Oracle Corporation et al v. SAP AG et al

Filing 853

Declaration of Elaine Wallace in Support of 851 Memorandum in Opposition, Declaration of Elaine Wallace In Support Of Defendants' Opposition To Plaintiffs' Motion No. 1 To Exclude Expert Testimony Of Stephen K. Clarke 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, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36)(Related document(s) 851 ) (McDonell, Jason) (Filed on 9/9/2010)

Oracle Corporation et al v. SAP AG et al

Doc. 853 Att. 8

EXHIBIT 8

Dockets.Justia.com

STEPHEN K. CLARKE June 10, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 652
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION ORACLE CORPORATION, a Delaware corporation, ORACLE USA, INC., a Colorado corporation, and ORACLE INTERNATIONAL CORPORATION, a California corporation, ) ) ) ) ) ) ) ) Plaintiffs, ) ) vs. ) No. 07-CV-1658 (PJH) ) SAP AG, a German ) corporation, SAP AMERICA, ) INC., a Delaware ) corporation, TOMORROWNOW, ) INC., a Texas corporation, ) and DOES 1-50, inclusive, ) ) Defendants. ) ________________________________)

VIDEOTAPED DEPOSITION OF STEPHEN K. CLARKE _________________________________ VOLUME 3; PAGES 652 - 969 THURSDAY, JUNE 10, 2010

HIGHLY

CONFIDENTIAL - ATTORNEYS' EYES ONLY

REPORTED BY:

HOLLY THUMAN, CSR No. 6834, RMR, CRR (1-427123)

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18 19 20 21 22 23 24 25

MR. PICKETT:

Q.

So let's move on, then,

to the ones that are in the methodology, specifically. I want to turn to what you call the "Customer-Specific Exclusion Criteria," and they're listed on pages 221 and 222. A. Q. That's correct. 11 items? Correct?

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A.

And you didn't -- you left out of the

title that these are the lost profits-related pools. Q. Fair enough. We're going to spend the

first portion of today on lost profits. A. Q. Okay. Now, the first six of the 11 are In

categories with which you and Mr. Meyer agree.

other words, you both exclude those customers for purposes of lost profits. MR. McDONELL: Correct?

It's vague and ambiguous.

You may answer, if you can. THE WITNESS: Yes. Obviously, Mr. Meyer I understand he

had exclusion pools as well.

didn't call them exclusion pools, but he had these pools where he grouped customers that exhibited certain behavior, and I agreed with him on these pools. I think he called them buckets. MR. PICKETT: Right? A. Q. Correct. And then the next five -- service Q. That's 1 through 6.

evaluation, parent mandate, service gap, no accused conduct, and other -- are additional categories that you created. Correct?

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MR. McDONELL: THE WITNESS: MR. PICKETT:

Object to the term -That's correct. Q. And if I understand it

right, if you identified a customer that fit into any one of those five customer-specific exclusion criteria, you automatically excluded that customer from your calculation of lost profits. A. Yes. I should just clarify that I think

the service gap, which is in 11.2.9, although I developed that pool independent of Mr. Meyer, ultimately he had -- he had customers that fell into that category. So he excluded them as well.

It's our definition of what goes into that pool is slightly different. Q. We'll get into that. What was your methodology -- well first of all, this is in effect an on/off switch. If you're

in the -- one of these pools, you're out of the lost profits methodology. MR. McDONELL: MR. PICKETT: analysis? MR. McDONELL: THE WITNESS: additional analysis. Same objection. No, I don't think there's an If you're -- if you fall into Correct?

Vague and ambiguous. Q. There's no additional

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one of these specific exclusion pools, then you would be excluded. MR. PICKETT: Q. What was your

methodology, generally, for picking the exclusion pools that automatically eliminated you from the lost profits calculation? I know there are others that require some more analysis. A. What I was trying to identify was the

behavior and the motivation for a customer for doing what they did. Doing what they did might be

terminating at Oracle and moving to TomorrowNow. It might be terminating some or all of the services at Oracle in doing that and possibly moving to SAP. So I was trying to identify what was going on at the customer level. my exclusion pools. So I looked at these pools really within the context of what I learned from Mr. Sommer, and my own analysis of volumes and volumes of data, to try to see whether there were reasons other than the alleged actions that caused the customer to switch. To do whichever one of those alternatives And that's true of all

they chose to do. And in a sense, I gathered the information

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about the behavior for many of these pools before I gave a name to the pool, although some of the pools preexisted the gathering of data, because Oracle had identified certain risk characteristics of the typical customer that is about to leave. So in that sense, I was looking for information that supported that position, Oracle's position. In the others, I named the pool and

grouped the customers into a pool downstream of gathering the information. Q. Were the -- and I'm speaking of the 11 Were those

customer-specific exclusion criteria.

categories identified in some other publication, or are these groupings that you made based on your analysis? MR. McDONELL: THE WITNESS: Assumes facts. No. These were groupings

that I made based on my analysis as I just described it. The nomenclature that goes with a

pool, even the existence of the nomenclature of "exclusion pool," is really just a semantic issue. Really got little to do with the precise words that we use. As "exclusion pool" would be another example of that, where whatever we call them, they

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are simply a grouping of customers that have exhibited similar characteristics for their -- in their behavior, and for -- as I described yesterday, for ease of reference in our discussions today.

TEXT REMOVED - NOT RELEVANT TO MOTION

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Q.

Other than in this case, have you based

your calculation of incremental costs on a statistical regression analysis?

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MR. McDONELL: Object to the form. THE WITNESS: this case? MR. PICKETT: right. A.

Vague and ambiguous.

Did you say other than in

Q.

Other than in this case,

I've used regression analyses a number of

times, yes. Q. A. And used ones that you yourself created? Right. MR. McDONELL: THE WITNESS: MR. PICKETT: Vague and ambiguous. I'm sorry. Q. Correct.

Do you have any training

with respect to the preparation of statistical regression analyses? A. Q. A. Yes. What is that? I first did a regression analysis in 1969

when I studied statistics at college. Q. You took an undergraduate course in

college in statistics? A. Q. Correct. Did you take any other courses in

statistics? A. In my postgraduate studies for

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accountancy, I did statistical analysis, regression analyses. Q. You took a course in regression analysis.

Is that your testimony? A. Q. A. Q. Yes. In connection with accounting? Correct. What does a regression analysis have to do It must be some British concept. In the United

with accounting? A.

Interesting question.

Kingdom, we have a very rigorous accounting program, with an exceptionally difficult exam that's split into a number of different subject areas. Similar to the subject areas that we have

in the United States for a CPA. But one of those exams -- at least when I did it; I don't know what they do today -- was called Elements of Financial Decisions. And these

were techniques, some of them statistical, but others -- other analytical techniques that an accountant, who might be in the position of being the Chief Financial Officer for a company or one of their underlings, trying to decide whether the company should invest in a project and so on, all manner of financial decisions, one component of

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that was a class on statistics.

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13 14 15 16 17 18 19 20 21 22 23 24 25

MR. PICKETT:

Q.

Did you use any

textbooks or academic references when you developed your regression models? A. Oh, my. I think I told you yesterday, I

did the first one in probably about September 1969, so -Q. I'm sorry, for -- let me clarify. I meant

doing the -- in using the regression models, you used for your regression analyses in this case. MR. McDONELL: question. THE WITNESS: I was -- I think I I was trying to -Object to the form of the

understood that question.

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MR. PICKETT: A.

Q.

Okay.

Go ahead.

If I'm doing a regression analysis these

days, in the same way that I don't need to look up the double entry for a cash purchase, for example, I don't need to go to a book to do this regression analysis. So I was giving you sort of an old

answer, because I've been doing them for such a long time. Q. So you didn't need to look up how to do a

regression analysis? MR. McDONELL: THE WITNESS: Asked and answered. That's correct.

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