Oracle Corporation et al v. SAP AG et al

Filing 1157

Declaration of Tharan Gregory Lanier in Support of 1156 Opposition/Response to Motion Declaration of Tharan Gregory Lanier in Support of Defendants' Oppositions to Oracle's Motions in Limine filed bySAP 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, # 22 Exhibit 22, # 23 Exhibit 23)(Related document(s) 1156 ) (Froyd, Jane) (Filed on 5/10/2012)

EXHIBIT 12

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 7
PAGES 1188 - 1420
OAKLAND, CALIFORNIA
FRIDAY, NOVEMBER 12, 2010

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
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]

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

26d3e825-e0fc-447f-987f-8e38dc183faa

Page 1296

TEXT REMOVED - NOT RELEVANT TO MOTION

19

Q.

20

EXCLUDED CUSTOMERS."

21

A.

THAT'S CORRECT.

22

Q.

AND YOU LISTED THE REASONS FOR EXCLUSION.

23

A.

THAT'S CORRECT.

24

Q.

AND ONE OF THE REASONS YOU LISTED WAS CAUSATION, CORRECT?

25

A.

I BELIEVE THAT'S ON THERE; THAT'S CORRECT.

AND YOU PREPARED ONE SCHEDULE THAT WAS CALLED "SUMMARY OF

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

26d3e825-e0fc-447f-987f-8e38dc183faa

Page 1301

TEXT REMOVED - NOT RELEVANT TO MOTION

2

Q.

3

BECAUSE OF SERVICE GAP ARE CUSTOMERS WHO JUST HAPPENED TO HAVE A

4

SERVICE GAP OF FOUR YEARS OR LONGER; IS THAT CORRECT?

5

A.

6

ADOPTED A SERVICE-GAP METHODOLOGY.

7

Q.

8

SERVICE-GAP BASIS?

9

A.

BUT AS IT TURNED OUT, THE ONLY CUSTOMERS YOU EXCLUDED

NO, THERE'S STILL ONE IN THAT'S OVER FOUR YEARS.

OKAY.

I NEVER

WELL, WHY DIDN'T YOU EXCLUDE THAT OTHER ONE ON A

BECAUSE THEY WERE TAKING TOMORROWNOW SERVICE THAT BUT FOR

10

TOMORROWNOW, THEY DIDN'T HAVE A SERVICE PROVIDER THAT CAN

11

PROVIDE VENDOR-LEVEL SERVICE.

12

Q.

WHAT WAS IT ABOUT THE TWO YOU EXCLUDED?

13

A.

I --

14

Q.

-- HAD BEEN GONE FOR MORE THAN FOUR YEARS.

15

A.

I MENTIONED SIEBEL A FEW MINUTES AGO.

16

CUSTOMER LEFT SIEBEL IN 2002, AND THEN FIVE YEARS LATER, THEY

17

GO -- THEY TAKE A CONTRACT WITH -- WITH TOMORROWNOW.

18

MENTIONED A MOMENT AGO, SAP BEGAN OFFERING TOMORROWNOW SERVICES

19

I BELIEVE IN THE FALL OF 2006.

20

THEM OUT, JUST BASED ON THOSE FACTS.

THE EVERGREEN

AND AS I

SO FROM THAT PERSPECTIVE, I TOOK

TEXT REMOVED - NOT RELEVANT TO MOTION

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

26d3e825-e0fc-447f-987f-8e38dc183faa

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]

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1518

TEXT REMOVED - NOT RELEVANT TO MOTION

18

MR. PICKETT:

THIS -- WHAT I'M GOING TO DO IS A VERY

19

NARROW SLICE OF THIS.

20

MR. CLARKE PURPORTS TO RELY UPON WHICH WERE PRODUCED AFTER THE

21

DISCOVERY DATE AND, INDEED, AFTER HIS EXPERT REPORT CAME IN.

22

THEY ARE LISTED HERE ON THE DEMONSTRATIVE.

23

DECLARATIONS WERE -- WERE PRODUCED LATE.

24
25

THERE ARE FIVE CUSTOMER DECLARATIONS THAT

THESE FIVE CUSTOMER

AND THEN MR. CLARKE SUPPLEMENTED HIS EXPERT REPORT TO
REDUCE HIS DAMAGES BASED ON THESE LATE-PRODUCED FILINGS.

NOT

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1519
1

ONLY -- DEFENDANTS, OF COURSE, KNEW WHO THESE CUSTOMERS WERE.

2

THEY DISCLOSED THEM IN DISCOVERY IN JULY 2007.

3

DECLARATIONS OBVIOUSLY IN 2010 ARE VERY LATE INDEED.

4

AND THESE

THE RULES ARE THAT EXPERT CANNOT RELY ON THIS, AND

5

YOUR HONOR, OF COURSE, WILL RECALL THAT OUR DAMAGES EXPERT WAS

6

NOT PERMIT TO RELY ON DOCUMENTS THAT WERE PRODUCED WELL

7

BEFORE -- A YEAR BEFORE THE DISCOVERY DEADLINE.

8

CASE, IT SEEMS TO ME THERE'S JUST NO QUESTION THAT THESE

9

LATE-PRODUCED DOCUMENTS CANNOT FORM THE BASIS FOR HIS OPINION.

10

THE COURT:

11

MR. McDONELL:

ALL RIGHT.

SO IN THIS

RESPONSE?

YES, YOUR HONOR.

MR. CLARKE HAS

12

RELIED ON DECLARATIONS FROM CUSTOMERS.

13

WERE PRODUCED AND PROVIDED TO PLAINTIFFS PRIOR TO THE DEPOSITION

14

OF THEIR EXPERT, MR. MEYER.

15

EXCEPTION OF THAT ONE -- I CAN'T BE SURE ABOUT THAT -- BUT MOST

16

OF THEM WERE ACTUALLY USED IN EXAMINATION OF THEIR EXPERT.

17

THE COURT:

18

MR. McDONELL:

ALL BUT ONE OF THOSE

THE VAST MAJORITY WITH THE POSSIBLE

ARE YOU TALKING ABOUT THESE FIVE?
YES.

THEY WERE PART OF HIS

19

DEPOSITION.

20

APPROPRIATE.

21

TRIAL THAT IT IS HIS PRACTICE AND HE BELIEVES IT'S APPROPRIATE

22

TO RELY ON SWORN STATEMENTS IN DOING THIS KIND OF WORK, SO I

23

DON'T THINK THERE'S ANY QUESTION ABOUT WHETHER IT'S THE TYPE OF

24

INFORMATION A DAMAGES EXPERT IN A CASE LIKE THIS WOULD RELY

25

UPON.

AND MR. CLARKE HAS RELIED ON THEM, WHICH IS
I COULD -- MR. MEYER HIMSELF TESTIFIED IN THIS

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1520
1
2

SO THE ONLY QUESTION, I THINK, IS WHETHER MR. CLARKE,
TOO, CAN RELY ON THEM IN THIS CASE AND HE CAN.

3

THE -- THE --

4

THE COURT:

5

THE WHOLE OBJECTION IS THAT THEY WERE

DISCLOSED AFTER THE DISCOVERY CUTOFF.

6

MR. McDONELL:

THEY WERE -- THEY WERE WRITTEN AFTER

7

THE DISCOVERY CUTOFF.

8

BELIEVE, ONE, THEY WERE COMPLETED BEFORE THE DEPOSITION OF

9

MR. MEYER AND PROVIDED TO MR. MEYER, AND HE HAD A CHANCE --

10
11

THE COURT:

BUT, AGAIN, WITH THE EXCEPTION OF, I

BUT IT'S MR. CLARKE WHO RELIED UPON THEM,

CORRECT?

12

MR. McDONELL:

THIS IS TRUE.

AND IT WAS WELL BEFORE

13

MR. CLARKE'S DEPOSITION THAT THEY WERE -- MR. MEYER WAS DEPOSED

14

FIRST.

15

MR. CLARKE WAS.

16
17

HE HAD THE DECLARATIONS.

THE COURT:

A MONTH OR TWO LATER,

WAS MR. CLARKE DEPOSED ON THESE

DECLARATIONS?

18

MR. McDONELL:

I'M TRYING TO REMEMBER IF THEY ASKED

19

HIM QUESTIONS ABOUT THEM.

20

TO ASK QUESTIONS ABOUT THEM.

21
22

THE COURT:

SO THE DECLARATIONS WERE PRODUCED TO

PLAINTIFFS' COUNSEL BEFORE MR. CLARKE'S DEPOSITION.

23

MR. McDONELL:

24

THE COURT:

25

BUT THEY HAD THEM, AND THEY WERE FREE

THAT'S TRUE, YOUR HONOR.

WAS HIS DEPOSITION AFTER HIS SUPPLEMENTAL

REPORT?

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1521
1
2

MR. McDONELL:

HIS DEPOSITION WAS AFTER HIS MAY 7

SUPPLEMENTAL REPORT, YES.

3

THE COURT:

OKAY.

4

ALL RIGHT.

IS THERE A PARTICULAR REASON WHY -- I

5
6
7
8
9
10
11

MEAN, YOU RECEIVED THESE.
MR. PICKETT:

WELL, LET ME -- IF I COULD GO BACK TO

THE DEMONSTRATIVE -(SIMULTANEOUS COLLOQUY.)
THE COURT:

HOLD ON.

COULD I ASK MY QUESTION --

(SIMULTANEOUS COLLOQUY.)
THE COURT:

IF, INDEED, YOU RECEIVED THESE AFTER THE

12

DISCOVERY CUTOFF DATE AND HAD THEM IN ORDER TO USE THEM FOR ANY

13

EXAMINATION ON DEPOSITION OF MR. CLARKE, WHY WAS NO MOTION FILED

14

WITH RESPECT TO THESE?

15
16

MR. PICKETT:

THERE WAS A MOTION, YOUR HONOR.

IT WAS

OUR MOTION IN LIMINE AND --

17

THE COURT:

18

MR. PICKETT:

WITH RESPECT TO THESE?
YES, IT WAS INCLUDED IN THE MOTION TO

19

EXCLUDE PORTIONS OF MR. CLARKE'S TESTIMONY, WHICH YOU DENIED

20

OUTRIGHT, WITHOUT DEALING WITH THE SEPARATE ISSUES.

21

THE COURT:

22

MR. PICKETT:

23

THE COURT:

IT WAS IN THE DAUBERT MOTION?
YES.

24

MR. PICKETT:

AS OPPOSED -- DID YOU SPEAK

SPECIFICALLY TO EACH --

25

OH, OKAY.

EACH ONE OF THE FIVE.

IT WAS THE LAST

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1522
1

TWO PAGES OF THAT MOTION.

AND AS TO -- THESE DOCUMENTS WERE NOT

2

PART OF THE EXPERT REPORT.

THEY CAME IN -- THE FIRST FOUR CAME

3

IN -- MR. MEYER'S DEPOSITION WAS MAY 10TH.

4

IN A MONTH BEFORE.

5

DEPOSITION.

SO ONE OF THEM CAME

THREE OF THEM CAME IN THE WEEK OF HIS

6

THE AUGUST 4 CAME IN AFTER BOTH OF THEM.
BUT FOR EXAMPLE, THE -- THE SPICE -- PROJECT SPICE

7

REPORT THAT YOUR HONOR HAS NOT PERMITTED OUR EXPERT TO RELY ON

8

WAS PRODUCED IN 2009.

9

OPPORTUNITY FOR THAT EVEN WITH THE FACT WITNESSES, SO I DON'T

10

THERE WAS PLENTY OF DEPOSITION

UNDERSTAND HOW THE STREET ISN'T A TWO-WAY STREET HERE.

11

MR. McDONELL:

THAT'S APPLES AND ORANGES ENTIRELY,

12

YOUR HONOR.

13

LITIGATION BEFORE JUDGE LAPORTE.

14

THAT THING HE'S TALKING ABOUT WAS SUBJECT OF

YOUR HONOR, FOR WHAT IT'S WORTH, WE WERE NOT PLANNING

15

TO OFFER THESE DECLARATIONS INTO EVIDENCE WITH MR. CLARKE.

16

MR. CLARKE WOULD, CONSISTENT WITH RULE 703, DESCRIBE GENERALLY

17

ALONG WITH HIS DESCRIPTION OF THE BODY OF INFORMATION THAT HE

18

HAD AVAILABLE TO HIM IN FORMING HIS OPINIONS, TESTIFY TO THE

19

FACT THERE WERE SWORN STATEMENTS OF CUSTOMERS THAT HE RELIED

20

UPON.

21

IF THEY'D LIKE TO.

BUT

AND THEN THEY'D BE FREE TO CROSS-EXAMINE HIM ABOUT THAT

22

THE COURT:

23

MR. McDONELL:

OKAY.
BUT THERE'S NO REASON THIS EVIDENCE

24

SHOULD NOT BE AT LEAST PART OF WHAT HIS RELIANCE MATERIALS

25

INCLUDE.

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1523
1

THE COURT:

2

MR. PICKETT:

OKAY.
TWO QUICK POINTS.

WE COULD NOT TAKE

3

THESE CUSTOMERS DEPOSITIONS WITH THESE NEWLY FOUND INFORMATION

4

BECAUSE DISCOVERY HAD CLOSED.

5

ORACLE EXECUTIVES ON PROJECT SPICE, WE COULDN'T TAKE THE

6

CUSTOMERS' DEPOSITIONS TO SEE WHETHER THESE DECLARATIONS WERE

7

TRUSTWORTHY, WHAT THE BACKGROUND WAS, WHETHER THERE WAS ANYTHING

8

TO THEM.

9

UNLIKE THEIR ABILITY TO TAKE THE

AND, SECONDLY, WE'RE IN A SITUATION WHERE HE SAYS,

10

WELL, WE'RE NOT GOING TO SPECIFICALLY CALL THEM OUT.

11

DIDN'T HAVE TO CALL OUT THE PROJECT SPICE, COULD HAVE TESTIFIED

12

THAT THE DAMAGES WERE $2.156 BILLION WITHOUT CALLING THEM OUT,

13

AND YOUR HONOR DIDN'T PERMIT IT.

OUR EXPERT

14

MR. McDONELL:

15

ONE SMALL POINT, IF YOU WANT A COMPLETE HISTORY, THEY

16

TOO GOT CUSTOMER DECLARATIONS, MOST OF WHICH WERE PROVIDED TO US

17

WITHIN DAYS OR A COUPLE OF WEEKS BEFORE THE CLOSE OF FACT

18

DISCOVERY.

19

OF OPPORTUNITIES TO TAKE DEPOSITIONS OF THESE PEOPLE.

20
21

AGAIN, THAT'S DIFFERENT, YOUR HONOR.

SO THERE'S REALLY NOT THAT MUCH DIFFERENCE IN TERMS

MR. PICKETT:

"BEFORE" THE FACT DISCOVERY CUTOFF.

THIS WAS MONTH, MONTHS AFTER.

22

THE COURT:

23

HE CAN REFER TO THEM.

24
25

OKAY.

ALL RIGHT.
THEY WILL NOT COME IN AS

EVIDENCE.
MR. McDONELL:

THANK YOU.

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1524
1

THE COURT:

THAT'S MY RULING.

TEXT REMOVED - NOT RELEVANT TO MOTION

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1535

TEXT REMOVED - NOT RELEVANT TO MOTION

23

Q.

24

GENERAL WHAT WORK YOU DID ON THIS CASE.

25

A.

OKAY.

YES.

LET'S TURN TO THIS CASE NOW.

WOULD YOU DESCRIBE IN

THE FIRST THING I DID WAS TO START GATHERING

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1536
1

DOCUMENTS.

2

IN THIS CASE, THERE WAS A MOUNTAIN OF -- OF DOCUMENTS THAT WE

3

GATHERED, 12 AND A HALF MILLION PAGES OF DOCUMENTS, IS WHAT WE

4

GOT, WHICH IS A PILE ABOUT A MILE AND A HALF HIGH IF YOU JUST

5

STACK IT UP.

6

THE WORK IS BASED ALMOST ENTIRELY ON DOCUMENTS.

AND

AND WE STARTED TO ANALYZE THAT INFORMATION.

LATER ON, WE GATHERED MORE INFORMATION FROM THE

7

COMPANIES ABOUT THEIR OPERATIONS, THEIR FINANCIAL CONDITION, THE

8

AMOUNT OF PROFIT THAT THEY MAKE.

9

TIME, DEPOSITIONS WERE BEING TAKEN WHERE SOMEBODY WOULD TELL

10

EITHER WHAT THEY KNEW AND WHAT THEY'D SAID AND DONE, OR THEY

11

WERE TESTIFYING ON BEHALF OF THE COMPANY AND SAYING THIS IS WHAT

12

THE COMPANY DID.

13

THOSE, TOO.

14

SO I READ THOSE.

AND ALSO DURING THAT LATER

AND THERE WERE MANY OF

AND THEN THERE WERE CUSTOMERS' DECLARATIONS, SOME OF

15

WHICH TALKED ABOUT HOW THEY MADE THE DECISION TO GO TO

16

TOMORROWNOW OR MAKE SOME OTHER DECISION.

17

IN ADDITION, I SHOULD POINT OUT THAT VIRTUALLY ALL OF

18

THE INFORMATION I WAS LOOKING AT WAS REALLY FOCUSED ON THE 358

19

TOMORROWNOW CUSTOMERS AND THE 86 SAP CUSTOMERS.

20

Q.

NOW, MR. CLARKE, WHY WERE YOU FOCUSING ON THE CUSTOMERS?

21

A.

THIS CASE IS ALL ABOUT CUSTOMERS.

22

Q.

WHEN YOU REFERRED TO THE 12 AND A HALF MILLION PAGES, DID

23

YOU HAVE ANYONE HELP YOU REVIEW THAT INFORMATION?

24

A.

I DID.

25

Q.

AND HOW MANY STAFF MEMBERS DID YOU HAVE WORKING ON THIS FROM

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

Page 1537
1

TIME TO TIME?

2

A.

3

THIS ENGAGEMENT.

4

IN JUNE, I COUNTED THEM UP.

5

WHO WORKED ON THE ENGAGEMENT.

6

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

7

HAD A LARGE TEAM OF PEOPLE.

AT ANY ONE TIME, THERE MIGHT HAVE BEEN 50 PEOPLE WORKING ON
OVERALL, JUST BEFORE MY DEPOSITION, WHICH WAS
AND THERE WERE 121 DIFFERENT PEOPLE
YOU CAN IMAGINE WITH THAT VOLUME

TEXT REMOVED - NOT RELEVANT TO MOTION

Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

cee31611-03a0-413a-a8ed-ca4c321dc01a

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 10
PAGES 1696 - 1879
OAKLAND, CALIFORNIA
THURSDAY, NOVEMBER 18, 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]

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

9bf78bca-2814-4f8c-93d0-595ef6167f63

Page 1784
TEXT REMOVED - NOT RELEVANT TO MOTION

3

Q.

4

CALCULATION FOR INFRINGER'S PROFITS.

5

PROFITS ATTRIBUTABLE TO TOMORROWNOW'S INFRINGEMENT.

YOU WERE ASKED ABOUT THE CHANGE IN YOUR NUMBERS, YOUR

6

THOSE ARE SAP'S SOFTWARE

YOU REMEMBER THAT?

7

A.

I DO.

8

Q.

AND WHAT I'D LIKE TO DO WITH YOU IS HAVE YOU TELL US WHY YOU

9

CHANGED THE NUMBERS.

SO LET'S START WITH -- YOUR FIRST REPORT

10

WAS DATED MARCH 26 OF THIS YEAR, CORRECT?

11

A.

THAT'S CORRECT.

12

Q.

AND IN THAT REPORT, YOU HAD FOUR COMPANIES -- FOUR CUSTOMERS

13

IN THIS CATEGORY AND THE AMOUNT OF THE PROFIT WAS APPROXIMATELY

14

$38 MILLION.

15

A.

THAT'S CORRECT.

16

Q.

AND YOU DID A SUPPLEMENT IN MAY, AND THE NUMBER DROPPED FROM

17

FOUR TO THREE?

18

A.

YES.

19

Q.

WOULD YOU TELL US WHY THAT NUMBER DROPPED?

20

A.

BECAUSE I HAD A CUSTOMER DECLARATION THAT INDICATED THAT

21

TOMORROWNOW HAD NOT PLAYED A ROLE IN -- IN THEM MAKING THAT --

22

THAT CHANGE.

23

Q.

DO YOU RECALL THE NAME OF THAT CUSTOMER?

24

A.

NOT OFFHAND.

25

Q.

OKAY.

IS THAT RIGHT?

LET ME SHOW YOU WHAT'S BEEN MARKED FOR IDENTIFICATION

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

9bf78bca-2814-4f8c-93d0-595ef6167f63

Page 1785
1

A6891.

2

A.

(REVIEWING DOCUMENT.)

3

(OFF-THE-RECORD DISCUSSION.)

4

MR. MITTELSTAEDT:

I'VE GOT A COPY FOR THE COURT.

5

Q.

AND WOULD YOU TELL US WHAT THIS DECLARATION IS, SIR.

6

A.

YES.

7

AND IT'S -- HE WAS THE SENIOR VICE-PRESIDENT OF BUSINESS

8

EXCELLENCE AND CHIEF INFORMATION OFFICER AT A COMPANY CALLED

9

NEWPAGE CORPORATION.

10

IT'S A DECLARATION FROM A DANIEL CLARK, NO RELATION,

11

DO YOU WANT ME TO CONTINUE TO DESCRIBE IT?
Q.

YES.

12
13

MR. BOISE:

OBJECTION, YOUR HONOR.

EVIDENCE, AND IT CAN'T GO IN EVIDENCE.

14

MR. MITTELSTAEDT:

15

THE COURT:

16

IT'S NOT IN

ONE?

I THINK --

HAVE YOU HAD ANY DISCUSSION ABOUT THIS

I DON'T REMEMBER THIS CUSTOMER.

17

MR. MITTELSTAEDT:

I THINK THEY'VE OPENED THE DOOR BY

18

MAKING THE POINT THAT HE CHANGED THE NUMBER, THE NUMBER WENT

19

FROM FOUR TO THREE WITHOUT ASKING HIM WHY.

20

DIRECTLY TO WHY.

21

SHOULD BE ABLE TO EXPLAIN WHY HE DROPPED THIS CUSTOMER, BUT I

22

THINK THIS ALSO SHOULD COME INTO EVIDENCE.

23

RELIED ON.

24
25

AND THIS GOES TO --

THIS IS THE DECLARATION, AND I THINK NOT ONLY

MR. BOISE:

IT'S SOMETHING HE'S

YOUR HONOR, IT'S NOT EVEN DATED.

LOOKS LIKE THE STAMP SIGNATURE.

IT

HE DIDN'T EVEN REMEMBER IT

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

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BEFORE.

2

THE COURT:

OKAY.

WELL, THE RELIANCE RULE ONLY GOES

3

WHEN THE OPPONENT IS OFFERING THE EXHIBIT.

4

REFER TO IT, BUT IT'S NOT PROPERLY ADMISSIBLE AS AN EXHIBIT.

5

BY MR. MITTELSTAEDT:

6

Q.

7

ON TO REMOVE THIS COMPANY.

8

TALKS ABOUT NEWPAGE COMPLETING ITS ACQUISITION OF ANOTHER

9

COMPANY.

OKAY.

10
11

I WILL ALLOW HIM TO

WOULD YOU TELL US WHAT IN THIS DECLARATION YOU RELIED

MR. BOISE:

AND YOU'LL NOTE IN PARAGRAPH 3, IT

OBJECTION, YOUR HONOR.

HE CAN'T READ THE

DOCUMENT WHEN IT'S NOT IN EVIDENCE.

12

THE COURT:

13

HE CAN SIMPLY REFER TO THE FACT THAT HE RELIED UPON

14

HE CAN SIMPLY -- SUSTAINED.

THE DOCUMENT.

15

MR. MITTELSTAEDT:

MAY I ASK HIM IN WHAT RESPECT?

16

MEAN, WHAT DID THE -- WHY DID HE REMOVE THEM BASED ON THIS

17

I

DOCUMENT?

18

THE COURT:

YEAH.

I'LL LET YOU ASK THAT QUESTION.

19

BY MR. MITTELSTAEDT:

20

Q.

21

DAMAGE CALCULATION BASED ON THIS DECLARATION?

22

A.

23

NEWPAGE WAS A LONG-TERM USER OF SAP.

24

DESCRIBED TO YOU THAT IF A COMPANY WAS ACQUIRED, VERY OFTEN THE

25

PARENT COMPANY WOULD REQUIRE THE NEW SUBSIDIARY TO CHANGE TO

WHY DID YOU REMOVE THIS CUSTOMER, STORA ENSO, FROM YOUR

I DID THAT BECAUSE STORA ENSO HAD BEEN ACQUIRED BY NEWPAGE.
SO IF YOU REMEMBER, I

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

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THEIR SOFTWARE.

2

THAT'S EXACTLY WHAT HAPPENED IN THIS CASE.

AND, ACTUALLY, IT IS DATED MAY 4TH, 2010.

3

Q.

SO IT'S DATED THREE DAYS BEFORE YOUR SUPPLEMENTAL REPORT?

4

A.

CORRECT.

5

Q.

AND IF YOU'D LOOK AT THE FOURTH PARAGRAPH AND TELL US

6

WHETHER THAT PROVIDED ANY ADDITIONAL REASON WHY YOU EXCLUDED

7

THEM?

8

A.

YES, IT DOES.

9

Q.

AND WHAT'S THE FURTHER REASON?

10

A.

THAT MR. CLARK SAYS THAT THE -- THE SUPPORT FROM TOMORROWNOW

11

WAS NOT INFLUENCED IN ANY WAY -- DID NOT INFLUENCE IN ANY WAY

12

THE DECISION TO GO TO SAP.

13

Q.

OKAY.

14

AND THEN YOU WERE ASKED WHETHER YOU TOOK ANOTHER

15

CUSTOMER OUT IN YOUR OCTOBER SUPPLEMENT.

16

A.

I DO.

17

Q.

AND YOU SAID YOU TOOK ANOTHER CUSTOMER OUT, AND SO THE --

18

THE PROFITS OWED TO ORACLE DROPPED BY A COUPLE MILLION DOLLARS.

19

DO YOU RECALL THAT?

DO YOU REMEMBER THAT?

20

A.

I DO.

21

Q.

AND I'D LIKE TO SHOW YOU THAT SECOND SUPPLEMENT.

22

I THINK COUNSEL FOR ORACLE ASKED YOU TO REFER TO THIS TO REFRESH

23

YOUR RECOLLECTION AS TO WHAT YOU HAD DONE.

24

AT IT AND TELL ME THE REASON THAT YOU REMOVED A CUSTOMER.

25

I THINK --

I'D LIKE YOU TO LOOK

MAY I APPROACH, YOUR HONOR?

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

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Page 1788
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THE COURT:

YES.

2

BY MR. MITTELSTAEDT:

3

Q.

(HANDING DOCUMENT.)

4

A.

THANK YOU.

5

Q.

NOW, THAT'S THE SECOND SUPPLEMENT YOU FILED IN OCTOBER?

6

A.

I BELIEVE THIS WAS A -- THIS WAS A JUNE CHANGE, ACTUALLY.

7

Q.

OKAY.

8

A.

THE SECOND SUPPLEMENT WAS DATED JUNE 4TH.

9

Q.

WELL -- OKAY.

ACTUALLY, I THINK WHAT HAPPENED WAS COUNSEL

10

SAID HE WOULD SKIP OVER THE JUNE ONE IN THE INTEREST OF TIME.

11

A.

YES.

12

Q.

SO --

13

A.

THAT'S THIS ONE.

14

Q.

AND DOES THAT EXPLAIN WHY YOU DECREASED FROM THREE TO TWO?

15

A.

CORRECT.

16

Q.

AND IS THERE A DECLARATION ATTACHED TO THAT SECOND

17

SUPPLEMENT?

18

A.

YES, THERE IS.

19

Q.

AND WHO IS THAT BY?

20

A.

IT'S FROM MR. BIRRENBACH.

21

Q.

OKAY.

22

A.

I'M PROBABLY GOING TO BUTCHER THIS NAME, BUT I'LL DO MY BEST

23

ROTK-PPCHEN SEKTKELLEREI.

24

Q.

25

REASON WHY YOU REMOVED THAT COMPANY FROM THE DAMAGE CALCULATION?

AND WHAT COMPANY IS HE WITH?

IT'S A GERMAN COMPANY.

AND IN YOUR SECOND SUPPLEMENT IN JUNE, DID YOU DESCRIBE THE

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

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Page 1789
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A.

YES.

2

Q.

AND WHAT REASON DID YOU PROVIDE?

3

A.

I GAVE AS THE REASON THIS DECLARATION.

4

DECLARATION, WHICH IS -- IT'S ONLY JUST OVER HALF A PAGE LONG, I

5

WAS ABLE TO IDENTIFY FIVE DIFFERENT EXCLUSION REASONS FOR

6

EXCLUDING THIS CUSTOMER.

7

AND BASED UPON THE

THEY SPECIFICALLY WANTED THE SAP FUNCTIONALITY.

THEY

8

SAID THEY DIDN'T LIKE FUSION IN THE FUTURE FOR JDE WORLD

9

PRODUCTS, WHICH IS WHAT THEY WERE USING AT THE TIME; THAT THEY

10

HAD EVALUATED OTHER PROVIDERS.

11

PRIOR TO JOINING TOMORROWNOW.

12

MY EXCLUSION POOLS.

13

GOING TOO FAR.

14

Q.

15

TOMORROWNOW PLAYED A ROLE IN THEIR DECISION TO GO TO SAP?

16

A.

YES.

17

Q.

AND WHAT INFORMATION DID YOU RELY ON?

18

A.

MR. BIRRENBACH SAID THAT IF TOMORROWNOW HAD NOT BEEN

19

AVAILABLE, THEY WOULD STILL HAVE REPLACED THE JDE WORLD PROGRAMS

20

THEY WERE USING WITH SAP.

21

Q.

THEY HAD DECIDED TO JOIN SAP
IF YOU REMEMBER, THAT WAS ONE OF

AND ALSO FOR OTHER REASONS, WHICH MAY BE

DID THEY -- DID YOU RECEIVE ANY INFORMATION AS TO WHETHER

OKAY.

22

SO THAT GETS US TO JUNE, OCTOBER, WHEN YOU'RE DOWN TO

23

TWO.

24

ORIGINAL THAT HAD BEEN INCLUDED IN THE FOUR?

25

A.

WERE THE REMAINING TWO AT THAT TIME PERIOD TWO OF THE

YES.

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

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Page 1790
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Q.

2

FOUR, BUT COULD YOU TELL US AGAIN JUST BRIEFLY WHY YOU ADDED TWO

3

BACK?

4

A.

5

PREPARATION FOR THE CASE WHERE YOU SORT OF SHINE A BRIGHTER

6

LIGHT ON EVERYTHING, THESE TWO CUSTOMERS APPEARED TO ME TO BE SO

7

CLOSE THAT I DIDN'T CARE TO TRY TO EXPLAIN TO YOU WHY I HAD

8

EXCLUDED THEM.

AND THEN YOU'VE EXPLAINED ALREADY WHY IT WENT BACK UP TO

YES.

9

I ADD THESE TWO CUSTOMERS BACK BECAUSE IN THE

SO EVEN THOUGH I THINK THERE'S -- THERE'S REASON TO

10

DO SO, THEY WERE SO CLOSE, I -- I CAME ON THE OTHER SIDE OF THE

11

DECISION AND DECIDED TO INCLUDE THEM IN THE DAMAGE CALCULATION.

12

Q.

13

THE INFRINGER'S PROFITS ANALYSIS ARE TWO FROM THE ORIGINAL; YOU

14

DROPPED OUT TWO BECAUSE OF THE DECLARATIONS THEY PROVIDED; AND

15

THEN YOU ADDED TWO DIFFERENT ONES IN?

16

A.

THAT'S CORRECT.

17

Q.

AND THAT MAKES THE FOUR NOW?

18

A.

CORRECT.

OKAY.

AND SO THE -- THE FOUR THAT YOU ARE INCLUDING NOW IN

TEXT REMOVED - NOT RELEVANT TO MOTION

Raynee H. Mercado, CSR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

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