Oracle Corporation et al v. SAP AG et al

Filing 1022

Declaration of Tharan Gregory Lanier in Support of 1021 Response filed by SAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21)(Related document(s) 1021 ) (Froyd, Jane) (Filed on 12/23/2010) Modified on 12/27/2010 (kc, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 1022 Att. 1

EXHIBIT 1

Dockets.Justia.com

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE ) ) PLAINTIFFS, ) ) VS. ) ) SAP AG, ET AL., ) ) DEFENDANTS. ) ____________________________) ORACLE CORPORATION, ET AL.

CERTIFIED COPY
NO. C 07-01658 PJH JURY TRIAL VOLUME 2 PAGES 297 - 479 OAKLAND, CALIFORNIA TUESDAY, NOVEMBER 2, 2010

(PAGES 297 THROUGH 312 ARE UNDER SEAL AND BOUND SEPARATELY)

TRANSCRIPT OF PROCEEDINGS APPEARANCES: FOR PLAINTIFFS: BY: BINGHAM MUCCUTCHEN LLP THREE EMBARCADERO CENTER SAN FRANCISCO, CALIFORNIA 94111-4607 ZACHARY J. ALINDER, HOLLY A. HOUSE, GEOFFREY M. HOWARD, DONN P. PICKETT, ATTORNEYS AT LAW BOIES, SCHILLER & FLEXNER LLP 1999 HARRISON STREET, SUITE 900 OAKLAND, CALIFORNIA 94612 STEVEN C. HOLTZMAN, ATTORNEY AT LAW

BY:

(APPEARANCES CONTINUED NEXT PAGE)

REPORTED BY:

RAYNEE H. MERCADO, CSR NO. 8258

RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR [phone]

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

335 OPENING STATEMENT \ HOWARD PROBLEM -- THOUSANDS OF PEOPLE WHO ARE WORKING ON THOSE ALL THE TIME, AND IN ADDITION TO WORKING ON DEVELOPING THE NEXT RELEASE OF WHATEVER SOFTWARE THAT IS OR THE NEXT GREATEST PRODUCT THAT THEY'RE GOING TO PUT OUT INTO THE MARKET. AND THE CUSTOMERS VALUE THESE SUPPORT PRODUCTS VERY HIGHLY, AS YOU CAN IMAGINE. AND THEY PAY FOR THEM ANYWHERE FROM

A FEW THOUSANDS OF DOLLARS TO A FEW MILLIONS OF DOLLARS EVERY YEAR DEPENDING ON HOW MUCH THEY HAVE AND THE SIZE AND THE SCOPE OF THE BUSINESS. NOW, THE SOFTWARE -- THE SUPPORT IS VALUABLE TO ORACLE FOR THE REVENUE THAT IT GENERATES BECAUSE IT'S REALLY THAT -- THOSE FEES, THE FEES THAT CUSTOMERS PAY FOR SUPPORT EVERY YEAR, THAT ORACLE USES TO REINVEST INTO ITS BUSINESS, TO PAY THE THOUSANDS OF DEVELOPERS WHO ARE WORKING ON DEVELOPING THE SUPPORT AND WORKING ON DEVELOPING THE NEXT GENERATION OF THE PRODUCT. THAT'S THE RESEARCH AND DEVELOPMENT THAT SOFTWARE COMPANIES ARE CONSTANTLY DOING IN ORDER TO STAY COMPETITIVE, IN ORDER TO IMPROVE. (DEMONSTRATIVE PUBLISHED TO JURY.) MR. HOWARD: NOW, ORACLE AND SAP, THEY'RE NOT THE THERE IS

ONLY ONES THAT PROVIDE SUPPORT FOR THEIR PRODUCTS. SOMETHING CALLED THIRD-PARTY SUPPORT.

THIRD-PARTY SUPPORT IS A

SEPARATE COMPANY -- THEY MAY BE SEPARATE COMPANIES, AND THE DEFENDANT TOMORROWNOW WAS ONE OF THOSE COMPANIES.
RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR [phone]

343 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 OPENING STATEMENT \ HOWARD THERE, 57 PERCENT. ORACLE AND PEOPLESOFT KIND OF TIED FOR SECOND WAY DOWN THERE AT ABOUT 12 PERCENT. NOW, AFTER THE ACQUISITION, SAP IS STILL FAR AND AWAY, AS I SAID, THE MORE DOMINANT PLAYER. BUT FOR THE FIRST

TIME -- REALLY, FOR THE FIRST TIME IN THE HISTORY OF ENTERPRISE APPLICATION SOFTWARE, ORACLE IS STARTING TO CATCH UP. AND

YOU'LL HEAR EVIDENCE THAT THIS IS WHAT SAP REGARDED AS A THREAT. SO THESE TWO COMPANIES HAVE A CHOICE. A CHOICE IN JANUARY OF 2005. (DEMONSTRATIVE PUBLISHED TO JURY.) MR. HOWARD: TOOK A RISK. RISK. THE EVIDENCE WILL SHOW THAT THEY EACH THEY EACH HAVE

THE RISK ORACLE TOOK WAS AN 11 BILLION-DOLLAR

AND IT WAS BETTING THAT IT COULD KEEP THOSE CUSTOMERS

HAPPY, THAT IT COULD INTEGRATE THE PEOPLESOFT PRODUCTS INTO ITS PRODUCT LINE, AND THAT IT COULD CREATE A COMPANY THAT COULD COMPETE WITH SAP. SAP ALSO TOOK A RISK. HAVE CHOSEN TO COMPETE FAIRLY. AND IT HAD A CHOICE. IT COULD

THE EVIDENCE WILL SHOW THAT

INSTEAD, IT CHOSE TO BUY TOMORROWNOW, A COMPANY THAT THE BOARD OF DIRECTORS AT SAP KNEW WAS INFRINGING ORACLE'S SOFTWARE. AND THEY CHOSE TO TAKE THAT RISK BECAUSE THEY EXPECTED TO MAKE ENORMOUS AMOUNTS OF MONEY, WHICH IS SOMETHING THAT YOU'LL TAKE INTO ACCOUNT IN DECIDING THE AMOUNT OF DAMAGES AND IT EXPECTED TO INFLICT ENORMOUS HARM ON ORACLE USING ORACLE'S OWN INTELLECTUAL PROPERTY.
RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR [phone]

453 SCREVEN - DIRECT / MR. HOWARD 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 I MEAN, IT REALLY IS A PROCESS OF TRIAL AND ERROR. YOU TRY A SOLUTION, YOU TRY A CERTAIN SET OF FUNCTIONALITY, RIGHT, YOU GIVE IT TO CUSTOMERS, AND CUSTOMERS GIVE YOU FEEDBACK. SOMETIMES THE FEEDBACK IS GOOD, SOMETIMES THE THIS DOESN'T WORK FOR ME. THIS DOESN'T

FEEDBACK IS BAD.

SATISFY MY REQUIREMENTS.

THEREFORE, YOU NEED TO TRY AGAIN.

YOU NEED TO CHANGE THE WAY THE APPLICATION WORKS. YOU NEED TO ADD SOME MORE FUNCTIONALITY. IT TAKES A LONG TIME

NO MATTER HOW MUCH MONEY YOU PUT AT IT, IT TAKES A LONG TIME TO BUILD OUT A COMPLETE VIABLE SOLUTION FOR CUSTOMERS IN THE APPLICATION SPACE. Q. YOU KNOW, YOU MENTIONED A $4 BILLION RESEARCH AND THAT'S A LOT OF MONEY. WHERE DOES ORACLE

DEVELOPMENT BUDGET.

GET THAT MONEY TO DEVELOP AND CREATE ITS PRODUCTS? A. SO, AS I MENTIONED, WE HAVE 370,000 CUSTOMERS AROUND THE NOW, THOSE CUSTOMERS, OF COURSE, HAVE PAID US MONEY TO

WORLD.

HAVE THE RIGHT TO USE THAT SOFTWARE, BUT THEY ALSO SUBSCRIBE TO SUPPORT. SO THEY PAY US FOR SUPPORT. THEY PAY US AN ANNUAL FEE IN ORDER TO BE ABLE TO ASK US QUESTIONS, REPORT PROBLEMS, AND MOST IMPORTANTLY GET UPDATES TO THAT SOFTWARE. SO GET FIXES TO BUGS, GET NEW FUNCTIONALITY,

YOU KNOW, GET INFORMATION FROM US ABOUT HOW TO USE THE SOFTWARE MORE EFFECTIVELY. Q. DO YOU HAVE PERSONAL EXPERIENCE WITH THE TYPE OF EFFORT

REQUIRED TO DEVELOP ENTERPRISE APPLICATION SOFTWARE?

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

458 SCREVEN - DIRECT / MR. HOWARD 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 ITS SOFTWARE WITH COPYRIGHTS? A. WELL, WE TALKED A FEW MINUTES AGO ABOUT THE WAY WE FUND IT'S BASICALLY PAID FOR BY THE MONEY THAT

OUR DEVELOPMENTS.

OUR CUSTOMERS PAY US, ESPECIALLY THE MONEY THAT OUR CUSTOMERS PAY US FOR SUPPORT. NOW, IF OTHER COMPANIES COULD JUST TAKE OUR INTELLECTUAL PROPERTY AND GIVE IT TO OTHER PEOPLE, THEN WE WOULDN'T HAVE THAT SUPPORT REVENUE. LICENSE FEES. WE WOULDN'T HAVE THOSE

WE WOULDN'T ACTUALLY BE ABLE TO PAY ALL THOSE

PROGRAMMERS THAT WE PAY TO MAKE OUR SOFTWARE BETTER AND TO INNOVATE. WHEN I FIRST JOINED ORACLE IN '86, ORACLE WAS A SMALL COMPANY WITH BASICALLY ONE PRODUCT. RIGHT? TODAY, AND

ORACLE IS A MUCH LARGER COMPANY WITH MANY, MANY PRODUCTS.

THAT CORE INITIAL DATABASE PRODUCT, ORACLE DATABASE, IS MUCH MORE POWERFUL AND MUCH MORE SOPHISTICATED. IF ORACLE DID NOT HAVE INTELLECTUAL PROPERTY RIGHTS, THEN THERE IS NO WAY THAT ORACLE COULD HAVE PAID FOR THE ENGINEERING TO MAKE THE ORACLE DATABASE WHAT IT IS TODAY TO BUILD THE ADDITIONAL PRODUCTS THAT WE BUILD TODAY. Q. DO YOU RUN ACROSS ORACLE'S COPYRIGHT PROTECTION EFFORTS IN

THE COURSE OF YOUR JOB? A. YES, YES, YES. ALL THE TIME. SO INSIDE ORACLE, OF

COURSE, EVERY TIME WE PRODUCE A CD OR DVD WITH OUR SOFTWARE IN IT IT'S STAMPED WITH THE COPYRIGHT.

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

479

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 WEDNESDAY, NOVEMBER 3, 2010 ___________________________________ DIANE E. SKILLMAN, CSR, RPR, FCRR ___________________________________ RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR CERTIFICATE OF REPORTER WE, RAYNEE H. MERCADO AND DIANE E. SKILLMAN, OFFICIAL REPORTERS FOR THE UNITED STATES COURT, NORTHERN DISTRICT OF CALIFORNIA, HEREBY CERTIFY THAT THE FOREGOING PROCEEDINGS IN C07-01658PJH, ORACLE USA, INC., ET AL. V. SAP AG, ET AL., WERE REPORTED BY US, CERTIFIED SHORTHAND REPORTERS, AND WERE THEREAFTER TRANSCRIBED UNDER OUR DIRECTION INTO TYPEWRITING; THAT THE FOREGOING IS A FULL, COMPLETE AND TRUE RECORD OF SAID PROCEEDINGS AS BOUND BY US AT THE TIME OF FILING. THE VALIDITY OF THE REPORTERS' CERTIFICATION OF SAID TRANSCRIPT MAY BE VOID UPON DISASSEMBLY AND/OR REMOVAL FROM THE COURT FILE.

/s/

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]