Viacom International, Inc. et al v. Youtube, Inc. et al

Filing 243

DECLARATION of William M. Hohengarten (Certain Unsealed Exhibits to Declaration of William M. Hohengarten in Support of Viacom's Motion for Partial Summary Judgment in Support re: 176 MOTION for Partial Summary Judgment /Viacom's Notice of Motion for Partial Summary Judgment on Liability and Inapplicability of the Digital Millennium Copyright Act Safe Harbor Defense.. Document filed by Country Music Television, Inc., Paramount Pictures Corporation, Viacom International, Inc., Black Entertainment Television, LLC, Comedy Partners. (Attachments: # 1 Exhibit 52 - Pt. 1, # 2 Exhibit 52 - Pt. 2, # 3 Exhibit 59, # 4 Exhibit 60, # 5 Exhibit 63, # 6 Exhibit 81, # 7 Exhibit 242, # 8 Exhibit 314, # 9 Exhibit 321, # 10 Exhibit 340)(Kohlmann, Susan)

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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK VIACOM INTERNATIONAL, INC., COMEDY PARTNERS, COUNTRY MUSIC TELEVISION, INC., PARAMOUNT PICTURES CORPORATION, and BLACK ENTERTAINMENT TELEVISION, LLC, ) ) ) ) ) ) Plaintiffs, ) ) vs. ) NO. 07-CV-2203 ) YOUTUBE, INC., YOUTUBE, LLC, ) and GOOGLE, INC., ) ) Defendants. ) ___________________________________) ) THE FOOTBALL ASSOCIATION PREMIER ) LEAGUE LIMITED, BOURNE CO., et al.,) on behalf of themselves and all ) others similarly situated, ) ) Plaintiffs, ) vs. ) NO. 07-CV-3582 ) YOUTUBE, INC., YOUTUBE, LLC, and ) GOOGLE, INC., ) ) Defendants. ) ___________________________________) VIDEOTAPED DEPOSITION OF ERIC SCHMIDT SAN FRANCISCO, CALIFORNIA WEDNESDAY, MAY 6, 2009 JOB NO. 16802

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MAY 6, 2009 9:14 a.m.

VIDEOTAPED DEPOSITION OF ERIC SCHMIDT, held at the offices of WILSON, SONSINI, GOODRICH & ROSATI, 601 California Avenue, Palo Alto, California, pursuant to notice, before ANDREA M. IGNACIO HOWARD, CLR, CCRR, RPR, CSR License No. 9830.

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A P P E A R A N C E S:

FOR THE PLAINTIFFS VIACOM INTERNATIONAL, INC.: JENNER & BLOCK, LLP By: SUSAN J. KOHLMANN, Esq.

1099 New York Avenue, NW, Suite 900 Washington, D.C. 20001 [phone] [e-mail]

FOR THE LEAD PLAINTIFFS AND PROSPECTIVE CLASS: PROSKAUER ROSE, LLP By: TANYA L. FORSHEIT, Esq.

2049 Century Park East, Suite 3200 Los Angeles, California 90067-3206 [phone] [e-mail]

FOR THE PLAINTIFFS VIACOM INTERNATIONAL INC.: SHEARMAN & STERLING, LLP By: STUART J. BASKIN, Esq. SEAN T. STRAUSS, Esq. (San Francisco) 599 Lexington Avenue New York, New York 10022-6069 [phone] [e-mail]

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SCHMIDT, ERIC APPEARANCES (Continued.)

FOR THE DEFENDANTS YOUTUBE, INC., YOUTUBE, LLC and GOOGLE, INC.: MAYER BROWN, LLP By: JOHN MANCINI, Esq. DAVID H. MCGILL, Esq. 1675 Broadway New York, New York 10019-5820 [phone] [e-mail]

ALSO PRESENT: GOOGLE By: KENT WALKER, Esq. CATHERINE LACAVERA, Esq. 1600 Amphitheater Parkway Mountain View, California 94043 [phone]

KEN REESER, Videographer.

---oOo---

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SCHMIDT, ERIC PALO ALTO, CALIFORNIA WEDNESDAY, MAY 6, 2009, 9:14 A.M.

THE VIDEOGRAPHER:

Good morning.

Today's videotaped deposition of Eric Schmidt is taken on May 6th, 2009, at 601 California Avenue, Palo Alto, California. In the matter of Viacom International, et al., vs. YouTube, Incorporated, et al., and The Football Association Premier League Limited, et al., vs. YouTube, Incorporated. Case Nos. 07-CV-2203 and 07-CV-3582. In the

U.S. District Court for the Southern District of New York. My name is Ken Reeser. I represent David

Feldman Worldwide, located at 600 Anton Boulevard, Suite 1100, Costa Mesa, California. We are now commencing at 9:14 a.m. Will all present please identify themselves, beginning with the witness. THE WITNESS: MR. MANCINI: Eric Schmidt. John Mancini, Mayer Brown, for

defendants Google and YouTube.

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SCHMIDT, ERIC MR. MCGILL: David McGill, also from Mayer

Brown, for the defendants. MR. WALKER: MS. LACAVERA: MR. BASKIN: Sterling, for Viacom. MR. STRAUSS: Sterling, for Viacom. MS. KOHLMANN: Block, for Viacom. MS. FORSHEIT: Tanya Forsheit, Proskauer Susan Kohlmann, Jenner & Sean Strauss, Shearman & Kent Walker, Google. Catherine Lacavera, Google. Stuart Baskin, Shearman &

Rose, for The Premier League and The Class. THE VIDEOGRAPHER: Thank you.

Would the court reporter please swear in the witness. ERIC SCHMIDT, having been sworn as a witness testified as follows:

EXAMINATION BY MR. BASKIN MR. BASKIN: Q Good morning, sir.

Did you have the opportunity to prepare for

this deposition? A Q I did. And how long did you prepare for the

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SCHMIDT, ERIC deposition? A Q Yesterday, a few hours. Now, I assume you have e-mail service on your

computer at Google? A Q I do. How many computers do you have, by the way? How

I'm impressed with all the computers in the room. many computers do you have? A Q Me personally, probably 30.

And over the course of these 30 computers, do

you frequently e-mail during the course of the day? A Q I do. Did you participate in gathering documents

for -- or your e-mails in connection with this litigation? MR. MANCINI: MR. BASKIN: Objection to form. Q. Did you play any role in

collecting your e-mails or other documents for this litigation? MR. MANCINI: THE WITNESS: MR. BASKIN: A Objection to form. I -- yes. Q. What did you do, sir?

I was given what I believe is a protective

order, is what it's called, and I followed that.

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SCHMIDT, ERIC Q And did you make the selection yourself as to

what is produceable in this litigation? MR. MANCINI: THE WITNESS: MR. BASKIN: with somebody else? MR. MANCINI: THE WITNESS: MR. BASKIN: Q Objection to form. Yes. Okay. Objection to form. No. Q. You made it in conjunction

And with whom did you make the decision as to

what is produceable in this litigation? MR. MANCINI: THE WITNESS: Objection to form. I'm not sure I understand the

question very well, because you're using a precise word, which is jointly producing something. MR. BASKIN: Okay. Well let me -- let me --

let me show you what -- let's mark as Schmidt Exhibit 1. (Document marked Schmidt Exhibit 1 for identification.) MR. BASKIN: MR. MANCINI: to you. MR. BASKIN: And let me hand you Schmidt I'll pass these out to the gang. The court reporter will hand it

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SCHMIDT, ERIC related to this case but none that are related to this case? MR. MANCINI: THE WITNESS: Objection; lacks foundation. Some people have permanent data

stores of all communications for their whole lives. Other people over time either delete or lose some of that e-mail. It has been my practice for 30 years to not retain my e-mails unless asked specifically. There are other people who would have copies of e-mails that I had sent, for example, in 2005, that you might find an e-mail that I sent to them that would not be in my copy but might be in their copy. MR. BASKIN: Q. Now, do I understand that it

has been your practice for -- strike that. For 30 years, for how long have you preserved your e-mails before they are deleted? MR. MANCINI: Objection to form; objection to

the characterization of the testimony. THE WITNESS: MR. BASKIN: Q That's not what I said, so... Okay.

I thought you told me if not -- I'm not I just want to know the answer.

fencing with you. You said that --

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SCHMIDT, ERIC A Q Yeah. -- I thought you said that for 30 years it's

been your practice not to preserve or to delete e-mails? MR. MANCINI: Objection to form; objection to

the characterization of the testimony. MR. BASKIN: A Q. Is that accurate?

Again, I'll answer the question previously

asked, which was it has been my practice to not keep my e-mails. Q And is this on some sort of automatic system

where they are deleted in the ordinary course over some ordinary period of time? MR. MANCINI: lacks foundation. THE WITNESS: Depending on the e-mail system Objection to form; objection,

and the company and so forth, the answer would vary. MR. BASKIN: Q Okay. What was

Well, let's take Google in 2005.

your practice then as to the length of time in which you preserved your e-mails before they were deleted? MR. MANCINI: THE WITNESS: Objection to form. It was my practice to delete or

otherwise cause the e-mails that I had read to go away

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SCHMIDT, ERIC as quickly as possible. MR. BASKIN: A Q Yes. And I assume that practice carried over to Q. Within days?

2006 and 2007 and 2008? MR. MANCINI: THE WITNESS: Objection; lacks foundation. In -- again, without the

specific dates, in principle, yes. MR. BASKIN: Q. Now, when the lawsuit was

filed in February 2007, did anyone instruct you that you should preserve your e-mails relevant to the litigation? Excuse me. As of -- excuse me. As of the

filing of this complaint, which is March of 2007, did anyone instruct you to preserve your e-mails that might be relevant to this litigation? MR. MANCINI: Objection to the extent it

calls for a privileged communication. THE WITNESS: I want to be careful not to

discuss a legal conversation that I had. You used a precise month. A -- a clear -- a

clear and precise answer would be that I did change my practice after this lawsuit was filed and I was notified.

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SCHMIDT, ERIC MR. BASKIN: Q. And do you recall whether

Mr. Drummond's various numbers were reduced to writing for the board or were they only communicated orally? MR. MANCINI: Objection to form; objection to

the characterization of the testimony. THE WITNESS: I have no recollection of how

they were communicated, but certainly verbally at a minimum. MR. BASKIN: Q. Now, you are aware, I

assume, that the acquisition agreement contains an indemnification provision relating to copyright lawsuits? MR. MANCINI: THE WITNESS: call a holdback. Objection; lacks foundation. I am aware of what I'm going to

I don't know the details of exactly

the terms of the holdback, but it is my understanding that it includes areas of copyright. MR. BASKIN: Q. And was that discussed by

the board in and around October 9, 2006? A Yes. MR. MANCINI: THE WITNESS: MR. BASKIN: discussion, sir? Objection to form. Yes. Q. And do you remember that

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SCHMIDT, ERIC MR. MANCINI: THE WITNESS: MR. BASKIN: Objection to form. No. Q. Was it a factor in your

mind, in recommending the transaction, that there was a holdback provision to protect Google in the event of copyright infringement lawsuits? MR. MANCINI: Objection to form; and

objection to the extent it seeks communications from counsel, to which I instruct the witness not to answer. THE WITNESS: It is common for us to have a Let me say

holdback, and this holdback was -- sorry. it more concretely.

It is -- when we do -- we do loss of acquisitions, it is common to have a holdback for legal issues, surprises and what have you. My judgment was this holdback was sort of in the ballpark, and that's the level of conversation that I recall. MR. BASKIN: sir. Q. Now, give me one second,

I want to collect my thoughts, because we may be

able to jump ahead a little bit. A Sure. THE WITNESS: May I give this back to you?

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SCHMIDT, ERIC MR. MCGILL: MR. BASKIN: like one, sir? A Q A Q I'm fine. You okay? Thank you. Prior to Google's purchase of YouTube, did Okay. I'm fine. Q. Thank you.

Most importantly, would you

you ever hear a Google executive complain that YouTube was competing unfairly because of the way it dealt with copyrighted material on its site? MR. MANCINI: Objection; lacks foundation;

and objection to the form to the extent it seeks a legal conclusion. THE WITNESS: I'm trying to think. I mean, I may -- someone may

I don't recall.

have said something, but it would have been in general terms. It wouldn't have been with the specificity of

your question. MR. BASKIN: Q. Well, did you ever hear any

Google executives criticize YouTube because of the way it dealt with copyright issues -MR. MANCINI: MR. BASKIN: of it? Same objections. Q. -- prior to your acquisition

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SCHMIDT, ERIC MR. MANCINI: THE WITNESS: Same objections. Again, I recall complaints

about YouTube having different policies, but not specific in the way you asked your question. MR. BASKIN: Q. Well, did you ever read an

internal Google document in which a Google executive criticized YouTube because of the way it dealt with copyright issues? MR. MANCINI: Objection; lacks foundation;

calls for a legal conclusion; and objection to form. THE WITNESS: recall specifics. MR. BASKIN: Q. Do you remember being told I may have. I don't -- I don't

by a senior Google executive that a large part of YouTube's traffic is from pirated content? MR. MANCINI: objection to form. THE WITNESS: MR. BASKIN: mark as Schmidt 7. No specific recollection, no. Let me hand you what we will It was Drummond 17, I believe, and Objection; lacks foundation;

Eun -- is that the way you pronounce it, E-U-N, Eun, Eun 12? THE WITNESS: /// Eun.

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SCHMIDT, ERIC (Document marked Schmidt Exhibit 7 for identification.) MR. BASKIN: A Q Q. Who is Mr. Eun, Mr. Schmidt?

I assume you're referring to David Eun at UM? Correct. Who is he?

A

An executive that we hired from Time Warner He -- he

who was doing media -- media partnerships. became Jennifer Feikin's boss. Q

Was he, in the pecking order of things,

basically the senior executive dealing with partnerships with content providers? MR. MANCINI: THE WITNESS: Objection to form. As I recall in the org chart,

he did content or media partnerships reporting, I think, to Omid Kordestani, who was responsible for overall partnerships. MR. BASKIN: Q A Q A on? Q Well, first, would it be fair to say that you Okay. Fair enough.

Now, let me hand -- hand you Exhibit 7. Okay. And Mister -What would -- what would you like me to focus

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SCHMIDT, ERIC sent this e-mail and the chain that follows it -strike that. Is it fair to say the Eric Schmidt from whom this e-mail was sent is you? A Q That is correct. And Mr. Kordestani, the cc, is the gentleman

you referred to a few seconds ago as Mr. Eun's direct report; correct? A Q That is correct. And going down to Mr. Eun's e-mail, that

e-mail was sent to you in and around May 12th, 2006; right, sir? A Q Yes. And that e-mail was sent to you prior to

something called the Video GPS; correct? A Q That's correct. And am I correct that GPS is a -- basically,

a quarterly review of product lines within Google that you -A No. MR. MANCINI: THE WITNESS: MR. BASKIN: A Objection; lacks foundation. No. Q. What was the Video GPS then?

Well, GPS stands for Google product strategy,

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SCHMIDT, ERIC and it's a series of meetings that occur on typically Tuesdays on a rotating basis. And Video GPS would

have been a review of the video -- Google Video product of some kind. And I would read this as -- I read -- I read this e-mail as he's briefing me ahead of the meeting. Q And I take it you did in fact attend the

Video GPS, to your recollection? A Q I normally attend them. And in addition to you, would the executive

management committee of the company attend GPS meetings? MR. MANCINI: THE WITNESS: Objection; lacks foundation. Approximately half of the

executives -- senior executives do, yes. MR. BASKIN: Q. So would Mr. Kordestani have

attended in the ordinary course? A Q Normally not. Since this fell within his jurisdiction, is

it likely he attended? MR. MANCINI: THE WITNESS: Objection to form. He would have to tell you, but

it's again un -- I would be speculating to know -- to know that. Again, normally Omid is not in the

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SCHMIDT, ERIC meetings. Normally I am in the meetings. Q. What about Mr. Brin?

MR. BASKIN: MR. MANCINI: THE WITNESS: MR. BASKIN: attended -A Q A Q A Q I do --

Objection; lacks foundation. Some percentage of the time. Q. Do you recall if Mr. Brin

-- the Video GPS? -- I do not. I do not.

And what about Mr. Page? Again, no recollection. In the ordinary course, does he tend to

attend Video GPS meetings? MR. MANCINI: THE WITNESS: Objection to form. Larry more than Sergey. But

their meetings -- the GPS's are built around me, so the normal course of business, I'm there and the others may or may not be there. MR. BASKIN: Q Okay.

Now, you said -- I think you said that you

read Mr. Eun's -- am I pronouncing that right, by the way? A Q That's correct. So it's E-U-N.

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SCHMIDT, ERIC You read Mr. Eun's e-mail as preparatory to the Video GPS; correct? A Q That is correct. Now, he tells you that -- strike that. Do you read this e-mail as focusing on the issue of how to beat YouTube? MR. MANCINI: Objection to the

characterization of the document. THE WITNESS: Well, I haven't read the whole

e-mail, but it starts by saying, "We are preparing in preparation for the GPS how we beat YouTube in the short term and how we win over time." So that would be consistent with your assertion. MR. BASKIN: Q. And do you recall that one

of the topics being discussed as a way of beating YouTube was whether Google Video should relax enforcement of our copyright policies in an effort to stimulate traffic growth? MR. MANCINI: Objection to the

characterization of the document. THE WITNESS: You would have to point me to a

paragraph or a sentence here. MR. BASKIN: Q. Well, first, do you -- do

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SCHMIDT, ERIC you recall this e-mail? A Q I do not. Have you seen this e-mail prior to today, to

the best of your recollection? A I think -MR. MANCINI: THE WITNESS: MR. MANCINI: Objection. Go ahead. Objection to the extent it

seeks communications with counsel. MR. BASKIN: Q bottom. Okay. Fair enough.

Now, so let's go to the e-mail, sir, at the You see it says -- the paragraph that reads

as follows, let me point it out to you, "there is a chance of pursuing short-term goals with such zealousness that we develop blind spots that could hurt us later. For example, there was heated debate

about whether we should relax enforcement of our copyright policies in an effort to stimulate traffic growth, despite the inevitable damage it would cause to relationships with content owners." Do you see that, sir? A Q I do see that paragraph. Do you remember reading that paragraph in and

around May 2006?

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SCHMIDT, ERIC MR. MANCINI: THE WITNESS: the e-mail. MR. BASKIN: Q. Do you recall being party to Objection; lacks foundation. As I indicated, I do not recall

a discussion as to whether Google Video should relax its copyright policies -MR. MANCINI: Objection to the extent it

seeks a leading conclusion. MR. BASKIN: finish. Q Excuse me. Excuse me. Let me

Then you may register your objection. Do you recall whether -- strike that. Do you recall being involved in discussions

in and around May 2006 on the topic of whether Google Video should relax enforcement of its copyright policies in an effort to stimulate traffic growth? MR. MANCINI: Objection to form; and

objection to the extent it seeks communications with counsel, to which I instruct the witness not to answer. THE WITNESS: I only have a vague

recollection of their -- as I testified previously, I have only a vague recollection of us talking about the difference between their policies, "their" being YouTube's and ours.

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SCHMIDT, ERIC MR. BASKIN: Q. So you do not have a

recollection of being party to a discussion about whether Google Video should relax its policies to comport with YouTube's? MR. MANCINI: THE WITNESS: Same objections. And again, I have no specific

recollection in that area. MR. BASKIN: Q. Now, in the next paragraph,

Mr. Eun says, "I think we should beat YouTube - and all competitors - but not at all costs. A large part

of their traffic is from pirated content." Do you see that, sir? A Q I see that. Does -- do you recall reading that sentence

in and around May of 2006? MR. MANCINI: THE WITNESS: Objection; lacks foundation. As I previously said, I don't

recall this e-mail and, therefore, I don't recall this sentence. MR. BASKIN: Q. Do you recall a conversation

with Mr. Eun on the topic that a large part of YouTube's traffic is from pirated content? MR. MANCINI: foundation. Objection to form; lacks

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SCHMIDT, ERIC companies to protect the -- their content on the YouTube website? MR. MANCINI: and objection to form. THE WITNESS: Okay. There were a lot of Objection; lacks foundation;

negatives in that question. MR. BASKIN: THE WITNESS: MR. BASKIN: real bad question. MR. MANCINI: MR. BASKIN: Yeah. Yeah. Let me withdraw it. Let me try again. Good idea. Q. Did you ever reach the That was a It was a lousy question.

conclusion, in your own mind, sir, that Google simply couldn't afford the license fee necessary to make Audible Magic technology available to content owners who wanted it in the end of 2006 and the early parts of 2007, irrespective of whether they entered into a license agreement with YouTube? MR. MANCINI: Objection; lacks foundation;

objection to form; and objection to the extent it's seeking mental impressions. THE WITNESS: this area. MR. BASKIN: Q. Let me ask you this: Based I -- I have no recollection in

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SCHMIDT, ERIC on your -- strike that. Q In 2006, can you tell us, for the record, the

name of even one large media company that was given access to available fingerprint technologies on YouTube in the absence of a revenue-sharing agreement? MR. MANCINI: THE WITNESS: don't know. MR. BASKIN: Q. And what about 2007? Can Objection to form. I'm sorry. In 2006, I -- I

you give me the name of one media company that was given access to available fingerprint technologies in the absence of a revenue deal? MR. MANCINI: I just want to object --

continuing objection that the witness has indicated his lack of recollection in this area. THE WITNESS: Yeah. I just -- I don't know

the details, so I don't recall. MR. BASKIN: Q. You don't recall the name of

one company, right, sir? MR. MANCINI: THE WITNESS: MR. BASKIN: A Q Same objection. Yeah. Q. Correct?

That is correct. Now, I just want to do five more minutes and

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SCHMIDT, ERIC Q Are you familiar that there's a segment of

the YouTube website that displays so-called private videos? MR. MANCINI: THE WITNESS: Objection to form. I've heard the term, but I

don't know what "private videos" means. MR. BASKIN: Q. So you have no idea how the

private videos sector of the website operates? A Q No. Okay. Would you know, as you sit here today,

whether a content company is capable of searching the private sector of the website to ascertain whether any of its copyrighted materials are contained in the private sector of the website and to try to take it down? MR. MANCINI: Objection; the witness has

testified to his lack of knowledge in this area. THE WITNESS: of the website is. MR. BASKIN: Q Okay. Fair enough. I don't know what private part

Now, in 2006 and early 2007, am I correct

that Viacom and Google were in a negotiation to try to achieve a revenue-sharing deal between the companies? MR. MANCINI: Objection to the

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SCHMIDT, ERIC characterization. THE WITNESS: business deal, so yes. MR. BASKIN: Q. And -- and that negotiation We were attempting to do a

went on for several months; did it not? A Q Yes, that's correct. And you were personally involved in the

negotiations to some degree; weren't you? A Q That's correct. And from time to time, you and Mr. Dauman,

the Viacom -- your counterpart at Viacom, would be in communication either by -- either orally or by e-mail; is that correct? A Q A Q Well, and in person, yes. And in person as well? Yes, absolutely. In fact, you visited the Viacom premises at

one point to participate, in part, in the negotiations; didn't you? A I participated, I believe, twice with meeting

with Philippe in his office to discuss the business, potential business deal. Q And at the same time, you were also

negotiating with some of the other -- the chief

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SCHMIDT, ERIC executives of other media companies; weren't you? A Q Yes. Now -- and I guess we already discussed as

part of the business review you were getting periodic reports of the status of negotiations with the big media companies; correct? MR. MANCINI: Objection to the

characterization of the prior testimony. THE WITNESS: MR. BASKIN: That is correct. Q. Now, so the jury can

understand what a revenue deal like this is, am I right that, as structured, these transactions provided that the media companies' property, videos, would be displayed on YouTube alongside advertisement? MR. MANCINI: Objection; lacks foundation;

objection to form; and objection to the presence of a nonexistent jury. THE WITNESS: As a general statement about

the business deals, the copyright owner would enter into a license agreement with Google where Google would show the videos or music or what have you and would be compensated on a per-play basis based on some form of advertising product either then in existence or one hoped for in the future.

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