Oracle Corporation et al v. SAP AG et al

Filing 931

Declaration of Elaine Wallace in Support of 930 Motion to Exclude Expert Testimony of Paul K. Meyer [Filed Pursuant to D.I. 915 ] filed by SAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 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)(Related document(s) 915 ) (Froyd, Jane) (Filed on 10/4/2010) Modified on 10/5/2010 (vlk, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 931 Att. 2

EXHIBIT 2

Dockets.Justia.com

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 1
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO 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 PAUL K. MEYER _________________________________ VOLUME 1; PAGES 1 - 331 WEDNESDAY, MAY 12, 2010

HIGHLY REPORTED BY:

CONFIDENTIAL - ATTORNEYS' EYES ONLY HOLLY THUMAN, CSR No. 6834, RMR, CRR (1-427362)

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 71

TEXT REMOVED - NOT RELEVANT TO MOTION

10:55:48 10:56:00 10:56:08 10:56:08 10:56:10 10:56:13 10:56:16 10:56:17 10:56:21 10:56:35 10:56:38 10:56:48 10:56:51 10:56:54

12 13 14 15 16 17 18 19 20 21 22 23 24 25

Q.

Okay.

I don't see any damage item on

Exhibit 2017 for infringer's profits against TomorrowNow. Do you know what I'm referring to when I say infringer's profits against TomorrowNow? A. Q. Yes, I believe in general sense, I do. As you sit here today, are you computing a

claim for damages of -- well, a claim of infringer's profits against TomorrowNow? A. I can't speak to the position of Oracle From my perspective -- and this

and its lawyers.

will evolve as we talk about Mr. Clarke's report -from my perspective, when it relates to the infringer's profit side of the remedies, that from

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 72
10:57:03 10:57:09 10:57:12 10:57:17 10:57:19 10:57:22 10:57:23 10:57:26 10:57:27 10:57:29 10:57:34 10:57:36 10:57:39 10:57:41 10:57:43 10:57:47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

the standpoint of the analysis, that TomorrowNow, as a separate entity within the SAP organization, does not have any profits to disgorge is sort of my position. But I don't want to be speaking on

behalf of Oracle or its lawyers, so I'll defer to them on that issue. Q. But let's stick with your position as you

sit here today. As you sit here today, you are not claiming that there are -- that TomorrowNow has received infringer's profits that should be disgorged. A. Is that true?

Setting aside the lawyers and the court,

that would be my position from the standpoint of the finance and economic and accounting issues, the damage issues.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 100

TEXT REMOVED - NOT RELEVANT TO MOTION

11:39:56 11:39:58 11:40:01 11:40:06 11:40:08 11:40:13 11:40:17 11:40:19 11:40:22 11:40:24 11:40:26 11:40:28 11:40:31 11:40:33 11:40:35 11:40:38 11:40:40 11:40:41 11:40:49 11:40:53

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

MR. McDONELL:

Q.

With respect to what's

been marked as Exhibit 2020, can you tell us the general purpose of the document? A. Yes. The general purpose was, there's

listed out, I believe it's 86 customers, and I've gone through and categorized them and provided information by column. So I note whether they're a Safe Passage customer or not -Q. And what is the significance of noting

whether they're a Safe Passage customer? A. Well, ultimately from my perspective if

they're found to have become a Safe Passage customer, I would then leave them in the determination of the infringer's profits, so -Q. A. And why would you do that? Because from my perspective, it would

relate to the marketing, solicitation, the business efforts that were taken by SAP in conjunction with TomorrowNow to improve and change and upgrade the

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 101
11:41:01 11:41:06 1 2

service that was being provided to one of these customers.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 151

TEXT REMOVED - NOT RELEVANT TO MOTION

14:01:57 14:01:58 14:02:02 14:02:06 14:02:15 14:02:19 14:02:28 14:02:30 14:02:31 14:02:32 14:02:33 14:02:40 14:02:43 14:02:47

12 13 14 15 16 17 18 19 20 21 22 23 24 25

MR. McDONELL:

Q.

Okay.

Can I ask you to

take your report, which has been marked Exhibit 2018, please. Turn to paragraph 95. look over paragraph 95, please. A. Q. (Examining document.) Have you had a chance to look at that? MS. HOUSE: THE WITNESS: MR. McDONELL: Give him a second. Okay. Q. There you indicate that Take a moment to

there are four approaches to determining valuation, and you cite the market approach, the income approach, the cost approach, and the Georgia Pacific hypothetical license negotiation approach.

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 152
14:02:50 14:02:51 14:02:52 14:02:53 14:02:56 14:02:58 14:02:59 14:03:01 14:03:07 14:03:09 14:03:13 14:03:15 14:03:18 14:03:22 14:03:24 14:03:25 14:03:27 14:03:30 14:03:35 14:03:37 14:03:40 14:03:42 14:03:42 14:03:44 14:03:47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Right? A. correct. Q. And you claim to have applied each of I mention those four approaches, that's

those four approaches in this case? A. Q. That's what I've done, that's correct. In your opinion, are each of those

approaches equally appropriate in this case? A. No, no, I wouldn't say that. I certainly

have done the analyses, and I believe I point out in the report some of the issues, like with the cost approach. But I believe that the market

approach and the income approach can be looked very closely in conjunction with the hypothetical negotiation. The cost approach is a little more -- is a little different. Just because you're looking at

cost it would take to design different software systems, you're not always looking at the future value, so there are probably some more limits on that. But it's still an approach that should be

considered. Q. Okay. Which of these approaches do you

consider the best? MS. HOUSE: Objection. Assumes facts not

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 153
14:03:48 14:03:50 14:03:51 14:03:54 14:03:57 14:04:00 14:04:02 14:04:07 14:04:09 14:04:09 14:04:10 14:04:12 14:04:16 14:04:18 14:04:26 14:04:30 14:04:32 14:04:34 14:04:40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

in evidence. THE WITNESS: In this situation, I

certainly think that the hypothetical negotiation brings together the results of all the analyses, so it's probably the most comprehensive. But the

market approach and the income approach I would say also have aspects that are very valuable to figuring out the value of the copyrighted materials. MR. McDONELL: Q. Okay. Why do you think

the hypothetical license approach is the best? A. Because basically, in Factor 15, you get

to look back at what you did in the first 14 factors or 13 factors, and you get to also address market and income and cost in those approaches and techniques in the entire analysis. And so in some respects, you get the benefits of all that to figure out the value of the copyrighted materials that are in suit here.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 159

TEXT REMOVED - NOT RELEVANT TO MOTION

14:13:19

25

Q.

So let me ask you one more time.

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 160
14:13:21 14:13:23 14:13:27 14:13:29 14:13:31 14:13:33 14:13:33 14:13:34 14:13:37 14:13:39 14:13:41 14:13:44 14:13:46 14:13:49 14:13:49 14:13:53 14:13:58 14:14:01 14:14:03 14:14:16 14:14:50 14:14:52 14:14:52 14:14:54 14:14:57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

With respect to the copyrights listed on pages 52 to 56 of the Fourth Amended Complaint, did you assume that each and every one of those copyrights was infringed by the defendant? MS. HOUSE: times. THE WITNESS: I've given you my answer on Asked and answered now four

that many times, and I did not have to assume that all of those were infringed. But whatever that group would be, and has proven to be, and I understand it's going to be extensive, would be the group of copyrighted properties that are in the scope of the license. MR. McDONELL: Q. Would you take a look

at your report in Exhibit 2018 at paragraph 105, please. MR. PICKETT: MR. McDONELL: 105. I mean 104. A. Q. A. Q. Thank you. Have you had a chance to read that? Yes, I have. Is it fair to summarize what you've said Which paragraph again? Q. Paragraph 104. I said

Page 70.

there as a statement that the fair market value of the license must reflect the fair market value of

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 161
14:15:00 14:15:05 14:15:06 14:15:07 14:15:08 14:15:11 14:15:13 14:15:16 14:15:20 14:15:23 14:15:26 14:15:29 14:15:33 14:15:37 14:15:41 14:15:44 14:15:47 14:15:50 14:15:55 14:15:55 14:15:57 14:15:59 14:16:02 14:16:07 14:16:10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

the infringement that actually occurred? A. Well, let me -MS. HOUSE: THE WITNESS: Objection. Vague.

Let me use my words, because

that's the best way to tell you what I've done. That when you say what actually occurred, it's -- whatever the scope of the infringing activities are, and those begin in 2005, January, and those are analyzed. And so that scope, that

ongoing scope, downloading and copying and creating environments and all this sharing, and back at paragraph 162 of my report, I do tie back to the analysis of Mr. Mandia, and I refer to basically the Registered Works and to all those activities. And that is the actual set of infringing activities. And so those Registered Works that are

addressed in paragraph 162 is exactly what's in the scope of the -- of use license. there. MR. McDONELL: Q. So is it fair to say That's what's in

that your assumption is that the fair market value of the license must reflect the fair market value of the infringement that actually occurred? A. I will say yes, with the caveat that the

lawyers may argue about what it means by the fair

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 162
14:16:12 14:16:15 14:16:16 14:16:17 14:16:20 14:16:23 14:16:25 14:16:27 14:16:32 14:16:36 14:16:38 14:16:40 14:16:43 14:16:44 14:16:46 14:16:53 14:16:56 14:16:57 14:16:59 14:17:01 14:17:03 14:17:07 14:17:08 14:17:10 14:17:13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

market value of the -- or the infringement that occurred. And my understanding is, it's the actual scope of the infringing activities that relate to all the properties under copyright, and that that is what the fair market value of the license has to relate to. Q. So for example, if the list of infringed

copyrights in the complaint were not accurate, and, say, half of those registrations were not infringed, would that affect your calculation of value? A. Not necessarily. Because from my

perspective, once again, I understand that all those registrations are not equivalent, they're not equal, some are more important than others. So whatever the registrations that relate to the property that SAP/Tomorrow Now planned to have and executed on taking and ultimately downloaded and used and copied, whatever that scope is, that's the scope that ultimately is part of the fair market value of the license. And that's what my paragraph 162 and I think paragraph 220 lay out for PeopleSoft and JDE. Q. Okay. So if Mr. Mandia only analyzed a

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 163
14:17:15 14:17:19 14:17:21 14:17:24 14:17:25 14:17:30 14:17:33 14:17:36 14:17:38 14:17:40 14:17:42 14:17:46 14:17:49 14:17:53 14:17:57 14:17:59 14:18:02 14:18:05 14:18:06 14:18:08 14:18:15 14:18:17 14:18:18 14:18:20 14:18:21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

subset of the Registered Works, does that mean that your damages opinion only relates to the same subset? A. That's not correct. My understanding is

that there was an expectation of SAP for what materials it would need, and that Mr. Mandia and others are addressing the scope of what was actually taken. And my understanding was that the scope of what's been taken, whether it relates to the human resource application for PeopleSoft, or financial, whatever that may be, and with JDE for their enterprises, whatever that scope is, has enabled, put SAP/Tomorrow Now in that position to carry out their business plans. And that his actual results

and the results of others on the team matched up with the expectations going on. Q. What I'm trying to understand is, how do

you -- when you're doing your value-of-use calculation of the copyrighted works, how do you associate the value you find with the works themselves? MS. HOUSE: answer again. THE WITNESS: I believe I answered that. Asked and answered. You can

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 164
14:18:22 14:18:26 14:18:29 14:18:35 14:18:39 14:18:42 14:18:43 14:18:46 14:18:48 14:18:51 14:18:55 14:18:57 14:18:59 14:19:01 14:19:02 14:19:04 14:19:07 14:19:09 14:19:12 14:19:13 14:19:15 14:19:18 14:19:20 14:19:24 14:19:27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

I mean, the way you do it is that there's an expectation that SAP has. And in SAP's 1-2-3

document in January 2005, it lays out what SAP/Tomorrow Now believes are the types of applications being run by the PeopleSoft and JDE customers. And they -- and it lays out where they -they will most likely focus. And then if you take the phone call as an example from January 19th, Mr. Agassi lays out and he provided examples. scenarios here. He says, we have two And he

There are 4,000 customers.

lays out specifically what he believes the customer base looks like. And that customer base that he lays out I believe will match up with the work that Mr. Mandia is doing, and others in the case. And therefore,

you have the expectation of the license, you have the infringing activities that have been identified that are the scope of the license, and then from there, you value it. Q. Okay. And that's how you do it.

But my question is, the SAP

expectation that you're saying exists doesn't necessarily translate into any particular copyrighted works. Isn't that right?

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 165
14:19:30 14:19:30 14:19:31 14:19:33 14:19:35 14:19:40 14:19:43 14:19:50 14:19:54 14:19:57 14:20:02 14:20:04 14:20:07 14:20:10 14:20:12 14:20:16 14:20:18 14:20:22 14:20:26 14:20:28 14:20:31 14:20:34 14:20:37 14:20:40 14:20:42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

A.

I think -MS. HOUSE: THE WITNESS: Assumes facts not in evidence. I think that from my

perspective, at least from the valuation perspective, if -- let me give you an example. SAP's expectation was that you'd have a situation where SAP was providing financial and manufacturing enterprise software to a customer, and that same customer is taking human resource from PeopleSoft. That's in Mr. Agassi's phone call

and his discussion with the analysts and with the public. Okay? And that's one expectation that

they have, "they" being SAP, across the 4,000 customers. There's a large portion of customers Okay?

that have that mixed-platform IT shop.

And so my understanding is that Mr. Mandia has come to findings about the human resource application and the taking of property that's under copyrights by SAP and TomorrowNow. And so that's how it matches up. From my

perspective, I just need to know that from the standpoint of what SAP needs from -- from the software that's copyrighted to carry out its business plans in 2005 was actually part of the infringing acts. And my understanding is that that

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 166
14:20:45 14:20:48 14:20:48 14:20:50 14:20:53 14:20:58 14:21:02 14:21:04 14:21:07 14:21:10 14:21:13 14:21:19 14:21:20 14:21:22 14:21:24 14:21:26 14:21:29 14:21:32 14:21:34 14:21:36 14:21:38 14:21:40 14:21:43 14:21:46 14:21:49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

would be proven by the lawyers and the technical experts. Q. Okay. So you yourself, Mr. Meyer, are not

specifically associating your value-of-use calculation with any particular identified copyrights. A. If you listen to me, it's not by a

particular copyrighted work, but the scope of the license contemplates that you'll have a sufficient number of copyright -- copyrighted properties in there to cover the product families that SAP had planned to execute on. Q. But as you sit here today, you couldn't

tell me which copyrights those are? A. I can't take you down, nor is it -- it's

beyond the scope of my expertise to take you down, because it's really an infringement analysis, an analysis of software, to take you down to some level of, by copyright. And from my perspective, I adopted the appropriate scope, and I believe that scope will be also addressed by the experts on infringement and on the use of the software. Q. valued? Can you tell me how many copyrights you've I'm sorry, how many copyright --

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 167
14:21:53 14:21:55 14:21:57 14:21:58 14:21:59 14:22:01 14:22:04 14:22:10 14:22:12 14:22:15 14:22:17 14:22:19 14:22:22 14:22:23 14:22:25 14:22:29 14:22:32 14:22:34 14:22:36 14:22:38 14:22:42 14:22:44 14:22:45 14:22:47 14:22:52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

registered copyrights you've valued? A. said. Q. A. I'm trying to, but -I didn't have to go to that level, because I think you're not listening to what I've

it -- for example, and this is a hypothetical, it could turn out that of the 120 registrations, maybe five or ten were the most important and provided the most value to SAP. And they're the ones that are part of the analysis. And so that's something that has to be

determined by Mr. Mandia and others that are doing that analysis. I'm very comfortable saying, though, that my understanding of SAP's expectations, and laid out in their documents contemporaneously, outside of this litigation, just as they planned to execute on their business plans in January 2005, are consistent with my understanding of the scope of infringement that's going to be, you know, part of the case that we're involved with. Q. One more time. As you sit here today, can you tell me how many copyright registrations you valued in your value-of-use calculation?

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 168
14:22:54 14:22:55 14:22:56 14:22:56 14:22:58 14:23:01 14:23:03 14:23:04 1 2 3 4 5 6 7 8

MS. HOUSE: THE WITNESS:

Asked and answered. A specific number? Q. Yes.

MR. McDONELL: A.

I did not approach the analysis that way.

I don't believe it's necessary, and I can't tell you an exact number for all the reasons I've already mentioned. Q. Thank you.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 184

TEXT REMOVED - NOT RELEVANT TO MOTION

14:40:47 14:40:49 14:40:51 14:40:53 14:40:57 14:41:02 14:41:04 14:41:06 14:41:10 14:41:12

16 17 18 19 20 21 22 23 24 25

Q.

Sir, does a market approach involve

determining the fair market value of a license to intellectual property? A. I'm using a valuation approach called the

market approach to come to a value of the license in these circumstances. Q. That's what I'm doing.

And by license, you're talking about the

fair market value of a license to use the subject intellectual property? A. The same scope of the license we talked

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 185
14:41:16 14:41:19 14:41:22 14:41:24 14:41:29 14:41:30 14:41:33 14:41:37 14:41:40 14:41:42 14:41:44 14:41:47 14:41:52 14:41:55 14:42:00 14:42:06 14:42:08 14:42:11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

about in the hypothetical, that same scope of infringing activity is now being bundled into a license. And then the question becomes, what's the

fair market value that one has to pay to have those rights? Q. Under the market approach, to try to

determine the value of that license, you look at -or you purport to look at comparable transactions for the same or similar intellectual property. that right? A. Well, you -- the objective is, you try to Is

identify the transactions in the marketplace that either provide something that's directly comparable or something that gives you instruction on what the market value would be of your subject license here, what's being -- the scope of that license. You're

trying to find information that enlightens you on that value.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 201

TEXT REMOVED - NOT RELEVANT TO MOTION

.
14:59:59 15:00:02 15:00:05 15:00:09 15:00:11 15:00:14 15:00:15 19 20 21 22 23 24 25

Q.

Would you agree that it would be

preferable in this case if you had comparable licenses to look at as opposed to having to indirectly do your calculation by looking at the purchase of PeopleSoft by Oracle? MS. HOUSE: THE WITNESS: Objection. No. Vague.

The enormity of this

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 202
15:00:18 15:00:21 15:00:25 15:00:28 15:00:30 15:00:34 15:00:36 15:00:40 15:00:42 15:00:44 15:00:46 15:00:48 15:00:52 15:00:54 15:00:57 15:00:59 15:01:01 15:01:02 15:01:04 15:01:09 15:01:12 15:01:14 15:01:15 15:01:16 15:01:17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

license transaction is so large, and it's actually on the same day or same week as the PeopleSoft transaction, that we have virtually the perfect metric. We have a fair market value transaction

between two large companies to acquire a series of assets, but one of the most important assets was the customer relationships and the related premium that was paid to get those relationships, and that ties back to being protected by the software and the copyrighted property. That's a very compelling metric to use. And what you have to do is break it down. And if

you break it down properly, you're in a great place to be, and it's much better data than trying to take license agreements to don't look at really the total value of what happened here. MR. McDONELL: Q. Okay. Would you agree

with me that if you had a comparable out there that was a license for the actual use that TomorrowNow made of this material, but with a different company, that that would be preferable to the approach you used? MS. HOUSE: vague. THE WITNESS: I would have to take what Incomplete hypothetical,

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Page 203
15:01:18 15:01:20 15:01:23 15:01:27 15:01:30 15:01:32 15:01:35 15:01:38 15:01:40 15:01:41 15:01:42 15:01:45 1 2 3 4 5 6 7 8 9 10 11 12

you just said and break it down and really vent that, because we have to go back to the scope of the license and all the other terms. And also,

you'd have to deal with the dynamics of the two parties here, because we're looking at once again value between two large companies, and we're looking at value that Oracle just paid for another large company, which included those intangible assets. And so I don't believe that what you proffered would necessarily be anything instructive.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe

PAUL K. MEYER May 12, 2010 HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
TEXT REMOVED - NOT RELEVANT TO MOTION

Page 265

16:34:04 16:34:06 16:34:09 16:34:11 16:34:12 16:34:14

2 3 4 5 6 7

Q.

To the best of your knowledge, Oracle's

never recorded any kind of impairment to its goodwill related to the activities of defendants in this case. A. Isn't that right?

If we're talking about on its balance

sheet for accounting purposes, that's correct.

TEXT REMOVED - NOT RELEVANT TO MOTION

Merrill Legal Solutions [phone]

f717aa37-c8bf-4613-a8ce-d28766cacefe