Oracle Corporation et al v. SAP AG et al

Filing 1200

Declaration of Kevin M. Papay in Support of 1199 Brief Offer Of Proof Regarding Oracle's Hypothetical License Damages filed byOracle International Corporation. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W, # 24 Exhibit X, # 25 Exhibit Y, # 26 Exhibit Z, # 27 Exhibit AA, # 28 Exhibit BB, # 29 Exhibit CC, # 30 Exhibit DD, # 31 Exhibit EE, # 32 Exhibit FF, # 33 Exhibit GG, # 34 Exhibit HH, # 35 Exhibit II, # 36 Exhibit JJ, # 37 Exhibit KK, # 38 Exhibit LL, # 39 Exhibit MM, # 40 Exhibit NN, # 41 Exhibit OO, # 42 Exhibit PP, # 43 Exhibit QQ, # 44 Exhibit RR, # 45 Exhibit SS, # 46 Exhibit TT, # 47 Exhibit UU, # 48 Exhibit VV, # 49 Exhibit WW, # 50 Exhibit XX, # 51 Exhibit YY, # 52 Exhibit ZZ, # 53 Exhibit AAA, # 54 Exhibit BBB, # 55 Exhibit CCC, # 56 Exhibit DDD, # 57 Exhibit EEE, # 58 Exhibit FFF, # 59 Exhibit GGG, # 60 Exhibit HHH, # 61 Exhibit III, # 62 Exhibit JJJ, # 63 Exhibit KKK, # 64 Exhibit LLL)(Related document(s) 1199 ) (Howard, Geoffrey) (Filed on 8/2/2012)

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 641 - 753
OAKLAND, CALIFORNIA
FRIDAY, NOVEMBER 5, 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
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 742

Page 744

1

A. THAT'S CORRECT.

1

2

Q. AND YOU ARE NOT AWARE OF ANYONE AT SAP EVER TRYING TO

2

3

LICENSE THE BASIC SOFTWARE OF A COMPETITOR TO USE TO COMPETE

3

4

WITH THAT COMPETITOR FOR MAINTENANCE AND SUPPORT OF THAT

4

5

COMPETITOR'S INSTALLATIONS, ARE YOU, SIR?

5

6

A. THAT'S CORRECT.

6

7

Q. DO YOU HAVE ANY IDEA OR UNDERSTANDING, DON'T WANT YOU TO

7

HAVE IN MIND, IF IT'S ACCEPTABLE TO YOUR HONOR, IS CLOSING

8

SPECULATE, JUST WANT TO KNOW IF YOU HAVE ANY IDEA OR

8

TUESDAY STARTING IN THE MORNING AT 8:30. BOTH SIDES -- CLOSE

9

UNDERSTANDING AT ALL, ANY RANGE OF HOW MUCH SAP WOULD CHARGE 9

WITH THE REBUTTAL. AND THAT WOULD BE DONE WITHIN A FOUR AND A

10

ORACLE FOR A LICENSE FOR ALL OF YOUR SOFTWARE IN ORDER TO

HALF HOUR PERIOD. SO IT WOULD GET TO THE JURY.

11

COMPETE WITH YOU TO PROVIDE MAINTENANCE AND SUPPORT FOR YOUR 11

12

CUSTOMERS?

12

INSTRUCT THERE OR WOULD YOU LET THEM -- I KNOW THEY WILL

13

A. I DON'T KNOW THAT.

10

THE COURT: THAT'S 25 -MR. LANIER: PER SIDE. NOT NEW, JUST TOTAL FROM THE
BEGINNING 25 PER SIDE.
MR. PICKETT: I HAVE DONE OTHER CALCULATIONS, AS YOU
MIGHT IMAGINE.
I THINK THE TOTAL IS PROBABLY RIGHT. AND WHAT WE

THE QUESTION I HAVE IS WHETHER YOUR HONOR WOULD

13

DELIBERATE AFTER 1:30. ARE THEY PERMITTED TO BE -- AND IS IT

14

MR. BOIES: NO MORE QUESTIONS.

14

YOUR HONOR'S PREFERENCE TO INSTRUCT THEM? I WOULD GUESS THE

15

THE COURT: IS THERE ANYTHING ELSE, MR. LANIER?

15

INSTRUCTIONS WOULD TAKE 45 MINUTES?

16

MR. LANIER: NO, YOUR HONOR.

16

17

THE COURT: THANK YOU, MR. BRANDT. YOU MAY STEP

17

18
19
20

DOWN.

THE COURT: NOT THAT LONG. THERE ARE NOT GOING TO
BE THAT MANY OF THEM ONCE WE FINISH.
MR. PICKETT: WOULD THAT BE YOUR --

18

THE WITNESS: (ENGLISH) THANK YOU.

19

THE COURT: I WOULD WANT ARGUMENTS AND INSTRUCTIONS

OUR THANKS TO THE INTERPRETER. YOU MAY STEP DOWN AS

20

TO TAKE PLACE ON THE SAME DAY. I WOULD MAKE TUESDAY A FULL DAY

21

FOR THE JURY, THAT TUESDAY. SO WE WOULD START AT 8:30, BUT

22

THE INTERPRETER: THANK YOU.

22

THEY WOULD BE HERE UNTIL 4:30.

23

THE COURT: WE ARE AT THE CLOSE OF THE DAY. AT THIS

23

24

TIME WE ARE GOING TO EXCUSE THE JURY. KEEP IN MIND OVER THE

24

25

WEEKEND THE INSTRUCTIONS THAT I'VE GIVEN YOU FROM TIME TO TIME: 25

1

YOU ARE NOT TO CONDUCT ANY INDEPENDENT RESEARCH ABOUT THE CASE, 1

2

YOU ARE NOT TO COMMUNICATE WITH ANYONE ABOUT THE CASE, AND YOU

2

3

ARE NOT -- YOU ARE TO AVOID ANY NEWS STORIES ABOUT THE CASE

3

HAVE TO EXERCISES A LITTLE DISCRETION ON OUR SIDE, BUT WE ARE

4

WHETHER IT BE BROADCAST OR PRINT MEDIA.

4

WILLING TO DO IT TO CONCLUDE EVIDENCE BY THE END OF MONDAY, AND

5

WE CAN DO THAT.

21

WELL.

MR. PICKETT: SO IT'S PLENTY OF TIME -THE COURT: WE CAN DO IT ALL ON THAT DAY ASSUMING
THAT THE EVIDENCE CONCLUDES BY MONDAY.

Page 743

5
6

HAVE A VERY GOOD WEEKEND, AND WE WILL RESUME AT
8:30 ON MONDAY MORNING. THANK YOU.

Page 745
MR. PICKETT: THAT'S WHAT I HAD IN MIND.
MR. LANIER: I THINK 25 HOURS PER SIDE, WE MIGHT

THE COURT: IF EVERYTHING IS IN BY MONDAY, AND IF

6

7

(PROCEEDINGS HELD OUTSIDE THE PRESENCE OF THE JURY.)

7

YOU DON'T HAVE ENOUGH TIME FOR YOUR ARGUMENTS ON TUESDAY, I

8

THE COURT: WE HAVE A COUPLE OF THINGS WE NEED TO

8

MEAN, IT'S WIDE OPEN. YOU CAN TAKE WHATEVER TIME YOU THINK IS

9

REASONABLY NEEDED TO CONCLUDE YOUR ARGUMENTS REGARDLESS OF HOW

9
10

DISCUSS.
I WOULD ALSO LIKE TO MAKE AN ANNOUNCEMENT FOR ANY

10

MUCH TIME YOU HAVE. PARTICULARLY IF YOU CAN GET IT DONE BY THE

11

PRESS PEOPLE WHO ARE HERE. IF YOU NEED TO -- IF YOU WANT TO BE

11

END OF DAY ON MONDAY.

12

ADDED TO OUR MEDIA LIST, WHICH IS THE LIST THAT SOME COURT

12

MR. LANIER: GREAT.

13

PERSONNEL WILL CONTACT WHEN EVENTS OCCUR IN THIS CASE, YOU WILL

13

14

NEED TO LEAVE A BUSINESS CARD WITH THE COURTROOM DEPUTY BEFORE 14

EXACTLY EVEN AT THIS POINT, AND LET ME EXPLAIN WHY. BECAUSE WE

15

YOU LEAVE.

15

STARTED THE CASE WITH THE 30/30 UNDERSTANDING. AND SO OUR

MR. PICKETT: I WOULD CONTEND IT SHOULDN'T BE QUITE

16

OKAY. NOW, THERE ARE A COUPLE OF THINGS WE NEED TO

16

FIRST WEEK WAS PLANNED THAT WAY. OPENING STATEMENTS WAS

17

TALK ABOUT BEFORE WE ADJOURN TODAY. AND I HAVE A SHORT LIST.

17

PLANNED THAT WAY.

18

YOU ALL WERE GOING TO MAKE SOME CALCULATIONS AND

18

MOREOVER -- SO THE FIRST TWO DAYS WE WERE ON A 30/30

19

GIVE ME SOME RECALCULATIONS WITH REGARD TO A PROPOSAL TO GET

19

SCHEDULE. NOW WE ARE TRYING TO TRIM IT DOWN. I DON'T THINK

20

THIS CASE TO THE JURY ON TUESDAY BEFORE THANKSGIVING.

20

OUR DEFICIT, IN OTHER WORDS, I THINK CAN BE EXPLAINED OR

21

EXCUSED SOMEWHAT BY THAT, NOT THE WHOLE THING, BUT A PIECE OF

21

MR. LANIER: YOUR HONOR, WE DID THOSE CALCULATIONS

IT.

22

ACTUALLY BEFORE WE TALKED TO YOUR HONOR BEFORE TRIAL, AND THAT 22

23

WAS WHERE OUR 25 HOURS A SIDE CAME FROM. THAT ACTUALLY

23

24

MAGICALLY WORKS TO GET US GIVING THE CASE TO THE JURY ON

24

NEW ISSUE FOR US. THEY SAID IN THEIR OPENING "WE TOOK

25

TUESDAY BEFORE THANKSGIVING.

25

RESPONSIBILITY". THEY STIPULATED TO INFRINGEMENT WHICH IS

SECONDLY, MR. BRANDT JUST TODAY OPENED UP A BRAND

27 (Pages 742 to 745)
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 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]

Page 1329

Page 1331
THIS IS A WIDE VARIETY OF REAL PROPERTY THAT YOU HAVE

1

Q. WHY NOT?

1

2

A. BECAUSE OF THE MAGNITUDE OF THE RISK TO ORACLE OF LICENSING

2

BASICALLY IN JANUARY 2005 TO GO OUT AND SERVICE. SO YOU DON'T

3

ITS IMPORTANT SOFTWARE TO ITS CHIEF COMPETITOR, SAP. AND I JUST

3

HAVE TO SIT THERE YOURSELF AND ACTUALLY CREATE THE SOFTWARE.

4

CAN'T EMPHASIZE ENOUGH HOW IMPORTANT IT IS THAT WE'RE IN

4

YOU HAVE THE SOFTWARE. AND THAT'S THE REAL PROPERTY THAT --

5

JANUARY 2005 ON THE HEELS OF THE PEOPLESOFT ACQUISITION FOR

5

THAT I'M VALUING. IT'S NOT SOMETHING -- IT'S NOT EVEN

6

$11 BILLION AND THE NEXT DAY, YOU'RE GIVING YOUR CHIEF

6

INTANGIBLE. IT'S REAL PROPERTY THAT WAS TAKEN.

7

COMPETITOR, WHO HAS STILL DOUBLE YOUR MARKETSHARE IN THE ERP

7

Q. AND WOULD YOU LOWER THE VALUE OF WHAT THEY TOOK IF SOMEHOW,

8

MARKET, THIS VERY IMPORTANT LICENSE THAT BASICALLY IS THE KEYS

8

THEY HAD DECIDED NOT TO USE IT YEARS LATER?

9

TO OPENING UP THE CUSTOMER DOOR AND 10,000 CUSTOMERS AND GOING

9

A. NO, BECAUSE THEY BASICALLY HAD THIS IN THEIR -- IN THEIR

10

IN AND SAYING, HEY, WE HAVE THE SAME THING THAT ORACLE HAS. WE

10

POSSESSION TO DO WHATEVER THEY WANTED TO DO. IT COULD HAVE GONE

11

CAN SERVICE YOU FROM NOW FOR THE NEXT TEN YEARS ON YOUR OLD

11

TO 10,000 PEOPLESOFT CUSTOMERS; PLUS, MORE IMPORTANTLY, THE

12

SYSTEMS AND HELP YOU GET TO NEW SYSTEMS OVER TIME.

12

4,000 JOINT CUSTOMERS, THE CUSTOMERS THAT ALREADY WERE SAP THAT
HAD PEOPLESOFT. AND THEY COULD GO TO THOSE CUSTOMERS AND SAY,

13

THAT'S JUST A VERY VALUABLE ASSET THAT ORACLE PAID

13

14

$11 BILLION FOR. SO YOU HAVE TO WORK THAT INTO THE EQUATION.

14

WE HAVE THIS SOFTWARE AND WE CAN NOW SERVICE PEOPLESOFT AND MAKE

15

THERE'S JUST -- IT'S JUST HOW IT HAS TO BE DONE. AND IT HAS TO

15

YOU ONE COMBINED UNIFIED PLATFORM.

16

BE PAID UP FRONT SO THAT ORACLE IS NOT SITTING THERE WONDERING,

16

Q. NOW, ANOTHER QUESTION YOU GOT ASKED ON TUESDAY WAS ABOUT

17

AM I GOING TO BE PAID $10 MILLION, $20 MILLION, A HUNDRED

17

WHETHER THERE WAS ROOM FOR SAP TO MAKE A PROFIT.

18

MILLION DOLLARS?

18

DO YOU RECALL THAT?

AND YOU'VE SEEN THE RESULTS OF THE OTHER SIDE OF THE

19

A. YES, I WAS ASKED THAT.

CALCULATIONS, AND THERE'S NO WAY THEY COULD EVER JUSTIFY AND

20

Q. AND ASSUMING DEFENDANTS HAVE TO MAKE A PROFIT, ASSUMING

21

ACCEPT THE RUNNING ROYALTY.

21

THAT, AT YOUR OPINION OF THE VALUE OF THE THREE LICENSES, THE

22

Q. LET ME TURN TO THE NEXT TOPIC. MR. MITTELSTAEDT ASKED YOU

22

PEOPLESOFT, THE SIEBEL, AND THE DATABASE, IS THERE STILL AN

23

SOME QUESTIONS ABOUT THE SCOPE OF WHAT'S TO BE VALUED FOR THESE 23

OPPORTUNITY FOR SAP TO MAKE A PROFIT AT THE LICENSE FEE OPINIONS

24

LICENSES.

24

THAT YOU HAVE?

25

A. YES, BASED ON MY VALUATION OF LICENSES, SAP COULD HAVE TAKEN

19
20

25

DO YOU RECALL THAT?

Page 1330

Page 1332

1

A. YES, I DO.

1

THIS LICENSE AND GONE AND EXECUTED ON THEIR PLANS, AND THEY

2

Q. LET'S TAKE A LOOK AT SLIDE 11 FROM YOUR DIRECT EXAMINATION.

2

COULD STILL MAKE A PROFIT ON -- I FEEL VERY COMFORTABLE ABOUT

3

THAT.

3

(EXHIBIT PUBLISHED TO JURY.)

4

BY MR. PICKETT:

4

Q. ALL RIGHT. NOW, LET ME TURN TO ANOTHER TOPIC RAISED BY

5

Q. COULD YOU REMIND THE JURY AGAIN WHAT THIS SLIDE DEPICTS WITH

5

SAP'S COUNSEL. HE SPENT A FAIR AMOUNT OF TIME BOTH TUESDAY AND

6

RESPECT TO SCOPE OF THE LICENSE?

6

TODAY ASKING YOU QUESTIONS ABOUT WHAT HAPPENED AFTER JANUARY 19,

7

A. YES, IT'S AN IMPORTANT SLIDE, AND IT'S A DIFFICULT CONCEPT

7

2005.

8

BECAUSE A LICENSE IS HARD TO SORT OF GET YOUR HANDS AROUND. AND

8

IN YOUR OPINION, IN MEASURING THE FAIR MARKET VALUE

9

WHAT THIS CHART WAS MEANT TO DO, AND MAYBE IT WASN'T OBVIOUS, IS

9

OF A LICENSE NEGOTIATED JANUARY 19, 2005, SHOULD YOU, THE JURY,

10

THAT IN THIS CASE, THEY'RE NOT JUST GETTING A LICENSE TO BE

10

OR THE PARTIES HAVE CONSIDERED EVENTS THAT OCCURRED AFTER THAT

11

ABLE -- AND GO GIVE SERVICE ON PEOPLESOFT CUSTOMERS. THEY

11

DATE?

12

ACTUALLY RECEIVED REAL PROPERTY, REAL SOFTWARE.

12

A. NO, I DON'T BELIEVE THEY -- THEY SHOULD. AND, REALLY, THE

13

MAIN REASON IS THAT IN THIS CIRCUMSTANCE, THERE'S -- THERE'S A

14

WEALTH AND AN ABUNDANCE OF INFORMATION ABOUT THE PROJECTIONS AND

13

AND SO ON THE LEFT-HAND SIDE IS JUST SORT OF LEGAL

14

RIGHTS AT THE TOP, 105 COPYRIGHT REGISTRATIONS, AND THEN IT SORT

15

OF DEPICTS HOW THAT TOOK FORM, YOU KNOW. IT'S AT LEAST HUNDREDS 15

THE EXPECTATIONS OF WHAT SAP WAS GOING TO ACCOMPLISH BY TAKING

16

OF THOUSANDS OF SOFTWARE FILES, AT LEAST THOUSANDS OF COPIES OF

16

THE SOFTWARE. AND THERE'S SO MUCH INFORMATION.

17

ENTIRE APPLICATIONS, AND AT LEAST HUNDREDS OF THOUSANDS OF

17

18

DOWNLOADS. SO THAT'S SORT OF THE ACTIVITY.

18

LOW-LEVEL EMPLOYEES. IT'S INFORMATION THAT THE PEOPLE THAT RUN

AS I MENTIONED ON MY DIRECT TESTIMONY, IT'S NOT FROM

19

BUT THE VISUAL OF THE PROPERTY IS ON THE RIGHT-HAND

19

THE COMPANY ARE MAKING DECISIONS ABOUT. AND THEY'RE GOING TO

20

SIDE. THE RIGHT-HAND SIDE, THESE ARE -- THIS IS ACTUAL PROPERTY

20

MARKET AND LAUNCHING THIS AND TELLING THEIR CUSTOMERS AND

21

THAT -- THAT SAP/TOMORROWNOW RECEIVED. AND THEY RECEIVED THESE 21

PUBLIC, WE HAVE THIS -- THIS RESOURCE, THIS SOFTWARE. WE'RE --

22

IN THE FORM OF SOFTWARE OBJECTS, SOFTWARE UPDATES, THESE BUG

22

AND THEY'VE DEVELOPED A PLAN AND GONE MARKET WITH THEIR OWN

23

FIXES AND PATCHES THAT MR. ELLISON TALKED ABOUT HERE AT TRIAL,

23

PROJECTIONS.

24

THE SOFTWARE APPLICATIONS, THE INSTRUCTIONAL MANUALS, AND THESE 24

25

CUSTOM SOLUTIONS.

25

AND SO THERE'S NO REASON TO GO FORWARD AND SAY, WELL,
HOW'D THEY EXECUTE? BECAUSE THEY TOOK THE PROPERTY KNOWING HOW

37 (Pages 1329 to 1332)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 1333

Page 1335

1

GOOD THIS WAS GOING TO BE FOR SAP WHEN THEY WENT AND COMPETED

1

THAT POINT.

2

WITH ORACLE HEAD TO HEAD FOR THOSE PEOPLESOFT CUSTOMERS.

2

Q. SOME OF THE EMAILS SUGGESTED THAT ORACLE -- OR AT LEAST SOME

3

Q. NOW, WE'RE GETTING NEAR THE END, BUT I WANT TO GO THROUGH A

3

PEOPLE AT ORACLE WERE NOT TAKING THE TOMORROWNOW THREAT

4

FEW OF THE DOCUMENTS THAT YOU WERE SHOWN. AND I WANT TO SHOW

4

PARTICULARLY SERIOUSLY.

5

YOU AND THE COURT WHAT WASN'T SHOWN FROM THOSE DOCUMENTS.

5

6

SO LET'S START WITH YOUR OWN REPORT. SAP'S COUNSEL

DO YOU RECALL THAT?

6

A. YES, I DO.

7

Q. DO YOU KNOW IF ORACLE WAS FULLY INFORMED AS TO TOMORROWNOW'S

7

REFERRED YOU TO PAGE 144 OF YOUR OWN REPORT AND SUGGESTED THAT

8

YOU SOMEHOW USED INFORMATION ABOUT ORACLE'S R & D EXPENDITURES 8

ACTIVITIES ON THE DATES OF THOSE EMAILS?

9

AFTER THE DATE OF THE NEGOTIATION.

9

A. MY UNDERSTANDING IS THAT ORACLE WAS NOT AWARE THAT

10

(EXHIBIT PUBLISHED TO JURY.)

10

TOMORROWNOW HAD THE SOFTWARE AND SOFTWARE SUPPORT MATERIALS, SO

11

BY MR. PICKETT:

11

ORACLE'S UNDERSTANDING WAS THAT TOMORROWNOW COULD NOT OFFER THIS

12

Q. WHAT DID YOU ACTUALLY WRITE IN YOUR REPORT?

12

IMPORTANT DISTINCTION, WHICH IS CALLED THE VENDOR-LEVEL SERVICE,

13

A. WELL, THIS IS IN MY REPORT. AND WHEN WE TALKED ABOUT THE

13

WHICH MEANS YOU CAN GET THE UPDATES AND THE PATCHES AND STAY

14

RESEARCH AND DEVELOPMENT, THE WAY IT WAS PUT IN THE REPORT, THIS 14

15

RELATES TO THE INVESTMENT BY ORACLE.

16

15

CURRENT WITH YOUR HUMAN RESOURCES UPDATES AND WHATNOT.
SO ORACLE DIDN'T BELIEVE THAT TOMORROWNOW HAD THAT

16

I SAID, "ORACLE'S INVESTMENT OVER -- OF OVER

CAPABILITY 'CAUSE IT'S VERY EXPENSIVE TO SPEND THE DEVELOPMENT

17

DOLLARS TO STAY CURRENT.

17

$1 BILLION IN FURTHER RESEARCH AND DEVELOPMENT FOR ITS

18

PEOPLESOFT AND JD EDWARDS PRODUCTS SINCE THE ACQUISITION" -- AND 18

Q. LET'S TAKE A LOOK AT AN EXAMPLE OF THAT. THIS IS EXHIBIT IN

19

THIS IS AN IMPORTANT PHRASE -- I SAID, "WHICH ORACLE WOULD

19

EVIDENCE A374. THIS IS ONE OF THE EMAILS THAT YOU WERE SHOWN BY

20

REASONABLY UNDERSTAND THAT IT WOULD HAVE TO SPEND."

20

SAP'S COUNSEL.

21

AND THAT MEANS THAT THEY WOULD HAVE KNOWN AT THE TIME

21

DO YOU SEE THAT?
(EXHIBIT PUBLISHED TO JURY.)

22

OF THE HYPOTHETICAL THEY'D HAVE TO KEEP INVESTING IN THE

22

23

PRODUCTS, THE PATCHES, AND THE BUG FIXES TO KEEP THE SOFTWARE

23

24

CURRENT.

24

BY MR. PICKETT:

25

Q. AND IF WE GO TO THE NEXT PAGE OF THIS DOCUMENT, IS THERE AN

25

AND THEN I SAY, "AND THAT SAP WOULD HAVE (SIC) AVOID

THE WITNESS: YES.

Page 1334

Page 1336

1

SPENDING BY VIRTUE OF THE LICENSE." SO SAP COULD TAKE THE

1

INDICATION HERE OF THE ISSUE, THAT IS, THAT SAP -- I'M SORRY --

2

LICENSE AND NOT SPEND THOSE DEVELOPMENT DOLLARS 'CAUSE ORACLE

2

THAT ORACLE DID NOT UNDERSTAND THAT TOMORROWNOW WAS TAKING BUGS

3

WOULD KEEP FORTIFYING THAT SOFTWARE WITH THE R & D DOLLARS.

3

AND FIXES, REGULATORY UPDATES, AND THE COPYRIGHTED SOFTWARE?

4

Q. SO YOU -- THANK YOU.

4

A. YES, THIS IS MR. JONES. AND HE'S DESCRIBING A SITUATION

5

NOW, LET'S TURN SOME TO SOME EMAILS YOU WERE SHOWN, A

5

WHERE BASICALLY IF YOU THINK THAT TOMORROWNOW DOESN'T REALLY

6

FAIR NUMBER OF EMAILS. SAP'S COUNSEL SHOWED YOU ORACLE EMAILS.

6

HAVE THE UP-TO-DATE SOFTWARE, IT WOULD BE SORT OF THE -- A -- A

7

POTENTIALLY LACKLUSTER, LESS-PERFORMING SERVICE OFFERING.

8

AND SO HE'S MAKING THE COMPARISON. AND WHAT HE'S

9

SAYING -- HE SAYS -- TO GIVE AN ANALOGY 'CAUSE HE DOESN'T

7

DID HE SHOW ANY SAP EMAILS?

8

A. NOT THAT I RECALL.

9

Q. AND HOW ABOUT THE DATE? DID HE SHOW YOU ANY EMAILS AFTER

10

THE JANUARY 19, 2005 NEGOTIATION DATE?

10

BELIEVE THEY HAVE -- HE DOESN'T KNOW THEY HAVE THE SOFTWARE. HE

11

A. FOR SAP?

11

SAYS, "COULD YOU IMAGINE TELLING YOUR DAD THAT YOU BOUGHT AN

12

Q. FOR ANYONE.

12

EXTENDED WARRANTY, NOT FROM THE MANUFACTURER, BUT FROM THE" --

13

A. HE SHOWED ME SOME EMAILS FOR ORACLE THAT WERE CERTAINLY

13

"BUT FROM SOME SHOP THAT LACKS CAPABILITIES AND ORIGINAL PARTS?"

14

AFTER THAT POINT IN TIME.

14

15

Q. RIGHT.

15

CHEAP, AND THE MECHANICS LACK CAPABILITIES. AND THEY JIMMY-UP

16

THEIR OWN PARTS."

16

AND ARE THE EMAILS AFTER THE DATE RELEVANT TO WHAT

AND THEN HE SAYS, IN QUOTES, "WELL, DAD, IT WAS

AND THEN HE GOES ON, AND HE SAYS, YOU KNOW, "YES,

17

WOULD BE IN THE MINDS OF THE PARTIES ON OR BEFORE THE DATE?

17

18

A. THEY WOULD NOT. THEY'RE -- THEY'RE NOT RELEVANT.

18

DAD, I DON'T KNOW WHAT I'LL DO WHEN I HAVE IT UP TO 75 MILES PER

19

Q. ALL RIGHT.

19

HOUR." BUT "WHEN ONE OF THE PARTS BREAKS, IT WILL BE UNDER

20

EXTENDED WARRANTY."

20

NOW MR. MITTELSTAEDT CALLED THESE EMAILS REALITY

21

CHECKS. DOES THAT MAKE ANY SENSE TO YOU?

21

22

A. NO, THERE'S -- THERE'S NO REASON TO HAVE TO DO A REALITY

22

23

CHECK IN THESE CIRCUMSTANCES TO MEASURE THE VALUE OF THIS

23

24

LICENSE AT JANUARY 2005. I JUST DESCRIBED A MOMENT AGO WHY. SO

24

25

IT WASN'T IMPORTANT TO GO FORTH AND TO LOOK AT INFORMATION PAST 25

AND THEN HE GOES ON AND SAYS, "WOULD YOU DRIVE SUCH A
CAR? WOULD YOUR DAD LET YOU?"
AND SO THAT'S HIS ANALOGY, 'CAUSE HE DOESN'T THINK -HE DOESN'T KNOW THAT TOMORROWNOW ACTUALLY HAS WHAT ORACLE HAS.
THEY HAVE THE SAME SOFTWARE AND CAN PROVIDE THE SAME LEVEL OF

38 (Pages 1333 to 1336)
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 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 1677
1
2
3
4

COVERED BY A MOTION IN LIMINE ORDER.

Page 1679
1

DO YOU RECALL THAT?

MR. BOIES: ALL --

2

A. I DO.

THE COURT: WERE YOU GETTING READY TO SAY I WILL

3

Q. NOW, THE VALUATION DATE FOR THAT LICENSE WOULD HAVE BEEN

4

EITHER JANUARY 18TH OR JANUARY 19TH OF 2005; IS THAT CORRECT?

WITHDRAW IT?

5

MR. BOIES: NO.

5

A. YES.

6

THE COURT: WHICH IN LIMINE ORDER?

6

Q. AND WHEN YOU ARE VALUING SOMETHING AS OF A VALUATION DATE,

7

MR. MITTELSTAEDT: ABOUT PRECLUDED EVIDENCE.

7

YOU NEED TO LOOK AT THE STATE OF AFFAIRS THAT EXISTS AT THAT

8

THE COURT: DO YOU REMEMBER WHICH NUMBER IT WAS?

8

TIME, NOT SOME OTHER TIME. FAIR?

9

A. YES.

9

THERE WAS A NUMBER OF THEM.

10

MR. MITTELSTAEDT: NUMBERS ONE AND TWO.

10

Q. SO THAT WHAT YOU WOULD BE LOOKING AT IS WHAT WOULD HAVE

11

MR. BOIES: THIS JUST REQUIRES A "YES" OR "NO"

11

BEEN IN THE MINDS OF SAP AND ORACLE ON JANUARY 18TH OR

12

JANUARY 19TH, CORRECT?

13

A. YES.

14

Q. ON JANUARY 18TH OR 19TH -- JUST SO I DON'T HAVE TO KEEP

15

SAYING IT, IN YOUR OPINION, IS IT THE 18TH OR IS IT THE 19TH?

12
13
14
15

ANSWER AT THIS POINT.
THE COURT: YOU MAY ANSWER THIS QUESTION, BUT YOU
MAY NOT EXPLORE THAT AREA.
THE WITNESS: NO.

16

BY MR. BOIES:

16

A. LET'S CALL IT THE 19TH.

17

Q. WHAT?

17

Q. ON JANUARY 19TH, NEITHER SAP NOR ORACLE HAD A CRYSTAL BALL

18

A. NO.

18

THAT WOULD HAVE TOLD THEM EXACTLY WHAT WAS GOING TO HAPPEN IN

19

Q. OKAY.

19

THE FUTURE, CORRECT?

20

A. NO CRYSTAL BALL.

20

MR. BOIES: LET ME PUT ONE QUESTION AND -- WHICH I

21

DON'T THINK HAS ANYTHING TO DO WITH THE IN LIMINE MOTIONS, YOUR 21

Q. SO ALL THEY COULD GO ON IN NEGOTIATING A LICENSE WAS WHAT

22

HONOR, BUT LET ME JUST PUT IT AND SEE.

22

THEY KNEW AND BELIEVED AT THE TIME, CORRECT?

23

BY MR. BOIES:

23

A. CORRECT.

24

Q. DID YOU INVESTIGATE THE EXTENT TO WHICH ORACLE REDUCED

24

Q. SO IN TERMS OF COMING UP WITH WHAT YOU REFER TO AS THIS

25

PRICES IN ORDER TO KEEP CUSTOMERS?

25

HYPOTHETICAL LICENSE, WHAT YOU ARE GOING TO BE DOING IS TRYING

Page 1678
1
2
3
4

Page 1680

MR. MITTELSTAEDT: SAME OBJECTION.

1

TO FIGURE OUT WHAT WOULD HAVE BEEN THEIR PLANS AND

THE COURT: I THINK THAT'S GETTING PRETTY CLOSE,

2

EXPECTATIONS -- I THINK YOU USED THE WORD "FORECASTS" AT

3

JANUARY 19TH, 2005, CORRECT?

4

A. YES.

MR. BOIES.
MR. BOIES: WHY DON'T I -- I AM NOT GOING TO FINISH

5

TODAY ANYWAY. PERHAPS WE CAN TAKE THAT UP AT THE BREAK, YOUR

5

Q. NOW, DID YOU LOOK AT WHAT THE PLANS, PROJECTIONS,

6

HONOR.

6

FORECASTS WERE OF SAP AS TO WHAT THEY THOUGHT WAS GOING TO

7

HAPPEN ON JANUARY 19TH, 2005?
A. YES.
Q. AND WHAT DOCUMENTS DID YOU LOOK AT IN THAT CONNECTION AND

7

THE COURT: OKAY.

8

BY MR. BOIES:

8

9

Q. IN TERMS OF YOUR ANALYSIS OF THE LOST PROFITS TO ORACLE,

9

10

THE LOST PROFITS THAT YOU CALCULATED RELATED TO THE DEPRIVATION 10

RELY ON?

11

OF A MAINTENANCE STREAM THROUGH 2008; IS THAT CORRECT?

11

A. I LOOKED AT THE BUSINESS CASE, WHICH I THINK WAS A

12

A. YES.

12

JANUARY 7TH DOCUMENT. AND THAT WAS THE DOCUMENT THAT HAD THE

13

Q. AND SOME OF THE CUSTOMERS FROM TOMORROWNOW WENT BACK TO 13

14

ORACLE, CORRECT?

14

THE ONLY REASON I AM SLIGHTLY HESITANT ON THAT IS

15

A. YES.

15

YOU ASKED ME IF I RELIED UPON THAT. AND I CONSIDERED IT, BUT I

16

Q. AND SOME DID NOT, CORRECT?

16

AM NOT SURE IT ROSE TO THE LEVEL OF RELIANCE. I DIDN'T BASE

17

A. CORRECT.

17

ANY CALCULATION ON IT, IF YOU LIKE.

18

Q. AND FOR THE CUSTOMERS THAT DID NOT GO BACK TO ORACLE, YOU

18

Q. NOW, IN ORDER TO COME UP WITH A VALUE OF A HYPOTHETICAL

19

DID NOT INCLUDE ANY DAMAGES FOR PERIODS AFTER 2008; IS THAT

19

LICENSE, YOU HAD TO FIGURE OUT WHAT SAP AND ORACLE WOULD HAVE

20

CORRECT?

20

NEGOTIATED ON JANUARY 19TH, 2005, CORRECT?

21

A. THAT'S CORRECT.

21

A. YES.

22

Q. LET ME TURN TO THE LICENSE, FAIR VALUE -- FAIR MARKET

22

Q. AND TO DO THAT YOU WOULD HAVE HAD TO DETERMINE WHAT YOU

23

VALUE LICENSE. THAT IS SOMETHING THAT YOU TESTIFIED WAS

23

BELIEVED WOULD HAVE BEEN IN THEIR MINDS ON THAT DATE, CORRECT?

24

SOMETHING THAT IS NEGOTIATED BEFORE THE INFRINGEMENT BEGINS SO 24

A. YES. IN PART, YES.

25

IT SHOULD NOT HAVE A PUNISHMENT ELEMENT TO IT.

Q. AND IN ORDER TO DO THAT, YOU WOULD HAVE NEEDED TO KNOW

25

FORECAST IN IT.

43 (Pages 1677 to 1680)
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 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]

Page 1745

Page 1747

1

BECAUSE MY QUESTION IS, DID YOU EVER INVESTIGATE WHAT

1

CONTRIBUTORILY INFRINGED 240 WORKS AS OPPOSED TO 120, THAT WOULD

2

SAP WOULD HAVE DEMANDED IF IT WERE TO GIVE TO ORACLE THE SAME

2

NOT CHANGE YOUR FAIR MARKET VALUE LICENSE EVEN A DOLLAR,

3

LICENSE THAT IT NEEDED FROM ORACLE TO DO WHAT IT DID?

3

CORRECT?

4

A. NO.

4

A. IT WOULD ONLY CHANGE IT IF THERE WAS MORE USE. REMEMBER,

5

Q. DID YOU EVER HAVE ANY CONVERSATIONS WITH ANYONE FROM SAP AS

5

WE'RE TRYING TO CALCULATE THE VALUE OF USE. AND IF THERE HAD

6

TO HOW MUCH SAP WOULD DEMAND FOR A LICENSE TO ALLOW ITS

6

BEEN MORE USE, THAT WOULD HAVE PRESUMABLY GENERATED MORE

7

COMPETITOR ORACLE TO MAINTAIN ITS SOFTWARE?

7

REVENUES, AND -- AND SO THERE'D HAVE BEEN MORE ROYALTY. SINCE

8

A. I DID NOT.

8

THAT DIDN'T HAPPEN, THE ANSWER IS NO.

9

Q. AM I CORRECT THAT THE WAY YOU COME UP WITH YOUR FAIR MARKET

9

Q. AND WHEN YOU SAY WE'RE TRYING TO CALCULATE USE, YOU MEAN

VALUE LICENSE, IT WOULDN'T MAKE ANY DIFFERENCE TO THE VALUE OF

10

YOU'RE TRYING TO CALCULATE.

THAT LICENSE HOW MANY COPIES -- HOW MANY INFRINGING COPIES

11

A. I'M TRYING TO --

12

TOMORROWNOW OR SAP ILLEGALLY DOWNLOADED?

12

Q. RIGHT.

13

A. NO, I -- WELL, I DON'T THINK SAP'S PART OF THAT TALKS. I

13

A. I'M TRYING TO CALCULATE USE, YES.

14

DON'T THINK THEY DOWNLOADED ANYTHING INAPPROPRIATE, BUT TN DID.

14

Q. ALL RIGHT. AND THAT'S EXACTLY MY POINT. YOU'RE TRYING TO

15

AND I THINK THAT'S A CONSIDERATION AND ONE OF THE REASONS WHY I

15

CALCULATE USE AS REFLECTED IN REVENUES, CORRECT?

16

ACTUALLY DID THE DISGORGEMENT OF THE INFRINGER'S PROFITS THE WAY

16

A. YES. I THINK THAT CAPTURES ALL OF THE USE.

17

I DID IT AND WHY I CALCULATED A ROYALTY ON ALL OF -- OF

17

Q. OH, IT DOES? YOU THINK SO?

18

TOMORROWNOW'S REVENUES. SO I DIDN'T EXCLUDE -- I DIDN'T EXCLUDE

18

A. I BELIEVE SO.

19

ANYONE FOR THE REASONABLE ROYALTY ON THE TOMORROWNOW SIDE.

19

Q. SO IF THEY GIVE IT AWAY AND GET NO REVENUES, DOES THAT MEAN

20

THEY DON'T USE IT?

10
11

SO I ASSUMED ALL OF THOSE REVENUES WERE GENERATED

20
21

INAPPROPRIATELY.

21

A. NO.

22

Q. YES, PERHAPS MY QUESTION WASN'T CLEAR.

22

Q. OKAY.

23

A. IT WOULD -- AND IF I DIDN'T MAKE AN ADJUSTMENT FOR THE TIMES

BECAUSE YOU'RE FOCUSING ON THE REVENUES, IF

23
24

TOMORROWNOW HAD DOWNLOADED TWICE AS MANY ILLEGAL COPIES, THAT 24

THEY GAVE IT AWAY, YOU'D BE RIGHT. BUT I DID MAKE AN ADJUSTMENT

25

WOULD NOT INCREASE YOUR ROYALTY PAYMENTS TO ORACLE AT ALL,

FOR THE TIMES THEY GAVE IT AWAY.

25

Page 1746

Page 1748

1

RIGHT?

1

Q. BUT YOU THEN HAVE TO MAKE AN ADJUSTMENT FOR THAT, DON'T YOU,

2

A. CORRECT.

2

SIR?

3

Q. AND IF -- AND YOU KNOW THAT ORACLE HAS CLAIMED AND, INDEED,

3

A. YES.

4

THE DEFENDANTS HAVE NOW ADMITTED THAT THERE WAS INFRINGEMENT OF 4

Q. YOU CAN'T JUST LOOK AT THE REVENUES 'CAUSE THERE ARE NO

5

120 SEPARATE COPYRIGHTED WORKS.

5

REVENUES WHEN THEY GIVE IT AWAY, CORRECT?

6

A. CORRECT. SO I CALCULATE WHAT THE REVENUES SHOULD HAVE BEEN

DO YOU KNOW THAT?

6
7

A. I DO.

7

AND THEN CALCULATED MY ROYALTY ON THAT BASIS.

8

Q. IF THERE HAD BEEN INFRINGEMENT OF 240 COPYRIGHTED WORKS, THE

8

Q. AND WHEN YOU SAY "SHOULD HAVE BEEN," WHO DETERMINES WHAT

9

WAY YOU APPROACH THE FAIR MARKET VALUE LICENSE, THAT WOULDN'T

9

THEY SHOULD HAVE BEEN?

10

HAVE CHANGED IT $1, CORRECT?

10

A. THERE WAS A REPORT CREATED BY AN EMPLOYEE OF TOMORROWNOW

11

A. ONLY IF THERE'D BEEN MORE USE; IN OTHER WORDS, TO GENERATE

11

THAT WENT THROUGH ALL OF THE CUSTOMERS THAT HAD DISCOUNTED

12

MORE REVENUE --

12

DEALS, AND PUT WHAT'S CALLED A STANDARD PRICING ON THOSE DEALS,

13

Q. MORE REVENUE.

13

SO YOU -- BY KNOWING WHAT WAS SUPPORTED, YOU COULD PRETTY MUCH

14

A. -- THEN THAT WOULD HAVE RESULTED IN MORE ROYALTY. BUT THAT

14

WORK OUT WHAT THE ORACLE PRICE WAS.

15

DIDN'T HAPPEN, SO WE'RE DEALING WITH WHATEVER ACTUALLY HAPPENED,

15

16

AND THAT'S WHAT I'M TRYING TO VALUE.

16

HALF OF THAT. IT'S SLIGHTLY DIFFERENT FROM JUST LOOKING AT

17

Q. AND WHAT YOU'RE -- WHAT YOU'RE DOING IS YOU'RE VALUING IT

17

ORACLE'S PRICING BECAUSE NOT EVERYTHING ORACLE SUPPORTED WAS

18

BASED NOT ON HOW MANY WERE DOWNLOADED, BUT -- OR HOW MANY WERE 18

SUPPORTED AT TOMORROWNOW. SO THIS REPORT SAID IF THESE ARE THE

19

USED OR HOW MANY COPYRIGHTED WORKS THERE WERE OR WHAT THE COST 19

PRODUCTS THAT ARE BEING SUPPORTED AT TOMORROWNOW AND YOU WERE

20

OF THOSE WERE, BUT JUST THE REVENUES AS YOU CALCULATE THEM,

20

PAYING US WHAT WE NORMALLY CHARGE, THIS IS HOW MUCH YOU'D BE

21

FAIR?

21

PAYING. AND THAT WAS THE NUMBER I CALCULATED THE ROYALTY ON.

22

A. NO. THAT'S NOT FAIR.

22

Q. SO YOU CALCULATED THE ROYALTY, WOULD IT BE FAIR TO SAY

23

Q. OKAY. IF THERE HAD BEEN -- AND I THOUGHT I ASKED YOU THIS

23

CUTTING THROUGH SOME OF THAT, THAT YOU CALCULATED THE ROYALTY ON

24

BEFORE, BUT LET ME ASK YOU AGAIN.

24

THE BASIS OF ABOUT HALF OF WHAT ORACLE WOULD HAVE BEEN CHARGING?

25

A. I THINK THAT'S ABOUT RIGHT, YES.

25

IF TOMORROWNOW HAD INFRINGED AND SAP HAD

AND I -- THE ESTIMATE, I THINK IT WAS, WOULD BE ABOUT

14 (Pages 1745 to 1748)
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 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 1889
SO WHAT IT MEANS IS THEIR STRATEGY, THEIR IDEA OF

Page 1891
1

LET SAP SELL SOME DATABASE TO US. THEY KEEP SOME OF THE MONEY,

2

WHAT WOULD BE FAIR CAN'T POSSIBLY BE FAIR. EVERY DOLLAR WE

2

THEY GIVE US SOME OF THE MONEY. NET/NET, WE'RE MUCH BETTER OFF

3

LOSE, THEY PAY US BACK 25 CENTS? THAT'S -- CAN'T BE REASONABLE

3

THAN IF THEY DIDN'T SELL TO THOSE CUSTOMERS.

4

COMPENSATION IN THIS MODEL. JUST DOESN'T MAKE SENSE IN THIS

4

Q. AND JUST SO WE'RE CLEAR, DOES SAP'S ORACLE DATABASE RESELLER

5

CASE.

5

AGREEMENT OR ANY OF THE PARTNER LICENSES THAT ORACLE HAS -- DO

6

Q. ALL RIGHT. LET'S MOVE ON TO THE DATABASE RESELLER

6

ANY OF THEM ALLOW ORACLE'S PARTNERS OR RESELLERS TO USE ORACLE'S

7

AGREEMENT. IN YOUR EXPERIENCE, DOES THE ORACLE DATABASE

7

INTELLECTUAL PROPERTY TO COMPETE AGAINST ORACLE FOR ORACLE'S

8

RESELLER AGREEMENT WITH SAP PROVIDE A GOOD BENCH MARK OR EXAMPLE

8

CUSTOMERS?

9

FOR THE FAIR MARKET VALUE LICENSES THAT WE'RE TALKING ABOUT

9

A. NO. NO, NO. IT'S THE EXACT OPPOSITE. IT'S LITERALLY THE

1

10

HERE?

10

DIFFERENCE BETWEEN LEFT AND RIGHT HERE.

11

A. ACTUALLY, IT -- IT DOESN'T MAKE ANY SENSE AT ALL. IN FACT,

11

Q. OKAY.

12

ALL -- EXTRAPOLATING FROM ANY RESELLER AGREEMENT DOESN'T MAKE

12

13

SENSE --

13

14

(DEMONSTRATIVE PUBLISHED TO JURY.)

TAKE THAT DOWN. THANK YOU.
IS THE DATABASE RESELLER AGREEMENT THE ONLY AGREEMENT

14

THAT ORACLE HAS WITH SAP?

15

THE WITNESS: -- BECAUSE --

15

A. NO. WE HAVE OTHERS.

16

ACTUALLY, LET ME LAY THIS OUT FOR YOU.

16

Q. NOW, YOU HEARD ABOUT THE JAVA LICENSE. COULD YOU TELL ME

17

MS. HOUSE: LET ME JUST TELL THE COURT WHAT THIS IS.

17

ABOUT THAT?

18

THIS IS PLAINTIFFS' DEMONSTRATIVE 18.

18

A. SURE. NOW, THE JAVA LICENSE -- I SORT OF DON'T KNOW WHY

19

Q. COULD YOU EXPLAIN TO THE JURY WHAT YOU'RE TALKING ABOUT?

19

THERE'S CONFUSION. THE JAVA LICENSE, WHEN DONE WITH SAP AND

20

A. SURE. SO ON THE RIGHT SIDE IS HOW RESELLERS WORK. SO LET'S

20

WHEN IT WAS DONE WITH SUN, WAS A PREPAID LUMP-SUM AMOUNT OF A

21

SAY ORACLE HAS THIS MANY CUSTOMERS, RIGHT? AND A RESELLER, HE

21

MILLION FIVE A YEAR, PERIOD.

22

SELLS OVER HERE, SO HE GETS EVEN MORE CUSTOMERS FOR US, OKAY.

22

23

AND THAT'S THE BIG DIFFERENCE. YOU START HERE, AND A RESELLER'S

23

EXTENDABLE FOR ANOTHER FIVE YEARS, THERE WAS NO ACCOUNTING,

24

A PARTNER. THEY HELP YOU GET CUSTOMERS YOU WOULDN'T OTHERWISE

24

THERE WAS NO AUDIT RIGHTS OR ANYTHING. IT'S A MILLION FIVE. IT

25

GET ON YOUR OWN. OKAY?

25

WAS FOR A TCK LICENSE. IT'S NOT ACTUALLY FOR JAVA. A TCK

AND DURING THE FIRST FIVE YEARS OF IT, AND IT WAS

Page 1890
1

SO WHAT HAPPENS IS -- LET'S SAY YOU START WITH A

Page 1892
1

LICENSE IS A TEST KIT TO CHECK THAT THEIR APPLICATIONS ARE JAVA

2

HUNDRED CUSTOMERS. IF YOU GET A RESELLER, MAYBE YOU GET 110,

2

COMPLIANT AND SO THAT THEY COULD USE THE JAVA BRAND NAME. AND

3

120 CUSTOMERS.

3

THAT'S WHAT THAT -- THAT WAS ABOUT.

4
5

OKAY. NOW, THAT'S RESELLERS. THAT MAKES SENSE.
THEN A RUNNING ROYALTY CAN MAKE SENSE IN THAT CASE.

4

BUT, YOU KNOW, SAP ALSO LICENSES OUR OUTSIDE IN

5

TECHNOLOGY, WHICH IS ANOTHER PART OF -- YOU KNOW, ANOTHER

6

ON THE OTHER SIDE, HERE WE HAVE -- ON THE LEFT SIDE,

6

PRODUCT THAT WE HAVE. THEY PAY AN UPFRONT LICENSE UNRELATED TO

7

WE HAVE ALREADY -- AND WE TALKED BIT FOR THREE WEEKS NOW --

7

THE VOLUMES THAT THEY BUY.

8

14,000 CUSTOMERS BETWEEN PEOPLESOFT AND SIEBEL, 14,000. NOTHING

8

9

SAP/TOMORROWNOW DOES WITH THE INTELLECTUAL PROPERTY WE LICENSE 9

MOVE TO STRIKE. THAT'S TESTIMONY ABOUT THE CONTENTS OF AN

10

THEM GIVES US ONE MORE CUSTOMER. IT'S ALWAYS THE SAME 14,000.

AGREEMENT THAT'S NOT IN EVIDENCE. VIOLATES THE BEST EVIDENCE

11

SO INSTEAD OF WIN/WIN WHERE A RESELLER GETS YOU MORE CUSTOMERS, 11

12

IT'S WIN/LOSS. IT'S A ZERO-SUM GAME. THEY TAKE CUSTOMERS OUT

12

13

OF THE 14,000. YOU'D NEVER HAVE ANY MORE.

13

14

THAT'S THE PROBLEM. HOW COULD YOU POSSIBLY

10

14

MR. LANIER: OBJECTION, YOUR HONOR. I'M SORRY AND

RULE AND IT'S HEARSAY.
THE COURT: I THINK HE'S RIGHT ABOUT THE LAST -- BUT
IT'S NOT THE ENTIRETY OF HER LAST ANSWER.
MS. HOUSE: WELL, I THINK, YOUR HONOR, IT WAS RAISED

EXTRAPOLATE FROM A MODEL THAT WORKS WHEN YOU'RE GROWING IN A

15

BY MR. MCDERMOTT HIMSELF WHEN HE TESTIFIED THAT THEY NEVER DO

CASE WHERE IT'S A ZERO-SUM GAME. IT JUST DOESN'T MAKE SENSE.

16

ANY UPFRONT IP LICENSES. DIRECTLY CONTRADICTS MR. MCDERMOTT'S

17

Q. AND JUST TO BACK UP FOR A SECOND, COULD YOU EXPLAIN WHY IT

17

TESTIMONY.

18

IS THAT YOU DECIDED TO LET SAP BE ONE OF THE RESELLERS OF THE

18

19

ORACLE DATABASE?

19

CAN WE HAVE -- I CAN'T MOVE MY CURSOR UP. CAN YOU --

20

A. WELL, SURE. I MEAN, WE HAVE A LOT OF RESELLERS. BUT

20

EITHER TELL ME HOW DO THAT -- I WANT TO HEAR THE BEGINNING OF

21

REMEMBER, SAP'S THE LARGEST ENTERPRISE SOFTWARE COMPANY, AND

21

HER ANSWER, WHICH I THOUGHT WAS FINE.

22

WHEN A CUSTOMER BUYS ERP SOFTWARE, ACCOUNTING, HR, THEY HAVE TO 22

23

RUN IT ON A DATABASE. AND SO WE'D LIKE ACCESS TO ALL THOSE

23

24

CUSTOMERS THAT SAP -- THEY'RE SAP CUSTOMERS, BUT THEY NEED A

24

25

DATABASE, SO WE'RE VERY HAPPY TO HAVE -- HERE ARE OUR CUSTOMERS,

25

15
16

THE COURT: ALL RIGHT.

(OFF-THE-RECORD DISCUSSION.)
THE COURT: WOULD YOU JUST READ IT. READ THE
QUESTION AND THE WHOLE THING.
(OFF-THE-RECORD DISCUSSION.)

4 (Pages 1889 to 1892)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 1893

Page 1895

1

(RECORD READ AS FOLLOWS:

1

A. WELL, HE ACTUALLY WAS WRONG ON A NUMBER OF FRONTS. IT WAS

2

"Q. NOW, YOU HEARD ABOUT THE JAVA LICENSE.

2

WHETHER THEY'RE INVOLVED UP -- IN LICENSE FEES UPFRONT LIKE

3

THAT. AND THE TRUTH IS THE OUTSIDE IN AGREEMENT IS A THREE-YEAR

4

AGREEMENT. IT ALLOWS THEM TO USE AS MUCH OF THE OUTSIDE IN

COULD YOU TELL ME ABOUT THAT?

3

"A. SURE. NOW, THE JAVA LICENSE -- I SORT

4
5

OF DON'T KNOW WHY THERE'S CONFUSION."

5

TECHNOLOGY AS THEY WANT. THE NUMBER DOESN'T WAIVER IN ANY WAY

6

THE COURT: OKAY. LET'S STOP FOR A SECOND.

6

FROM VOLUMES, AND IT'S -- IT'S SUCH A CLASSIC TYPE OF LICENSE

7

ALL RIGHT. ISN'T THE JAVA LICENSE THE LICENSE WE SAW

7

AGREEMENT. IT'S ACTUALLY CALLED A BUYOUT. AND THAT WAS

8

INCORRECT.

8

THAT MR. MITTELSTAEDT MOVED INTO EVIDENCE?
MR. LANIER: RIGHT. AND, YOUR HONOR, I WAS OBJECTING

9

9

THEY ACTUALLY ON THEIR OWN SIDE, BY THE WAY, THE --

10

TO HER TESTIMONY ABOUT ANOTHER AGREEMENT THAT SHE MENTIONED

10

SAP THEMSELVES LICENSES SYBASE, WHICH IS ONE OF THEIR PRODUCTS,

11

AFTER THE JAVA LICENSE. THE JAVA LICENSE IS IN EVIDENCE.

14

ALSO UNLIMITED USE OVER MULTIPLE YEARS OR FOR MULTIPLE PRODUCTS

12

TO OTHER TECHNOLOGY COMPANIES.

MR. LANIER: IT WAS THE OTHER AGREEMENT THAT MS. CATZ

13

11

THE COURT: OKAY.

12

13

SO I MEAN, THOSE WERE JUST POPPED OUT OF THE TOP OF

14

MENTIONED --

MY HEAD WITHOUT DOING ANY, YOU KNOW, RETHINKING. THE MOMENT HE

15

THE COURT: OKAY. ALL RIGHT.

15

SAID IT, I KNEW THAT HE WAS MISTAKEN.

16

MR. LANIER: -- WHICH IS NOT --

16

Q. NOW, ALSO DOES ORACLE AND DOES SAP LICENSE ITS TECHNOLOGY TO

17

THE COURT: ALL RIGHT. I DON'T THINK THE SECOND ONE

17

ITS ENTERPRISE CUSTOMERS AS AN UPFRONT FASHION, OR IS IT A

18

RUNNING ROYALTY?

18

IS IN.

19

ARE YOU PLANNING ON PUTTING IT ON?

19

A. IN GENERAL, OUR CUSTOMERS ACTUALLY PAY US UPFRONT FOR, LET'S

20

MS. HOUSE: I'M NOT GOING TO PUT IT IN EVIDENCE.

20

SAY -- YOU KNOW, NUMBER OF YEARS, AND THEY CAN USE AS MUCH AS

21

MR. MCDERMOTT TESTIFIED THAT SAP NEVER LICENSES IP

21

THEY WANT. BUT IN GENERAL, ACTUALLY ALL OF -- MOST OF OUR

22

UPFRONT, AND SO I'M ASKING MS. CATZ HER PERSONAL KNOWLEDGE ABOUT 22

LICENSES -- I CAN'T ACTUALLY THINK OF ONE THAT ISN'T UPFRONT --

23

WHETHER THAT IS TRUE OR NOT.

23

AND THEY PAY, BY THE WAY, IN GENERAL -- COMMERCIAL CUSTOMERS PAY
FOR SUPPORT UPFRONT REGARDLESS OF HOW MUCH THEY USE.

24

THE COURT: OKAY. AND YOUR OBJECTION IS...?

24

25

MR. LANIER: OBJECTION TO MS. CATZ'S PERSONAL

25

AND SOME OF THESE CUSTOMERS PAY, IN FACT, HUNDREDS OF

Page 1894

Page 1896

1

KNOWLEDGE ABOUT THAT, DON'T OBJECT TO. SHE WAS CHARACTERIZING

1

MILLIONS UPFRONT.

2

THE CONTENTS OF AN AGREEMENT, WHICH IS -- THAT IS WHAT I

2

Q. AND THE SAME IS TRUE FOR SAP, TO YOUR KNOWLEDGE?

3

OBJECTED TO. THAT PART THERE.

3

A. YES.
Q. OKAY.

4

THE COURT: OKAY.

4

5

MR. LANIER: DESCRIBING THE CONTENT OF AN AGREEMENT.

5

6

MS. HOUSE: WELL, MR. MCDERMOTT WAS, TOO, WHEN HE

6

INVOLVED IN PREPARING PROJECTIONS AT ORACLE, AS YOU TOLD THE

7

JURY LAST WEEK, CORRECT?

8

A. YEAH. OBVIOUSLY, I'VE BEEN INVOLVED AT ORACLE FOR -- FOR

9

QUITE A LONG TIME AND BEFORE THAT, AS AN INVESTMENT BANKER FOR

7
8
9

SAYS THAT NONE OF THEM -THE COURT: YEAH, IF SHE CAN TESTIFY AS TO HER
PERSONAL KNOWLEDGE AS TO WHETHER OR NOT THERE WERE SUCH

NOW, LET'S TALK A BIT ABOUT PROJECTIONS. YOU WERE

MANY YEARS.

10

LICENSES. SHE CAN CERTAINLY REFER TO A PARTICULAR AGREEMENT AND 10

11

THAT GIVES RISE TO THAT KNOWLEDGE. HOW ELSE WOULD SHE KNOW IT

11

12

UNLESS SHE WAS AWARE THAT THERE WAS SUCH AN AGREEMENT?

12

SAP PROJECTION FROM PLAINTIFFS' EXHIBIT 4814. THAT'S THE

MR. LANIER: THE PROBLEM, YOUR HONOR, IS WITH THIS

13

THREE-YEAR PROJECTION OF 897 MILLION.

13

MS. HOUSE: COULD YOU PLEASE PUT UP ON THE SCREEN THE

(EXHIBIT PUBLISHED TO JURY.)

14

WORD "UPFRONT," THAT'S ACTUALLY A WORD THAT NEEDS TO BE

14

15

DETERMINED IN THE CONTEXT OF EACH AGREEMENT. IS A FEE PAID

15

BY MS. HOUSE:

16

EVERY YEAR CREDITED AGAINST ROYALTIES UP FRONT?

16

Q. OKAY. YOU'VE SEEN THAT A FEW TIMES THIS -- LAST COUPLE

17

WEEKS. IS THIS THE SORT OF DOCUMENT THAT ORACLE TYPICALLY

17

THE COURT: OKAY. THEN YOU CAN EXPLORE THAT WITH HER

18

ON CROSS-EXAMINATION. OVERRULED.

18

GENERATES IN DEVELOPING A BUSINESS CASE?

19

BY MS. HOUSE:

19

A. YES. SOMETHING JUST LIKE THAT, ACTUALLY.

20

Q. OH, OKAY. LET'S TRY TO CLEAN UP THIS SO IT'S NOT SO

20

Q. AND DO YOU RECALL TESTIMONY IN THIS CASE -- IF YOU CAN TURN

21

CONFUSING. I'LL MAKE IT CLEAR.

21

BACK TO THE FRONT PAGE OF THIS DOCUMENT.
(EXHIBIT PUBLISHED TO JURY.)

22

MR. MCDERMOTT SPECIFICALLY TESTIFIED WHEN ASKED BY

22

23

HIS COUNSEL WHETHER SAP EVER LICENSES IP TO COMPETITORS UP -- IN

23

24

AN UPFRONT-PAYMENT FASHION. AND I'M ASKING YOU WHAT'S YOUR

24

Q. DO YOU RECALL THE TESTIMONY IN THIS CASE THAT THE MEMBERS OF

25

PERSONAL KNOWLEDGE THAT TELLS YOU THAT HE'S WRONG?

25

THE EXECUTIVE COMMITTEE OF SAP PROVIDED EXTENSIVE INPUT AND

MS. HOUSE: AND THE -- PULL UP THE FIRST PARAGRAPH.

5 (Pages 1893 to 1896)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR

Page 1913

Page 1915

1

A. BUT IT ISN'T CREDITED AGAINST ROYALTIES. AND THE -- IF

1

BEGINNING AND NEVER MAKE ANOTHER PAYMENT, RIGHT? THAT'S NOT HOW

2

YOU'RE TALKING ABOUT -- SAP AGREEMENTS, THE OUTSIDE IN AGREEMENT

2

IT ACTUALLY WORKS?

3

IS ONE -- ONE PAYMENT FOR THREE YEARS AND YOU PAY THE WHOLE

3

A. WELL, IT KIND OF DEPENDS, SO THEY PAY FOR THE TERM UPFRONT.

4

THING UPFRONT, NOT EVERY YEAR.

4

LIKE, FOR EXAMPLE, I HAVE A LOT OF CUSTOMERS WHO

5

Q. HOW MUCH IS IT?

5

BUY -- THEY'LL PAY 10 MILLION, SOMETIMES A HUNDRED MILLION,

6

A. I THINK ALSO ABOUT 1.2 MILLION, SOMETHING LIKE THAT.

6

SOMETIMES MORE, UPFRONT TO USE ALL OF OUR SOFTWARE FOR THE NEXT

7

Q. OKAY. WITH AN "M," RIGHT?

7

THREE YEARS OR FIVE YEARS. THEY DON'T HAVE TO TELL US HOW MUCH

8

A. YEAH. I MEAN --

8

THEY USE OR ANYTHING. THEY PAY THE WHOLE THING FOR THE

9

Q. OKAY.

9

SOFTWARE. IT'S CALLED A PERPETUAL RIGHT, WHICH MEANS FOREVER,

10

A. -- SAP, THE ONLY PLACE THEY'VE PAID US BILLIONS IS FOR THE

10

THEY CAN USE IT. THEY PAY IT UPFRONT NOW, AND THEN THEY ALSO

11

DATABASE LICENSES.

11

BUY ONE YEAR'S SUPPORT, AND THEY PAY THAT UPFRONT. BUT THAT'S

12

Q. AND WE'LL TALK ABOUT THAT ONE IN A MINUTE.

12

ALL THEY'VE COMMITTED TO.

13

NOW, YOU KNOW ORACLE'S HAD AN EXPERT THAT TESTIFIED

13

IF THEY WANT SUPPORT ANOTHER YEAR, THEN THEY WOULD

14

IN THIS CASE, RIGHT?

14

LICENSE THAT AGAIN, AND THEY GENERALLY -- THE COMMERCIAL

15

A. YES, MR. MEYER.

15

CUSTOMERS PAY THAT UPFRONT.

16

Q. AND HE LOOKED AT LOTS OF LICENSE AGREEMENTS FROM BOTH SIDES,

16

Q. AND IN THAT SO-CALLED UPFRONT SCENARIO, YOU KNOW ACTUALLY

17

RIGHT?

17

WHICH CUSTOMER -- IT'S ONE CUSTOMER WHO'S LICENSED TO USE IT

18

A. YOU HAVE TO ASK HIM EXACTLY WHAT HE LOOKED AT.

18

UNDER THE TERMS THAT'S DOCUMENTED, AND YOU KNOW EXACTLY HOW LONG

19

Q. ARE YOU AWARE THAT HE PUT IN HIS REPORT THAT THERE WERE NO

19

AND THAT TIME FRAME MAY HAVE LIMITS, AND YOU KNOW THE TERMS

20

COMPARABLE LICENSE AGREEMENTS TO WHAT WE'RE TALKING ABOUT HERE 20

ABOUT WHAT THEY NEED TO DO IF THEY WANT MORE MAINTENANCE,

21

AFTER LOOKING AT ALL THOSE AGREEMENTS?

21

CORRECT?

22

A. BETWEEN US AND SAP?

22

A. ARE WE TALKING ABOUT THE MAINTENANCE OR THE LICENSE?

23

Q. NONE AT ALL. BASED ON EVERYTHING HE SAW, NO COMPARABLE

23

Q. TALKING ABOUT THE ENTIRE CUSTOMER ARRANGEMENT THERE. WAS

24

LICENSE AGREEMENTS. ARE YOU AWARE OF THAT?

24

WHAT I JUST SAID TRUE?

25

A. I'M ACTUALLY SURPRISED BY THAT BECAUSE I KNOW QUALCOMM

25

A. EXCEPT THE ONE THING YOU DON'T KNOW AND THE THING THAT

Page 1914

Page 1916

LICENSED, LIKE, TO SAMSUNG FOR WELL OVER A BILLION DOLLARS

1

USUALLY GENERATES A LOT OF PRICING IS HOW MUCH OF EACH PRODUCT

TECHNOLOGY, AND THAT'S -- I MEAN, I'M NOT AN EXPERT, SO -- I

2

THEY'RE USING. SO YOU DON'T KNOW HOW MANY PROCESSORS OF

JUST REMEMBER THAT.

3

DATABASE OR HOW MANY USERS OF ERP SOFTWARE. WE DON'T KNOW, AND

4

Q. YEAH, SO I'M JUST ASKING ABOUT THE PERSON THAT ORACLE PUT UP

4

WE DON'T TRACK ANY OF IT, AND THE CUSTOMER DOESN'T HAVE TO

5

HERE AND PAID TO GET ITS OPINION ON WHAT THE DAMAGES AMOUNT

5

EITHER. THAT'S WHY THEY LIKE THESE UPFRONT PAYMENTS.

6

SHOULD BE -- YOU'RE AWARE, AREN'T YOU, THAT HE ACTUALLY PUT IN

6

Q. THAT'S RIGHT. AND SO THAT GETS TO THE QUESTION OF USE.

7

WRITING THAT THERE ARE NO COMPARABLE LICENSE AGREEMENTS,

7

8

CORRECT?

8

SAP DID THAT. WERE YOU -- I FORGOT WHETHER THIS WAS A FRIDAY

9

A. WELL, THAT'S HIS OPINION. I --

9

YOU WERE IN COURT OR NOT. WERE YOU IN THE COURT WHEN

1
2
3

NOW WE HEARD A LOT, MS. CATZ, ABOUT SAP DID THIS AND

10

Q. OKAY.

10

MR. MANDIA, ORACLE'S TECHNICAL EXPERT, TESTIFIED?

11

A. QUALCOMM, I THINK, SHOWS THAT'S NOT RIGHT.

11

A. NO, I'M SORRY.

12

Q. OKAY.

12

Q. SO YOU DON'T -- DO YOU ACTUALLY KNOW YOURSELF HOW

13

TOMORROWNOW USED THE SOFTWARE?

13

BACK JUST TO TRYING TO DRAW SOME COMPARISONS BETWEEN

14

LUMP SUM THAT ORACLE'S ASKING FOR HERE AND SOME OTHER THINGS. 14

15

YOU'D AGREE -- SO WE'VE ESTABLISHED THAT IT'S

A. I THINK I DO.

15

Q. DO YOU KNOW WHAT MR. MANDIA'S EXPRESSED OPINION WAS ON THAT?

16

BILLIONS, NOT MILLIONS. WE'RE GOOD SO FAR?

16

A. I --

17

A. OH, YEAH, ABSOLUTELY.

17

Q. THE EXPERT THAT ORACLE PUT UP.

18

Q. OKAY. ONE WAS PAID -- ONE WOULD BE PAID UPFRONT, THE OTHERS 18

A. NO, NO, I UNDERSTAND.

19

THAT YOU MENTIONED ARE PAID OVER TIME, AT LEAST THE SUN ONE IS, 19

Q. OKAY.

20

CORRECT?

20

A. BUT I'M SURE HE EXPRESSED A LOT OF OPINIONS. I JUST DON'T

21

A. NO, THE -- OH, THE JAVA ONE, BUT NOT SAP OUTSIDE IN.

21

KNOW WHICH ONE YOU'RE POINTING TO.

22

Q. OKAY. THE OTHER COMPARISON YOU DREW WAS WITH CUSTOMER

22

Q. AND DO YOU KNOW WHAT MR. MANDIA SAID ABOUT WHETHER HE FOUND

23

AGREEMENTS.

23

ANY EVIDENCE THAT SAP ITSELF USED THE SOFTWARE AT ISSUE HERE?

24

A. NO, THEIR SUBSIDIARY USED THE SOFTWARE.

25

Q. OKAY. AND THE LICENSE THAT WE'RE TALKING ABOUT HERE, YOU'D

24

NOW, CUSTOMERS DON'T PAY EVERYTHING THAT THEY'RE

25

GOING TO PAY TO EITHER ORACLE OR SAP IN ONE LUMP SUM AT THE

10 (Pages 1913 to 1916)
Raynee H. Mercado, CSR, RMR, CRR, FCRR & Diane E. Skillman, CSR, RPR, FCRR