Oracle Corporation et al v. SAP AG et al

Filing 1121

Declaration of Nitin Jindal in Support of 1120 MOTION for Clarification filed byOracle International Corporation. (Attachments: # 1 Exhibit A)(Related document(s) 1120 ) (Howard, Geoffrey) (Filed on 4/17/2012)

EXHIBIT A

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE
ORACLE CORPORATION, ET AL.

)
)
PLAINTIFFS,
)
)
VS.
)
)
SAP AG, ET AL.,
)
)
DEFENDANTS.
)
____________________________)

JURY TRIAL
NO. C 07-01658 PJH

PAGES 480 - 640
OAKLAND, CALIFORNIA
THURSDAY, NOVEMBER 4, 2010

(PAGES 485 THROUGH 491 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

BY:

BOIES, SCHILLER & FLEXNER LLP
1999 HARRISON STREET, SUITE 900
OAKLAND, CALIFORNIA 94612
STEVEN C. HOLTZMAN, ATTORNEY AT LAW

(APPEARANCES CONTINUED NEXT PAGE)

REPORTED BY:

RAYNEE H. MERCADO, CSR NO. 8258

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

Page 508

Page 510

1

AND AGAIN IN MOTIONS IN LIMINE, AND YOUR HONOR RULED THAT THERE

2

WOULD NOT BE A BACK-DOOR ASSAULT ON THAT, INCLUDING BY TRYING TO 2

3

BAKE IT INTO THIS MUCH MORE AMORPHOUS FAIR MARKET VALUE

3

THEY'RE PLANNING TO PLAY IN A CLIP IS NOT SO CRYSTAL CLEAR ONE

4

APPROACH.

4

WAY OR THE OTHER AS TO WHAT THEY WILL LATER ARGUE THIS MEANS.

5

SO TO GET THROUGH TODAY, WE WOULD ALLOW THE CLIP TO

5

WHAT COUNSEL SHOWED YOU ON THE BOARD HERE WAS ONE

1

THAT DOCUMENT FOR THAT PURPOSE.
MY SENSE OF MR. ZIEMEN'S TESTIMONY IS IT'S -- THAT

SIDE OF A COIN. WHAT THEY'RE SHOWING YOU THERE IS EXACTLY THE

6

BE PLAYED IF YOUR HONOR -- WELL, YOUR HONOR WILL ALLOW IT IF

PIECE PART THAT WOULD GO WITH ORACLE'S CLAIM THAT IT HAS LOST --

7

YOUR HONOR ALLOWS -- BUT WE WOULD CONSENT THAT THE CLIP CAN BE

8

THAT THE FUNDAMENTAL LOSS IT HAS SUSTAINED AS A RESULT OF THE

8

PAID (SIC) -- PLAYED SO LONG AS WE RESERVE OUR RIGHT, SUBJECT TO

9

ACTION OF DEFENDANTS IS -- IT'S LOST ITS OPPORTUNITY TO SELL

9

YOUR RULING, THAT THIS DOES NOT COME IN FOR THAT PURPOSE, TO

6
7

10

MORE AND DIFFERENT SOFTWARE. THAT'S THE CLAIM. THAT'S THE

10

11

VALUE.

11

THE COURT: WELL, THIS IS -- I DON'T KNOW WHY WE'RE

12

SPENDING SO MUCH TIME -- OF COURSE, IT CAN'T COME IN ON THE

12

WHAT THEIR EXPERT MR. MEYER HAS DONE IS HE'S TAKEN

PROVE UPSELL, CROSS-SELL OR GOOD-WILL VALUE.

13

THE VALUE OF PEOPLESOFT, ORACLE'S PURCHASE OF PEOPLESOFT. HE'S

13

CROSS-SELL/UPSELL ISSUE. BUT IT CERTAINLY SEEMS TO ME TO BE

14

CONCLUDED THAT THE VAST BULK OF THAT REPRESENTED UPSELL AND

14

PERTINENT TO THE QUESTION OF FAIR MARKET VALUE. I MEAN, THAT'S

15

CROSS-SELL OPPORTUNITIES TO ORACLE, THE VERY SUBJECT ON WHICH WE 15

AN OBJECTIVE STANDARD, AND I -- THIS SEEMS TO ME TO BE PERFECTLY

16

HAD NO DISCOVERY.

RELEVANT TO THAT.

17

16

AND THEN WHAT HE DOES IS HE TAKES PROJECTIONS THAT

17

18

WERE NOT APPROVED BY THE BOARD BUT IN WHICH WE'VE DEBATED WITH

19

THEM ON DAUBERT. WE CONTINUE TO DEBATE WITH THEM. BUT HE GRABS 19

20

THE NUMBER AS YOU MIGHT EXPECT IN A LARGE COMPANY, LOTS OF

20

21

NUMBERS ON MANY SUBJECTS. HE TAKES THOSE NUMBERS AND THEN

21

22

CREATES A FRACTION. HE SAYS, WELL, BASED ON THE FRACTION I GET

22

23

FROM YOUR NUMBERS OF, IN THIS CASE 3,000 CUSTOMERS, I'M GOING TO

23

24

TAKE THAT FRACTION, PUT IT OVER THE TOTAL PEOPLESOFT CUSTOMERS,

24

25

SO THREE OUT OF TEN BASICALLY, AND MULTIPLY IT BY THE VALUE OF

25

18

THE QUESTION IS HOW YOU'RE GOING TO ARGUE THE
SIGNIFICANCE OF THIS INFORMATION, AND AS LONG AS YOU COMPLY WITH
THE PRIOR ORDERS OF JUDGE LAPORTE AND ME, THEN IT'S FINE.
MR. PICKETT: JUST WHAT I SAID, IT'S THE FAIR MARKET
VALUE. IT'S WHAT'S IN THEIR HEAD.
THE COURT: YES.
MR. PICKETT: SO LET'S PROCEED. I DO THINK THE
EXHIBIT NEEDS TO BE ADMITTED INTO EVIDENCE.
THE COURT: YES, I'M GOING TO PERMIT IT INTO EVIDENCE

Page 509
1
2

THIS CROSS-SELL AND UPSELL VALUE.
PRESTO-CHANGE-O, THAT IS THEIR CLAIM FOR BILLIONS OF

Page 511
1
2

SUBJECT TO THE LIMITATIONS OF THE PRETRIAL RULINGS.
MR. McDONELL: OKAY.

3

DOLLARS FOR LOST CROSS-SELL AND UPSELL OPPORTUNITIES. IT IS

3

4

VERY CLEVER. IT IS WONDERFUL FINESSE, AND IN A COMPLEX CASE

4

5

LIKE THIS, YOUR HONOR, THAT CAN BE DONE EVERY TIME YOU BLINK.

5

6

BUT THE VALUE THEY'RE SEEKING, THE RECOVERY THEY'RE

6

7

TRYING TO MAKE -- AND I -- I WOULD ASK COUNSEL TO ADDRESS THIS,

7

ON THIS SUBJECT OF DAMAGES? WE'RE FEELING A LITTLE FUZZINESS,

8

IS THAT THEY BELIEVE THAT ON THE DAY OF THIS EVENT, THAT THERE

8

AND FEDERAL COURT LITIGATION IS NOT SUPPOSED TO BE FUZZY.

9

WAS A LOST OPPORTUNITY TO MAKE UPSELLS AND CROSS-SELLS.

9

THINGS -- WE'RE SUPPOSED TO BE KIND OF -- KNOW WHERE YOU'RE

10

LET ME JUST GIVE YOU ONE MORE PIECE PART OF IT

10

THE COURT: SO IT CAN'T BE USED TO ARGUE THE THINGS
THAT YOU WERE FORBIDDEN TO ARGUE.
MR. PICKETT: IT WON'T BE USED TO ARGUE LOST PROFITS.
MR. McDONELL: YOUR HONOR, MAY I TAKE 15 MORE SECONDS

GOING WHEN YOU REACH THIS POINT.

11

BECAUSE I WANT TO SHOW HOW METICULOUS WE'VE BEEN IN TRYING TO

11

12

PROTECT THIS FROM COMING IN THE BACK DOOR.

12

WHACK. FOR EXAMPLE, THE PLAINTIFFS DON'T MENTION THEIR DAMAGES

13

EXPERT IN THEIR OPENING STATEMENT. THEY DON'T MENTION DAMAGES

14

NUMBER. WE'VE PREPARED THIS CASE BASED ON THEIR REPRESENTATIONS

13

THEY HAVE ALSO TESTIFIED -- IT'S CRYSTAL CLEAR AND

COUPLE OF THINGS JUST ARE -- SEEM A LITTLE OUT OF

14

THERE'LL BE NO DISPUTE ABOUT IT, AND THEY WILL NOT DISPUTE IT,

15

THAT THAT CROSS-SELL AND UPSELL OPPORTUNITY WAS WHAT THEY DEEMED15

FROM DAY ONE THAT DAMAGES WOULD BE SUBJECT OF EXPERT TESTIMONY

16

THE GOOD WILL OF PEOPLESOFT. AND THERE'S BEEN A CLEAR ORDER --

AND THEY'VE PRESENTED THAT IT WAY.

17

THERE WAS A CLEAR REPRESENTATION SIX MONTHS AGO OR EIGHT MONTHS 17

18

AGO THAT THEY WOULDN'T ASK FOR THAT. THERE'VE BEEN TWO ORDERS

18

WITH WHAT WOULD BE, IN OUR VIEW, AN IMPERMISSIBLE SHIFT IN THE

19

THAT THEY WOULDN'T EVEN MENTION THAT.

19

DAMAGES THEORY THAT'S BEING PRESENTED, WE'D LIKE TO HAVE SOME

20

ADVANCED NOTICE OF THAT, LIKE, NOW, FOR EXAMPLE.

20

AND HERE WE ARE TODAY WHERE THEY WANT TO USE THIS

16

IF THERE'S BEEN SOME SEA CHANGE AND WE MIGHT BE FACED

21

DOCUMENT TO CREATE THIS FRACTION AND SAY, WELL, ONE-THIRD OF OUR

21

THE COURT: OH. I'M NOT EXACTLY SURE WHAT YOU'RE

22

GOOD WILL HAS BEEN HARMED AND WE WANT TO BE PAID FOR IT.

22

ASKING. I BELIEVE THAT THE -- IN THE OPENING STATEMENT, THEY

23

THE COURT: OKAY.

23

REFERRED TO SEVERAL BILLION DOLLARS.

24

MR. McDONELL: SO VERY QUICKLY, WHAT WE WOULD DO JUST

24

MR. PICKETT: UM-HMM.

25

MR. McDONELL: THERE WAS NO NUMBER PRESENTED FOR WHAT

25

TO GET THROUGH TODAY, YOUR HONOR, IS WE OBJECT TO THE USE OF

7 (Pages 508 to 511)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE
ORACLE CORPORATION, ET AL.

)
)
PLAINTIFFS,
)
)
VS.
)
)
SAP AG, ET AL.,
)
)
DEFENDANTS.
)
____________________________)

JURY TRIAL
NO. C 07-01658 PJH
VOLUME 5
PAGES 754 - 946
OAKLAND, CALIFORNIA
MONDAY, NOVEMBER 8, 2010

TRANSCRIPT OF PROCEEDINGS

APPEARANCES:
FOR PLAINTIFFS:
BY:

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
DAVID BOIES,
STEVEN C. HOLTZMAN, ATTORNEYS AT LAW

(APPEARANCES CONTINUED NEXT PAGE)

REPORTED BY:

RAYNEE H. MERCADO, CSR NO. 8258
DIANE E. SKILLMAN, CSR NO. 4909
RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR [phone]

Page 763

Page 765

1

BY MR. BOIES:

1

PROVIDING THESE SERVICES. SO WE HAD PAID A LITTLE IN EXCESS OF

2

Q. NOW, WHY IS IT IMPORTANT TO ORACLE THAT ORACLE BE THE

2

$11 BILLION ACQUIRING PEOPLESOFT, WHICH INCLUDED THE PEOPLESOFT

3

COMPANY THAT SUPPLIES THIS MAINTENANCE AND SUPPORT SERVICES TO

3

PRODUCT LINE AND THE JD EDWARDS PRODUCT LINE.

4

CUSTOMERS THAT ARE LICENSING ORACLE SOFTWARE?

4

5

A. WELL, LET ME SAY AGAIN, I HAVE TO SPLIT THE SUPPORT SERVICES

5

BUG FIXES, ALL OF OUR REGULATORY UPDATES, AND NEW VERSIONS -- IN

6

INTO TWO PIECES. THERE ARE THE SUPPORT SERVICES WHERE YOU ASK

6

OTHER WORDS, IF WE HAD GIVEN THEM THE RIGHT TO ALL OF OUR

7

QUESTIONS ON HOW TO IMPROVE THE SOFTWARE OR YOU ASK QUESTIONS

7

ENGINEERING OUTPUT FOR THESE TWO PRODUCT LINES, JD EDWARDS

8

ABOUT HOW TO USE THE SOFTWARE, OR YOU MAKE AN EXTENSION TO THE

8

AND -- AND PEOPLESOFT, MY ESTIMATE IS THAT THEY WOULD HAVE BEEN

9

SOFTWARE.

9

ABLE TO GET MORE THAN 20 PERCENT, 30 PERCENT OF THE PEOPLESOFT

10

WE HAVE A VARIETY OF COMPANIES THAT WE WORK WITH THAT

10

IF WE HAD LICENSED SAP TO HAVE ACCESS TO ALL OF OUR

CUSTOMERS TO MOVE AWAY FROM ORACLE OVER TO SAP.

11

DO THAT KIND OF SUPPORT. IBM DOES THAT KIND OF SUPPORT,

11

SAP WAS A -- WELL, SAP IS THE NUMBER ONE APPLICATIONS

12

ACCENTURE DOES THAT KIND OF SUPPORT. THERE'S THE OTHER KIND OF

12

COMPANY IN THE WORLD. WE'RE NUMBER TWO. THEY'RE THE MARKET

13

SUPPORT, WHICH IS THE CONTINUOUS IMPROVEMENT OF THE SOFTWARE

13

LEADER. THEY'RE CREDIBLE. THEY'RE HIGHLY RESPECTED. THEY'RE

14

ITSELF, THE NEW VERSIONS OF THE SOFTWARE, WHAT WE WOULD CALL

14

THE LARGEST SOFTWARE COMPANY IN EUROPE.

15

REGULATORY UPDATES TO THE SOFTWARE AND BUG FIXES WHERE WE'RE

15

AND IF THEY HAD ACCESS TO ALL OF OUR INTELLECTUAL

16

ACTUALLY FUNDAMENTALLY CHANGING THE SOFTWARE.

16

PROPERTY, IF THEY HAD ACCESS TO ALL OF OUR ENGINEERING,

17

THEY'RE -- THEY COULD MAKE A VERY CREDIBLE OFFER TO ANY OF OUR

17

THERE -- VIRTUALLY ALL OF OUR CUSTOMERS GET THOSE

18

SUPPORT SERVICES FROM US BECAUSE WE HAVE THOUSANDS OF ENGINEERS 18

CUSTOMERS TO GET SERVICES AND -- AND PURSUE A FUTURE WITH SAP

19

WORKING ON BUG FIXES AND REGULATORY UPDATES AND CONTINUOUS

19

RATHER THAN WITH ORACLE.

20

IMPROVEMENTS OF THE SOFTWARE. SO WE REALLY SPLIT SUPPORT INTO

20

21

TWO SEPARATE BUSINESSES. THE SERVICE PORTION OF THE BUSINESS

21

ESTIMATE IS, UNDER THOSE CIRCUMSTANCES, THEY WOULD BE ABLE TO

22

WHERE HUMAN BEINGS ASK OTHER HUMAN BEINGS HOW TO USE THE

22

GET AT LEAST 20, AS MUCH AS 30 PERCENT OF OUR CUSTOMERS.

23

SOFTWARE, WHERE YOU MAKE EXTENSIONS TO THE SOFTWARE, AND IBM

23

BY MR. BOIES:

24

EXTENDS OUR SOFTWARE AND ACCENTURE EXTENDS OUR SOFTWARE, AS DO 24

Q. NOW, BEFORE GOING ON TO THE OTHER FACTORS, YOU MENTIONED

25

MANY OTHER CUSTOMERS AND THIRD-PARTY SUPPORT COMPANIES.

PEOPLESOFT AND JD EDWARDS. WHAT ABOUT SIEBEL?

25

AND, AGAIN, ON -- AGAIN, I THINK A CONSERVATIVE

Page 764

Page 766

1

IN CASE OF ACTUALLY PUTTING IN REGULATORY UPDATES OR

1

A. WELL, SIEBEL -- SIEBEL IS A SLIGHTLY DIFFERENT SITUATION.

2

FIXING BUGS OR DELIVERING NEW VERSIONS, THAT'S DONE PRETTY MUCH

2

WHEN WE ACQUIRED SIEBEL, THEY ALSO ANNOUNCED SUPPORT FOR SIEBEL

3

EXCLUSIVELY BY ORACLE.

3

IMMEDIATELY, SAP DID. SAP ALREADY HAD A TEAM IN PLACE THAT WAS

4

Q. NOW, YOU'RE AWARE THAT THE DEFENDANTS IN THIS ACTION HAVE

4

SUPPORTING PEOPLESOFT APPLICATIONS AND JD EDWARDS APPLICATIONS.

5

ADMITTED INFRINGEMENT OF COPYRIGHT, CORRECT?

5

TO THE BEST OF MY KNOWLEDGE, THEY HAD NO -- THEY HAD NO BUSINESS

6

A. YES.

6

AT ALL SUPPORTING SIEBEL CUSTOMERS SO THEY HAD A HEAD START, IF

7

Q. INFRINGEMENT OF ORACLE'S COPYRIGHTS?

7

YOU WILL; THEY HAD AN ONGOING BUSINESS.

8

A. YES.

8

9

Q. AND I THINK YOU'RE AWARE THAT ONE OF THE ISSUES IN THIS CASE

9

SO WHILE I THINK IT WAS REASONABLE TO ASSUME THAT
THEY COULD GET 20 OR 30 PERCENT OF OUR CUSTOMERS HAD THEY

10

IS WHAT WAS THE VALUE OF THE HYPOTHETICAL LICENSE THAT WOULD

10

LICENSED OUR ENGINEERING OUTPUT FOR JD EDWARDS AND PEOPLESOFT, I

11

HAVE BEEN REQUIRED TO PERMIT THE DEFENDANTS TO LAWFULLY DID

11

THINK THEY WOULD HAVE GOTTEN A SMALLER PERCENTAGE OF THE SIEBEL

12

(SIC) WHAT THEY ACTUALLY DID.

12

CUSTOMERS JUST BECAUSE THAT WAS A BUSINESS THEY WERE STARTING

13

FROM SCRATCH. AND SO MAYBE THEY WOULD HAVE GOTTEN 15,
20 PERCENT OF THE SIEBEL CUSTOMERS.

13

YOU'RE FAMILIAR WITH THAT?

14

A. I AM.

14

15

Q. AND I'D LIKE TO ASK YOU SOME QUESTIONS ABOUT THAT.

15

Q. NOW, WHAT FACTORS, OTHER THAN THE POTENTIAL LOSS OF

16

CUSTOMERS, WOULD YOU TAKE INTO ACCOUNT IN TERMS OF THE RIGHT

16

IN TERMS OF TRYING TO VALUE THAT LICENSE, IF YOU HAD

17

ENGAGED IN A NEGOTIATION WITH SAP AND TOMORROWNOW BACK IN EARLY 17

PRICE FOR A LICENSE FOR THE KIND OF PERMISSION TO USE YOUR

18

2005, WHAT ARE THE CONSIDERATIONS THAT WOULD HAVE BEEN TAKEN

18

SOFTWARE THAT SAP AND TOMORROWNOW WOULD HAVE REQUIRED TO DO WHAT

19

INTO ACCOUNT IN THAT NEGOTIATION?

19

THEY DID?

MR. LANIER: OBJECTION, YOUR HONOR. AS WE'VE

20

A. WELL, THEY WOULD HAVE -- THEY'D BE ABLE TO ESTABLISH

21

DISCUSSED, WE OBJECT TO THIS LINE OF QUESTIONING.

21

RELATIONSHIPS WITH THESE CUSTOMERS AND SELL THEM ADDITIONAL

22

THE COURT: ALL RIGHT. OVERRULED, HOWEVER.

22

PRODUCTS. SO ONCE YOU HAVE A RELATIONSHIP WITH A CUSTOMER AND

23

THE WITNESS: WELL, I THINK -- I THINK THERE'S ONE

23

THE CUSTOMER FINDS YOU A GOOD SUPPLIER THAT PROVIDES A GOOD

20

24

OVERWHELMING CONSIDERATION, AND THAT IS HOW MANY PEOPLESOFT AND 24

PRODUCT WITH GOOD SERVICES, THEN YOU CAN USE THAT RELATIONSHIP,

25

JD EDWARDS CUSTOMERS WE WOULD HAVE LOST TO SAP IF THEY WERE

YOU CAN EXPAND UPON THAT RELATIONSHIP AND SELL THEM ADDITIONAL

25

4 (Pages 763 to 766)
Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 799

Page 801

1

IF THAT'S THE WAY DAMAGES ARE MEASURED, SHOULD MATCH THE TIME

2

PERIOD THAT TOMORROWNOW ACTUALLY OPERATED, RIGHT? IT'S WHAT YOU 2

3

SAID THERE.

3

4

A. I BELIEVE SO.

4

THE COURT: ALL RIGHT.

5

Q. OKAY. STARTING ON LINE 7, THERE'S ANOTHER SENTENCE.

5

MR. LANIER: THANK YOU, MR. ELLISON.

6

"MR. LANIER ALSO DID NOT EXPLAIN OR ASK ME TO ASSUME THAT THE

6

THE COURT: ALL RIGHT.

7

LICENSE WOULD INVOLVE A LIMITED USE AND ACCESS BY TOMORROWNOW

7

ANY REDIRECT?

8

ALONE AND WOULD HAVE NOT ALLOWED SAP OR TOMORROWNOW TO OPENLY 8

9

MARKET THEIR ACCESS TO AND USE OF ORACLE'S INTELLECTUAL PROPERTY

10

AS PART OF A COMPETITIVE SERVICE OFFERING."

1

HIS TESTIMONY WAS 20 TO 30 PERCENT.
MR. LANIER: YOU'RE ABSOLUTELY RIGHT, YOUR HONOR.
AND IF I SAID THAT, I DID MISSPEAK. THANK YOU.

MR. BOIES: YES, YOUR HONOR, JUST BRIEFLY.
REDIRECT EXAMINATION

9
10

YOU SEE THAT?

BY MR. BOIES:

11

Q. MR. ELLISON, COUNSEL SHOWED YOU A NUMBER OF DOCUMENTS FROM

12

A. I DO.

12

JANUARY OF 2005 AND SHORTLY THEREAFTER. AND HE ASKED YOU

13

Q. AND SO YOU UNDERSTAND THAT, AGAIN, TO THE EXTENT LICENSE

13

WHETHER ANYONE HAD SAID IN JANUARY OF 2005 THAT YOU EXPECTED

14

SHOULD BE PART OF THIS CASE, IT'S BASED ON TOMORROWNOW'S LIMITED

14

TOMORROWNOW AND SAP TO TAKE 20 OR 30 PERCENT OF THE CUSTOMERS.

15

USE AND ACCESS, CORRECT?

15

16

A. I DO.

16

A. I DO.

17

Q. OKAY.

17

Q. IN JANUARY OF 2005 OR SHORTLY THEREAFTER, DID YOU KNOW THAT

11

DO YOU RECALL THAT?

18

THANK YOU, SIR.

18

THEY -- THAT SAP AND TOMORROWNOW WERE INFRINGING YOUR

19

YOU CAN PUT THAT DOWN.

19

COPYRIGHTS?

20

JUST A FEW MORE QUESTIONS, MR. ELLISON.

20

A. I DID NOT.

PUTTING IT IN PERSPECTIVE, JUST MAKING SURE WE'VE GOT

21

Q. WOULD THAT HAVE BEEN MADE A DIFFERENCE IN TERMS OF YOUR

22

IT, YOU TOLD THE JURY, YOU WERE -- YOU'D BE -- YOU WOULD HAVE

22

ASSESSMENT OF THE RISK?

23

BEEN CONCERNED BACK IN JANUARY OF 2005 THAT SAP COULD HAVE GOT

23

A. IT WOULD HAVE MADE A DIFFERENCE. I -- YES.

24

AS MUCH AS 20- TO 30,000 (SIC) CUSTOMERS, RIGHT?

24

Q. NOW, HE ALSO ASKED YOU WHETHER YOU KNEW THAT TOMORROWNOW HAD

25

A. THAT'S CORRECT.

25

ACTUALLY GOTTEN 358 CUSTOMERS.

21

Page 800

Page 802

1

Q. YOU NEVER WROTE THAT DOWN; YOU DON'T WRITE THOSE KINDS OF

1

2

THINGS DOWN, RIGHT?

2

A. YES.

3

A. THAT'S CORRECT.

3

Q. NOW, IF YOU'D BEEN NEGOTIATING A LICENSE TO GIVE ALL THIS

4

Q. YOU DON'T KNOW OF ANYBODY WHO EVER WROTE DOWN A SIMILAR

4

INTELLECTUAL PROPERTY THAT THEY TOOK TO THEM BACK IN JANUARY OF

5

CONCERN.

5

2005, WOULD YOU HAVE CONDITIONED THE VALUE OF THAT LICENSE ON

6

A. YES.

6

HOW MANY CUSTOMERS THEY ACTUALLY GOT?

7

Q. OKAY.

7

A. NO. THE -- WE WOULD -- WE WOULD CONDITION THE LICENSE ON

8

THE VALUE OF THE SOFTWARE THEY WERE TAKING AND THE POTENTIAL

9

LOSS TO OUR BUSINESS.

8
9

IN ACQUIRING PEOPLESOFT, YOU ACQUIRED -- AND THEN
EVENTUALLY SIEBEL, YOU ACQUIRED A TOTAL OF ABOUT 13,000

DO YOU RECALL THAT?

10

CUSTOMERS, RIGHT?

10

MR. BOIES: THANK YOU. NO MORE QUESTIONS.

11

A. THAT'S RIGHT.

11

THE COURT: ANYTHING ELSE, MR. LANIER?

12

Q. NOW, YOU AGREE WITH ME, SIR, THAT IF YOU WANTED TO KNOW WHY 12

MR. LANIER: TWO QUESTIONS, YOUR HONOR.

13

THE CUSTOMERS DID A PARTICULAR THING, THEN THE PEOPLE TO ASK

13

THE COURT: SURE.

14

WOULD BE THE CUSTOMERS, RIGHT?

14

MR. LANIER: THANK YOU.

15

A. YES.

15

16

Q. ARE YOU AWARE OF WHETHER ANY CUSTOMER EVIDENCE HAS BEEN

16

BY MR. LANIER:

17

PRESENTED TO THIS JURY BY YOUR LAWYERS?

17

Q. MR. ELLISON, YOU JUST TOLD MR. BOIES THAT IT WOULD HAVE MADE

18

A. I'M NOT AWARE.

18

A DIFFERENCE TO YOU IF YOU HAD KNOWN THAT THERE WAS COPYRIGHT

19

Q. OKAY. SO YOU GOT ABOUT 13,000 CUSTOMERS, AND A GRAND TOTAL

19

INFRINGEMENT. YOU REMEMBER THAT?

20

OF 358 OF THEM OVER A FEW YEARS CHOSE SAP OR, RATHER, CHOSE

20

A. YES.

21

TOMORROWNOW, CORRECT?

21

Q. IN JANUARY OF 2005, YOU HAD NO IDEA HOW TOMORROWNOW WAS

22

A. I THINK THAT'S THE NUMBER THAT MOVED TO SAP; THAT'S RIGHT.

22

DOING WHAT IT WAS DOING, DID YOU?

RECROSS-EXAMINATION

23

MR. LANIER: THANK YOU, SIR.

23

A. I HAD SOME SUSPICIONS.

24

THE COURT: EXCUSE ME, MR. LANIER. I THINK YOU MIGHT

24

Q. AND WITH THOSE SUSPICIONS IN MIND, THERE'S STILL NOT A SHRED

25

HAVE MISSPOKE WHEN YOU SAID "20- TO 30,000 CUSTOMERS." I THINK

25

OF CONTRARY EVIDENCE, IS THERE, THAT YOU ACTUALLY HAD THAT

13 (Pages 799 to 802)
Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 863
WE WERE REALLY TRYING TO REALLY LAY OUT OUR PLANS

Page 865
1

A. NO. WE COULDN'T BECAUSE WE WOULDN'T HAVE THE EXCLUSIVE

2

GOING FORWARD FOR THE PRODUCTS, FOR THE VISION OF THE TWO

2

RIGHTS ANYMORE. SO A LOT OF THESE CUSTOMERS WOULD, IN FACT, BE

3

COMPANIES WORKING TOGETHER, AND TO SOME EXTENT WE WANTED TO

3

A JUMP BALL. AND WE COULDN'T COUNT ON THE BILLION TWO, WHICH

4

KIND OF PUT THE DRAMA OF THE PREVIOUS 18 MONTHS BEHIND US.

4

UNDERLIES THE ENTIRE MODEL, AND SO WE COULDN'T COUNT ON THE

5

Q. AND HOW DID YOU LEARN ABOUT SAP'S NEXT DAY ACQUISITION OF

5

BILLION TWO COMING IN MINIMALLY ANNUALLY TO PAY THE

6

TOMORROWNOW?

6

$11 BILLION.

7

A. IT WAS A HUGE, HUGE ANNOUNCEMENT. I MEAN, ALL OF ORACLE

7

Q. WHAT ADVANTAGES WOULD ORACLE LOSE BY PROVIDING SAP ACCESS

8

LIT UP. IT WAS GIGANTIC. THE PRESS PICKED IT UP. IT WAS, YOU

8

TO ITS SOFTWARE AND SUPPORT MATERIALS AT THAT TIME?

9

KNOW, ORACLE PAYS 10 BILLION, SAP PAYS 10 MILLION GETS THE SAME

9

A. IT'S THE SAME ADVANTAGES THAT ALL OF US SOFTWARE COMPANIES

1

THING, TYPE OF THING. IT WAS EVERYWHERE. ALL OF ORACLE WAS

10

HAVE. WHEN YOU HAVE THE RIGHT TO USE YOUR SOFTWARE EXCLUSIVELY

TALKING ABOUT IT.

11

AND YOU SELL SUPPORT, AND YOU CAN DO NOT ONLY THE UPDATE

12

Q. DO YOU RECALL THE NAME OF THE PROGRAM THAT SAP ANNOUNCED

12

WRITES, BUT THE SECURITY FIXES, AND REALLY EVERYTHING, REALLY

13

USING TOMORROWNOW AS ITS SUPPORT FIRST STEP?

13

ALL THE SUPPORT. WHEN YOU ARE THE ONLY ONE WHO HAS MADE THE

14

A. SAFE PASSAGE.

14

INVESTMENT IN IT, IT'S A HUGE ADVANTAGE THAN FOR -- OVER

15

Q. AND WHAT DID YOU UNDERSTAND SAP WAS GOING TO DO WITH

15

ANYBODY ELSE.

16

TOMORROWNOW AGAINST ORACLE?

16

Q. NOW, MS. CATZ, YOU'VE HEARD THE TESTIMONY OF YOUR FORMER

17

A. WELL, WHAT I UNDERSTOOD WAS WHAT THEY SAID THEY WERE GOING 17

CO-PRESIDENT, MR. PHILLIPS, AND THEN MR. ELLISON TODAY ABOUT

18

TO TRY TO DO, WHICH WAS TAKE THOSE CUSTOMERS WE HAD JUST

THE BILLIONS IN LICENSE FEES THAT THEY BELIEVE ORACLE

19

ACQUIRED AND OFFER THEM IN COMPETITION WITH US SUPPORT FOR THE 19

REASONABLY WOULD BE SEEKING FROM SAP FOR ACCESS TO THE SOFTWARE

20

PEOPLESOFT AND J.D. EDWARDS PRODUCTS.

AND SUPPORT MATERIALS THAT SAP TOOK FROM ORACLE IF IT WAS BEING

21

Q. DID THE FACT THAT IT WAS SAP WHO HAD ACQUIRED TOMORROWNOW 21

22

MAKE A DIFFERENCE TO ORACLE?

22

23

A. OH, YEAH, IT MADE A TON OF DIFFERENCE BECAUSE SAP WAS THE

23

24

NUMBER ONE PLAYER IN THE MARKET. IT GAVE THIS WHOLE OFFERING

24

CONTINUING OBJECTION TO THIS LINE OF QUESTIONING AS A

25

INCREDIBLE CREDIBILITY, AND THE ANALYSTS WROTE ABOUT IT

25

NONDISCLOSED EXPERT OPINION, CALLING FOR SPECULATION AND THE

10
11

18

20

EVALUATED ON JANUARY 19, 2005.
DO YOU AGREE WITH THEM? AND WHY?
MR. LANIER: OBJECTION, YOUR HONOR. WE WOULD LIKE A

Page 864

Page 866

1

EVERYWHERE.

1

2

Q. WHAT DID ORACLE DO IN RESPONSE?

2

3

A. WELL, FIRST WE TRIED TO FIGURE OUT WHAT WAS GOING ON A

3

THE WITNESS: SEE, RIGHT THEN AND THERE, WE HAD JUST

4

LITTLE BIT. LITTLE DID WE KNOW WE HAD NO ACTUAL IDEA, BUT

4

PAID $11 BILLION, OVER $11 BILLION FOR THIS ASSET FOR THESE

5

FIRST WE TRIED TO LEARN WHAT IT WAS. AND THEN WE TRIED TO

5

CUSTOMERS.

6

COMMUNICATE TO THE CUSTOMER BASE, YOU KNOW, WHAT WE OFFERED AND 6

7

SHOWED THE VALUE OF SUPPORT AS OFFERED BY ORACLE.

7

TO THE NUMBER ONE PLAYER IN THE INDUSTRY TO HAVE THAT SAME

8

Q. GOING FORWARD, IN CONNECTION WITH THE SAFE PASSAGE

8

SOFTWARE AND SUCH THAT WE WOULD HAVE TO COMPETE FOR THOSE

9

PROGRAM, HOW DID ORACLE FIGHT BACK?

9

EXISTING CUSTOMERS ALL OVER AGAIN, AND, FRANKLY, THEY WOULD

10

HAVE AS GOOD A CHANCE, IF NOT BETTER, OF WINNING BECAUSE THEY

REASONS WE BRIEFED.
THE COURT: ALL RIGHT. OVERRULED.

IF WE WERE ALL OF A SUDDEN GOING TO GIVE A LICENSE

10

A. WELL, WE LITERALLY HAD TO SORT OF OVERCOMMUNICATE AND

11

OVERSUPPORT ALL OF THE CUSTOMERS BECAUSE THE TOMORROWNOW WAS 11

ARE THE NUMBER ONE PLAYER, IT'S DEFINITELY IN THE BILLIONS.

12

EVERYWHERE. AND WE REALLY TRIED TO BASICALLY DO AN EVEN BETTER

12

THERE'S NO QUESTION. WE NEVER WOULD HAVE PAID $11 BILLION FOR

13

JOB. WE EXTENDED SUPPORT DATES, ALL SORTS OF THINGS THAT WERE

13

IT. WE COULDN'T AFFORD IT. AND TO SELL A LICENSE, IT WOULD

14

RATHER EXPENSIVE, AND WE JUST CONSTANTLY TRIED TO PROVE THE

14

HAVE TO MAKE UP FOR THE LOSS THAT WE WOULD GET BY GIVING IT

15

VALUE OF SUPPORT TO OUR CUSTOMERS AT THE TIME.

15

TO -- SELLING IT TO SAP.

16

Q. WAS THAT HARD TO DO WHEN SOMEBODY WAS OFFERING SUPPORT AT

16

BY MS. HOUSE:

17

HALF PRICE?

17

Q. WOULD YOU TAKE PAYMENT FROM SAP FOR ACCESS TO ORACLE'S

18

A. IT'S HARD TO DO AT HALF PRICE. IT'S REALLY HARD TO DO AT

18

SOFTWARE AND SUPPORT MATERIALS OVER TIME?

19

ZERO, AND THAT WAS GOING ON.

19

A. NO, OF COURSE, NOT. WE HAD TO PAY UP FRONT. WE DIDN'T

20

Q. ALL RIGHT. LET'S MOVE FROM THE -- MOVE ON TO THE QUESTION

20

PAY FOR PEOPLESOFT, YOU KNOW, ON LAYAWAY EITHER. I MEAN, WE

21

OF THE APPROPRIATE DAMAGES HERE.

21

PAID IT ALL UP FRONT.

22

MS. CATZ, WOULD ORACLE HAVE PAID WHAT IT DID FOR

22

SAP WOULD HAVE TO PAY IT ALL UP FRONT. BECAUSE

23

PEOPLESOFT AND SIEBEL KNOWING THAT ORACLE'S KEY COMPETITOR

23

FOR -- NOT ONLY FOR THE FACT THAT WE HAD JUST PAID IT, I CAN

24

WOULD HAVE ACCESS TO THE SOFTWARE AND SUPPORT MATERIALS THAT

24

ONLY IMAGINE TELLING MY BOARD, WE WILL GET IT OVER TIME,

25

ORACLE THOUGHT WERE ITS ALONE?

25

DEPENDING ON HOW WELL THEY DO.

29 (Pages 863 to 866)
Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 867

Page 869
1

Q. IN YOUR JOB OVER THE YEARS AT ORACLE, HAVE PEOPLE EVER

2

MEASURE IT. BECAUSE WE ARE EVEN IN DISPUTE RIGHT NOW ABOUT

2

PRESENTED YOU WITH PROJECTIONS?

3

WHICH CUSTOMERS. WE WOULD END UP BACK IN COURT. THE ONLY WAY

3

A. YES.

4

TO DO IT IS UP FRONT JUST LIKE WE PAID FOR IT.

4

Q. AND THOSE PROJECTIONS AREN'T ALWAYS RIGHT, ARE THEY?

5

Q. NOW SAP'S COUNSEL IN HIS OPENING STATEMENT SAID THAT SAP

5

A. NO.

6

STANDS READY TO PAY ORACLE $40 MILLION AS COMPENSATION FOR THE

6

Q. I IMAGINE OVER THE YEARS THAT YOU HAVE SEEN YOUR STAFF

7

INFRINGEMENT IT HAS NOW ADMITTED TO.

7

GIVE YOU ONE OR TWO PROJECTIONS AND YOU SAY, I DON'T KNOW, DO

8

IT AGAIN THIS WAY OR HERE'S WHAT'S MISSING, THINGS LIKE THAT,

9

RIGHT?

1

8
9

BUT, FRANKLY, I DIDN'T EVEN KNOW HOW WE WOULD EVEN

WHY HAVEN'T YOU TAKEN THAT OFFER?
A. TAKING $40 MILLION FROM SAP, SAP PAYING US $40 MILLION IS

10

A REWARD FOR THEIR BAD BEHAVIOR, FRANKLY. IT ACTUALLY, FOR

10

A. SURE.

11

PEOPLE WHO SAY THEY ARE TAKING RESPONSIBILITY FOR EVERYTHING

11

Q. IF WE WERE TO WANDER AROUND ORACLE AND LOOK AT EVERY

12

THEY DID, THIS IS EXACTLY THE OPPOSITE OF THAT.

12

PROJECTION THAT ANYONE HAS EVER DONE, LOOK AT ALL THE POWER

13

POINTS, WE'D PROBABLY FIND SOME PROJECTIONS THAT YOU'D AT AND

13

THIS IS LIKE TAKING SOMEONE'S WATCH AND HOCKING IT.

14

SAY IT'S A $2,000 WATCH, AND HOCKING IT FOR $20, AND THEN

14

SAY, I DON'T AGREE WITH THAT. IS THAT FAIR?

15

OFFERING TO GIVE US $20. IT'S CRAZY.

15

A. DEFINITELY.

16

Q. WHAT WOULD ACCEPTING $40 MILLION AS COMPENSATION FOR SAP'S

16

Q. SO EVERYTHING THAT SAYS PROJECTION, EVERYTHING THAT MIGHT

17

ADMITTED EXTENSIVE INFRINGEMENT OF ORACLE'S SOFTWARE AND

17

EVEN BE OFFERED TO YOU ISN'T ALWAYS RIGHT, IS IT?

18

SUPPORT MATERIAL SIGNAL?

18

A. NO, IT'S NOT ALWAYS RIGHT. THOUGH, I WILL TELL YOU,

19

A. ACTUALLY, IT'S A REWARD FOR BAD BEHAVIOR. AND IT

19

PEOPLE GO OUT OF THEIR WAY, IF THEY ARE OFFERING IT TO ME OR

20

COMPLETELY UNDERVALUES THE ENTIRE BASIS OF OUR INDUSTRY THAT

20

SENIOR MANAGEMENT OR TO THE BOARD, IT'S -- THEY THINK IT'S

21

ALL OF US PARTICIPATE IN. BECAUSE WE'RE ALL ABOUT INTELLECTUAL

21

RIGHT. AT THE MOMENT THEY ARE DOING IT, THEY THINK IT'S RIGHT.

22

PROPERTY. IF WE DON'T PROTECT IT, THAT MEANS PEOPLE CAN TAKE

22

Q. I'LL BET THEY DO NOT WANT TO MAKE YOU MAD.

23

THE INTELLECTUAL PROPERTY AND HOPE THEY DON'T GET CAUGHT. IF

23

24

THEY GET CAUGHT, MAYBE GIVE BACK THE HARM, YOU KNOW, THAT THEY 24

THAT EXHIBIT 4809, THE GIANT FAT ONE. IF WE CAN USE YOU? IT

25

THINK THEY CAUSED. WHEN, IN FACT, THAT ISN'T -- THAT ISN'T THE

WAS ALL --

25

I WONDER IF WE CAN ASK YOUR TEAM TO HELP US OUT WITH

Page 868
1

VALUE OF WHAT THEY DID AT ALL.

Page 870
1

2

MS. HOUSE: THANK YOU, MS. CATZ.

2

3

THE COURT: ALL RIGHT.

3

4

CROSS-EXAMINATION?

4

5

MR. LANIER: THANK YOU.

5

6

CROSS-EXAMINATION

MS. HOUSE: I DON'T KNOW IF WE HAVE IT ALL ON -MR. LANIER: I AM GOING TO ASK ABOUT SOME OF THE
SAME PAGES YOU ASKED MS. CATZ ABOUT.
THANK YOU VERY MUCH.
THE WITNESS: IS IT IN MY BINDER?

6

BY MR. LANIER:

7

BY MR. LANIER:

7

Q. YES. IT'S IN YOUR BINDER THAT YOUR LAWYERS GAVE YOU. WE

8

Q. GOOD MORNING, MS. CATZ. STILL MORNING? YES.

8

LOOKED AT A FEW SLIDES FROM THAT.

9

A. OKAY.

9

NICE TO SEE YOU AGAIN.

10

MS. HOUSE: DO YOU HAVE A BINDER FOR ME?

10

11

MR. LANIER: I MIGHT, I MIGHT NOT.

11

12

MS. HOUSE: ALL RIGHT.

12

13

MR. LANIER: HOW ABOUT THAT?

13

14

MS. HOUSE: THAT SOUNDS PROMISING.

14

15

MR. LANIER: I'M JUST TRYING TO KEEP IT SHORT.

15

Q. I WILL ASK ABOUT A FEW PAGES OF IT.
MR. LANIER: IF YOU CAN START WITH THE FRONT PAGE.
THAT WOULD BE GREAT.
(EXHIBIT DISPLAYED ON SCREEN.)
SO THIS IS THAT EXHIBIT 4809 -- THANK YOU, GUYS, I
APPRECIATE IT.
CAN YOU JUST BLOW UP THAT TOP PART?

16

BY MR. LANIER:

16

17

Q. MS. CATZ, YOU TEACH A CLASS I HEAR?

17

BY MR. LANIER:

18

A. YES, I DO.

18

Q. SO THIS IS MS. SIM, YOU MENTIONED HER. AND IT'S GOING TO

19

Q. DO YOU GIVE OUT ANY HOMEWORK?

19

A LOT OF PEOPLE. THESE ARE THE SCRIPTS FOR THAT ANALYST DAY,

20

A. YES, I DO.

20

RIGHT?

21

Q. DO PEOPLE GET IT RIGHT EVERY TIME THEY GIVE IT BACK TO YOU

21

A. YES, I THINK SO. IT SAYS HERE THE FINAL SLIDES.

22

THE FIRST TIME?

22

Q. SO, SLIDES. I AM SORRY, NOT SCRIPTS.

23

A. WELL, WE TALK ABOUT IT IN CLASS. THEY ARE BUSINESS

23

24

STUDENTS. THEY DON'T -- THEIR HOMEWORK IS NOT SUBMITTED UNTIL 24

JANUARY 26TH, 2005, RIGHT?

25

THE EXAMS.

A. YES. THAT'S RIGHT.

25

THE DATE, YOU CAN SEE THAT UP THERE. IT'S

30 (Pages 867 to 870)
Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE
ORACLE CORPORATION, ET AL.

)
)
PLAINTIFFS,
)
)
VS.
)
)
SAP AG, ET AL.,
)
)
DEFENDANTS.
)
____________________________)

JURY TRIAL
NO. C 07-01658 PJH
VOLUME 9
PAGES 1512 - 1695
OAKLAND, CALIFORNIA
TUESDAY, NOVEMBER 16, 2010

TRANSCRIPT OF PROCEEDINGS
APPEARANCES:
FOR PLAINTIFFS:
BY:

BINGHAM MCCUTCHEN LLP
THREE EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111-4607
ZACHARY J. ALINDER,
HOLLY A. HOUSE,
GEOFFREY M. HOWARD,
DONN P. PICKETT, ATTORNEYS AT LAW

BY:

BOIES, SCHILLER & FLEXNER LLP
1999 HARRISON STREET, SUITE 900
OAKLAND, CALIFORNIA 94612
DAVID BOIES,
STEVEN C. HOLTZMAN, ATTORNEYS AT LAW

(APPEARANCES CONTINUED NEXT PAGE)

REPORTED BY:

RAYNEE H. MERCADO, CSR NO. 8258
DIANE E. SKILLMAN, CSR NO. 4909

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

Page 1537

Page 1539

1

TIME TO TIME?

1

YOU HEARD AT LENGTH FROM MR. MEYER ON THIS ISSUE. I'M GOING TO

2

A. AT ANY ONE TIME, THERE MIGHT HAVE BEEN 50 PEOPLE WORKING ON

2

DEAL WITH IT, TOO. WE COME TO COMPLETELY DIFFERENT NUMBERS, AS

3

THIS ENGAGEMENT. OVERALL, JUST BEFORE MY DEPOSITION, WHICH WAS

3

YOU CAN SEE. BUT THIS IS AN ALTERNATIVE. SO YOU GET ONE AND

4

IN JUNE, I COUNTED THEM UP. AND THERE WERE 121 DIFFERENT PEOPLE

4

TWO, OR THREE.

5

WHO WORKED ON THE ENGAGEMENT. YOU CAN IMAGINE WITH THAT VOLUME

5

Q. OKAY. NOW, THE LOST-SUPPORT PROFITS NUMBER OF 19 MILLION,

6

OF INFORMATION TO LOOK AT, IT'S JUST VERY TIME-CONSUMING, SO WE

6

THAT'S LOWER THAN THE 32 MILLION I TOLD THE JURY IN THE OPENING

7

HAD A LARGE TEAM OF PEOPLE.

7

STATEMENT. CAN YOU EXPLAIN TO US WHY THAT NUMBER HAS NOW

8

Q. OKAY. WANT TO TALK A LITTLE BIT MORE ABOUT WHY YOU WERE

8

DROPPED TO 19 FROM 32?

9

FOCUSING ON THE CUSTOMER INFORMATION. YOU MENTIONED 358

9

A. YES. THE -- THE PLAINTIFFS IN THE 32 MILLION WERE TWO

10
11

10

TOMORROWNOW CUSTOMERS AND 86 SAP CUSTOMERS.
WHY DIDN'T YOU JUST CALCULATE THAT THE DEFENDANTS

COMPANIES, OIC THAT I KNOW YOU'VE HEARD ABOUT, AND OUSA, WHICH

11

IS ORACLE -- ORACLE U.S.A. VERY LATE IN THE CASE, THE ORACLE

12

OWED COMPENSATION TO ORACLE FOR ALL OF THOSE CUSTOMERS?

12

U.S.A. -- THE OUSA PLAINTIFF WAS REMOVED FROM THE CASE, SO THE

13

A. BECAUSE WE SHOULD ONLY CALCULATE THE DAMAGES THAT AROSE AS A

13

DAMAGES THAT RELATED TO OUSA HAD TO COME OUT OF CALCULATION.

14

RESULT OF WHAT'S BEING ALLEGED IN THE CASE. NOW, IT'S NOT AN

14

SO THE DIFFERENCE IS -- ALMOST EXACTLY THE DIFFERENCE

15

ALLEGATION ANY LONGER. IT'S AN ADMISSION, THAT THE COPYRIGHTS

15

BETWEEN THE 32 MILLION AND THIS NUMBER IS BECAUSE OF THAT OUSA

16

WERE INFRINGED.

16

REMOVAL FROM THE CASE.

17

Q. OKAY. AND DID MR. MEYER ALSO LOWER HIS NUMBER FOR THE SAME

17

SO IT'S WHAT HAPPENED AS A RESULT OF THAT

18

INFRINGEMENT THAT'S WHAT MATTERS. AND THE ONLY WAY TO DO THAT

18

REASON AS YOU UNDERSTAND IT?

19

IS TO LOOK AT ONE CUSTOMER AT A TIME. YOU HAVE TO TRY AND

19

A. HE DID.

20

DETERMINE WHY THEY DID WHAT THEY DID. IF THEY -- IF THEY WENT

20

Q. THE INFRINGER'S PROFITS, THAT'S SAP'S PROFITS ON SOFTWARE

21

TO TOMORROWNOW OR WENT TO SAP FOR REASONS COMPLETELY UNRELATED 21

SOLD AS A RESULT OF TOMORROWNOW'S INFRINGEMENT. HOW MANY

22

TO THE INFRINGEMENT, THEN THERE WOULD BE NO DAMAGES, AND EACH

22

CUSTOMERS IS REFLECTED IN THE 8 MILLION?

23

CUSTOMER IS UNIQUE.

23

A. I'D JUST LIKE TO CORRECT THAT A LITTLE BIT. THE INFRINGER'S

24

PROFITS IS BOTH TOMORROWNOW AND SAP.

24
25

SO THE ONLY WAY TO DO THAT IS TO GATHER THE
INFORMATION ONE CUSTOMER AT A TIME AND TRY TO UNDERSTAND THAT

25

SO NOW GOING TO THE SECOND PART OF YOUR QUESTION,

Page 1538

Page 1540

1

INFORMATION TO LET US KNOW WHY THEY DID WHAT THEY DID. SO IT'S

1

WHICH WAS THE -- THE SAP COMPONENT OF THAT IS BASED UPON FOUR

2

A BEHAVIORAL ISSUE, WHY DID THEY DO WHAT THEY DID.

2

CUSTOMERS, SO NOT 86, JUST FOUR.

3

Q. OKAY. WHAT CONCLUSIONS DID YOU REACH AS TO THE AMOUNT OF

3

Q. OKAY. AGAIN, IN THE OPENING STATEMENT I THINK I SAID "TWO

4

COMPENSATION THAT TOMORROWNOW AND SAP OWE TO ORACLE?

4

CUSTOMERS." WHY THE DIFFERENCE?

5

AND, YOUR HONOR, WE HAVE A SLIDE ON THIS, AND THIS

5

A. WE WORK SO HARD TO DO THIS ANALYSIS, BUT IN THE -- THE

6

RUN-UP TO THE TRIAL, YOU CAN IMAGINE THAT THE INTENSITY OF WORK

7

GETS EVEN GREATER. AND I'VE BEEN OVER ALL OF THESE CUSTOMERS

8

AGAIN TO SEE WHETHER I FELT GOOD ABOUT BRINGING WHAT I HAD

9

LEARNED TO YOU.

6
7

WOULD BE THE FIRST SLIDE.
(DEMONSTRATIVE PUBLISHED TO JURY.)

8

BY MR. MITTELSTAEDT:

9

Q. IF YOU WOULD JUST EXPLAIN TO US, MR. CLARKE, WHAT THIS SLIDE

10

IS AND WHAT IT MEANS.

10

11

A. YES. THIS SLIDE SHOWS THAT THERE ARE REALLY THREE AREAS

11

DIDN'T THINK REALLY SHOULD BE EXCLUDED FROM THE DAMAGES. SO

12

THAT WE CALCULATE THESE DAMAGES IN. AND TWO OF THEM GO TOGETHER 12

WHEN MR. MITTELSTAEDT SAID, IT'S "TWO CUSTOMERS," BACK THEN, IT

13

AND ARE AN ALTERNATIVE TO THE THIRD WAY OF DOING IT, AND YOU'RE

13

STILL WAS TWO CUSTOMERS. BUT SINCE THEN, I'VE -- I'VE PUT THESE

14

PROBABLY FAMILIAR WITH ALL OF THESE TERMS BY NOW.

14

TWO OTHERS IN. SO IT'S NOW FOUR CUSTOMERS THAT WE ARE

15

CALCULATING THE DAMAGES ON.

15

THE LOST SUPPORT PROFITS, THAT WILL BE THE PROFITS

AND IN DOING THAT, I FOUND TWO CUSTOMERS THAT I

16

THAT ORACLE WOULD HAVE MADE IF THE CUSTOMERS AT ISSUE HAD NOT

16

Q. AND THAT INCREASED THE AMOUNT OF COMPENSATION OWED TO

17

LEFT ORACLE. SO WE LOOK AT THE ONES THAT LEFT AS A RESULT OF

17

ORACLE?

18

THE INFRINGEMENT, CALCULATE THE PROFITS ORACLE WOULD HAVE MADE

18

A. IT DOES.

19

ON THOSE, AND THAT'S THIS $19.3 MILLION NUMBER AT THE TOP.

19

Q. NOW, WE'RE GOING TO GET INTO THIS IN MORE DETAIL, BUT IN A

20

NUTSHELL, CAN YOU TELL US HOW YOU THINK MR. MEYER WENT WRONG IN

20

THE INFRINGER'S PROFITS IS THE PROFITS THAT SAP AND

21

TOMORROWNOW MADE THAT THEY WOULDN'T HAVE MADE ABSENT THE

21

THE HYPOTHETICAL NEGOTIATION REASONABLE ROYALTY CALCULATION THAT

22

INFRINGEMENT. AND THAT'S WHAT WE CALL THE INFRINGER'S PROFITS.

22

HE DID?

23

THAT'S THE EIGHT-POINT -- ALMOST $8.7 MILLION ON HERE.

23

A. WELL, I BELIEVE HE WENT WRONG IN MANY AREAS. BUT THE --

24

SO YOU GET TO AWARD EITHER THOSE TWO. OR ANOTHER WAY

24

THEY FALL INTO MAJOR CATEGORIES. THE FIRST IS THAT I THINK THE

25

TO DO IT IS TO LOOK AT THIS REASONABLE ROYALTY CALCULATION. AND

25

DOCUMENTS HE RELIED UPON TO CALCULATE HIS NUMBER DON'T SAY WHAT

8 (Pages 1537 to 1540)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 1633

Page 1635

1

SO AT THE TOP HERE, WE HAVE ORACLE'S LOST SUPPORT

1

Q. WELL, APPROXIMATELY.

2

PROFITS OF 19.3 MILLION. THE INFRINGERS' SAP PROFITS OF 7.6,

2

A. LESS THAN TEN.

3

AND TOMORROWNOW INFRINGERS' PROFITS OF 1 MILLION. SO THE TOTAL

3

Q. LESS THAN TEN.

4

LOST PROFITS AND INFRINGERS' PROFITS OF $28 MILLION.

4

LESS THAN FIVE?

5

A. I COULDN'T TELL YOU.

TOMORROWNOW THAT WAS 34.8 MILLION, SAP, 3.8 MILLION, AND FOR

6

Q. LESS THAN FOUR?

7

THE ORACLE DATABASE 1.9 MILLION. IF YOU ADD THAT ONE UP, IT'S

7

A. I DON'T KNOW. I DON'T KEEP TRACK OF CASES THAT WAY.

8

40.6 MILLION.

8

5

OR YOU COULD LOOK AT THE REASONABLE ROYALTY. FOR

6

9

MR. MITTELSTAEDT: THANK YOU. NO FURTHER QUESTIONS.

9

THE ONLY WAY I COULD DO THAT WILL BE IF YOU GAVE ME
A LIST OF ALL THE CASES I HAVE TESTIFIED IN. I COULD PROBABLY

10

THE COURT: ALL RIGHT.

10

COUNT THEM UP.

11

CROSS-EXAMINATION?

11

Q. LET ME ASK YOU THIS: WHAT ARE THE CASES THAT YOU CAN

12

MR. BOIES: THANK YOU, YOUR HONOR.

12

REMEMBER IN WHICH YOU TESTIFIED ABOUT A HYPOTHETICAL ROYALTY IN

13

A COPYRIGHT INFRINGEMENT CASE?

14

BY MR. BOIES:

14

A. THE COREL CASE WAS IN FEDERAL COURT IN SACRAMENTO. I

15

Q. GOOD MORNING, MR. CLARKE.

15

WOULD HAVE TO LOOK AT -- I HAVE A LIST IF YOU WANTED TO GO

16

A. GOOD MORNING.

16

BEYOND THAT.

17

Q. AS YOU KNOW, I AM DAVID BOIES AND WE MET IN THE ELEVATOR?

17

Q. THE COREL CASE IS THE ONE THAT YOU CAN REMEMBER NOW?

18

A. WE DID.

18

A. YES.

19

Q. LET ME JUST BEGIN WITH SOME BACKGROUND QUESTIONS.

19

Q. AND WHAT DID YOU ESTIMATE THE FAIR MARKET VALUE OF THAT

COUNSEL FOR SAP INDICATED THAT YOU HAD BEEN PAID

CROSS-EXAMINATION

13

20

ROYALTY TO BE IN THE COREL CASE?

21

$14 MILLION FOR YOUR WORK IN THIS CASE?

21

A. NOT VERY MUCH. $20,000 I THINK.

22

A. CORRECT.

22

Q. $20,000.

23

Q. NOW, THAT DID NOT ALL GO TO YOU, CORRECT?

23

24

A. I WISH.

24

INFRINGEMENT CASE THAT YOU HAVE EVER HAD TO TRY TO ESTIMATE THE

25

Q. HOW MUCH OF THAT WENT TO YOU?

25

VALUE OF A FAIR MARKET VALUE LICENSE?

20

IS IT FAIR TO SAY THAT THIS IS THE LARGEST COPYRIGHT

Page 1634

Page 1636

A. I REALLY HAVE NO IDEA. THERE'S A SPECIFIC CALCULATION

1

A. YES. THIS WOULD BE -- IT'S THE LARGEST ONE I HAVE

THAT WOULD ALLOW THAT, BUT IT JUST COMES IN A LUMP SUM MIXED IN

2

TESTIFIED ON. IT'S NOT THE LARGEST ONE I HAVE BEEN INVOLVED

3

WITH ALL MY OTHER COMPENSATION, SO I REALLY HAVE NO IDEA.

3

IN.

4

Q. WELL, YOU KNOW THAT YOU GET A SPECIFIC PERCENTAGE OF YOUR

4

Q. IN A COPYRIGHT INFRINGEMENT CASE?

5

TIME, CORRECT?

5

A. I AM PRETTY SURE IT'S COPYRIGHT INFRINGEMENT.

6

A. CORRECT.

6

Q. WHAT WAS THAT COPYRIGHT INFRINGEMENT CASE?

7

Q. AND YOU KNOW THAT YOU GET A SPECIFIC PERCENTAGE OF

7

A. I CAN'T TELL YOU THE NAME OF THE CASE. I THINK IT'S ON MY

8

EVERYBODY ELSE'S TIME THAT WORKS ON IT?

8

R+SUM+ AS THE "M" COMPANY. BECAUSE I WAS NOT DISCLOSED AS AN

9

A. THAT'S CORRECT.

9

EXPERT, SO I THINK THE SIDES WOULD PREFER THAT I KEEP THAT A

1
2

10

Q. AND YOU KNOW WHAT THOSE PERCENTAGES ARE, RIGHT?

10

SECRET.

11

A. I DO.

11

Q. BUT --

12

Q. WHAT ARE THOSE PERCENTAGES?

12

A. I CAN TELL YOU THE AMOUNT OF MONEY THAT WAS INVOLVED.

13

A. 85 PERCENT OF MY TIME COMES TO ME AND 14 PERCENT OF

13

Q. YOU WOULD HAVE TO TELL ME THE COMPANY THAT'S INVOLVED.

14

EVERYONE ELSE'S TIME.

14

A. I CAN'T DO THAT.

15

Q. WHAT YOU ARE SAYING IS YOU HAVEN'T BOTHERED TO DO THE

15

Q. WELL, YOU DO UNDERSTAND --

16

ARITHMETIC TO FIGURE OUT HOW MUCH THAT IS?

16

17

A. I HAVE NEVER DONE THAT.

17

18

Q. YOU SAID THAT YOU TESTIFIED IN A NUMBER OF CASES INVOLVING

18

19

THE VALUATION OF INTELLECTUAL PROPERTY; IS THAT CORRECT?

19

20

A. YES.

20

21

Q. HAVE YOU EVER TESTIFIED BEFORE IN A COPYRIGHT INFRINGEMENT

21

UNLESS I KNOW -- HE PUT IT ON HIS R+SUM+ AS PART OF HIS

22

CASE THAT INVOLVED A HYPOTHETICAL ROYALTY?

22

BACKGROUND. HE'S JUST REFERENCED --

23

A. YES.

23

24

Q. HOW MANY TIMES?

24

PROVIDED ON THE R+SUM+ AND THEN I'LL TELL YOU WHAT YOU CAN ASK

25

A. I COULDN'T SAY.

25

HIM.

MR. BOIES: COULD THE COURT INSTRUCT HIM TO TELL ME
THAT?
THE COURT: I DON'T KNOW THAT THAT'S NECESSARY,
COUNSEL. THE NAME OF THE COMPANY THAT WAS INVOLVED?
MR. BOIES: OR THE INDUSTRY. I CAN'T CROSS-EXAMINE

THE COURT: CAN YOU SHOW ME WHAT DETAILS WERE

32 (Pages 1633 to 1636)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE
ORACLE CORPORATION, ET AL.

)
)
PLAINTIFFS,
)
)
VS.
)
)
SAP AG, ET AL.,
)
)
DEFENDANTS.
)
____________________________)

JURY TRIAL
NO. C 07-01658 PJH
VOLUME 11
PAGES 1880 - 2020
OAKLAND, CALIFORNIA
FRIDAY, NOVEMBER 19, 2010

TRANSCRIPT OF PROCEEDINGS
APPEARANCES:
FOR PLAINTIFFS:
BY:

BINGHAM MCCUTCHEN LLP
THREE EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111-4607
ZACHARY J. ALINDER,
HOLLY A. HOUSE,
GEOFFREY M. HOWARD,
DONN P. PICKETT, ATTORNEYS AT LAW

BY:

BOIES, SCHILLER & FLEXNER LLP
1999 HARRISON STREET, SUITE 900
OAKLAND, CALIFORNIA 94612
DAVID BOIES,
STEVEN C. HOLTZMAN, ATTORNEYS AT LAW

(APPEARANCES CONTINUED NEXT PAGE)

REPORTED BY:

RAYNEE H. MERCADO, CSR NO. 8258
DIANE E. SKILLMAN, CSR NO. 4909

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

Page 2005
FOR THEM TO, I THINK, FIGURE IT OUT.

Page 2007
1

AGREED, I BELIEVE, THAT WE ARE EXCHANGING OUR DEMONSTRATIVES

2

MR. BOIES: I THINK --

2

FOR THE CLOSING ARGUMENTS 3:00 O'CLOCK SUNDAY AFTERNOON. WE

3

THE COURT: YOU CAN WORK ON THIS. I AM NOT SAYING

3

WILL HAVE A SHORT REBUTTAL AFTER THEY FINISH THE ARGUMENT.

4

THAT THIS IS THE EXACT FORM, BUT I DON'T WANT TO USE ONE LIKE

4

5

WHAT YOU ALL SUBMITTED, WHICH IS JUST THE ONE QUESTION.

5

THEORETICAL, AS TO WHETHER WE HAVE -- I AM SURE THERE ARE NOT

6

GOING TO BE MANY, WE MAY COME UP WITH A COUPLE MORE

1

MR. LANIER: IT'S ALSO GOING TO BE HELPFUL FOR

6

AND THERE IS A QUESTION, MAYBE IT IS JUST

7

APPEAL AS WELL, DEPENDING ON --

7

DEMONSTRATIVES FOR THAT REBUTTAL, WHETHER WE WOULD HAVE TO

8

THE COURT: EXACTLY.

8

DISCLOSE THOSE OR NOT IN ADVANCE. WE WILL SHOW THEM,

9

UNLESS YOU ALL SETTLE THE CASE.

9

OBVIOUSLY, BEFORE WE STOOD UP.

10

(LAUGHTER.)

10

11

THE COURT: WHICH IS STILL --

11

EXCHANGE WHICH ONES YOU ARE GOING TO NEED ON REBUTTAL, I ALWAYS

12

MR. BOIES: ANYTHING IS POSSIBLE, YOUR HONOR.

12

ASSUMED REBUTTAL IS KIND OF SOMEWHAT ON THE FLY. YOU WANT TO

13

THE COURT: -- STILL OPEN TO YOU.

13

RESPOND TO -- TO THE EXTENT THAT YOU CAN TELL FROM THEIR

14

OKAY. NOW, I THINK THAT TAKES CARE OF THESE ISSUES.

14

DEMONSTRATIVES, I WOULD LIKE YOU TO SHARE THEM JUST SO THAT WE

15

I WOULD LIKE YOU ALL TO FILE THEM MAYBE -- SO THAT I HAVE JUST

15

DON'T HAVE ANY OBJECTIONS.

16

A LITTLE TIME ON MONDAY MORNING. I AM ASSUMING THERE IS ONLY

16

IF YOU CAN'T, I DON'T EXPECT REBUTTAL EVIDENCE TO BE

17

GOING TO BE ONE THAT THERE MIGHT BE SOME, AND THAT IS --

17

GENERALLY EXCHANGED. IF IT'S TRUE REBUTTAL, YOU DON'T KNOW
ABOUT IT YET.

THE COURT: TO THE EXTENT YOU CAN TELL FROM THE

18

MR. BOIES: WHAT WE WILL TRY TO DO IS GIVE YOU ONE.

18

19

AND IF THERE IS DISAGREEMENT, WE WILL GIVE YOU TWO VERSIONS

19

20

JUST OF THAT --

20

UP -- MAY BE CREATED IN THE COURTROOM AS THEY PROCEED ON

21

MONDAY.

THE COURT: I THINK THERE'S ONLY ONE INSTRUCTION

21
22

THAT I WOULD EXPECT TO HAVE ANY COMPETING VERSIONS ON. I THINK 22

23

YOU OUGHT TO BE ABLE TO WORK ON ALL THE REST OF THEM.

23

24

MR. LANIER: UNDERSTOOD. WE WILL TRY TO MOVE THAT.

24

25

THE COURT: THAT'S WITH WHAT TO DO WITH THE EVIDENCE

25

MR. PICKETT: SOME OF THESE MAY BE ACTUALLY JIMMIED

THE COURT: JUST AS LONG AS THERE IS SUPPORTING
EVIDENCE IN THE RECORD OBVIOUSLY. THAT'S THE ONLY -MR. LANIER: I HADN'T HEARD WE HAD AGREED ON THE
TIME, BUT WE HAVE AGREED ON THE TIME?

Page 2006
1

THAT -- THE LATER -MR. LANIER: IF WE DON'T WORK THROUGH THAT, WE'LL

2

Page 2008
MR. PICKETT: IT THINK 3:00 O'CLOCK ON SUNDAY

1
2

3

MAKE IT CLEAR WHOSE VERSION IS WHOSE. DOES YOUR HONOR WANT
SOME REDLINING OF THE DIFFERENCES OR JUST THE TWO DIFFERENT

4

5

VERSIONS?

5

MR. BOIES: NO, NO.

3

4

AFTERNOON.

THE COURT: JUST THE TWO DIFFERENT VERSIONS OF THAT

6
7
8
9

ONE.
AGREE UPON, YOU CAN BRING THEM MONDAY MORNING AND I CAN READ

MR. PICKETT: I THOUGHT I SAW AN EMAIL LAST NIGHT AT

6
7

ASSUMING THAT ALL THE OTHER INSTRUCTIONS YOU CAN

MR. LANIER: I DON'T KNOW IF WE HAVE. IF WE HAVE,
THAT'S FINE.
ABOUT 2:43 A.M. THAT SAID THAT.

8

MR. LANIER: WE WILL WORK OUT THE PRECISE TIME.

9

MR. BOIES: I DID NOT SEE THAT E-MAIL, YOUR HONOR.

10

THEM. WE CAN TALK ABOUT EIGHT. IF THERE IS STILL THE

11
12

TO FILE THAT ON SUNDAY, SO THAT --

MR. PICKETT: YOU WERE SLEEPING.

REMAINING ONE THAT YOU DISAGREE ON, I WOULD ACTUALLY LIKE YOU 11

10

MR. BOIES: I WAS.
THE COURT: FILE YOUR INSTRUCTIONS THEN BEFORE

12

13

MR. BOIES: WE WILL DO THAT.

13

14

THE COURT: -- I CAN LOOK UP ANY CASES THAT YOU RELY

THREE. I WILL EXPECT THEM BY THREE.

14

15
16
17
18
19
20
21

UPON.

THE COURT: JUST THE ONE THAT YOU DON'T AGREE ON IF

MR. BOIES: WE WILL DO THAT.

16

YOU ARE UNABLE TO AGREE ON IT. I AM STILL HOPEFUL THAT YOU

MR. LANIER: THANK YOU, YOUR HONOR. WE WILL DO

17

WILL BE ABLE TO.

THAT.
THE COURT: ALL RIGHT. ARE WE FINISHED? YOU WANT
TO MAKE A MOTION?
MR. LANIER: WE NEED TO MAKE OUR RULE 50 MOTION

19
20
21

BRIEFLY, YOUR HONOR, SO THAT WE CAN THEN DO WHAT WE NEED TO DO 22

23

AFTERWARDS. WE DON'T NEED TO TAKE A LONG TIME, BUT WE DO NEED 23

24

TO DO IT, IF YOUR HONOR WILL INDULGE US.
MR. PICKETT: ONE QUESTION, YOUR HONOR. WE HAVE

MR. LANIER: WE WILL SHARE THAT HOPE AND DO OUR

18

22

25

MR. LANIER: THE INSTRUCTIONS?

15

BEST.
THE COURT: OKAY. NOW YOUR MOTION.
MR. LANIER: FOR THE RECORD, THEN, THANK YOU, YOUR
HONOR.
WE PRESENT A MOTION, DEFENDANTS PRESENT A MOTION

24

UNDER RULE 50. I WON'T TAKE THE COURT'S TIME WITH REMINDING

25

THE COURT OF THE STANDARD UNDER RULE 50.

33 (Pages 2005 to 2008)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 2009
1

OBVIOUSLY, OUR MOTION IS ADDRESSED ONLY TO DAMAGES

Page 2011
1

I AM GOING TO BE CONSISTENT WITH MY PRIOR RULING.

2

AND SPECIFICALLY ONLY TO WHETHER PLAINTIFFS ARE ENTITLED TO

2

MOTION IS DENIED.

3

EVEN PURSUE OR THE REASONABLENESS OF THE FAIR MARKET VALUE

3

4

LICENSE THEORY THAT THEY HAVE PURSUED.

4

PROBABLY RENEW IT FOR ALL THE REASONS YOUR HONOR UNDERSTANDS
WHEN WE GET DOWN TO DOING IT ON PAPER.

MR. LANIER: WE UNDERSTAND, YOUR HONOR. WE WILL

5

SO ISSUE NUMBER ONE, WHICH WAS RAISED ON SUMMARY

5

6

JUDGMENT. I WILL BRIEFLY REMIND THE COURT OF WHAT THE ISSUE

6

THE NEXT MOTION UNDER RULE 50 IS THAT THE CLAIM FOR

7

WAS AND THEN WON'T RESTATE ALL OF THAT BECAUSE THE COURT IS

7

A HYPOTHETICAL LICENSE IN THE AMOUNT OF AT LEAST 1.65 BILLION

8

WELL FAMILIAR WITH THE ISSUES.

8

IS UNREASONABLE ON ITS FACE.

9

WE RE-RAISE IT THOUGH BECAUSE IN VIEW OF NO LONGER

9

SO THAT'S NOT A QUESTION OF WHETHER THEY ARE

10

DEPOSITION TESTIMONY AND SUBSEQUENT DECLARATIONS ABOUT WHAT

10

ENTITLED TO PURSUE A LICENSE, BUT WHETHER IT'S UNREASONABLE ON

11

LICENSE I WOULD HAVE DONE OR WHAT I HAVE NOT, WE NOW HAVE IN

11

ITS FACE AND NO REASONABLE JURY COULD OR SHOULD FIND IN THAT.

12

THE TRIAL OF THIS CASE UNEQUIVOCAL EVIDENCE THAT ORACLE WOULD

12

AS YOUR HONOR KNOWS FROM THE CASE LAW, THE MACKEY

13

NOT HAVE GRANTED A LICENSE OF THE TYPE WE ARE TALKING ABOUT

13

RIZER CASE, THE BAKER VERSUS URBAN OUTFITTERS CASE, BAKER PUTS

14

HERE.

14

IT WELL, AND IT IS RECOGNIZED IN YOUR HONOR'S RULING, AN

15

INDISPENSABLE COMPONENT OF A REASONABLE LICENSE FEE IS QUITE
OBVIOUSLY THAT IT BE REASONABLE.

15

THAT'S UNEQUIVOCAL EVIDENCE THAT THEY WOULD NOT HAVE

16

HAD THEY BEEN GIVEN THE CHOICE. THAT COMES IN THE FORM OF

16

17

TESTIMONY FROM MR. PHILLIPS, FOR EXAMPLE, MR. ALLISON, MS.

17

18

CATZ, AND MR. BRANDT. SO THE EVIDENCE IS THAT THE PARTIES

18

MASSIVELY BIGGER THAN THE PROFITS THAT WERE ACTUALLY LOST OR

19

WOULD NOT HAVE AGREED.

19

THE PROFITS ATTRIBUTABLE -- OR THE PROFITS, LOST PROFITS

20

ATTRIBUTABLE TO THE INFRINGEMENT, OR THE INFRINGER'S PROFITS

20

NOW, WE PRESENTED THAT EVIDENCE ON SUMMARY JUDGMENT

AND FROM OUR PERSPECTIVE, IN PART BECAUSE IT IS

21

ALONG WITH AN ARGUMENT THAT UNDER THE LAW OF THE NINTH CIRCUIT, 21

ATTRIBUTABLE TO THE INFRINGEMENT, A POINT ON WHICH THERE IS NO

22

SUPPLEMENTED BY GUIDANCE FROM THE SECOND CIRCUIT THAT IN A

22

MEANINGFUL DISPUTE. WE DID NOT HEAR FROM MR. MEYER ON REBUTTAL

23

COPYRIGHT CASE AS OPPOSED TO A PATENT CASE, THE COURT IS

23

ABOUT HOW CUSTOMERS DISAGREEING WITH MR. CLARKE. WE DID NOT

24

REQUIRED TO HOLD THE PLAINTIFFS TO PROVING THAT THERE WOULD

24

HEAR EVEN FROM THEIR ONE REBUTTAL EXPERT, MS. CATZ, DISAGREEING

25

HAVE BEEN A LICENSE, THEN WE GET TO MEASURING IT AS IT WOULD

25

WITH THE ANALYSIS OF MR. CLARKE.

Page 2010

Page 2012
SO, THE ONLY EVIDENCE ON WHAT CUSTOMERS DID OR

1

HAVE BEEN REACHED BY A WILLING BUYER AND WILLING SELLER, ET

1

2

CETERA. SO, BASED ON THE POLAR BEAR CASE, JARVIS, ENCYCLOPEDIA

2

DIDN'T DO ON WHAT THE LOST PROFITS WERE AND THE INFRINGER'S

3

BROWN, AND BUSINESS TRENDS, WE CAN PROVIDE MORE PRECISE

3

PROFITS WERE ADDS UP TO AROUND $32 MILLION, I CONFESS I HAVE

4

CITATIONS IF IT'S USEFUL, BUT THEY WERE ALL CASES DISCUSSED ON

4

FORGOTTEN, BUT THE NUMBER IS IN THE RECORD BASED ON WHAT

5

SUMMARY JUDGMENT. NO NEW LAW HERE.

5

CUSTOMERS ACTUALLY DID.

6

WE WOULD, AGAIN, RAISE THE QUESTION OF CAUSATION.

6

SO, 1.66 BILLION IS A LOT BIGGER THAN 32 MILLION. I

7

BOTTOM LINE, OUR POSITION IS BASED ON THE TRIAL EVIDENCE, WHICH

7

HAVE NOT TRIED TO DO THE MATH. THE COURT MAY HAVE FIGURED OUT

8

IS NOW NO LONGER DISPUTES OF FACT, THERE'S NO NEED FOR

8

THAT IS NOT MY STRONG SUIT, BUT IT'S A HECK OF A LOT. AND THAT

9

CLARIFYING DECLARATIONS, UNEQUIVOCAL STATEMENTS BY BOTH PARTIES 9

IS ON ITS FACE, ON THE UNDISPUTED EVIDENCE IN THIS CASE,

10

THEY WOULD NOT HAVE AGREED TO THIS LICENSE, THEN WHAT WE

OBJECTIVELY AND REASONABLE.

11

CONTEND TO BE A REQUIREMENT OF CAUSATION THAT THERE WOULD HAVE 11

12

BEEN A LICENSE, HAS NOT BEEN MET AND, THEREFORE, WE DON'T EVEN

12

1.66 BILLION TO THEIR -- THE LOST PROFITS NUMBER AND

13

NEED TO GET TO THE WILLING BUYER AND WILLING SELLER. WE CAN

13

INFRINGER'S PROFITS NUMBER THEY DON'T WANT TO PRESENT. WE ARE

14

EXPAND ON ANY OF THAT, BUT THAT IS, SIMPLY PUT, THE MOTION. ON

14

PRESENTING -- COMPARING THAT TO THE UNDISPUTED EVIDENCE LOST

15

THAT SCORE, THERE'S ANOTHER ONE TO COME.

10

I WANT TO MAKE THAT CLEAR. WE ARE NOT COMPARING THE

15

PROFITS AND INFRINGER'S PROFIT 32 MILLION, THAT IS OBJECTIVELY

16

THE COURT: RESPONSE?

16

UNREASONABLE AND EVEN THOUGH YOUR HONOR PERMITTED THEM TO

17

MR. BOIES: AS HE SAYS, THERE'S NO NEW LAW. THIS IS

17

PURSUE THE THEORY, YOUR HONOR EXPRESSLY DIRECTED OR STATED THE

18

THE ISSUE THAT THE COURT DECIDED ON SUMMARY JUDGMENT. WE

18

LAW CAN'T BE SPECULATIVE, WE WILL COME TO THAT ONE IN A MOMENT,

19

WEREN'T GIVEN AN OPTION TO HAVE THAT LICENSE NEGOTIATION IN

19

AND IT HAS TO BE REASONABLE. THIS IS UNREASONABLE.

20

JANUARY OF 2005, THEY SIMPLY TOOK THE LICENSE WITHOUT ASKING.

20

IN A NUTSHELL THAT'S IT.

21

THE COURT: RESPONSE?

21
22

THAT CAN'T BE A DEFENSE. I THINK THE COURT WAS
CORRECT IN ITS SUMMARY JUDGMENT.

22

MR. BOIES: YOUR HONOR, FIRST OF ALL, IT IS NOT

23

THE COURT: OKAY.

23

UNDISPUTED EVIDENCE. MR. MEYER DIRECTLY DISPUTED IT. IT WAS

24

MR. LANIER: SUBMITTED, YOUR HONOR.

24

ALSO DISPUTED ON CROSS-EXAMINATION. WE THINK THAT THE

25

THE COURT: SUBMITTED?

25

$32 MILLION FIGURE IS NOT SUPPORTABLE. BUT EVEN IF IT WERE, I

34 (Pages 2009 to 2012)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR