1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA - - - - - - - - - - - - - - - - - -X UNITED STATES OF AMERICA, : : PLAINTIFF, : : V. : C.A. NO. 98-1232 : MICROSOFT CORPORATION, : : DEFENDANT. : - - - - - - - - - - - - - - - - - -X STATE OF NEW YORK, ET AL., : : PLAINTIFFS, : : V. : C.A. NO. 98-1233 : MICROSOFT CORPORATION, : : DEFENDANT. : - - - - - - - - - - - - - - - - - -X MICROSOFT CORPORATION, : : COUNTERCLAIM-PLAINTIFF, : : V. : : DENNIS C. VACCO, ET AL., : : COUNTERCLAIM-DEFENDANTS. : - - - - - - - - - - - - - - - - - -X WASHINGTON, D.C. MAY 24, 2000 2:00 P.M. (P.M. SESSION) VOLUME 79 TRANSCRIPT OF TRIAL BEFORE THE HONORABLE THOMAS P. JACKSON UNITED STATES DISTRICT JUDGE 2 FOR THE PLAINTIFFS: DAVID BOIES, ESQ. PHILLIP R. MALONE, ESQ. DOUGLAS MELAMED, ESQ. JOHN COVE, ESQ. ANTITRUST DIVISION U.S. DEPARTMENT OF JUSTICE P.O. BOX 36046 SAN FRANCISCO, CA 94102 FOR THE DEFENDANT: JOHN L. WARDEN, ESQ. STEVEN L. HOLLEY, ESQ. RICHARD C. PEPPERMAN, II, ESQ. THEODORE EDELMAN, ESQ. RICHARD J. UROWSKY, ESQ. MICHAEL LACOVARA, ESQ. SULLIVAN & CROMWELL 125 BROAD STREET NEW YORK, NY 10004 WILLIAM H. NEUKOM, ESQ. DAVID A. HEINER, ESQ. MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND, WA 98052-6399 COURT REPORTER: DAVID A. KASDAN, RMR, CRR MILLER REPORTING CO., INC. 507 C STREET, N.E. WASHINGTON, D.C. 20003 (202) 546-6666 3 INDEX PAGE REBUTTAL ARGUMENT BY MR. BOIES 8 REBUTTAL ARGUMENT BY MR. WARDEN 28 4 1 2 P R O C E E D I N G S THE COURT: MR. BOIES, BEFORE YOU START, THERE 3 ARE SEVERAL POINTS MADE IN THE AMICUS BRIEF OF THE 4 COMPUTER AND COMMUNICATIONS INDUSTRY ASSOCIATION AND 5 SOFTWARE AND INFORMATION INDUSTRY ASSOCIATION THAT I WOULD 6 LIKE BOTH YOU AND MR. WARDEN TO ADDRESS AT SOME POINT, AND 7 IF YOU WANT TO RECESS AND WANT TO REFLECT ON THEM, WE 8 COULD CERTAINLY DO THAT. 9 MR. WARDEN, ON PAGE 18 OF THAT BRIEF, THERE IS A 10 QUOTATION, OR AT LEAST A PROPOSITION, FOR WHICH 11 MR. BALLMER IS CITED AS THE SOURCE, AND THAT READS AT THE 12 BOTTOM OF THE SECOND FULL PARAGRAPH, OR THE FIRST FULL 13 PARAGRAPH, "INDEED, 40 PERCENT OF THE FUNCTIONALITY OF THE 14 DESKTOP VERSION OF WINDOWS 2000 IS USELESS WITHOUT A 15 WINDOWS 2000 SERVER." 16 COMMENT ON THAT, IF YOU WILL, AT SOME POINT. 17 AND I WOULD LIKE TO HAVE YOU THEN ON PAGE 35 AND FOOTNOTE 11, THE AMICUS BRIEF 18 ALLUDES TO SECTION 3(I) OF THE PROPOSED FINAL JUDGMENT TO 19 THE EFFECT THAT IT REQUIRES MICROSOFT, UPON ANY NEW 20 OPERATING SYSTEM TEMPORARY REQUIREMENT--UPON ANY NEW 21 OPERATING SYSTEM RELEASE, TO KEEP THE IMMEDIATELY PRIOR 22 VERSION OF WINDOWS AVAILABLE AT AN UNCHANGED PRICE. 23 SUGGESTION IS IF THAT TEMPORARY REQUIREMENT ALSO WERE 24 EXTENDED TO OFFICE AND TO LICENSEES OTHER THAN OEM'S, BOTH 25 MICROSOFT'S SUCCESSOR COMPANIES WOULD BE COMPETING THE 5 1 SUFFICIENTLY AGAINST THEMSELVES TO RESTRAIN PRICE 2 INCREASES. 3 AND THEN AGAIN ON PAGE 56, THE AMICUS BRIEF 4 SUGGESTS THAT AS AN ALTERNATIVE TO MAKING--TO ESTABLISHING 5 A THIRD COMPANY MARKETING ONLY THE INTERNET EXPLORER, THE 6 ALTERNATIVE SUGGESTION WOULD BE TO REQUIRE IN THE DECREE A 7 PROVISION THAT WOULD REQUIRE THAT THE INTERNET EXPLORER BE 8 LICENSED ON AN OPEN-SOURCE BASIS AT ZERO ROYALTY. 9 AND THEN FINALLY, WITH RESPECT TO YOUR ALLUSION 10 TO TRADITIONAL EQUITABLE REMEDIES, MR. WARDEN, YOU 11 INDICATED THAT CERTAIN PROVISIONS REPRESENTED A 12 CONFISCATION OF INTELLECTUAL PROPERTY RIGHTS BELONGING TO 13 MICROSOFT, AND I ASK YOU IF FORFEITURE IS NOT A 14 TRADITIONAL EQUITABLE REMEDY. 15 THAT SAID, I'M PREPARED TO HEAR FROM BOTH OF YOU, 16 AND AS I SAY, I WILL ALLOW YOU ANY ADDITIONAL TIME YOU 17 WANT TO RESPOND TO MY QUESTIONS TO CONFER WITH YOUR 18 COLLEAGUES. 19 PREROGATIVE. 20 21 AND IF YOU CHOOSE NOT TO RESPOND, THAT'S YOUR MR. BOIES: YOUR HONOR, I WILL PROCEED, AND MR. WARDEN HAS INDICATED HE WILL RESPOND AFTERWARDS. 22 THE COURT: ALL RIGHT. 23 MR. BOIES: WITH RESPECT TO THE FIRST ISSUE 24 RAISED BY THE COURT IN TERMS OF THE EXTENT TO WHICH 40 25 PERCENT OF WINDOWS NEEDS THE SERVER, THAT IS SOMETHING 6 1 THAT I THINK MR. WARDEN IS PROBABLY GOING TO RESPOND TO. 2 3 I THINK IT'S PROBABLY MR. WARDEN'S MR. BOIES: I ASSUME THAT MR. BALLMER WAS TELLING RESPONSE. 4 5 THE COURT: THE TRUTH WHEN HE SAID IT. 6 THE COURT: WELL, I'M NOT SURE IF IT'S SUPPOSED 7 TO BE A QUOTE ATTRIBUTED TO MR. BALLMER OR IF IT'S 8 ATTRIBUTED TO SOMEONE ELSE. 9 10 MR. BOIES: WHETHER OR NOT IT IS, I THINK MR. WARDEN IS THE RIGHT PERSON TO ADDRESS THAT. 11 THE COURT: I THINK MR. WARDEN CAN ADDRESS THAT. 12 MR. BOIES: WITH RESPECT TO THE ISSUE OF A 13 SEPARATE COMPANY FOR INTERNET EXPLORER OR A SEPARATE 14 ROYALTY FREE LICENSING FOR INTERNET EXPLORER, THE PROPOSAL 15 THAT WE HAVE PUT FORWARD WOULD HAVE INTERNET EXPLORER IN 16 BOTH OF THE TWO COMPANIES, AND INTERNET EXPLORER IS 17 ALREADY--MICROSOFT, IN ORDER TO GET ITS TECHNOLOGIES USED, 18 HAS MADE IT WIDELY AVAILABLE. 19 THE COURT: THEIR ROYALTY. 20 MR. BOIES: EXACTLY. SO, WE WOULD THINK IT WOULD 21 BE A RELATIVELY SMALL STEP TO DO THAT, AND I'M SURE THAT 22 THEY WOULD HAVE ANY OBJECTION TO DOING THAT, OR THEY 23 MIGHT. 24 ESSENTIAL FOR ACCOMPLISHING THE PURPOSES OF RESTORING 25 COMPETITION. THAT IS NOT SOMETHING THAT WE HAD THOUGHT THAT WAS 7 1 2 THE COURT: THE PROVISION IN 3(I) THAT REQUIRES A CONTINUED ISSUANCE IN SUPPORT OF PRIOR VERSIONS? 3 MR. BOIES: YES. 4 THE COURT: AND ON IDENTICAL TERMS? 5 MR. BOIES: ON IDENTICAL TERMS. 6 THE COURT: TO JUST OEM'S OR TO ANY LICENSEE? 7 MR. BOIES: I THINK IT SHOULD BE ANY LICENSEE. 8 THE COURT: WELL, AT THE MOMENT, IT APPARENTLY 9 RUNS ONLY TO OEM'S. 10 MR. BOIES: I THINK THAT'S RIGHT BECAUSE I THINK 11 WE WERE FOCUSING ON REALLY OEM'S AS THE PRIMARY LICENSEE, 12 BUT I THINK IN TERMS OF THE WINDOWS LICENSE, I THINK THE 13 AMICUS IS CORRECT, THAT IT SHOULD BE ANY LICENSEE. 14 THE COURT: OKAY. 15 MR. BOIES: WITH RESPECT TO THE SECOND HALF OF 16 THE COURT'S QUESTION WITH RESPECT TO OFFICE, I DON'T THINK 17 WE THINK THAT THE RECORD IS SUFFICIENT TO IMPOSE A 18 REQUIREMENT OF NOT ALLOWING AN INCREASE IN THE PRICE OF 19 OFFICE. 20 THE COURT: OKAY. 21 MR. BOIES: I THINK THERE ARE OBVIOUSLY SOME 22 ATTRACTIVE PROCOMPETITIVE ASPECTS TO IT, BUT I THINK OUR 23 VIEW IS HAVING THOUGHT ABOUT IT AND CONSULTED BRIEFLY 24 AFTER THE COURT RAISED THE QUESTION, WE DON'T THINK THAT 25 THE RECORD IN THIS CASE WOULD SUPPORT THAT. 8 1 2 THE COURT: FAIR ENOUGH. REBUTTAL ARGUMENT BY COUNSEL FOR PLAINTIFFS 3 MR. BOIES: THIS MORNING, I INDICATED THAT THERE 4 WERE AT LEAST TEN EXAMPLES OF CONDUCT WHICH THE COURT HAD 5 FOUND ILLEGAL THAT MICROSOFT'S PROPOSED REMEDY WOULD NOT 6 ADDRESS. 7 TWO OF THE TEN. 8 HAS NOT CONTESTED IT. 9 MR. WARDEN HAS CONTESTED THAT WITH RESPECT TO THAT IS, WITH RESPECT TO EIGHT OF THEM HE WITH RESPECT TO THE TWO THAT HE HAS CONTESTED, HE 10 SAYS 6(B) PREVENTS DISCRIMINATION AGAINST ISV'S. 11 IF YOU LOOK AT 6(B) OF THE MICROSOFT PROPOSED REMEDY, WHAT 12 YOU SEE IS THAT MICROSOFT CANNOT CONDITION THE RELEASE OF 13 TECHNICAL INFORMATION ON ISV'S AGREEING NOT TO WRITE 14 PLATFORM SOFTWARE FOR APPLICATIONS FOR A PLATFORM SOFTWARE 15 TO COMPETE WITH ANY MICROSOFT SOFTWARE. 16 A PROVISO THAT MAY WEAKEN IT FURTHER. 17 HOWEVER, AND THEN THERE'S BUT THE MAIN POINT IS THAT THAT SAYS NOTHING AT 18 ALL ABOUT THE POINT I MADE THIS MORNING, WHICH IS THE 19 FIRST-WAVE AGREEMENTS SAY THAT IF YOU GET THIS EARLY 20 DISCLOSURE, YOU MUST WRITE MICROSOFT'S VERSION OF JAVA. 21 YOU MUST WRITE MICROSOFT'S BROWSER INTO YOUR PROGRAMS. 22 EVEN IF THEY'RE NOT PRECLUDED FROM ALSO WRITING SOMEBODY 23 ELSE'S MIDDLEWARE, BY REQUIRING THEM TO MAKE MICROSOFT'S 24 MIDDLEWARE UNIVERSAL, IT HAS EXACTLY THE SAME EFFECT THAT 25 THE COURT FOUND WITH RESPECT TO MICROSOFT'S REQUIREMENT 9 1 THAT ITS BROWSER BE UNIVERSAL. IT DISCOURAGES PEOPLE, 2 EVEN THOUGH IT DOESN'T MAKE THEM AGREE NOT TO DO IT. 3 PRACTICAL EFFECT IS TO EXCLUDE THEM, AND THE PRACTICAL 4 EFFECT IS TO TIE ISV'S WRITING FOR MICROSOFT'S BROWSER, 5 MICROSOFT'S VERSION OF JAVA, MICROSOFT'S OTHER MIDDLEWARE, 6 TO ACCESS TO MICROSOFT'S MONOPOLY OPERATING SYSTEM. THE 7 THE COURT: OKAY. 8 MR. BOIES: SO, THEIR PROPOSAL REALLY DOESN'T 9 ADDRESS WHAT WE WERE TALKING ABOUT AT ALL. 10 THE SECOND ACT THAT THEY SAID THEY HAD ADDRESSED 11 WAS RETALIATION AGAINST OEM'S, AND HE DIRECTED THE COURT 12 TO PARAGRAPH FOUR OF THEIR ORDER. 13 PARAGRAPH FOUR IS THAT IT DOES NOT AT ALL PROHIBIT 14 RETALIATION AGAINST OEM'S EXCEPT FOR CANCELING A LICENSE. 15 THAT IS, IT SAYS YOU CAN'T CANCEL A LICENSE OR REFUSE TO 16 GRANT A LICENSE, BUT IT ALLOWS MICROSOFT TO RETALIATE IN 17 EACH OF THE WAYS THAT I IDENTIFIED THIS MORNING: PRICE 18 DISCRIMINATION, WITHHOLDING EARLY ACCESS TO TECHNICAL 19 INFORMATION, COOPERATIVE ADVERTISING, COOPERATIVE 20 VENTURES. 21 REMEMBER, GX 433, FROM THE TRIAL WHERE COMPAQ WAS 22 DISCUSSING HOW RETALIATORY WOULD MICROSOFT GET, AND THESE 23 WERE EXAMPLES OF THE WAY THAT MICROSOFT COULD RETALIATE 24 AGAINST COMPAQ, DID--AS THE RECORD SHOWS AND THE COURT 25 FOUND--RETALIATE AGAINST OTHER OEM'S. THE PROBLEM WITH THERE WAS AN EXHIBIT I'M SURE THE COURT WILL 10 1 AND NONE OF THOSE KINDS OF RETALIATIONS THAT ARE 2 LISTED THERE OR THAT THE COURT FOUND WOULD BE COVERED BY 3 MICROSOFT'S PROPOSED REMEDY, SO THAT MICROSOFT'S REMEDY 4 DOESN'T EVEN ADDRESS IN ANYTHING LIKE AN ADEQUATE FASHION 5 EITHER OF THE TWO OUT OF TEN EXAMPLES THAT I GAVE THIS 6 MORNING. 7 MR. WARDEN RAISED SOME QUESTIONS ABOUT THREE 8 SUBSECTIONS OF THE GOVERNMENT'S PROPOSED REMEDY, AND I 9 WANT TO ADDRESS EACH ONE OF THOSE SEPARATELY. 10 FIRST, HE RAISED A QUESTION ABOUT PARAGRAPH 11 3(A)(III)(4), WHICH IS A PROVISION THAT ALLOWS OEM'S TO 12 AUTOMATICALLY LAUNCH OR MAKE THE DEFAULT NON-MICROSOFT 13 MIDDLEWARE. 14 CLAIMED THAT THEY DIDN'T WANT TO PREVENT OEM'S FROM DOING. 15 AND INDEED, THE COURT WILL REMEMBER MR. KEMPIN SAYING THAT 16 HE HAD ARRANGED ORAL CONVERSATIONS, ORAL AGREEMENTS, WITH 17 TWO OEM'S WHO WOULD ALLOW THEM TO DO THAT. 18 PUT IT IN WRITING, BUT THEY HAD DONE IT WITH TWO OEM'S 19 ORALLY, AND THIS IS SIMPLY DESIGNED TO MAKE SURE THAT THAT 20 IS, IN FACT, CARRIED OUT AND MADE AVAILABLE WITHOUT 21 DISCRIMINATION. 22 NOW, THAT IS EXACTLY WHAT MICROSOFT AT TRIAL THEY HAVEN'T THE OTHER ASPECT OF SUBSECTION FOUR THAT 23 MR. KEMPIN DID NOT ADDRESS IS REMOVING THE MEANS OF 24 END-USER ACCESS, WHICH IS ALSO THE POINT THAT MR. WARDEN 25 MADE WITH RESPECT TO SUBPARAGRAPH 3(G). AND HE SAYS IT 11 1 WOULD TAKE MANY, MANY MONTHS AND ALL THE RESOURCES OF THE 2 COMPANY TO REMOVE END-USER ACCESS. 3 AWARE FROM MR. FELTEN'S TESTIMONY THAT WITH FAR LESS 4 RESOURCES THAN MICROSOFT AND FAR LESS PERSONNEL, HE WAS 5 ABLE TO DO AT LEAST A SUBSTANTIAL JOB IN DOING THAT, AND I 6 THINK THE TESTIMONY WAS CONSISTENT THROUGHOUT THAT 7 MICROSOFT WOULD HAVE A VERY EASY JOB IN DOING THAT. 8 9 THE COURT IS OBVIOUSLY AND, IN FACT, AS THE COURT HAS FOUND AND THE EVIDENCE SHOWED, MICROSOFT HAS ADD/REMOVE FEATURES FOR 10 MORE THAN 80 FEATURES OF THEIR PROGRAM. 11 DOESN'T THREATEN THEIR MONOPOLY THEY'RE HAPPY TO PUT IN AN 12 ADD/REMOVE FEATURE FOR. 13 TECHNOLOGICAL DIFFICULTY. 14 STRATEGY. 15 ANYTHING THAT AND IT'S NOT A QUESTION OF IT IS A QUESTION OF MARKETING THE THIRD POINT HE MADE WAS WITH RESPECT TO 3(F), 16 WHICH IS JUST A BAN ON CONTRACTUAL TYING, AND HE MADE A 17 REFERENCE THAT I THINK WAS JUST AN INADVERTENT MISTAKE 18 ABOUT THAT INVOLVING REMOVAL OF CODE. 19 SECTION 3(F) INVOLVES REMOVAL OF CODE. 20 YOU CAN'T CONTRACTUALLY TIE OR CONDITION THE GRANTING OF 21 ONE LICENSE ON LICENSE FOR ANOTHER PRODUCT. 22 I DON'T THINK WHAT IT SAYS IS EVEN WITH RESPECT TO 3(G), THE ONE I WAS JUST 23 TALKING ABOUT, WHERE YOU ARE DEALING WITH PRODUCTS THAT 24 HAVE BEEN BOUND TOGETHER TECHNOLOGICALLY, THE REQUIREMENT 25 IS TO REMOVE END-USER ACCESS OR TO GIVE OEM'S A CHOICE. 12 1 IT IS NOT RESTRICTING MICROSOFT'S ABILITY TO DESIGN ITS 2 PRODUCTS. 3 THE LAST POINT THAT HE MADE WAS HE OBJECTED TO 4 THE SECURE FACILITY IN 3(B). 5 PEOPLE TO HAVE ACCESS TO THE API'S. 6 MR. WARDEN, HE WASN'T REALLY OBJECTING TO THAT, BUT HE WAS 7 OBJECTING TO THE FACT THAT PEOPLE COULD COME TO THE 8 SECURED FACILITY, AND HE WAS WORRIED ABOUT PIRATES. 9 3(B) IS DESIGNED TO ALLOW AND AS I UNDERSTOOD WELL, FIRST, ONE OF THE REASONS THAT IT'S A 10 SECURED FACILITY, SO-CALLED CLEAN ROOM, IS SO THAT PEOPLE 11 CAN COME THERE UNDER STRICT SUPERVISION. 12 ANYTHING OUT. 13 THEY ARE ABLE TO COME IN AND TEST WHAT THEY HAVE, BUT 14 THEY'RE NOT ABLE TO STEAL THE CODE. 15 LIMITED TO QUALIFIED REPRESENTATIVES, SO THEY HAVE A RIGHT 16 TO OBJECT IF THEY THINK ANYBODY WHO IS COMING IN IS NOT A 17 QUALIFIED REPRESENTATIVE OR IS, IN MR. WARDEN'S WORDS, A 18 "PIRATE." 19 THEY DON'T TAKE THEY AREN'T ABLE TO TAKE OUT THE CODE. THE PROVISION IS AND THE SOLE PURPOSE OF USING THAT ROOM HAS TO BE 20 TO PERMIT INTEROPERABILITY; THAT'S SPECIFIED IN THE 21 PROVISION. 22 DOES ATTEMPT TO MISUSE THE INFORMATION, WHICH I THINK IS 23 VERY DIFFICULT, GIVEN THE CLEAN ROOM, THE SECURE ROOM 24 RESTRICTIONS. 25 SO, THERE'S A WAY OF ENFORCING THAT IF ANYBODY NOW, MR. WARDEN SAYS, "ONCE YOU LET ANYBODY SEE 13 1 THIS SOURCECODE, IT'S TOO LATE. YOU CAN'T HEM IT IN." 2 WELL, THE PROBLEM WITH THAT ARGUMENT, YOUR HONOR, IS THAT 3 THE RECORD IS ABSOLUTELY CLEAR THAT MICROSOFT NOW MAKES 4 ITS SOURCECODE AVAILABLE TO COMPETITORS. 5 GOVERNMENT EXHIBITS 433, 1519, 1125, AND 804, WHAT YOU SEE 6 IS THAT MICROSOFT HAS MADE THE SOURCECODE AVAILABLE TO 7 COMPAQ, BRISTOL, COMPUSERVE AND AOL. 8 HAS A BROAD ACCESS TO WINDOWS SOURCECODE, AND MICROSOFT 9 WAS PREPARED TO SHARE THE SOURCECODE WITH IBM, A FIRM THAT 10 IT NOW ASSETS IS A TERRIBLE COMPETITOR AND SHOULD NEVER BE 11 ABLE TO GET INSIDE THE CLEAN ROOM. 12 SHARE THAT SOURCECODE WITH IBM WITHOUT SECURED FACILITY 13 RESTRICTIONS IF IBM WOULD AGREE TO DO THE THINGS THAT 14 MICROSOFT WANTED. 15 2164 AND 2167 AND MR. NORRIS'S TESTIMONY ON JUNE 8, 1999, 16 AT PAGES 26 AND 27, YOU WILL SEE THE EVIDENCE FOR THAT. 17 SO, THE FACT OF THE MATTER IS THAT NOT ONLY IS IF YOU LOOK AT AOL, IN PARTICULAR, THEY WERE PREPARED TO AND IF YOU LOOK AT GOVERNMENT EXHIBITS 18 THIS ENTIRELY SECURE AND MICROSOFT'S LEGITIMATE INTERESTS 19 ENTIRELY PROTECTED, BUT MICROSOFT'S ARGUMENT IS 20 INCONSISTENT WITH ITS OWN PRACTICE OUTSIDE THIS COURTROOM. 21 LET ME TURN TO THE ISSUE OF DIVESTITURE. AND 22 WITH RESPECT TO THE DIVESTITURE, MR. WARDEN'S ARGUMENT IS 23 ESSENTIALLY AN ATTEMPT TO REARGUE THE MERITS OF THE CASE. 24 WHAT HE SUGGESTS IS THAT THE COURT HAS NOT FOUND ANY 25 CAUSAL RELATIONSHIP OR ANY EFFECT TO MICROSOFT'S CONDUCT. 14 1 WE THINK THAT THAT IS SIMPLY NOT CONSISTENT WITH ANY FAIR 2 READING OF THE COURT'S CONCLUSIONS OF LAW AND FINDINGS OF 3 FACT. 4 FOR EXAMPLE, JUST SOME EXAMPLES HERE, AT 5 CONCLUSION PAGE NINE, MICROSOFT'S CAMPAIGNS SUCCEEDED IN 6 PREVENTING FOR SEVERAL YEARS AND PERHAPS PERMANENTLY 7 NAVIGATOR AND JAVA FROM FULFILLING THEIR POTENTIAL TO OPEN 8 THE MARKET FOR INTEL-COMPATIBLE PC OPERATING SYSTEMS TO 9 COMPETITION ON THE MERITS. BECAUSE MICROSOFT ACHIEVED 10 THIS RESULT THROUGH EXCLUSIONARY ACTS THAT LACKED 11 PROCOMPETITIVE JUSTIFICATION, THE COURT DEEMS MICROSOFT'S 12 CONDUCT THE MAINTENANCE OF MONOPOLY POWER BY 13 ANTICOMPETITIVE MEANS. 14 BEEN CLEARER THAN THAT. 15 I DON'T THINK THE COURT COULD HAVE IN FINDINGS AT 411, THE COURT SAYS THAT ALTHOUGH 16 THERE IS INSUFFICIENT EVIDENCE TO FIND THAT ABSENT 17 MICROSOFT'S ACTIONS, NAVIGATOR AND JAVA ALREADY WOULD HAVE 18 IGNITED GENUINE COMPETITION IN THE MARKET FOR INTEL 19 OPERATING SYSTEMS, IT IS CLEAR THAT MICROSOFT HAS RETARDED 20 AND PERHAPS ALTOGETHER EXTINGUISHED THE PROCESS BY WHICH 21 THESE TWO MIDDLEWARE TECHNOLOGIES COULD HAVE FACILITATED 22 THE INTRODUCTION OF COMPETITION INTO AN IMPORTANT MARKET. 23 IN FINDINGS 377, 378, 383, 407, 412, 411, AND THE 24 CONCLUSIONS AT 19 AND 20 AND 15, THE COURT REPEATEDLY 25 STRESSES THE SUBSTANTIAL ANTICOMPETITIVE EFFECT THAT 15 1 MICROSOFT'S ACTION HAS HAD. AND IT SIMPLY IS NOT, IN OUR 2 VIEW--ALTHOUGH THE COURT IS OBVIOUSLY THE BEST JUDGE OF 3 ITS OWN WRITINGS, BUT CERTAINLY OUR READING OF THOSE 4 WRITINGS CANNOT BE SQUARED WITH THE IDEA THAT THE COURT 5 HAS NOW FOUND THAT MICROSOFT HAS SUBSTANTIALLY AND 6 REPEATEDLY ADVERSELY AFFECTED COMPETITION IN THIS MARKET. 7 THERE IS NO COURT CASE, AND CERTAINLY THE AREEDA 8 TREATISE DOES NOT SET FORTH ANY PARTICULAR BUT-FOR TEST OR 9 PROBABILITY TEST; THEY CAN'T CITE A CASE FOR THAT. 10 INDEED, THE LAW IS EXACTLY THE CONTRARY. 11 UNITED SHOE, UNITED SHOE WAS A CASE IN WHICH THEY GOT 12 THEIR MONOPOLY UNLAWFULLY. 13 ANY CAUSAL CONNECTION. 14 LEASING, WAS A PRACTICE THAT COMPANIES WITHOUT MONOPOLY 15 POWER ARE ENTIRELY FREE TO ENGAGE IN. 16 MR. WARDEN LIKES TO SAY, A UNITARY COMPANY. 17 COURT WAS RELUCTANT TO BREAK THE COMPANY UP. 18 COURT IN 1980 RULED IT HAD TO BE BROKEN UP. 19 REFERS TO THIS AS A CONSENT DECREE. 20 CONSENT DECREE THAT WAS NEGOTIATED AFTER THE SUPREME COURT 21 RULED THAT THE DISTRICT COURT'S REFUSAL TO PROCEED WAS 22 INAPPROPRIATE. 23 IF YOU TAKE THERE WAS NO FINDING THERE WAS THE PRACTICE THAT WAS ATTACKED, IT WAS, AS THE DISTRICT THE SUPREME MR. WARDEN WELL, IT WAS A WITH RESPECT TO THE ISSUE AS TO WHETHER THE 24 BROWSER THREAT WAS JUST A SPECULATIVE THREAT, MR. WARDEN 25 SAYS, "WELL, NO MATTER WHAT THE COURT FOUND, THE COURT'S 16 1 RULING IN ERROR BECAUSE THE BROWSER WAS JUST A SPECULATIVE 2 THREAT." 3 FINDINGS. 4 CERTAINLY DIDN'T VIEW THIS AS A SPECULATIVE THREAT. 5 VIEWED IT AS A VERY REAL THREAT, AND IT WAS. 6 THE COURT HAS EXTENSIVELY DEALT WITH THIS IN ITS AND, OF COURSE, MICROSOFT AND BILL GATES THEY THE NEXT ARGUMENT THAT MICROSOFT MAKES IS THAT 7 THE REMEDIES SHOULD BE LIMITED BECAUSE THE LAW WAS 8 UNCLEAR, AND HE SAYS THE COURT OF APPEALS MAKES SECTION 1 9 LAW OF TYING UNCLEAR. NOW, FIRST OF ALL, TYING IS ONE 10 ASPECT, A NOT UNIMPORTANT ASPECT OF THE CASE, BUT ONLY ONE 11 ASPECT OF THEIR MONOPOLIZATION. 12 SECOND, THE LAW WITH RESPECT TO SECTION 2 TYING 13 HAS NEVER BEEN UNCLEAR. 14 SUGGEST THAT A COMPANY WITH MONOPOLY POWER COULD ENGAGE IN 15 THIS KIND OF CONDUCT. 16 EVEN THE COURT OF APPEALS DIDN'T SO, SINCE THE PRIMARY BASIS OF THE REMEDY, AND 17 CERTAINLY THE PRIMARY BASIS OF THE DIVESTITURE REMEDY, IS 18 SECTION 2, THERE IS NO LACK OF CLARITY WITH RESPECT TO THE 19 LAW. 20 MICROSOFT ALSO SAYS THAT THIS CASE WAS NOT ABOUT 21 OFFICE, AND THEREFORE OFFICE SHOULD NOT BE INVOLVED IN ANY 22 REMEDY. 23 CASE WAS ABOUT OFFICE IN A NUMBER OF RESPECTS. 24 ABOUT THEIR USE OF OFFICE IN ORDER TO FORCE APPLE TO DO 25 ITS BIDDING IN THE MIDDLEWARE AREA. THAT MISSES THE POINT ON TWO AREAS. FIRST, THE IT WAS IT WAS ALSO ABOUT 17 1 THEIR USE OF THEIR MONOPOLY POWER WITH RESPECT TO THE 2 OPERATING SYSTEM TO PENALIZE PEOPLE THAT COMPETED WITH 3 OFFICE. 4 AND 132 ABOUT HOW MICROSOFT PENALIZED IBM AND OTHER PEOPLE 5 FOR DISTRIBUTING PRODUCTS THAT COMPETED WITH OFFICE, AND 6 THEY USED THEIR MONOPOLY POWER IN THE OPERATING SYSTEM TO 7 DO THAT. 8 9 AND THE COURT MADE FINDINGS AT FINDINGS 127, 129, SO, THE FIRST PART IS THAT THE CASE WAS IN A SIGNIFICANT WAY--THE CASE WAS IN A SIGNIFICANT WAY ABOUT 10 OFFICE. BUT EVEN IF IT HAD NOT BEEN DIRECTLY ABOUT 11 OFFICE, IT WAS ABOUT APPLICATIONS BARRIER TO ENTRY AND 12 ABOUT MIDDLEWARE, AND THAT'S REALLY WHAT THE REMEDY IS 13 STRIKING AT. 14 MICROSOFT COMES FORWARD WITH THIS DEFINITION OF 15 WHAT THEY CALL "UNITARY COMPANIES" THAT ARE NOT SUPPOSED 16 TO BE BROKEN UP. 17 UNITARY COMPANY THAT WAS BROKEN UP WAS UNITED SHOE. 18 IN ADDITION, WITH RESPECT TO BOTH AMERICAN NOW, THE FIRST EXAMPLE, OF COURSE, OF A 19 TOBACCO AND PARAMOUNT, ALTHOUGH THEY WERE SEPARATE 20 ENTITIES, THE COURT DIDN'T JUST BREAK UP AND SEPARATE 21 CORPORATE ENTITIES. 22 THOSE CORPORATE ENTITIES AND PUT ASSETS OUT OF ONE AND PUT 23 THEM IN ANOTHER. 24 INCONSISTENT WITH DIVESTITURE OF UNITARY COMPANY. 25 IN FACT, ENTIRELY CONSISTENT WITH IT, AND THERE IS NOT A IT REACHED INTO THE INNER INNARDS OF THIS IS NOT A SITUATION THAT IS IT IS, 18 1 SINGLE CASE AND NOT A SINGLE COMMENTATOR THAT HAS EVER 2 SUGGESTED THAT DIVESTITURE SHOULD NOT BE APPLIED TO A, 3 QUOTE, UNITARY COMPANY. 4 INDEED, IN THE MOST RECENT UNITARY COMPANY, AT&T, 5 JUDGE GREENE TALKED ABOUT THE BENEFITS OF DIVESTITURE 6 WHERE HE SAYS IN WORDS THAT I THINK THE COURT MAY SEE SOME 7 PARALLEL WITH THE FACTS OF THIS CASE, "IT WOULD BE 8 DIFFICULT TO FORMULATE AN ORDER THAT WOULD EFFECTIVELY 9 DEAL WITH ALL OF THE DIFFERENT KINDS OF ANTI-COMPETITIVE 10 BEHAVIOR WITH RESPECT TO MANY DIFFERENT SUBJECTS. 11 IS EVIDENCE THAT SUGGESTS THAT AT&T'S PATTERN DURING THE 12 LAST 30 YEARS HAS BEEN TO SHIFT FROM ONE ANTICOMPETITIVE 13 ACTIVITY TO ANOTHER, AS VARIOUS ALTERNATIVES WERE 14 FORECLOSED THROUGH THE ACTION OF REGULATORS OR THE COURTS 15 OR AS A RESULT OF TECHNICAL DEVELOPMENT. 16 BACKGROUND, IT IS UNLIKELY THAT, REALISTICALLY, AN 17 INJUNCTION COULD BE DRAFTED THAT WOULD BE BOTH 18 SUFFICIENTLY DETAILED TO BAR SPECIFIC ANTICOMPETITIVE 19 CONDUCT YET SUFFICIENTLY BROAD TO PREVENT THE VARIOUS 20 CONCEIVABLE KINDS OF BEHAVIOR THAT AT&T MIGHT EMPLOY IN 21 THE FUTURE." 22 THERE IN VIEW OF THIS NOW, OF COURSE, MICROSOFT'S CONDUCT HAS NOT GONE 23 ON FOR 30 YEARS, BUT IT HAS GONE ON, AS THE COURT HAS 24 FOUND, FOR MANY YEARS; AND IT HAS, JUST AS AT&T'S CONDUCT 25 DID, SHIFTED FROM ONE PATTERN TO ANOTHER TO MEET EACH OF 19 1 THE THREATS THAT MICROSOFT HAS PERCEIVED. 2 MICROSOFT NEXT ARGUES THAT COMPETITION IS FOR THE 3 WHOLE MARKET, AND THEREFORE YOU SHOULDN'T WORRY ABOUT 4 MONOPOLY. 5 EVEN THEIR ECONOMISTS, SAID THAT THERE WAS COMPETITION 6 ONLY FOR THE WHOLE MARKET. 7 SURVIVOR. 8 SAYING THE BROWSER MARKET IS GOING TO CONTINUE TO HAVE TWO 9 COMPANIES IN IT. WELL, FIRST OF ALL, NONE OF THE ECONOMISTS, THERE WAS ONLY GOING TO BE ONE INDEED, UP UNTIL TODAY, MICROSOFT HAS BEEN BUT EVEN IF IT WERE COMPETITION FOR THE 10 WHOLE MARKET, OF WHICH THERE WAS NO EVIDENCE IN THE RECORD 11 AND NO FINDINGS, YOU WOULD STILL WANT THAT COMPETITION TO 12 BE COMPETITION ON THE MERITS. 13 MICROSOFT SAYS THAT IT IS BARRED FROM COMPETING 14 FOR THE NEXT SHIFT, THE NEXT TECHNOLOGICAL CHANGE, THE 15 NEXT NEW PRODUCT ADVANCE. 16 THE GOVERNMENT'S PROPOSED REMEDY THAT DOES THAT, YOUR 17 HONOR, AS I THINK THE COURT KNOWS. 18 THAT THAT COMPETITION TAKE PLACE ON A LEVEL PLAYING FIELD. 19 MICROSOFT GETS TO COMPETE, BUT IT DOESN'T GET TO USE ITS 20 MONOPOLY POWER TO PUT A THUMB ON THE SCALES AND TO 21 PRE-DETERMINE THE EFFECT OF THAT COMPETITION. 22 NOTHING THAT RESTRICT'S MICROSOFT'S ABILITY TO COMPETE. 23 ALL THAT IS RESTRICTED HERE IS MICROSOFT'S ABILITY TO ACT 24 IN AN ANTICOMPETITIVE WAY AND TO USE ITS MARKET POWER TO 25 PRECLUDE COMPETITION ON THE MERITS FROM OTHERS. OF COURSE, THERE IS NOTHING IN WHAT WE HAVE ASKED IS THERE IS 20 1 THANK YOU, YOUR HONOR. 2 THE COURT: 3 MR. WARDEN: 4 ALL RIGHT. COULD I HAVE FIVE MINUTES IN ORDER TO ANSWER THE QUESTIONS, AND THEN I WILL WRAP UP? 5 THE COURT: SURE. 6 (BRIEF RECESS.) 7 MR. WARDEN: WE WILL TAKE FIVE MINUTES. YOUR HONOR, MR. HOLLEY IS GOING TO 8 ANSWER THE FIRST QUESTION, WHICH I THINK LEADS TO A FAIRLY 9 COMPLICATED DISCUSSION. 10 11 THE COURT: FAIR ENOUGH. MR. HOLLEY IS FULLY CAPABLE OF IT. 12 MR. HOLLEY: 13 THE COURT: 14 MR. HOLLEY: GOOD AFTERNOON, YOUR HONOR. GOOD AFTERNOON. AS I UNDERSTOOD THE COURT'S 15 QUESTION, WHAT WAS MICROSOFT'S RESPONSE TO THE STATEMENT 16 ATTRIBUTED TO MR. BALLMER IN THE CCIA BRIEF THAT 40 17 PERCENT OF THE-- 18 19 20 THE COURT: IS IT TRUE, OR DID MR. BALLMER SAY IT? MR. HOLLEY: I DO NOT KNOW WHETHER MR. BALLMER 21 SAID IT, YOUR HONOR, BUT I CAN SAY THIS: I THINK IT'S 22 IMPORTANT FOR THE COURT TO UNDERSTAND WHO THE CCIA IS IN 23 READING THAT BRIEF. 24 OF UNIX VENDORS, ALL OF WHOM COMPETE WITH MICROSOFT IN THE 25 PROVISION OF OPERATING SYSTEM SOFTWARE. THE CCIA IS AN ORGANIZATION COMPRISED 21 1 THE COURT: 2 MR. HOLLEY: 3 JUST COMPETITORS, YOUR HONOR. 4 SCARED OF MICROSOFT'S EFFORTS TO BRING THE SAME 5 HIGH-VOLUME, LOW-PRICE MODEL THAT HAS BEEN SO USEFUL IN 6 THE PC SPACE TO SERVERS, AND THAT IS WHY THEY FILED BRIEFS 7 LIKE THE ONE THAT THEY FILED. 8 IMPORTANT TO SET THE STAGE FOR WHO THOSE FOLKS ARE AND WHY 9 THEY ARE HERE. 10 I AGREE. THEY'RE COMPETITORS. THEY'RE COMPETITORS, AND THEY'RE NOT THEY'RE COMPETITORS RUNNING SO, I JUST THINK IT'S THE SECOND THING I WOULD LIKE TO SAY, YOUR HONOR, 11 IS WINDOWS 2000 WAS NOT AT ISSUE IN THIS CASE. 12 NO EVIDENCE IN THE RECORD REGARDING WINDOWS 2000 OR, 13 FRANKLY, REGARDING ITS PREDECESSOR, WINDOWS NT 4.0. 14 IT'S OUTSIDE THE CONTEXT OF THE CASE. 15 THERE IS SO, AS I UNDERSTAND THE ARGUMENT THAT CCIA IS MAKING, 16 IT IS A CLASSIC MONOPOLY LEVERAGING CLAIM. THE CLAIM IS 17 THAT MICROSOFT HAS A MONOPOLY ON THE DESKTOP AND IT IS 18 USING THAT DESKTOP MONOPOLY TO LEVERAGE A STRONG POSITION 19 IN SERVERS. 20 THIS ARGUMENT. 21 DISMISSED THE MONOPOLY LEVERAGING CLAIM IN THIS CASE ON 22 SUMMARY JUDGMENT ON THE BASIS THAT IT WAS NOT COGNIZABLE 23 AT LAW. 24 LEAST NOT IN THIS COURT, AND THAT IS ALSO WHAT OTHER 25 COURTS OF APPEALS HAVE HELD AROUND THE COUNTRY. THE PROBLEM--THERE ARE SEVERAL PROBLEMS WITH THE FOREMOST OF THEM IS THAT YOUR HONOR THERE IS NO SUCH CLAIM KNOWN TO ANTITRUST LAW, AT SO, THE 22 1 MONOPOLY LEVERAGING CLAIM IS FLAWED LEGALLY. 2 IT IS ALSO FLAWED FACTUALLY BECAUSE THE CLIENT 3 CODE IN WINDOWS 2000 CURRENTLY HAS A MARKET SHARE OF ZERO, 4 EFFECTIVELY. 5 2000. 6 AROUND THE WORLD, AND THE FEATURES THAT THE CCIA PEOPLE DO 7 NOT LIKE ARE NOT AVAILABLE IN EITHER WINDOWS 3.X OR 8 WINDOWS 9.X. 9 OPERATING SYSTEMS DOES NOT APPLY IN THIS PARTICULAR 10 THE PRODUCT WAS RELEASED IN FEBRUARY OF IT IS ONLY NOW BEING DEPLOYED IN CUSTOMER SITES SO, MICROSOFT'S SUPPOSED MONOPOLY IN INSTANCE. 11 THE THIRD THING I WOULD LIKE TO SAY IS THAT THE 12 RELATIONSHIP--AND WE WILL SEE THIS IN JUST A MOMENT--THE 13 RELATIONSHIP BETWEEN WINDOWS 2000 CLIENTS--THE THINGS THAT 14 SIT ON DESKTOPS--AND WINDOWS 2000 SERVERS IS VERY, VERY 15 COMPLICATED; AND THERE'S NO EVIDENCE IN THE RECORD ON THAT 16 POINT. 17 AND, IN FACT, THANKS TO SUN MICROSYSTEMS AND NOVELL, TWO 18 OF MICROSOFT'S LARGEST COMPETITORS, MICROSOFT IS ENGAGED 19 IN A PROCEEDING RIGHT NOW IN FRONT OF THE DIRECTOR GENERAL 20 FOR COMPETITION IN EUROPE TO ADDRESS EXACTLY THE QUESTIONS 21 THAT THE CCIA BRIEF RAISES HERE. 22 YOU COULD HAVE AN ENTIRE TRIAL ABOUT THIS MATTER. THE NEXT POINT I WOULD LIKE TO MAKE, YOUR HONOR, 23 IS THAT WINDOWS 2000 CLIENT, THE DESKTOP VERSION, SUPPORTS 24 AN ENTIRE RANGE OF INDUSTRY PROTOCOLS BECAUSE IT WAS 25 DESIGNED TO INTEROPERATE WITH NOVELL NETWARE, WITH IBM'S 23 1 AIX UNIX VARIANTS, WITH SUN SOLARIS UNIX VARIANT, WITH A 2 WHOLE RANGE OF OTHER OPERATING SYSTEMS. 3 THAT WINDOWS 2000 PROFESSIONAL ONLY WORKS WITH WINDOWS 4 2000 SERVER IS FLATLY WRONG, AND MICROSOFT WOULD BE 5 PREPARED TO PROVE THAT IF GIVEN AN OPPORTUNITY, YOUR 6 HONOR. 7 SO, THE NOTION GIVEN THE ABSENCE OF ANY EXCLUSION OF OTHER 8 SERVER OPERATING SYSTEMS BECAUSE THEY WORKED JUST FINE 9 WITH WINDOWS 2000 CLIENT, THERE IS NO REASON UNDER THE 10 ANTITRUST LAWS WHY MICROSOFT CANNOT MAKE ITS DESKTOP 11 OPERATING SYSTEM WORK VERY WELL WITH ITS SERVER OPERATING 12 SYSTEM. 13 IN BERKEY PHOTO AGAINST EASTMAN KODAK, THAT KODAK, EVEN 14 THOUGH IT HAD A MONOPOLY IN FILM, WAS ENTITLED TO DEVELOP 15 BOTH CAMERAS, FILM AND PHOTO PROCESSING THAT ALL WORKED 16 VERY WELL TOGETHER. 17 IN JUST THE SAME WAY THAT THE SECOND CIRCUIT SAID NOW, COMPANIES LIKE BERKEY AND GAF WERE VERY 18 UNHAPPY ABOUT THAT, AS WAS FUJI, BUT WHAT THE COURT HELD 19 WAS THAT COMPANIES WHICH ARE ENGAGED IN A BROAD RANGE OF 20 BUSINESS ACTIVITY HAVE THE RIGHT--THEY HAVE THE 21 RIGHT--THERE'S NOTHING WRONG WITH IT--TO DEVELOP THEIR 22 PRODUCTS IN SUCH A WAY THAT THEY WORK WELL TOGETHER. 23 THAT'S JUST A NATURAL MANIFESTATION OF BEING A COMPANY IN 24 A BROAD RANGE OF BUSINESSES. 25 SUN, WHO IS A LEADING MEMBER OF CCIA, HAS NETWORK 24 1 COMPUTERS CALLED SUN RAYS, YOUR HONOR, AND THEY 2 COMMUNICATE WITH SUN SOLARIS SERVERS USING ENTIRELY 3 PROPRIETARY PROTOCOLS. 4 MORNING, A CLOSED SYSTEM. IT IS NOT AVAILABLE TO 5 MICROSOFT OR ANYONE ELSE. THOSE PROTOCOLS ARE NOT 6 AVAILABLE, AND WE DO NOT KNOW HOW THEY WORK. 7 IT IS, AS MR. WARDEN SAID THIS SO, THAT'S JUST ONE EXAMPLE, YOUR HONOR, THESE 8 SORTS OF PROTOCOLS, THESE SORTS OF RELATIONSHIPS BETWEEN 9 CLIENTS AND SERVERS ARE NOT--NOTHING UNUSUAL ABOUT THAT 10 SORT OF RELATIONSHIP. 11 I WOULD LIKE TO TAKE ONE EXAMPLE FROM PROFESSOR 12 HENDERSON'S DECLARATION, AND IT'S IN PARAGRAPH 50, YOUR 13 HONOR. 14 DECLARES IN HER STATEMENT THAT WINDOWS 2000 PC'S CANNOT 15 LOG INTO A UNIX KERBEROS SERVER, AND I WANT TO USE THAT 16 STATEMENT AS AN EXAMPLE BOTH OF HOW UNBELIEVABLY 17 COMPLICATED THESE ISSUES ARE AND ALSO JUST HOW WRONG THE 18 GOVERNMENT HAS GOTTEN IT. 19 YOUR HONOR, BECAUSE THEY HAVE NEVER TAKEN ANY DISCOVERY ON 20 THIS ISSUE, AND IT WAS NEVER AN ISSUE AT TRIAL, AND IT IS 21 VERY DIFFICULT. 22 SHE SAYS--SHE'S AN ECONOMIST, BUT SHE TESTIFIES OR AND IT'S UNDERSTANDABLE WHY, I WOULD LIKE TO SHOW YOU A SLIDE, YOUR HONOR, 23 WHICH EXPLAINS THE KERBEROS SECURITY AT MORGAN STANLEY IN 24 LONDON. 25 HENDERSON IS WRONG, BUT IT'S GOING TO BE A LITTLE NOW, WHAT THIS SLIDE SHOWS IS THAT PROFESSOR 25 1 DIFFICULT TO EXPLAIN WHY, BUT I WOULD LIKE TO. 2 WINDOWS 2000 PROFESSIONAL IS THE DESKTOP VERSION 3 OF MICROSOFT'S NEW OPERATING SYSTEM. SO, ON THE TRADING 4 FLOOR AT MORGAN STANLEY IN LONDON, THERE ARE WINDOWS 2000 5 PROFESSIONAL DESKTOPS. 6 CAN YOU CLICK TO THE NEXT SLIDE. 7 UNDER THE KERBEROS SECURITY AUTHENTICATION 8 PROTOCOL, WHEN A MORGAN STANLEY TRADER COMES IN IN THE 9 MORNING, THAT WINDOWS 2000 PROFESSIONAL CLIENT 10 AUTHENTICATES ITSELF TO A UNIX KERBEROS KEY DISTRIBUTION 11 CENTER. 12 PROFESSOR HENDERSON MADE IS WRONG. 13 PROFESSIONAL CLIENT IS LOGGING ON TO A UNIX SERVER. 14 CAN I SEE THE NEXT SLIDE, PLEASE? 15 WHAT THE WINDOWS 2000 PROFESSIONAL CLIENT GETS SO, RIGHT NOW WE SEE THAT THE STATEMENT THAT THIS WINDOWS 2000 16 BACK IS WHAT IS CALLED THE "TICKET-GRANTING TICKET," TGT. 17 THE WINDOWS 2000 PROFESSIONAL CLIENT THEN SENDS THAT 18 TICKET-GRANTING TICKET TO A WINDOWS 2000 KEY DISTRIBUTION 19 CENTER SO THAT IT CAN USE WINDOWS 2000 SERVER RESOURCES. 20 CAN I SEE THE NEXT SLIDE, PLEASE? 21 THE WINDOWS 2000 SERVER THEN SENDS BACK A 22 RESOURCE TICKET TO THE WINDOWS 2000 PROFESSIONAL CLIENT. 23 NEXT SLIDE, PLEASE. 24 AND THEN THE WINDOWS 2000 PROFESSIONAL CLIENT 25 SENDS TO THE WINDOWS 2000 SERVER ON WHICH THE RESOURCE, 26 1 THE FILES OR WHATEVER INFORMATION IT WANTS, IS STORED, 2 SENDS THAT TICKET THERE. 3 THIS SYSTEM IS IN OPERATION NOW. IT WORKS. 4 THERE IS NO PROBLEM WITH IT. AND THEREFORE, AS CAN YOU 5 SEE, YOUR HONOR--AND I'M NOT GOING TO GO INTO ALL THE GORY 6 DETAILS--IT IS VERY COMPLICATED. 7 NAME MAPPING MEANS AND WHAT THE AUTH DATA FIELD MEANS. 8 THE CRITICAL POINT IS, THERE IS NO EVIDENCE IN THE RECORD 9 ABOUT THIS SUBJECT. WE COULD TALK ABOUT WHAT THERE ARE PEOPLE AT MIT WHO SPEND 10 THEIR LIVES ARGUING ABOUT KERBEROS SECURITY, AND WE HAVE 11 NO EVIDENCE OF ANY OF THAT. 12 SO, YOUR HONOR, I THINK WHAT YOU HAVE TO DRAW 13 FROM ALL OF THIS IS THAT IT IS NOT A BASIS FOR AWARDING 14 RELIEF AGAINST MICROSOFT AT THIS JUNCTURE, INCLUDING THE 15 SORT OF DRACONIAN RELIEF THAT THE GOVERNMENT WOULD LIKE TO 16 HAVE, WHICH WOULD BASICALLY REQUIRE MICROSOFT TO DISCLOSE 17 ALL OF THE DETAILS OF HOW ALL THIS WORKS TO ALL OF ITS 18 COMPETITORS, EVEN THOUGH IT INTEROPERATES JUST FINE NOW 19 WITHOUT A TRIAL, WITHOUT SOME SORT OF EVIDENTIARY BASIS 20 FOR DOING SO. 21 22 23 MR. WARDEN WILL NOW ADDRESS THE OTHER QUESTIONS THAT THE COURT ASKED. MR. BOIES: YOUR HONOR, COULD I BE HEARD BRIEFLY 24 ON THIS RESPONSE TO HIS ANSWERS TO YOUR QUESTIONS? 25 SEEMS TO MOVE BEYOND THAT INTO NEW AREAS. IT 27 1 FIRST, HE QUOTED THE HENDERSON AFFIDAVIT. IF 2 ANYBODY WANTED TO CROSS-EXAMINE OR TAKE THE DEPOSITIONS, 3 THEY WERE AVAILABLE TO DO SO. 4 INTO THEIR RESPONSE, THEY COULD HAVE DONE SO. 5 THAT THEY KNOW--I DON'T--THEY CHOSE NOT TO DO THAT. 6 IF THEY'RE GOING TO QUOTE THE AFFIDAVIT NOW, THEY OUGHT TO 7 QUOTE THE WHOLE THING. 8 IF THEY WANTED TO PUT THIS FOR REASONS BUT AND PARAGRAPH 38, SHE SAYS, BEFORE SHE GETS TO 9 THE PORTION HE QUOTES, "WHILE WINDOWS 2000 PROFESSIONAL, 10 THE PC OPERATING SYSTEM, CAN INTEROPERATE WITH A VARIETY 11 OF SERVERS, IT OFFERS A SIGNIFICANT NUMBER OF"--AND THEN 12 IT GOES ON TO ADVANTAGES. 13 I NEED PAGE 14. 14 "--FUNCTIONS THAT CAN ONLY BE IMPLEMENTED IF THE 15 CONSUMER IS USING A SERVER RUNNING IN WINDOWS 2000 SERVER 16 OPERATING SYSTEM, INCLUDING SUCH FEATURES AS SECURITY, 17 MICROSOFT'S IMPLEMENTATION OF KERBEROS, THE ABILITY TO 18 RETAIN USER-SPECIFIC SETTINGS, DATA AND APPLICATIONS, 19 REGARDLESS OF WHICH WINDOWS 2000-BASED PC THE CONSUMER 20 USES ON A NETWORK," ET CETERA. 21 THIS IS, I THINK, IF THE COURT WILL SEE IF YOU 22 LOOK AT THE ENTIRE AFFIDAVIT, SOMEWHAT TAKEN OUT OF 23 CONTEXT. 24 TO DO WITH THE REMEDIES THAT WE HAVE PROPOSED. 25 SOMETHING ON WHICH OUR REMEDY DEPENDS. BUT MORE TO THE POINT, IT DOESN'T HAVE ANYTHING IT'S NOT IT IS NOTHING THAT 28 1 THEY HAVE SOUGHT TO RAISE PREVIOUSLY, AND IT SIMPLY IS A 2 RED HERRING. 3 4 REBUTTAL ARGUMENT BY COUNSEL FOR DEFENDANT MR. WARDEN: MR. HOLLEY MADE HIS PRESENTATION IN 5 RESPONSE TO THE COURT'S QUESTION COMING FROM AN AMICUS 6 BRIEF, BUT I DO WANT TO MAKE CLEAR THAT THE GOVERNMENT IS 7 SEEKING DISCLOSURE OF COMMUNICATIONS PROTOCOLS BETWEEN 8 DESKTOP CLIENTS AND SERVER OPERATING SYSTEMS THAT ARE 9 PROPRIETARY TO MICROSOFT. 10 11 SO, THIS ALL DOES BEAR ON THE RELIEF THAT THEY'RE SEEKING, AS WELL. NOW, THE COURT'S SECOND QUESTION WAS ABOUT THE 12 THREE-YEAR PRICING PROVISION, AND MR. BOIES ANSWERED IT AS 13 TO OFFICE, BUT HE DID THINK IT SHOULD EXTEND TO WINDOWS 14 AND ALL CHANNELS, AND THAT'S CLEARLY WRONG, YOUR HONOR, 15 BECAUSE THE OEM CHANNEL IS THE ONLY CHANNEL AS TO WHICH 16 ANY CLAIM OR EVIDENCE WAS ADDUCED, THAT PRICING OF WINDOWS 17 WAS USED FOR ANYTHING. 18 IN THE RETAIL CHANNEL, OR WHATEVER, WERE COERCED TO DO 19 ANYTHING BY REASON OF THE PRICE OF WINDOWS. THERE IS NO EVIDENCE THAT PEOPLE 20 WITH RESPECT TO THE SUGGESTION THAT INTERNET 21 EXPLORER BE PUT IN THE PUBLIC DOMAIN, SO TO SPEAK, AS 22 OPEN-SOURCE INFORMATION, FIRST I WANT TO POINT OUT NOT 23 ONLY WHAT MR. HOLLEY SAID ABOUT WHO THOSE PEOPLE ARE AND 24 WHAT THEY'RE ABOUT, BUT, YOU KNOW, THEY ARE 25 JOHNNY-COME-LATELIES TO THIS AFFAIR. THIS BRIEF CAME IN 29 1 LAST WEEK. 2 TO IT. 3 FACTUAL ASSERTIONS ARE CERTAINLY NOT EVIDENTIARY. 4 THERE IS NO REASON ANYONE WOULD HAVE RESPONDED THE THINGS THEY PUT IN THEIR BRIEF BY WAY OF IN ANY EVENT, MAKING IE SOURCECODE OPEN SOURCE, 5 WHETHER IT'S OWNED BY THE PRESENT MICROSOFT CORPORATION IN 6 ITS PRESENT UNITARY FORM, OR WHETHER IT'S OWNED BY A NEW 7 APP'S COMPANY, AS THE GOVERNMENT WOULD HAVE IT, OR 8 WHATEVER, SUFFERS FROM ALL OF THE SAME DESTRUCTIVE 9 PROBLEMS THAT I DISCUSSED IN DISCUSSING PUTTING ANY KIND 10 OF INTELLECTUAL PROPERTY IN THE PUBLIC DOMAIN: 11 INCENTIVE TO INNOVATE AND SO FORTH. 12 LACK OF AS TO FORFEITURE AS A TRADITIONAL EQUITABLE 13 REMEDY, THAT TYPICALLY EXTENDS TO THE PROCEEDS OF CRIME OR 14 CONTRABAND. 15 HERE. THERE'S NO EVIDENCE OF ANYTHING LIKE THAT 16 THE COURT: 17 MR. WARDEN: YOU'RE TALKING ABOUT A CIVIL REMEDY? EVEN CIVILLY, I THINK THAT'S WHAT 18 NORMALLY EXTENDS TO THE BURDEN OF PROOF. 19 BURDEN OF PROOF RATHER THAN CRIMINAL BURDEN OF PROOF, BUT 20 I DIDN'T BRING A TREATISE ON EQUITY WITH ME HERE TODAY. 21 THE COURT: 22 MR. WARDEN: 23 ABOUT CONFISCATION. 24 THE COURT: 25 MAYBE A CIVIL YOU OPENED THE SUBJECT. I OPENED THE SUBJECT BY TALKING YOU OPENED THE SUBJECT BY TALKING ABOUT TORT LAW AND THE BURDEN OF PROOF. 30 1 2 MR. WARDEN: ANYTHING IN THIS CASE. 3 4 THERE IS NO PRAYER FOR FORFEITURE OF THE COURT: FORFEITURE AND CONFISCATION SYNONOMOUSLY. 5 MR. WARDEN: THERE IS NO BASIS ADDUCED IN THE 6 PROOF IN THIS CASE THAT WOULD JUSTIFY A COURT OF EQUITY 7 ACTING UNDER ANY RUBRIC OR CONDITION OR PRINCIPLE OF 8 EQUITY KNOWN TO THE ANGLO-AMERICAN LEGAL SYSTEM THAT WOULD 9 JUSTIFY CONFISCATION FORFEITURE, DIVERSION, CONVERSION, OR 10 WHATEVER, OF MICROSOFT'S INTELLECTUAL PROPERTY. 11 THE COURT: 12 MR. WARDEN: OKAY. EVEN THE SLIDE THAT WAS PUT UP AT 13 ONE POINT BY ONE OF THE OPPOSING COUNSEL, AND I THINK--I 14 DON'T REMEMBER WHO--TALKED ABOUT IMPOSING OBLIGATIONS TO 15 LICENSE THINGS AT REASONABLE ROYALTIES WHEN THEY HAVE BEEN 16 MISUSED, OR WHATEVER. 17 HERE. 18 WE DON'T HAVE ANYTHING LIKE THAT NOW, I'M NOT GOING TO TRY TO GO BACK OVER THE 19 DECREEDAL PROVISIONS OF THEIRS AND OURS AGAIN, BUT I WANT 20 TO SAY ONE THING IN RESPONSE TO WHAT MR. BOIES DID THERE, 21 AND THAT IS, IF YOU GO BACK AND LOOK AT 3(A)(3)(IV), AND 22 YOU RECOGNIZE THAT THE DEFINITION OF MIDDLEWARE INCLUDES 23 OPERATING SYSTEM COMPONENTS, AND YOU RECOGNIZE THAT 24 END-USER ACCESS IS DEFINED TO INCLUDE AUTOMATIC INVOCATION 25 OF FUNCTIONALITY BY THE OPERATING SYSTEM WHEN THE USER 31 1 DIRECTS SOME FUNCTION TO BE PERFORMED, AND THE SO-CALLED 2 ALTERNATE DEFAULT MIDDLEWARE IS INCAPABLE OF PERFORMING 3 THAT FUNCTION, THAT'S STILL A PROHIBITED FORM OF END-USER 4 ACCESS. 5 6 THE COURT: ALL RIGHT. I FOUND THE PROVISION. CAN YOU SAY THAT AGAIN? 7 MR. WARDEN: WELL, YEAH. WHEN YOU PUT TOGETHER 8 THE DEFINITION OF MIDDLEWARE AND THE DEFINITION OF 9 END-USER ACCESS, THE LATTER--AS I EXPLAINED THIS MORNING, 10 THE DEFINITION OF MIDDLEWARE IS SO BROAD THAT IT INCLUDES 11 COMPONENTS OF THE OPERATING SYSTEM THAT BOTH EXPOSE API'S 12 AND ARE INTERDEPENDENT WITH OTHER PARTS OF THE OPERATING 13 SYSTEM. 14 AND THEN WHEN YOU LOOK AT THE DEFINITION OF 15 END-USER ACCESS, IT INCLUDES AUTOMATIC INVOCATION OF CODE 16 WHEN THEY SELECTED ALTERNATIVE DEFAULT MIDDLEWARE WON'T 17 DO--IS INCAPABLE OF EXECUTING THE FUNCTION THAT THE USER 18 HAS SELECTED. 19 MIDDLEWARE EVEN AT THAT POINT, THAT IS FORBIDDEN END-USER 20 ACCESS. 21 IF YOU GO BACK TO THE MICROSOFT, QUOTE, IN FACT, IT MEANS THE DAMN THING DOESN'T WORK. NOW, AS TO SOURCECODE ACCESS, WE HAVE AFFORDED 22 PEOPLE, AS THE COURT IS FULL AWARE: THE LIMITED 23 SOURCECODE ACCESS, UNDER STRICT CONTRACTUAL RESTRAINTS, 24 FOR SOUND COMMERCIAL PURPOSES. 25 THAT OWNERS OF INTELLECTUAL PROPERTY DO. THAT IS ONE OF THE THINGS AND YOU KNOW WHY 32 1 WITH COMPAQ, THEY'RE A CO-DEVELOPER WITH US. 2 AND AOL GOT ONLY IE, NOT THE REST OF THE PLATFORM AND FOR 3 THE PARTICULAR PURPOSE OF CREATING A PROPRIETARY CLIENT. 4 AND BRISTOL IS NOT IN COMPETITION WITH MICROSOFT AT ALL. 5 IT MAKES A VERY SPECIALTY PRODUCT--LET'S PUT IT THAT 6 WAY--AND THEY WERE GIVEN VERY LIMITED SOURCECODE LICENSES 7 TO ENABLE THEM TO DO THAT. 8 9 COMPUSERVE IN ANY EVENT, THOSE PROVE NOTHING ABOUT WHETHER IT'S DESIRABLE, PROPER, LAWFUL, PRUDENT, TO REQUIRE 10 MICROSOFT'S BASIC INTELLECTUAL PROPERTY TO BE EFFECTIVELY 11 PUT IN THE PUBLIC DOMAIN. 12 FINALLY, I WOULD LIKE TO SAY THAT THE FINDINGS OF 13 THE COURT THAT MR. BOIES DISPLAYED WHEN HE WAS ADDRESSING 14 THE ISSUE OF CAUSATION JUST A WHILE AGO, THAT NOTHING IN 15 THOSE FINDINGS RE: THE POSSIBLE EFFECTS OF JAVA AND 16 NAVIGATOR ARE AT ALL INCONSISTENT WITH, OR IN ANY WAY 17 CONTRADICT, THE CHAIN OF SPECULATION THAT I HAVE OUTLINED 18 ON MY OPENING ARGUMENT AND PREVIOUSLY ON ANOTHER OCCASION. 19 WITH THAT, YOUR HONOR, I WILL ONLY SAY THAT WE 20 AGREE THAT COMPETITION SHOULD BE ON THE MERITS AND THAT 21 THE REMEDY IMPOSED BY THE GOVERNMENT, EVEN THE CONDUCT 22 REMEDY ALONE, WOULD DISABLE US FROM PARTICIPATING IN THAT 23 COMPETITION BY EITHER OBLITERATING OR AT LEAST DISPERSING 24 OUR LEGITIMATE COMMERCIAL CAPABILITIES. 25 THE COURT: ALL RIGHT. 33 1 MR. WARDEN: OKAY. NOW, THAT'S ALL I WOULD HAVE 2 TO SAY. 3 MAY, WHETHER THE COURT NOW KNOWS WHAT FURTHER PROCESS, IF 4 ANY, THERE WILL BE; AND IF NOT, WHEN WE MIGHT KNOW THAT. 5 I WOULD LIKE AT THIS POINT TO ASK THE COURT, IF I THE COURT: 6 PROCESS, MR. WARDEN. 7 MR. WARDEN: I'M NOT CONTEMPLATING ANY FURTHER OKAY. IF YOU CONTEMPLATE NO FURTHER 8 PROCESS, YOUR HONOR, I HAVE TWO REQUESTS. THE FIRST IS 9 I'M GOING TO ASK MR. HOLLEY TO MAKE AN OFFER OF PROOF 10 WHICH IS IN VERY PRELIMINARY FORM. AND SECOND, I WOULD 11 REQUEST THAT WHEN THE COURT HAS DETERMINED WHAT 12 SUBSTANTIVE PROVISIONS IT INTENDS TO INCLUDE IN A JUDGMENT 13 THAT THE PARTIES AND THE GOVERNMENT, AS WELL AS US, BE 14 GIVEN 48 HOURS TO COMMENT ON THE FORM OF THE PROPOSED 15 DECREE PRIOR TO ITS ENTRY. 16 THAT, BUT I'M MAKING THAT REQUEST. YOUR HONOR NEEDN'T RESPOND TO 17 THE COURT: I HAVE NO PROBLEM WITH THAT. 18 HOW LONG WILL IT TAKE THE PLAINTIFFS TO PRESENT 19 ME WITH A CLEAN COPY OF A FORM OF FINAL JUDGMENT WHICH 20 WOULD REFLECT PROCEEDINGS HERE TODAY? 21 22 MR. BOIES: WE OUGHT TO BE ABLE TO DO THAT VERY PROMPTLY, YOUR HONOR. 23 THE COURT: YES. TOMORROW? FRIDAY? 24 MR. BOIES: CERTAINLY BY FRIDAY. 25 THE COURT: ALL RIGHT. AND YOU WOULD LIKE 48 34 1 HOURS TO COMMENT ON THAT, MR. WARDEN? 2 MR. WARDEN: 3 THE COURT: 4 MR. WARDEN: 5 OFFER OF PROOF. YES. OKAY. I WILL ASK MR. HOLLEY TO MAKE OUR THANK YOU. 6 THE COURT: 7 MR. HOLLEY: OKAY. I WOULD LIKE TO HAND UP TO THE COURT 8 A DOCUMENT ENTITLED "DEFENDANT MICROSOFT CORPORATION'S 9 OFFER OF PROOF." 10 THE COURT: 11 MR. HOLLEY: ALL RIGHT. THAT SHALL BE FILED. I DON'T INTEND TO READ IT TO YOUR 12 HONOR, BUT I WOULD LIKE TO IN VERY BRIEF OUTLINE DESCRIBE 13 WHAT IS CONTAINED IN IT. 14 THE COURT: IS THIS THE ORIGINAL? 15 MR. HOLLEY: 16 FILE WITH THE CLERK'S OFFICE. THE ORIGINAL, YOUR HONOR, WE WILL THAT IS A COURTESY COPY. 17 THE COURT: GIVE IT TO MR. WEST. 18 MR. WARDEN: WE'LL DO THAT, YOUR HONOR. 19 MR. HOLLEY: MICROSOFT, IF GIVEN AN OPPORTUNITY 20 TO DO SO, AT AN EVIDENTIARY HEARING, WOULD PROVE EACH AND 21 EVERY ONE OF THE FACTUAL ASSERTIONS CONTAINED IN THE 22 DOCUMENT ENTITLED "DEFENDANT MICROSOFT CORPORATION'S 23 SUMMARY RESPONSE TO PLAINTIFFS' PROPOSED FINAL JUDGMENT" 24 DATED MAY 10TH, 2000. 25 IN ADDITION, IF GIVEN AN OPPORTUNITY TO DO SO AT 35 1 AN EVIDENTIARY HEARING, MICROSOFT WOULD CALL, AMONG 2 OTHERS, THE FOLLOWING WITNESSES: 3 SENIOR FELLOW AT THE BROOKINGS INSTITUTION IN WASHINGTON, 4 D.C., ON MICROSOFT'S BEHALF. 5 EVERY MAJOR SECTION 2 MONOPOLIZATION CASE SINCE THE 6 PASSAGE OF THE SHERMAN ACT THAT RESULTED IN THE AWARD OF 7 STRUCTURAL RELIEF, AND THAT ANALYSIS DEMONSTRATES THAT 8 DESPITE ASSURANCES FROM THE GOVERNMENT AND THE CONFIDENT 9 PREDICTIONS OF ITS EXPERTS AT THIS TIME, SUCH STRUCTURAL DR. ROBERT CRANDALL IS A DOCTOR CRANDALL HAS ANALYZED 10 RELIEF HAS, AS A GENERAL MATTER, FAILED TO IMPROVE 11 ECONOMIC WELFARE EITHER BY REDUCING PRICES OR INCREASING 12 OUTPUT. 13 14 THE COURT: SAYS IN THE OFFER OF PROOF; IS THAT CORRECT? 15 MR. HOLLEY: 16 THE COURT: 17 18 MR. HOLLEY, THAT'S IN ESSENCE WHAT HE THE WHOLE THING. THAT IS CORRECT, YOUR HONOR. OKAY. YOU DON'T HAVE TO GO THROUGH THAT WILL SPEAK FOR ITSELF. MR. HOLLEY: OKAY, YOUR HONOR. I WOULD JUST LIKE 19 TO SAY THAT IN ADDITION TO BOTH THE FACTUAL ASSERTIONS 20 THAT MICROSOFT WOULD PROVE FROM THE SUMMARY RESPONSE AND 21 THE WITNESSES WHOSE TESTIMONY IS REFLECTED IN THE OFFER OF 22 PROOF, MICROSOFT WOULD, IN ADDITION, IF GIVEN A FAIR 23 OPPORTUNITY TO DO SO, DEVELOP THE TESTIMONY OF OTHER 24 INDUSTRY PARTICIPANTS WHO WOULD TESTIFY ABOUT THE SEVERE 25 ADVERSE EFFECTS THAT WOULD FLOW FROM ENTRY OF THE 36 1 GOVERNMENT'S PROPOSED FINAL JUDGMENT. 2 AND QUALITY OF EVIDENCE THAT MICROSOFT HAS ASSEMBLED IN 3 THE BRIEF TIME AVAILABLE, THERE IS EVERY REASON TO BELIEVE 4 THAT MICROSOFT COULD ASSEMBLE FAR MORE EVIDENCE IF GIVEN 5 AN OPPORTUNITY TO DO SO. 6 THANK YOU, YOUR HONOR. 7 THE COURT: 8 MR. HOLLEY: 9 THE COURT: 10 GIVEN THE AMOUNT IN THE BRIEF TIME GIVEN? THAT'S CORRECT, YOUR HONOR. THIS CASE HAS BEEN PENDING FOR TWO YEARS, MR. HOLLEY. 11 MR. HOLLEY: YOUR HONOR, IN THE CONFERENCES THAT 12 PRECEDED THE FILING OF THE GOVERNMENT'S PROPOSED FINAL 13 JUDGMENT, IT WAS MADE ABSOLUTELY CLEAR BY THE MICROSOFT 14 CORPORATION THAT IT WAS NOT GOING TO--AND, IN FACT, YOUR 15 HONOR SAID IT WOULD BE FAIR AND APPROPRIATE FOR MICROSOFT 16 NOT TO--DO ANYTHING OTHER THAN PREPARE THE DOCUMENTS THAT 17 WERE FILED ON THE 10TH OF MAY OF 2000. 18 THANK YOU, YOUR HONOR. 19 THE COURT: MR. BOIES? 20 MR. BOIES: YOUR HONOR, I DON'T WANT OUR SILENCE 21 TO BE SUGGESTIVE THAT WE THINK THIS WAS FILED EITHER IN 22 TIMELINESS OR IN FORM OF AN APPROPRIATE OFFER. 23 24 25 MR. WARDEN: WE HAVE NOTHING MORE TODAY, YOUR HONOR. THE COURT: VERY WELL. MATTER IS SUBMITTED. 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THANK YOU, COUNSEL. WE WILL STAND IN RECESS. (WHEREUPON, AT 3:07 P.M., THE HEARING WAS ADJOURNED.) 38 1 CERTIFICATE OF REPORTER 2 3 I, DAVID A. KASDAN, RMR-CRR, COURT REPORTER, DO 4 HEREBY TESTIFY THAT THE FOREGOING PROCEEDINGS WERE 5 STENOGRAPHICALLY RECORDED BY ME AND THEREAFTER REDUCED TO 6 TYPEWRITTEN FORM BY COMPUTER-ASSISTED TRANSCRIPTION UNDER 7 MY DIRECTION AND SUPERVISION; AND THAT THE FOREGOING 8 TRANSCRIPT IS A TRUE RECORD AND ACCURATE RECORD OF THE 9 PROCEEDINGS. 10 I FURTHER CERTIFY THAT I AM NEITHER COUNSEL FOR, 11 RELATED TO, NOR EMPLOYED BY ANY OF THE PARTIES TO THIS 12 ACTION IN THIS PROCEEDING, NOR FINANCIALLY OR OTHERWISE 13 INTERESTED IN THE OUTCOME OF THIS LITIGATION. 14 15 16 17 18 19 20 21 22 23 24 25 ______________________ DAVID A. KASDAN