just my 11 opinion -- they ran into a lot of technical 12 problems. They kept moving the date out. 13 Question: And was that pretty common 14 for software? 15 Answer: It was, yes. 16 Question: In other words, you can 17 miss a date? 18 Answer: Always. Always -- you will 19 always miss a date with software. 20 Question: Is that common in the 21 industry? 22 Answer: Yes. 23 (Whereupon playing of video 24 concluded.) 25 BY MR. HOLLEY: 7784 1 Q. Now, Mr. Alepin, when you were 2 preparing to deliver your opinions in this 3 case, did you think it was important to take 4 into account and to tell the Jury about 5 testimony like the testimony we just heard from 6 Mr. Crummey, that missing dates in the software 7 industry is something that, in his words, 8 always happens? 9 A. I factored the normal practices of our 10 industry into my analysis and into my 11 conclusion. 12 Q. Now, the specific example that you 13 focused on in your direct testimony was Windows 14 Vista; is that correct? 15 A. That was one of them. 16 Q. And you were shown Plaintiffs' Exhibit 17 7264. And if you need to see it again, I'm 18 happy to show it to you. 19 But that was the e-mail from 20 Mr. Allchin to Mr. Gates and Mr. Ballmer dated 21