[1]Download the WP 5.1 version VIDEOTAPED DEPOSITION EXCERPTS OF BILL GATES 13 BY MR. HOUCK: 14 QUESTION: IN OR ABOUT JUNE 1995, 15 MR. GATES, DID YOU BECOME INVOLVED IN THE 16 PLANNING FOR SOME MEETINGS WITH NETSCAPE? 17 ANSWER: NO. 18 QUESTION: THE E-MAIL I WANT TO ASK YOU 19 ABOUT FIRST, MR. GATES, IS DATED JUNE 1ST, 1995, 20 AND THE VERY TOP PORTION INDICATES THAT THE 21 BOTTOM PORTION IS BEING SENT TO YOU FOR YOUR 22 INFORMATION BY PAUL MARITZ, AND THE BOTTOM 23 PORTION IS AN E-MAIL FROM THOMAS REARDON, DATED 24 JUNE 1, 1995, ON THE SUBJECT OF WORKING WITH 25 NETSCAPE. _________________________________________________________________ PAGE 5 1 DO YOU RECALL RECEIVING THIS MEMORANDUM OR 2 E-MAIL? 3 ANSWER: E-MAIL, NO. 4 QUESTION: ALL RIGHT. I APOLOGIZE FOR USING 5 MY OLD-FASHIONED TERMINOLOGY. 6 YOU DON'T RECALL RECEIVING THIS E-MAIL 7 PARTICULARLY? 8 ANSWER: NO. 9 QUESTION: THE E-MAIL STATES, `DAN AND BARB 10 AND I MET LATE YESTERDAY TO REVIEW OUR RECENT 11 DISCUSSIONS WITH NETSCAPE AND FORM OUR NEXT FEW 12 ACTION ITEMS. DAN IS MEETING WITH JIM BARKSDALE, 13 THEIR CEO, SHORTLY.' 14 DO YOU UNDERSTAND THE REFERENCE TO DAN TO BE 15 A REFERENCE TO DAN ROSEN? 16 ANSWER: PROBABLY. 17 QUESTION: IS THE REFERENCE TO BARBARA A 18 REFERENCE TO BARBARA FOX? 19 ANSWER: I MEAN, YOU COULD ASK THOMAS. 20 PROBABLY. 21 QUESTION: DO YOU HAVE ANY UNDERSTANDING, 22 SIR? 23 ANSWER: BASED ON--I HAVE NEVER SPOKEN WITH 24 THOMAS ABOUT THIS. I DON'T REMEMBER SEEING THE 25 E-MAIL. _________________________________________________________________ PAGE 6 1 QUESTION: DO YOU RECALL SPEAKING TO ANYONE 2 ABOUT THE MEETING REFERRED TO HERE BETWEEN DAN 3 ROSEN AND JIM BARKSDALE? 4 ANSWER: NO. 5 QUESTION: THE E-MAIL GOES ON TO LIST 6 WORKING GOALS, WHICH ARE, ONE, LAUNCH STT, OUR 7 ELECTRONIC PAYMENT PROTOCOL. GET STT PRESENCE ON 8 THE INTERNET. TWO, MOVE NETSCAPE OUT OF THE 9 WIN32 INTERNET CLIENT AREA. THREE, AVOID COLD OR 10 HOT WAR WITH NETSCAPE. KEEP THEM FROM SABOTAGING 11 OUR PLATFORM EVOLUTION. 12 DO YOU UNDERSTAND THE REFERENCE TO WIN32 13 INTERNET CLIENT TO BE A REFERENCE TO WINDOWS 95? 14 ANSWER: NO. 15 QUESTION: WHAT DO YOU UNDERSTAND IT TO BE A 16 REFERENCE TO? 17 ANSWER: WIN32. 18 QUESTION: AND CAN YOU DESCRIBE WHAT THAT 19 IS. 20 ANSWER: 32-BIT WINDOWS. 21 QUESTION: IS WINDOWS 95 A 32-BIT WINDOWS 22 PRODUCT? 23 ANSWER: IT'S ONE OF THEM. 24 QUESTION: WERE THERE ANY OTHER 32-BIT 25 PRODUCTS IN DEVELOPMENT IN JUNE OF 1995? _________________________________________________________________ PAGE 7 1 ANSWER: CERTAINLY. 2 QUESTION: WHICH ONES? 3 ANSWER: WINDOWS NT. 4 QUESTION: DO YOU KNOW WHETHER MR. REARDON 5 WAS REFERRING TO WINDOWS NT AND WINDOWS 30 AND 6 WINDOWS 95, OR ONE OR THE OTHER? 7 ANSWER: WIN32'S A TERM THAT REFERS TO ALL 8 THE 32-BIT PLATFORMS. 9 QUESTION: AND AS I UNDERSTAND YOUR 10 TESTIMONY THAT THE 32-BIT PLATFORMS UNDER 11 DEVELOPMENT IN JUNE OF 1995 WERE WINDOWS NT AND 12 WINDOWS 95; IS THAT CORRECT? 13 ANSWER: NO. WINDOWS NT WAS SHIPPING, AND 14 THERE WAS A NEW VERSION THAT WAS UNDER 15 DEVELOPMENT. 16 QUESTION: AND WINDOWS 95 WAS IN DEVELOPMENT 17 AT THIS TIME? 18 ANSWER: CERTAINLY." 19 (PAUSE.) 20 "QUESTION: IN THE PORTION OF THE E-MAIL 21 DENOMINATED NUMBER TWO, WHICH IS "MOVE NETSCAPE 22 OUT OF WIN32/WIN95, AVOID BATTLING THEM IN THE 23 NEXT YEAR," THERE APPEARS THE FOLLOWING STATEMENT 24 IN THE SECOND PARAGRAPH, QUOTE, THEY APPEARED TO 25 BE MOVING FAST TO ESTABLISH THEMSELVES IN THE _________________________________________________________________ PAGE 8 1 VALUE-ADD APP BUSINESS BY LEVERAGING NETSCAPE 2 ITSELF AS A PLATFORM. 3 DO YOU RECALL WHETHER YOU AGREED THAT THAT'S 4 WHAT NETSCAPE WAS DOING BACK IN JUNE '95? 5 ANSWER: AT THIS TIME I HAD NO SENSE OF WHAT 6 NETSCAPE WAS DOING." 7 (PAUSE.) 8 "QUESTION: DO YOU RECALL, AS YOU SIT HERE 9 TODAY, APART FROM JUST READING THESE E-MAILS, 10 ANYTHING THAT WAS REPORTED BACK TO YOU BY ANY OF 11 THE PARTICIPANTS FROM MICROSOFT AT THIS JUNE 21ST 12 MEETING? 13 ANSWER: WELL, I THINK SOMEWHERE ABOUT THIS 14 TIME SOMEBODY SAID TO ME THAT--ASKED IF IT MADE 15 SENSE FOR US TO CONSIDER INVESTING IN NETSCAPE, 16 AND I SAID THAT THAT DIDN'T MAKE SENSE TO ME. I 17 DIDN'T SEE THAT AS SOMETHING THAT MADE SENSE. 18 QUESTION: DO YOU RECALL WHO SAID THAT TO 19 YOU? 20 ANSWER: IT WOULD HAVE BEEN PROBABLY 21 SUGGESTED IN A PIECE OF E-MAIL FROM DAN, I THINK. 22 QUESTION: DO YOU RECALL WHEN YOU GOT THAT 23 SUGGESTION, WHETHER IT WAS BEFORE OR AFTER THE 24 MEETING? 25 ANSWER: OH, IT WOULD HAVE BEEN AFTER THE _________________________________________________________________ PAGE 9 1 MEETING. 2 QUESTION: DO YOU RECALL ANYTHING ELSE THAT 3 ANYONE TOLD YOU BACK IN JUNE '95 ABOUT THE 4 MEETING? 5 ANSWER: NO." 6 (PAUSE.) 7 "BY MR. BOIES: 8 QUESTION: YOU ARE AWARE THAT IT HAS BEEN 9 ASSERTED THAT AT THAT MEETING THERE WAS AN 10 ATTEMPT TO ALLOCATE MARKETS BETWEEN NETSCAPE AND 11 MICROSOFT; CORRECT, SIR? 12 ANSWER: MY ONLY KNOWLEDGE OF THAT IS THAT 13 THERE WAS AN ARTICLE IN THE WALL STREET JOURNAL 14 VERY RECENTLY THAT SAID SOMETHING ALONG THOSE 15 LINES. OTHERWISE, NO. 16 QUESTION: IS IT YOUR TESTIMONY THAT THE 17 FIRST TIME THAT YOU WERE AWARE THAT THERE WAS AN 18 ASSERTION THAT THERE HAD BEEN A MARKETABLE 19 ALLOCATION MEETING OR AN ATTEMPT TO ALLOCATE 20 MARKETS AT A MEETING BETWEEN REPRESENTATIVES OF 21 MICROSOFT AND NETSCAPE WAS A RECENT WALL STREET 22 JOURNAL ARTICLE? 23 ANSWER: I'M NOT SURE HOW TO CHARACTERIZE 24 IT. THE FIRST THING--THE FIRST I HEARD ANYTHING 25 ABOUT THAT MEETING AND SOMEBODY TRYING TO _________________________________________________________________ PAGE 10 1 CHARACTERIZE IT IN SOME NEGATIVE WAY WAS AN 2 ANDREESSEN QUOTE THAT WAS IN THE WALL STREET 3 JOURNAL VERY RECENTLY, AND IT SURPRISED ME. 4 QUESTION: ARE YOU AWARE OF ANY INSTANCES IN 5 WHICH REPRESENTATIVES OF MICROSOFT HAD MET WITH 6 COMPETITORS IN AN ATTEMPT TO ALLOCATE MARKETS? 7 MR. HEINER: OBJECTION. 8 THE WITNESS: I'M NOT AWARE OF ANY SUCH 9 THING. I KNOW IT'S VERY MUCH AGAINST THE WAY WE 10 OPERATE. 11 BY MR. BOIES: 12 QUESTION: IT WOULD BE AGAINST COMPANY 13 POLICY TO DO THAT? 14 ANSWER: THAT'S RIGHT." 15 (PAUSE.) 16 "QUESTION: LET ME ASK YOU, DID YOU--WHEN 17 YOU SAW THE WALL STREET JOURNAL ARTICLE THAT 18 TALKED ABOUT A MAY MEETING IN TERMS OF ALLEGEDLY 19 MARKET DIVIDING CONDUCT, DID YOU TRY TO FIND OUT 20 WHETHER THERE HAD BEEN A MAY MEETING BETWEEN 21 REPRESENTATIVES OF MICROSOFT AND REPRESENTATIVES 22 OF NETSCAPE? 23 ANSWER: WELL, AGAIN, I WOULDN'T 24 CHARACTERIZE THE ARTICLE IN THAT WAY. WHEN I 25 READ THE ARTICLE, WHAT IT SAID INTERESTED ME _________________________________________________________________ PAGE 11 1 ENOUGH AND CONCERNED ME ENOUGH I DID SEEK TO FIND 2 OUT IF THERE WAS A MAY MEETING, BUT I DON'T THINK 3 THE ARTICLE IS WHAT YOU'RE SUGGEST--SAID WHAT 4 YOU'RE SUGGESTING. I MEAN, WE SHOULD GET A COPY 5 OF THE ARTICLE. I DON'T REMEMBER IT THAT WAY. I 6 REMEMBER ANDREESSEN TALKING ABOUT HOW HE HAD BEEN 7 IN FEAR THAT DON CORLEONE HAD COME TO SEE HIM. 8 AND, YOU KNOW, ONCE I REALIZED THAT THERE 9 WAS NO MEETING IN MAY AND THAT IT WASN'T--YOU 10 KNOW, THAT HE, AFTER THE MEETING, SAID HE ENJOYED 11 THE MEETING AND THAT IT WAS, YOU KNOW, JUST A 12 GROUP OF OUR GUYS DOWN THERE TRYING TO TALK ABOUT 13 IF THERE WAS ANYWAY AREAS OF COOPERATION, IT 14 SEEMED--THE WHOLE THING SEEMED VERY STRANGE TO 15 ME. 16 QUESTION: DID YOU TALK TO PEOPLE TO FIND 17 OUT WHETHER THERE WAS A MAY MEETING? 18 ANSWER: YES. 19 QUESTION: WHO DID YOU TALK TO? 20 ANSWER: I CONSULTED WITH MY LAWYERS. 21 QUESTION: OTHER THAN CONSULTING WITH YOUR 22 LAWYERS, DID YOU TRY TO FIND OUT WHETHER THERE 23 WAS A MAY MEETING? 24 ANSWER: WELL, MY LAWYERS, THEN, TALKED TO 25 ALL THE PEOPLE THAT MIGHT HAVE MET WITH NETSCAPE, _________________________________________________________________ PAGE 12 1 AND I MADE SURE THEY DID THAT PRETTY BROADLY. 2 QUESTION: YOU WERE INFORMED THAT THERE WAS 3 NO MAY MEETING; IS THAT YOUR TESTIMONY? 4 ANSWER: THAT'S THE UNDERSTANDING I WAS 5 GIVEN, YES, AND THEN I WAS GIVEN SOME OTHER 6 INFORMATION THAT I HAVE ALREADY MENTIONED. 7 QUESTION: BUT ALL OF THAT INFORMATION CAME 8 FROM YOUR LAWYERS AND NOT FROM NONLAWYER 9 EMPLOYEES OF MICROSOFT; IS THAT WHAT YOU'RE 10 SAYING? 11 ANSWER: IT CAME TO ME THROUGH MY LAWYERS. 12 QUESTION: DID YOU EVER HAVE A CONVERSATION 13 WITH ANYONE IN THE LAST 12 MONTHS, OTHER THAN 14 YOUR LAWYERS, CONCERNING WHETHER THERE WERE 15 MEETINGS IN MAY OR JUNE OF 1995 WITH NETSCAPE, 16 AND IF SO, WHAT HAPPENED AT THOSE MEETINGS? 17 ANSWER: WELL, THERE MIGHT HAVE BEEN A POINT 18 AFTER I GOT ALL THE DATA FROM THE LAWYERS WHERE I 19 SAID TO SOME OF THE PR PEOPLE WHAT AN OUTRAGEOUS 20 SLANDER THAT ARTICLE HAD BEEN AND HOW UNFAIR I 21 FELT IT WAS. AND SO, I MAY HAVE MENTIONED THAT 22 TO THEM. 23 QUESTION: DID YOU HAVE ANY CONVERSATIONS, 24 IN THE LAST 12 MONTHS, WITH ANY PERSON WHO WAS 25 DEALING WITH NETSCAPE IN 1995 ABOUT WHETHER THERE _________________________________________________________________ PAGE 13 1 WERE MAY OR JUNE MEETINGS, AND IF SO, WHAT 2 HAPPENED AT THOSE MEETINGS? 3 ANSWER: NO. I RELIED ON THE LAWYERS TO GO 4 AND MEET WITH THOSE PEOPLE AND GATHER THE FACTS 5 AND EDUCATE ME ABOUT WAS THERE A MAY MEETING AND 6 WHAT WAS THE AGENDA, WHAT WAS ANDREESSEN'S STATE 7 OF MIND AFTER THE MEETING, WHAT DID THE NOTES 8 LOOK LIKE. BUT THAT'S ALL VERY RECENT. THAT IS 9 AFTER THE JOURNAL ARTICLE. 10 QUESTION: NOW, HAVE YOU EVER READ THE 11 COMPLAINT IN THIS CASE? 12 ANSWER: NO. 13 QUESTION: HAVE YOU EVER RECEIVED A SUMMARY 14 OF THE COMPLAINT IN THIS CASE? 15 ANSWER: I WOULDN'T SAY I'VE RECEIVED A 16 SUMMARY, NO. I HAVE TALKED TO MY LAWYERS ABOUT 17 THE CASE, BUT NOT REALLY THE COMPLAINT. 18 QUESTION: DO YOU KNOW WHETHER IN THE 19 COMPLAINT THERE IS AN ASSERTION--I'M NOT TALKING 20 ABOUT THE WALL STREET JOURNAL ARTICLE. I'M 21 TALKING ABOUT THE COMPLAINT THAT WAS FILED LAST 22 MAY. DO YOU KNOW WHETHER IN THAT COMPLAINT THERE 23 ARE ALLEGATIONS CONCERNING A 1995 MEETING BETWEEN 24 NETSCAPE AND MICROSOFT REPRESENTATIVES RELATING 25 TO ALLEGED MARKET DIVISION DISCUSSIONS? _________________________________________________________________ PAGE 14 1 ANSWER: I HAVEN'T READ THE COMPLAINT, SO I 2 DON'T KNOW FOR SURE. BUT I THINK SOMEBODY SAID 3 THAT THAT IS IN THERE. 4 QUESTION: DID YOU FIND THAT OUT BEFORE OR 5 AFTER THE WALL STREET JOURNAL ARTICLE? 6 ANSWER: THE FIRST TIME I KNEW ABOUT THESE 7 ALLEGATIONS WAS THE WALL STREET JOURNAL ARTICLE, 8 SO-- 9 QUESTION: THAT IS, THAT ARTICLE PRECEDED 10 ANY KNOWLEDGE THAT YOU HAD OR DIDN'T HAVE RELATED 11 TO THE COMPLAINT? 12 ANSWER: THAT'S RIGHT." 13 (PAUSE.) 14 "QUESTION: HAVE YOU EVER HAD DISCUSSIONS 15 WITHIN MICROSOFT ABOUT THE DESIRABILITY OF TRYING 16 TO UNDERMINE SUN BECAUSE OF WHAT SUN WAS DOING IN 17 JAVA? 18 ANSWER: I SAID TO YOU, PART OF OUR ACTIVITY 19 IS TO GO OUT AND WORK WITH CUSTOMERS TO SEE WHAT 20 IT TAKES TO HAVE THEM CHOOSE TO LICENSE OUR 21 PRODUCTS, AND THAT'S IN COMPETITION WITH MANY 22 OTHER COMPANIES, INCLUDING SUN." 23 (PAUSE.) 24 "QUESTION: I'M NOT NOW TALKING ABOUT WHAT 25 YOU DO IN COMPETITION WITH OTHER PRODUCTS OR _________________________________________________________________ PAGE 15 1 OTHER COMPANIES. WHAT I'M TALKING ABOUT IS 2 WHETHER OR NOT YOU'VE HAD DISCUSSIONS WITH PEOPLE 3 WITHIN MICROSOFT IN WHICH YOU TALKED ABOUT THE 4 NEED TO UNDERMINE SUN--USING THOSE WORDS, IF THAT 5 WILL HELP YOU--WITHIN MICROSOFT. 6 ANSWER: I DON'T REMEMBER USING THOSE WORDS. 7 QUESTION: YOU DON'T? 8 ANSWER: NO. 9 QUESTION: DO YOU THINK YOU DID USE THOSE 10 WORDS, OR YOU JUST DON'T KNOW, ONE WAY OR THE 11 OTHER? 12 ANSWER: I DON'T KNOW. 13 QUESTION: WOULD IT BE CONSISTENT WITH THE 14 WAY YOU FELT ABOUT JAVA, FOR YOU TO HAVE TOLD 15 PEOPLE THAT YOU WANTED TO UNDERMINE SUN? 16 ANSWER: AS I'VE SAID, ANYTHING ABOUT JAVA, 17 YOU'VE GOT TO SHOW ME A CONTEXT BEFORE I CAN 18 ANSWER, BECAUSE JUST THE TERM "JAVA" ITSELF CAN 19 MEAN DIFFERENT THINGS." 20 (PAUSE.) 21 "QUESTION: DID YOU HAVE DISCUSSIONS WITH 22 APPLE IN WHICH YOU WERE TRYING TO GET APPLE TO 23 AGREE TO HELP YOU UNDERMINE SUN? 24 ANSWER: THERE WAS SOME DISCUSSION ABOUT 25 WHAT RUNTIME API'S APPLE WOULD SUPPORT, WHETHER _________________________________________________________________ PAGE 16 1 THEY WOULD SUPPORT SOME OF OURS OR SOME OF SUN'S. 2 I DON'T THINK I WAS INVOLVED IN ANY DISCUSSIONS, 3 MYSELF, WITH APPLE ABOUT THAT. 4 QUESTION: WELL, LET ME SHOW YOU A DOCUMENT 5 AND TRY TO PROBE WHAT YOU MEAN BY BEING INVOLVED. 6 LET ME GIVE YOU A COPY OF A DOCUMENT THAT HAS 7 BEEN PREVIOUSLY MARKED AS GOVERNMENT EXHIBIT 265. 8 A PORTION OF THIS DOCUMENT IS AN E-MAIL 9 MESSAGE FROM YOU TO PAUL MARITZ AND OTHERS, AND 10 THE PORTION THAT I'M PARTICULARLY INTERESTED 11 IN--AND YOU CAN READ AS MUCH OF THE THREE-LINE 12 E-MAIL AS YOU WISH--IS THE LAST SENTENCE, WHICH 13 READS, QUOTE, DO WE HAVE A CLEAR PLAN ON WHAT WE 14 WANT APPLE TO DO TO UNDERMINE SUN, CLOSED QUOTES? 15 DID YOU SEND THIS E-MAIL, MR. GATES, ON OR 16 ABOUT AUGUST 8TH, 1997? 17 ANSWER: I DON'T REMEMBER SENDING IT. 18 QUESTION: DO YOU HAVE ANY DOUBT THAT YOU 19 SENT IT? 20 ANSWER: NO. IT APPEARS TO BE E-MAIL I 21 SENT. 22 QUESTION: DO YOU RECOGNIZE THAT THIS IS A 23 DOCUMENT PRODUCED FROM MICROSOFT'S FILES, DO YOU 24 NOT, SIR? 25 ANSWER: NO. _________________________________________________________________ PAGE 17 1 QUESTION: YOU DON'T? 2 ANSWER: WELL, HOW WOULD I KNOW THAT? 3 QUESTION: WELL, DO YOU SEE THE DOCUMENT 4 PRODUCTION NUMBERS DOWN AT THE BOTTOM? 5 ANSWER: I HAVE NO IDEA WHAT THOSE NUMBERS 6 ARE." 7 "QUESTION: LET ME GO BACK TO THE E-MAIL, 8 MR. GATES. 9 WHAT DID YOU MEAN WHEN YOU ASKED MR. MARITZ 10 WHETHER OR NOT, QUOTE, WE HAVE A CLEAR PLAN ON 11 WHAT WE WANT APPLE TO DO TO UNDERMINE SUN, CLOSED 12 QUOTE? 13 ANSWER: I DON'T REMEMBER. 14 QUESTION: DID YOU PERSONALLY PARTICIPATE IN _________________________________________________________________ PAGE 19 1 ANY CONVERSATIONS WITH APPLE IN 1997 AND 1998? 2 ANSWER: OF ANY KIND? 3 QUESTION: LET ME BE A LITTLE MORE SPECIFIC. 4 DID YOU PARTICIPATE IN ANY CONVERSATIONS 5 WITH APPLE IN 1997 OR 1998, CONCERNING WHAT APPLE 6 WOULD OR WOULD NOT DO THAT WOULD AFFECT MICROSOFT 7 COMPETITIVELY? 8 ANSWER: WELL, THERE WERE SOME CONVERSATIONS 9 WITH STEVE JOBS ABOUT MICROSOFT OFFICE AND 10 SOME--AND A RELATIONSHIP WE FORMED AROUND THAT 11 AND SOME OTHER ISSUES. 12 QUESTION: AND DID YOU PARTICIPATE IN THOSE 13 CONVERSATIONS? 14 ANSWER: I TALKED TO STEVE JOBS ON THE 15 PHONE, I THINK, TWICE. 16 QUESTION: AND WHAT WAS THE NATURE OF YOUR 17 CONVERSATIONS WITH MR. JOBS? 18 ANSWER: WELL, STEVE HAD--STEVE CALLED ME UP 19 AND SAID THAT HE HAD BECOME THE CEO OF APPLE, 20 SORT OF, AND THAT GIL AMELIO WASN'T THE CEO OF 21 APPLE. AND HE RAISED THE QUESTION OF WAS THERE 22 SOME BENEFICIAL AGREEMENT THAT WE COULD ENTER 23 INTO DIFFERENT THAN WE'D BEEN DISCUSSING WITH 24 GIL. AND IT WASN'T A VERY LONG CALL, BUT THE 25 CONCLUSION WAS THAT GREG MAFFEI WOULD GO SEE _________________________________________________________________ PAGE 20 1 STEVE." 2 (PAUSE.) 3 "QUESTION: AND WAS IT YOUR UNDERSTANDING 4 THAT MICROSOFT OFFICE FOR MACINTOSH WAS BELIEVED 5 BY APPLE TO BE VERY IMPORTANT TO THEM? 6 ANSWER: I REALLY HAVE A HARD TIME 7 TESTIFYING ABOUT THE BELIEF OF A CORPORATION. I 8 REALLY DON'T KNOW WHAT THAT MEANS. 9 QUESTION: WELL, SIR, IN MAKING THE 10 DECISIONS AS TO WHAT YOU WOULD ASK OF APPLE, DID 11 YOU BELIEVE THAT WHAT YOU WERE OFFERING APPLE 12 WITH RESPECT TO MICROSOFT OFFICE FOR MACINTOSH 13 WAS IMPORTANT ENOUGH TO APPLE SO THAT THEY OUGHT 14 TO GIVE YOU SOMETHING FOR IT? 15 ANSWER: I HAVE NO IDEA WHAT YOU'RE TALKING 16 ABOUT WHEN YOU SAY "ASK." 17 QUESTION: WELL, LET ME SHOW YOU A DOCUMENT 18 THAT HAS PREVIOUSLY BEEN MARKED AS GOVERNMENT 19 EXHIBIT 268. THIS IS A DOCUMENT BEARING 20 MICROSOFT DOCUMENT PRODUCTION STAMPS MS 98 21 0110952 THROUGH 53. 22 THE FIRST PART OF THIS PURPORTS TO BE A COPY 23 OF AN E-MAIL FROM DAN--DON BRADFORD TO BEN 24 WALDMAN, WITH A COPY TO YOU, MR. MARITZ AND 25 OTHERS, ON THE SUBJECT OF, QUOTE, JAVA ON _________________________________________________________________ PAGE 21 1 MACINTOSH/IE CONTROL. 2 DID YOU RECEIVE A COPY OF THIS E-MAIL ON OR 3 ABOUT FEBRUARY 13TH, 1998? 4 ANSWER: I DON'T KNOW." 5 "QUESTION: DO YOU HAVE ANY REASON TO DOUBT 6 THAT YOU RECEIVED A COPY OF THIS E-MAIL? 7 ANSWER: NO. 8 QUESTION: THE FIRST PARAGRAPH READS, QUOTE, 9 APPLE WANTS TO KEEP BOTH NETSCAPE AND MICROSOFT 10 DEVELOPING BROWSERS FOR MAC--BELIEVING IF ONE 11 DROPS OUT, THE OTHER WILL LOSE INTEREST (AND ALSO 12 NOT REALLY WANTING TO PICK UP THE DEVELOPMENT 13 BURDEN). GETTING APPLE TO DO ANYTHING THAT 14 SIGNIFICANTLY MATERIALLY DISADVANTAGES NETSCAPE 15 WILL BE TOUGH. DO YOU AGREE THAT APPLE SHOULD BE 16 MEETING--IT READS, DO AGREE THAT APPLE SHOULD BE 17 MEETING THE SPIRIT OF OUR CROSS-LICENSE AGREEMENT 18 AND THAT MACOFFICE IS THE PERFECT CLUB TO USE ON 19 THEM. 20 DO YOU HAVE AN UNDERSTANDING OF WHAT 21 MR. BRADFORD MEANS WHEN HE REFERS TO MACOFFICE 22 AS, QUOTE, THE PERFECT CLUB TO USE ON APPLE, _________________________________________________________________ PAGE 22 1 CLOSED QUOTE? 2 ANSWER: NO. 3 QUESTION: THE SECOND SENTENCE OF THAT 4 PARAGRAPH, THE ONE THAT READS `GETTING APPLE TO 5 DO ANYTHING THAT SIGNIFICANTLY MATERIALLY 6 DISADVANTAGES NETSCAPE WILL BE TOUGH,' WAS IT 7 YOUR UNDERSTANDING IN FEBRUARY OF 1998 THAT 8 MICROSOFT WAS TRYING TO GET APPLE TO DO SOMETHING 9 TO DISADVANTAGE NETSCAPE? 10 ANSWER: NO. 11 QUESTION: DO YOU KNOW WHY MR. BRADFORD 12 WOULD HAVE WRITTEN THIS IN FEBRUARY OF 1998 AND 13 SENT A COPY TO YOU? 14 ANSWER: I'M NOT SURE. 15 QUESTION: DID YOU EVER SAY TO MR. BRADFORD, 16 IN WORDS OR IN SUBSTANCE, IN FEBRUARY OF 1988 OR 17 THEREAFTER, `MR. BRADFORD, YOU GOT IT WRONG. WE 18 ARE NOT OUT TO SIGNIFICANTLY OR MATERIALLY 19 DISADVANTAGE NETSCAPE THROUGH APPLE? 20 ANSWER: NO. 21 QUESTION: DID YOU EVER TELL MR. BRADFORD OR 22 ANYONE ELSE IN FEBRUARY 1998 OR THEREAFTER THAT 23 THEY SHOULD NOT BE TRYING TO GET APPLE TO DO 24 THINGS THAT WOULD SIGNIFICANTLY OR MATERIALLY 25 DISADVANTAGE NETSCAPE? _________________________________________________________________ PAGE 23 1 ANSWER: NO. 2 QUESTION: WHAT WAS MR. BRADFORD'S POSITION 3 IN FEBRUARY OF 1998? 4 ANSWER: I THINK HE HAD A SMALL GROUP IN 5 CALIFORNIA THAT WORKED--I'M NOT SURE WHO HE 6 WORKED FOR. HE PROBABLY WORKED FOR SOMEBODY WHO 7 WORKED FOR SILVERBERG--NO. NO, I'M NOT SURE WHO 8 HE WORKED FOR. 9 QUESTION: LET'S BEGIN WITH WHAT COMPANY HE 10 WORKED FOR. HE CLEARLY WORKED FOR MICROSOFT; 11 CORRECT, SIR? 12 ANSWER: THAT'S RIGHT. 13 QUESTION: AND DO YOU KNOW WHAT HIS TITLE 14 WAS? 15 ANSWER: NO. 16 QUESTION: DO YOU KNOW WHO MR. WALDMAN IS? 17 ANSWER: YES. 18 QUESTION: WHAT WAS HIS TITLE IN FEBRUARY OF 19 1998? 20 ANSWER: I DON'T KNOW. 21 QUESTION: WHAT WERE HIS RESPONSIBILITIES IN 22 FEBRUARY OF 1998? 23 ANSWER: HE WAS--HE RAN A GROUP THAT WAS 24 DOING MACINTOSH SOFTWARE. NEITHER OF THESE GUYS 25 HAVE A TITLE LIKE `VICE PRESIDENT;' THAT I CAN _________________________________________________________________ PAGE 24 1 SAY FOR SURE. SO, THEY--YOU KNOW, THEY HAVE A 2 TITLE LIKE ENGINEER OR SOFTWARE ENGINEER, 3 SOFTWARE ENGINEER MANAGER, BUT I DON'T KNOW THEIR 4 TITLE. THEY'RE NOT EXECUTIVES. 5 QUESTION: IN ADDITION TO YOU AND 6 MR. MARITZ, COPIES OF THIS GO TO DAVID COLE, DAVE 7 REED, CHARLES FITZGERALD, AND JOHN DEVAAN. 8 DO YOU KNOW WHAT MR. COLE'S POSITION WAS IN 9 1998? 10 ANSWER: YES. 11 QUESTION: WHAT WAS IT? 12 ANSWER: HE WAS THE VP--ACTUALLY, I DON'T 13 KNOW VP OF WHAT, BUT HE WAS A VP WORKING FOR--I 14 DON'T KNOW IF WE REORGANIZED BY THEN. HE WAS IN 15 MARITZ'S ORGANIZATION SOMEWHERE." 16 (PAUSE.) 17 "QUESTION: AND MR. DEVAAN? 18 ANSWER: MR. DEVAAN WAS MANAGING THE OVERALL 19 OFFICE DEVELOPMENT. 20 QUESTION: DID YOU HAVE ANY CONVERSATIONS 21 WITH ANYONE WITHIN MICROSOFT AS TO WHAT POSITION 22 MICROSOFT SHOULD TAKE WITH APPLE IN TERMS OF WHAT 23 MICROSOFT SHOULD ASK APPLE FOR IN RETURN FOR 24 MICROSOFT DEVELOPING MACOFFICE? 25 ANSWER: WHAT TIME FRAME ARE YOU IN? _________________________________________________________________ PAGE 25 1 QUESTION: 1997 OR 1998. 2 ANSWER: WELL, IT ACTUALLY MAKES A BIG 3 DIFFERENCE. WE REACHED AN AGREEMENT WITH APPLE 4 IN 1997, AND THERE IS NO--I'M NOT AWARE OF ANY 5 AGREEMENT OTHER THAN THE 1997 ONE. 6 MR. BOIES: COULD I HAVE THE QUESTION READ 7 BACK. 8 (THE RECORD WAS READ AS FOLLOWS): 9 QUESTION: DID YOU HAVE ANY CONVERSATIONS 10 WITH ANYONE WITHIN MICROSOFT AS TO WHAT POSITION 11 MICROSOFT SHOULD TAKE WITH APPLE IN TERMS OF WHAT 12 MICROSOFT SHOULD ASK APPLE FOR IN RETURN FOR 13 MICROSOFT DEVELOPING MACOFFICE? 14 THE WITNESS: I'M NOT SURE WHAT YOU'RE 15 SAYING ABOUT MACOFFICE. WE DEVELOPED MACOFFICE 16 BECAUSE IT'S A PROFITABLE BUSINESS FOR US. 17 BY MR. BOIES: 18 QUESTION: WELL, YOU THREATENED TO CANCEL 19 MACOFFICE, DID YOU NOT, SIR? 20 ANSWER: NO. 21 QUESTION: YOU NEVER THREATENED APPLE THAT 22 YOU WERE GOING TO CANCEL MACOFFICE? IS THAT YOUR 23 TESTIMONY? 24 ANSWER: THAT'S RIGHT. 25 QUESTION: DID YOU EVER DISCUSS WITHIN _________________________________________________________________ PAGE 26 1 MICROSOFT THREATENING APPLE THAT YOU WERE GOING 2 TO CANCEL MACOFFICE? 3 ANSWER: YOU WOULDN'T CANCEL--NO." 4 "QUESTION: NOW, LET ME DIRECT YOUR 5 ATTENTION TO THE SECOND ITEM ON THE FIRST PAGE OF 6 THIS EXHIBIT. AND THIS PURPORTS TO BE AN E-MAIL 7 FROM MR. WALDMAN TO YOU, DATED JUNE 27, 1997; IS 8 THAT CORRECT, SIR? 9 ANSWER: THE SECOND ONE, UMM-HMM. 10 QUESTION: YOU HAVE TO ANSWER AUDIBLY YES OR 11 NO, MR. GATES. 12 ANSWER: YES, THE SECOND ONE. 13 QUESTION: NOW, IN THE SECOND PARAGRAPH OF 14 THIS E-MAIL TO YOU, THE SECOND SENTENCE READS, 15 QUOTE, THE THREAT TO CANCEL MACOFFICE 97 IS 16 CERTAINLY THE STRONGEST BARGAINING POINT WE HAVE, 17 AS DOING SO WILL DO A GREAT DEAL OF HARM TO APPLE 18 IMMEDIATELY,. 19 DO YOU SEE THAT, SIR? 20 ANSWER: UMM-HMM. 21 QUESTION: DO YOU RECALL RECEIVING THIS _________________________________________________________________ PAGE 30 1 E-MAIL IN JUNE OF 1997? 2 ANSWER: NOT SPECIFICALLY. 3 QUESTION: DO YOU HAVE ANY DOUBT THAT YOU 4 RECEIVED THIS E-MAIL IN JUNE OF 1997? 5 ANSWER: NO. 6 QUESTION: DO YOU KNOW WHY MR. WALDMAN WROTE 7 YOU IN JUNE OF 1997 THAT THE THREAT TO CANCEL 8 MACOFFICE 97 IS CERTAINLY THE STRONGEST 9 BARGAINING POINT WE HAVE, AS DOING SO WILL HAVE 10 DO A GREAT DEAL OF HARM TO APPLE IMMEDIATELY? 11 ANSWER: WELL, MR. WALDMAN WAS IN CHARGE OF 12 THIS UPDATE, AND THE MACOFFICE PRODUCT HAD BEEN 13 SHIPPING FOR OVER A DECADE BY NOW, AND THERE WAS 14 A FINANCIAL QUESTION OF WHETHER TO DO THIS 15 UPDATE. AND HE FELT IT MADE GOOD BUSINESS 16 SENTENCE TO DO IT. OTHER PEOPLE, IRRESPECTIVE OF 17 THE RELATIONSHIP WITH APPLE, HAD SAID THAT IT 18 DIDN'T MAKE SENSE TO DO THE UPDATE. AND SO, 19 THERE WAS SOME MAIL FROM BEN, INCLUDING THIS ONE, 20 WHERE HE WAS SAYING HE THOUGHT WE SHOULD GO AHEAD 21 AND FINISH THE PRODUCT. 22 I'M NOT SURE WHAT HE MEANS ABOUT THE 23 NEGOTIATIONS WITH APPLE. I'M NOT SURE WHAT WE 24 WERE NEGOTIATING WITH APPLE AT THIS POINT. 25 QUESTION: WAS THIS THE TIME THAT YOU WERE _________________________________________________________________ PAGE 31 1 NEGOTIATING WITH APPLE TO TRY TO FIND OUT WHAT 2 YOU COULD GET APPLE TO DO TO UNDERMINE SUN? 3 ANSWER: WELL, THE ONLY E-MAIL--THE ONLY 4 THING YOU'VE SHOWN ME WHERE THAT TERM WAS USED IS 5 AFTER WE REACHED A MACOFFICE AGREEMENT WITH 6 APPLE. 7 QUESTION: YOU'RE REFERRING TO YOUR E-MAIL 8 DATED AUGUST 8, 1997; IS THAT CORRECT? 9 ANSWER: THAT'S RIGHT. 10 QUESTION: THAT HAS BEEN MARKED AS 11 EXHIBIT 265; IS THAT CORRECT? 12 ANSWER: THAT'S RIGHT. THAT'S AFTER. 13 QUESTION: THAT'S AUGUST 8TH, 1997? 14 ANSWER: THAT'S RIGHT. 15 QUESTION: AND IT IS CLEAR FROM YOUR AUGUST 16 8TH, 1997, MEMO THAT YOU ARE STILL ATTEMPTING TO 17 GET APPLE TO DO ADDITIONAL THINGS, IS IT NOT, 18 SIR? 19 ANSWER: NO. 20 QUESTION: WELL, SIR, LET'S READ IT. IT IS 21 ONLY THREE LINES. YOU QUITE, QUOTE, I WANT TO 22 GET AS MUCH MILEAGE AS POSSIBLE OUT OF OUR 23 BROWSER AND JAVA RELATIONSHIP HERE. 24 AND WHEN YOU TALK ABOUT `HERE,' YOU'RE 25 TALKING ABOUT WITH APPLE, ARE YOU NOT, SIR? _________________________________________________________________ PAGE 32 1 ANSWER: I'M NOT SURE. 2 QUESTION: WELL, THE SUBJECT OF THIS IS `FW: 3 POST-AGREEMENT;' CORRECT, SIR? 4 ANSWER: YEAH. THAT'S WHAT MAKES ME THINK 5 THIS WAS PROBABLY POST-AGREEMENT. 6 QUESTION: POST-AGREEMENT WITH APPLE; RIGHT? 7 ANSWER: YES. 8 QUESTION: OKAY. SO, THE SUBJECT IS 9 POST-AGREEMENT WITH APPLE, AND THE VERY FIRST 10 SENTENCE SAYS, `I WANT TO GET AS MUCH MILEAGE AS 11 POSSIBLE OUT OF OUR BROWSER AND JAVA RELATIONSHIP 12 HERE.' 13 THE SECOND SENTENCE SAYS, `IN OTHER WORDS, A 14 REAL ADVANTAGE AGAINST SUN AND NETSCAPE.' 15 THE THIRD LINE SAYS, `WHO SHOULD AVI BE 16 WORKING WITH? DO WE HAVE A CLEAR PLAN ON WHAT WE 17 WANT APPLE TO DO TO UNDERMINE SUN?' 18 NOW, DO YOU HAVE ANY DOUBT THAT WHEN YOU 19 TALK ABOUT `I WANT TO GET AS MUCH MILEAGE AS 20 POSSIBLE OUT OF OUR BROWSER AND JAVA RELATIONSHIP 21 HERE,' YOU'RE TALKING ABOUT APPLE? 22 ANSWER: THAT'S WHAT IT APPEARS. 23 QUESTION: OKAY. DO YOU HAVE ANY 24 RECOLLECTION OF ANY DISCUSSIONS ABOUT THE SUBJECT 25 MATTER OF THIS E-MAIL IN OR ABOUT AUGUST OF 1997? _________________________________________________________________ PAGE 33 1 IF THE QUESTION WAS CONFUSING, I WOULD BE 2 HAPPY TO REPHRASE IT, MR. GATES. 3 ANSWER: GO AHEAD. 4 QUESTION: DID YOU SEND THIS E-MAIL? 5 ANSWER: IT APPEARS I DID. 6 QUESTION: DID YOU DISCUSS THIS E-MAIL WITH 7 ANYONE? 8 ANSWER: I DON'T REMEMBER THAT. 9 QUESTION: LET ME GO BACK TO EXHIBIT 263, 10 WHICH IS THE JUNE 27, 1997, E-MAIL FROM 11 MR. WALDMAN TO YOU. 12 DO YOU RECALL--AND I KNOW YOU'VE SAID YOU 13 DON'T RECALL RECEIVING THIS E-MAIL, BUT DO YOU 14 RECALL ANYONE DESCRIBING THE THREAT TO CANCEL 15 MACOFFICE 97 AS A BARGAINING POINT THAT YOU HAVE 16 IN DEALINGS WITH APPLE, IN OR ABOUT JUNE OF 1997? 17 ANSWER: I REMEMBER GOING TO MEETINGS WHERE 18 PAUL MARITZ TOOK THE POSITION THAT WE SHOULDN'T 19 DO THE UPDATE, AND--THE MACOFFICE 97 UPDATE. 20 AND THE MAIN NEGOTIATION WE HAD WITH APPLE 21 AT THIS POINT WAS A DISCUSSION ABOUT A PATENT 22 CROSS-LICENSE, AND SO I SAID TO PAUL I WANTED TO 23 UNDERSTAND BETTER WHERE WE WERE ON THE PATENT 24 CROSS-LICENSE AND UNDERSTAND THE STATE OF THE 25 MACOFFICE DEVELOPMENT. _________________________________________________________________ PAGE 34 1 AND THEN IT APPEARS THAT THIS IS AN E-MAIL 2 THAT IS COMING AFTER THAT MEETING. I DON'T 3 REMEMBER SOMEBODY USING THOSE EXACT WORDS. 4 QUESTION: WHETHER YOU REMEMBER SOMEBODY 5 USING THE EXACT WORDS THAT MR. WALDMAN USES IN 6 HIS JUNE 27, 1997, E-MAIL TO YOU, DO YOU REMEMBER 7 PEOPLE TELLING YOU, IN SUBSTANCE, THAT THE THREAT 8 TO CANCEL MACOFFICE 97 WAS A STRONG BARGAINING 9 POINT THAT YOU HAD AGAINST APPLE AND THAT 10 CANCELING MACOFFICE 97 WOULD DO A GREAT DEAL OF 11 HARM TO APPLE IMMEDIATELY? 12 ANSWER: I KNOW THERE WAS THE INTERNAL 13 DEBATE ABOUT WHETHER TO DO THE UPDATE, AND I KNOW 14 THERE WAS THE PATENT DISCUSSION GOING ON. AND I 15 SAID THAT MAYBE--EVEN IF IT DIDN'T MAKE BUSINESS 16 SENSE TO DO THE UPDATE, MAYBE AS PART OF AN 17 OVERALL RELATIONSHIP WITH THE PATENT 18 CROSS-LICENSE, THAT WE SHOULD GO AHEAD AND DO IT. 19 AND SO, A COMMITMENT TO DO THE UPGRADE WAS 20 ONE OF THE THINGS THAT WE TOLD APPLE WE MIGHT 21 COMMIT TO AS PART OF THE PATENT CROSS-LICENSE 22 RELATIONSHIP. 23 QUESTION: AND DID YOU BELIEVE IN 1997 THAT 24 CANCELING MACOFFICE 97 WOULD DO A GREAT DEAL OF 25 HARM TO APPLE, AS MR. WALDMAN WRITES YOU IT _________________________________________________________________ PAGE 35 1 WOULD? 2 ANSWER: THERE WAS A QUESTION ABOUT WHETHER 3 TO DO THE UPGRADE AND WHETHER IT MADE BUSINESS 4 SENSE. I CAN'T REALLY SAY HOW MUCH IMPACT IT 5 WOULD HAVE ON APPLE OF US DOING THE UPGRADE OR 6 NOT. CERTAINLY BEN, AS THE PERSON IN CHARGE OF 7 THE UPGRADE, WAS VERY PASSIONATE ABOUT ITS 8 IMPORTANCE AND ITS DRAMATIC NATURE. 9 QUESTION: MY QUESTION TO YOU NOW, SIR, IS 10 WHETHER YOU BELIEVED THAT CANCELING MACOFFICE 97 11 WOULD DO A GREAT DEAL OF HARM TO APPLE. 12 ANSWER: WELL, I KNOW THAT APPLE WOULD 13 PREFER THAT WE HAVE A MORE UPDATED VERSION OF 14 MACOFFICE, THAT THAT WOULD BE A POSITIVE THING 15 FOR THEM, AND SO THAT'S WHY IT WAS PART OF THE 16 NEGOTIATION RELATIVE TO THE PATENT CROSS-LICENSE. 17 QUESTION: AND DID YOU BELIEVE THAT 18 CANCELING MACOFFICE 97 WOULD DO A GREAT DEAL OF 19 HARM TO APPLE? 20 ANSWER: I TOLD YOU I THINK IT WOULD BE 21 BETTER FOR APPLE TO HAVE EVERYBODY DOING MAJOR 22 UPGRADES LIKE THIS. I DOUBT--YOU KNOW, I 23 DON'T--I CAN'T CHARACTERIZE THE LEVEL OF BENEFIT 24 OF THE UPGRADE TO APPLE, BUT CERTAINLY IT'S 25 SOMETHING THEY WANTED US TO COMPLETE. _________________________________________________________________ PAGE 36 1 QUESTION: THE NEXT SENTENCE IN 2 MR. WALDMAN'S JUNE 27, 1997, E-MAIL TO YOU 3 BEGINS, `I ALSO BELIEVE THAT APPLE IS TAKING THIS 4 THREAT PRETTY SERIOUSLY.' 5 DID SOMEONE TELL YOU, IN OR ABOUT JUNE OF 6 1997, THAT APPLE WAS TAKING MICROSOFT'S THREAT TO 7 CANCEL MACOFFICE 97 SERIOUSLY OR PRETTY 8 SERIOUSLY? 9 ANSWER: WELL, MARITZ HAD TAKEN THE POSITION 10 THAT IT DIDN'T MAKE BUSINESS SENSE TO FINISH THIS 11 UPGRADE, AND IT'S VERY POSSIBLE APPLE MIGHT HAVE 12 HEARD ABOUT MARITZ'S OPINION THERE AND, 13 THEREFORE, BEEN WORRIED THAT WE, BUSINESS-WISE, 14 DIDN'T SEE A REASON TO COMPLETE THE UPGRADE, AND 15 THAT THEY--THEY WOULD HAVE THE OLDER MACOFFICE AS 16 OPPOSED TO THIS NEW WORK THAT WE WERE PARTWAY 17 ALONG ON. 18 QUESTION: MR. GATES, MY QUESTION IS NOT 19 WHAT POSITION MR. MARITZ DID OR DID NOT TAKE. MY 20 QUESTION IS WHETHER ANYONE TOLD YOU, IN OR ABOUT 21 JUNE OF 1997, THAT APPLE WAS TAKING PRETTY 22 SERIOUSLY MICROSOFT'S THREAT TO CANCEL 23 MACOFFICE 97. 24 ANSWER: APPLE MAY HAVE KNOWN THAT SENIOR 25 EXECUTIVES AT MICROSOFT, MARITZ IN PARTICULAR, _________________________________________________________________ PAGE 37 1 THOUGHT THAT IT DIDN'T MAKE BUSINESS SENSE TO 2 COMPLETE THAT UPGRADE. 3 QUESTION: MR. GATES, I'M NOT ASKING YOU 4 WHAT APPLE MAY HAVE KNOWN OR MAY NOT HAVE KNOWN. 5 WHAT I'M ASKING YOU IS WHETHER ANYBODY TOLD YOU, 6 IN OR ABOUT JUNE OF 1997, THAT APPLE WAS TAKING 7 PRETTY SERIOUSLY MICROSOFT'S THREAT TO CANCEL 8 MACOFFICE 97. 9 ANSWER: THOSE PARTICULAR WORDS? 10 QUESTION: TOLD YOU THAT IN WORDS OR IN 11 SUBSTANCE. 12 ANSWER: I THINK I REMEMBER HEARING THAT 13 APPLE HAD HEARD ABOUT MARITZ'S VIEW THAT IT 14 DIDN'T MAKE SENSE TO CONTINUE THE UPGRADE, 15 BUT--AND THAT, YOU KNOW, THEY WANTED US TO 16 CONTINUE THE UPGRADE. BUT I--I DON'T REMEMBER 17 ANY OF THE--IT BEING PHRASED AT ALL THE WAY 18 YOU'RE PHRASING IT. 19 QUESTION: WELL, THE WAY I'M PHRASING IT IS 20 THE WAY THAT MR. WALDMAN PHRASED IT TO YOU IN HIS 21 E-MAIL OF JUNE 27 OF 1997; CORRECT, SIR? 22 ANSWER: WELL, IN READING IT, I SEE THOSE 23 WORDS, YES." 24 (PAUSE.) 25 "QUESTION: MR. GATES, MR. WALDMAN, ON JUNE _________________________________________________________________ PAGE 38 1 27, 1997, SENDS YOU AN E-MAIL THAT SAYS, `THE 2 THREAT TO CANCEL MACOFFICE 97 IS CERTAINLY THE 3 STRONGEST BARGAINING POINT WE HAVE, AS DOING SO 4 WILL DO A GREAT DEAL OF HARM TO APPLE 5 IMMEDIATELY. I ALSO BELIEVE THAT APPLE IS TAKING 6 THIS THREAT PRETTY SERIOUSLY,' CLOSED QUOTE. 7 DO YOU RECALL ANYONE-- 8 ANSWER: DO YOU WANT TO FINISH THE SENTENCE 9 OR NOT? 10 QUESTION: YOU CAN, IF YOU THINK IT IS 11 NECESSARY TO ANSWER THE QUESTION. 12 DO YOU RECALL ANYONE TELLING YOU WHAT I HAVE 13 JUST QUOTED, IN WORDS OR IN SUBSTANCE, IN OR 14 ABOUT JUNE OF 1997? 15 ANSWER: NO." 16 (PAUSE.) 17 "QUESTION: OKAY. LET ME ASK YOU TO LOOK AT 18 A DOCUMENT PREVIOUSLY MARKED AS GOVERNMENT 19 EXHIBIT 260." 20 DID YOU SEND THIS E-MAIL, MR. GATES, ON OR 21 ABOUT JUNE 23, 1996? 22 ANSWER: I DON'T REMEMBER IT SPECIFICALLY, 23 BUT I DON'T HAVE ANY REASON TO DOUBT THAT I DID. 24 QUESTION: IN THE SECOND PARAGRAPH YOU SAY, 25 QUOTE, I HAVE TWO KEY GOALS IN INVESTING IN THE 26 APPLE RELATIONSHIP: ONE, MAINTAIN OUR 27 APPLICATIONS SHARE ON THE PLATFORM; AND TWO, SEE 28 IF WE CAN GET THEM TO EMBRACE INTERNET EXPLORER 29 IN SOME WAY, CLOSED QUOTE. 30 DO YOU SEE THAT? 31 ANSWER: YEAH. 32 QUESTION: DOES THAT REFRESH YOUR 33 RECOLLECTION AS TO WHAT YOUR TWO KEY GOALS WERE 34 IN CONNECTION WITH APPLE IN JUNE OF 1996? 35 ANSWER: FIRST OF ALL, JUNE OF 1996 IS NOT 36 IN THE TIME FRAME THAT YOUR PREVIOUS QUESTION 37 RELATED TO. AND CERTAINLY IN THE E-MAIL TO THIS 38 GROUP, I'M NOT TALKING ABOUT THE PATENT THING, 39 BUT BELIEVE ME, IT WAS OUR TOP GOAL IN THINKING 40 ABOUT APPLE FOR MANY, MANY YEARS BECAUSE OF THEIR _________________________________________________________________ PAGE 40 1 ASSERTIONS. 2 QUESTION: MY TIME FRAME IN MY QUESTION, 3 SIR, WAS A TIME FRAME BEGINNING IN 1996, WHEN YOU 4 BEGAN TO VIEW NETSCAPE OR THE JAVA RUNTIME THREAT 5 AS A COMPETITIVE THREAT TO MICROSOFT. 6 ANSWER: AND THAT WAS AFTER JUNE OF 1996. 7 QUESTION: AND IS IT YOUR TESTIMONY THAT IN 8 JUNE OF 1996 YOU DID NOT CONSIDER NETSCAPE TO BE 9 A COMPETITIVE THREAT TO MICROSOFT? 10 ANSWER: NETSCAPE WAS A COMPETITOR, BUT IN 11 TERMS OF JAVA AND ALL THE RUNTIME-RELATED ISSUES, 12 WE DIDN'T HAVE A CLEAR VIEW OF THAT AT ALL. 13 QUESTION: SO THAT--I WANT TO BE SURE I'VE 14 GOT YOUR TESTIMONY ACCURATELY. 15 IT IS YOUR TESTIMONY THAT IN JUNE OF 1996 16 YOU CONSIDERED NETSCAPE TO BE A COMPETITIVE 17 THREAT, BUT YOU DID NOT CONSIDER JAVA OR JAVA 18 RUNTIME TO BE A COMPETITIVE THREAT; IS THAT YOUR 19 TESTIMONY? 20 ANSWER: WE CONSIDERED NETSCAPE TO BE A 21 COMPETITOR, AND I TOLD YOU EARLIER THAT UNTIL 22 LATE '96, WE WERE UNCLEAR ABOUT OUR POSITION ON 23 VARIOUS JAVA RUNTIME THINGS AND WHAT OTHER 24 COMPANIES WERE DOING AND WHAT THAT MEANT FOR US 25 COMPETITIVELY. _________________________________________________________________ PAGE 41 1 QUESTION: DO YOU AGREE THAT IN JUNE OF 2 1996, THE TWO KEY GOALS THAT YOU HAD IN TERMS OF 3 THE APPLE RELATIONSHIP WERE, QUOTE, ONE, MAINTAIN 4 YOUR APPLICATIONS SHARE ON THE PLATFORM; AND TWO, 5 SEE IF YOU COULD GET APPLE TO EMBRACE INTERNET 6 EXPLORER IN SOME WAY? 7 ANSWER: NO. 8 QUESTION: DO YOU HAVE ANY EXPLANATION FOR 9 WHY YOU WOULD HAVE WRITTEN TO MR. MARITZ AND 10 MR. SILVERBERG ON JUNE 23, 1996, THAT THOSE WERE 11 YOUR TWO KEY GOALS IN THE APPLE RELATIONSHIP? 12 ANSWER: NO, THEY WEREN'T INVOLVED IN THE 13 PATENT ISSUE AT ALL, SO WHEN I WRITE TO THEM, I'M 14 FOCUSED ON THE ISSUES THAT RELATE TO THEM. 15 I DO MENTION PATENTS IN HERE, BUT THAT 16 CERTAINLY WAS THE PRIMARY GOAL AT THIS TIME AND 17 IN SUBSEQUENT TIMES. 18 QUESTION: LET ME BE CLEAR. WHEN YOU WRITE 19 TO MR. MARITZ AND MR. SILVERBERG, YOU TALK ABOUT 20 PATENTS, DO YOU NOT, SIR? 21 ANSWER: WHERE DO YOU SEE THAT? 22 QUESTION: WELL, DID YOU TALK ABOUT PATENTS? 23 ANSWER: DO YOU WANT ME TO READ THE ENTIRE 24 MAIL? 25 QUESTION: HAVE YOU READ IT ENOUGH TO KNOW _________________________________________________________________ PAGE 42 1 WHETHER YOU TALK ABOUT PATENTS? 2 ANSWER: I SAW THE WORD "PATENT" IN ONE 3 PLACE. IF I READ THE WHOLE THING, I COULD FIND 4 OUT IF IT'S IN THE OTHER PLACES AS WELL. 5 QUESTION: YOU DO TALK ABOUT PATENT 6 CROSS-LICENSE, DO YOU NOT, IN THIS MEMO? AND IF 7 YOU WANT TO LOOK AT THE LAST PAGE, FIVE LINES 8 FROM THE BOTTOM. 9 ANSWER: YEAH, THEY WEREN'T INVOLVED IN THE 10 PATENT ISSUES AT ALL, SO IT LOOKS LIKE IN THIS 11 MAIL I JUST MENTION THAT IN A SUMMARY PART, BUT 12 IT WAS OUR TOP GOAL IN OUR DISCUSSIONS WITH 13 APPLE. 14 QUESTION: WHEN YOU WRITE TO MR. MARITZ AND 15 MR. SILVERBERG, YOU DON'T DESCRIBE THAT AS YOUR 16 TOP GOAL. IN FACT, YOU DON'T EVEN DESCRIBE IT AS 17 ONE OF YOUR TWO OR THREE KEY GOALS; CORRECT, SIR? 18 ANSWER: THIS PIECE OF E-MAIL DOESN'T TALK 19 ABOUT THE PATENT GOAL AS THE TOP GOAL. IT'S MOST 20 LIKELY THAT'S BECAUSE THE PEOPLE COPIED ON THE 21 MAIL DON'T HAVE A THING TO DO WITH IT, AND I 22 WOULDN'T DISTRACT THEM WITH IT. 23 QUESTION: I WANT TO BE SURE I HAVE YOUR 24 TESTIMONY CORRECT. 25 IN JUNE OF 1996, WHAT WAS PAUL MARITZ'S _________________________________________________________________ PAGE 43 1 TITLE? 2 ANSWER: HE WAS INVOLVED IN PRODUCT 3 DEVELOPMENT ACTIVITIES. 4 QUESTION: HE WAS INVOLVED IN PRODUCT 5 DEVELOPMENT ACTIVITIES. 6 WHAT WAS HIS TITLE? 7 ANSWER: I DON'T KNOW. SYSTEMS. 8 QUESTION: SYSTEMS? 9 ANSWER: UMM-HMM. 10 QUESTION: DID HE HAVE A TITLE THAT WENT 11 WITH THAT? 12 ANSWER: SENIOR VICE PRESIDENT-SYSTEMS. I 13 DON'T KNOW. 14 QUESTION: SENIOR VICE PRESIDENT-SYSTEMS, I 15 SEE. 16 DID MR. SILVERBERG HAVE A POSITION IN JUNE 17 OF 1996? 18 ANSWER: HE WORKED FOR MR. MARITZ. 19 QUESTION: DID HE HAVE A TITLE? 20 ANSWER: I DON'T KNOW WHAT HIS TITLE WAS AT 21 THE TIME. HE WOULD HAVE BEEN AN OFFICER OF SOME 22 KIND. 23 QUESTION: AN OFFICER OF SOME KIND. 24 SO, YOU'RE WRITING A MEMO TO PAUL MARITZ, A 25 SENIOR VICE PRESIDENT; AND BRAD SILVERBERG, AN _________________________________________________________________ PAGE 44 1 OFFICER OF SOME KIND, AND YOU'RE SENDING COPIES 2 TO FOUR OTHER PEOPLE ON THE SUBJECT OF THE APPLE 3 MEETING. AND YOU SAY, `I HAVE TWO KEY GOALS IN 4 INVESTING IN THE APPLE RELATIONSHIP.' 5 ANSWER: THAT'S QUITE DISTINCT THAN ANY 6 GOALS I MIGHT HAVE FOR A DEAL WITH APPLE. IT 7 SAYS, `I HAVE TWO KEY GOALS IN INVESTING IN THE 8 APPLE RELATIONSHIP,' NOT, `I HAVE TWO KEY GOALS 9 FOR A DEAL WITH APPLE.' 10 QUESTION: WELL, SIR, AT THE BOTTOM YOU SAY 11 WHAT YOU PROPOSE IN TERMS OF A DEAL, AND YOU TALK 12 ABOUT WHAT APPLE WILL GET OUT OF THE DEAL AND 13 WHAT MICROSOFT WILL GET OUT OF THE DEAL; CORRECT, 14 SIR? 15 ANSWER: DO YOU WANT ME TO READ TO YOU THE 16 E-MAIL? I MEAN, I DON'T KNOW ANYTHING MORE THAN 17 JUST WHAT IT SAYS IN THE E-MAIL. I'M GLAD TO 18 READ IT TO YOU. 19 QUESTION: WELL, SIR, DOES IT SAY AT THE 20 BOTTOM OF THE E-MAIL THAT YOU ARE PROPOSING 21 SOMETHING WITH APPLE AND YOU ARE IDENTIFYING WHAT 22 APPLE WOULD GET UNDER YOUR PROPOSED DEAL AND WHAT 23 MICROSOFT WOUL