IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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UNITED STATES OF AMERICA,
Plaintiff,
v.
MICROSOFT CORPORATION,
Defendant.
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Civil Action No. 98-1232 (TPJ) |
STATE OF NEW YORK, ex rel.
Attorney General DENNIS C. VACCO, et al.,
Plaintiffs,
v.
MICROSOFT CORPORATION,
Defendant.
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Civil Action No. 98-1233 (TPJ) |
A.
Procedural History
On
May 18, 1998, the United States and the Attorneys General for 20 states and
the
District of Columbia filed separate antitrust actions against Microsoft for
violating various
Federal
and State antitrust statutes. On May 22, 1998, the Court consolidated the
separate actions for
all
purposes, including but not limited to discovery, pending further order of
the Court. On June
12,
1998, and after a scheduling conference with attorneys for all parties, the
Court entered
Pretrial
Order No. 1. Pretrial Order No. 1 provides, in relevant part, that the
"presumptive limitations
on
depositions set forth in Local Rule 207(b) shall not apply, but counsel for
parties shall
exercise
good judgment in not taking an unreasonably large number of depositions."
(¶ 3.)
Additionally,
the Court expressed that it "expects the parties to work in good faith to
resolve discovery
disputes." (¶ 5.)
In an
effort to expedite discovery and allay any confidentiality concerns of the
parties or
any third parties, the parties entered into a Stipulated Protective Order on
June 27, 1998.
The
Stipulated Protective Order provides protection for "Confidential" and
"Highly
Confidential"
documents and information. "Confidential" material is defined to be "any
trade secret or
other
confidential research, development or commercial information contained in
any document as
such
terms are used in Rule 26(c)(7) of the Federal Rules of Civil Procedure and
any applicable
case
law interpreting Rule 26(c)(7)." (¶A(9)). "Highly Confidential"
material is defined to be
"any
trade secrets or other confidential research, development or commercial
information . . . that
is
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
2
entitled to a higher level of protection than Confidential Information due to
its commercial
sensitivity." (¶A(10)). Taking into account the sensitive nature of
"Highly
Confidential
Information," the Stipulated Protective Order further provides that "Highly
Confidential
Information" can only be disclosed to limited categories of people,
including independent
experts
or consultants. (¶D(2)). Moreover, such disclosure can be made only if
the independent
expert
or consultant agrees to be bound by the Stipulated Protective Order and
further agrees to
submit
to the jurisdiction of the Court with regard to enforcement of the Order.
(¶F(1)).
B. Request No. 20
On
June 17, 1998, Plaintiffs served on Microsoft its First Joint Request for
Production of
Documents (Exhibit A). Request for Production No. 20 seeks production of
source code files
of
certain versions of Windows 95 and 98, and the related documentation
necessary to
understand
the source code files. (See Exhibit A). Plaintiffs limited the
request to the listed files
in an effort
to minimize production burdens, and also limited the request to only those
files believed to
be
relevant to Microsoft's integration claims.
On
June 27, 1998, Microsoft served its objections to Plaintiffs' Requests for
Production.
Microsoft objected to Request for Production No. 20 on the grounds that it
was
burdensome,
irrelevant, and required disclosure of "extemely confidential, highly
sensitive trade secrets."
(See
Exhibit D). Microsoft refused to produce the requested code.
Plaintiffs met and conferred with Microsoft in an attempt
to reach an
accommodation.
With regard to burden, Plaintiffs have expressed a willingness to address
Microsoft's
concerns
and it appears an accommodation can be reached. (See Exhibit E).
Microsoft's
improper
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
3
confidentiality and relevance objections, however, have not been resolved
despite good faith
efforts and are the subject of this motion.
C. Microsoft Refuses to Make
Available William
Gates, III for Adequate Deposition
On
July 14, 1998, Plaintiffs served deposition notices on Microsoft. Among the
notices,
Plaintiffs noticed the deposition of William Gates, III, Microsoft's Chief
Executive Officer.
(See
Exhibit C). Plaintiffs requested that Mr. Gates be made available for two
days of deposition.
While Microsoft recognizes the relevance of Mr. Gates' testimony in this
matter and has
tentatively made Mr. Gates available to testify on August 12, 1998,
Microsoft has refused
to
make Mr. Gates available for more than eight hours of testimony.
D. Employees for Deposition
On July 14, 1998, Plaintiffs noticed the Rule 30(b)(6)
deposition of Microsoft
(see Exhibit
B) and also served subpoenas for deposition testimony from fifteen Microsoft
employees.
(See
Exhibit C). Microsoft has not served any objections to the Notices or
Subpoenas, nor has
it
moved for a Protective Order. Rather, Microsoft unilaterally has refused
to schedule more
than
seven depositions in addition to the depositions of Mr. Gates and Steven
Ballmer. Despite
Plaintiffs' good faith agreement to evaluate the need for any depositions
that appear to be
duplicative on an on-going basis as the depositions proceed, Microsoft
persists in its refusal
even
to schedule the depositions.
Having
complied with their Rule 37 and Local Rule 108(m) meet and confer
requirements
(see Exhibit F), the United States and Plaintiff States bring this
Motion to address
Microsoft's
groundless objections and unilateral refusals to comply with proper
discovery requests.
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
4
II. ARGUMENT
A. Source Code Files Of Windows 95 and 98
Microsoft continues to object to producing certain source
code files for
Windows 95 and
98 on the basis of relevance and confidentiality. Microsoft's objections are
improper.
1. The Requested Source Code is Relevant
Microsoft's assertion that the requested source code is
not relevant is
disingenuous.
Indeed, in its recently filed answer, Microsoft makes repeated factual and
legal assertions
relating
to technical design features of its products that can only be countered
through analysis of its
source code.2
Specifically, Microsoft asserts that "Internet Explorer technologies are
integral
elements of Windows 95 and Windows 98, not a `separate software program'."
(Defendant
Microsoft Corporation's Answer to the Complaint Filed by the U.S. Department
of Justice
at
ΒΆ64). Microsoft further asserts that "the incorporation of Internet
Explorer technologies
into
Windows is efficient and produces benefits that users could not otherwise
obtain themselves."
(Seeid. at ¶119). Microsoft also asserts that it "has
never `tied
Internet Explorer to Windows
95' or Windows 98 and that Web browsing functionality is an integral feature
of both
operating
systems." (Seeid. at 109). Accordingly, Microsoft's source
code is relevant
and important to an
analysis of Microsoft's claims.
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
5
3. The Protective Order
Adequately Addresses
Microsoft's Confidentiality Concerns
Microsoft stipulated to a Protective Order that provides
adequate protection
for trade
secrets, including Microsoft's source code. Indeed, Microsoft circulated a
first draft of the
Protective Order to Plaintiffs within days of the filing of the action for
the purpose of
allowing
expedited discovery without concern for confidentiality issues. The
Stipulated Protective
Order,
as initially circulated and as filed, specifically provides protection for
trade secrets and other
highly sensitive or confidential information in accordance with Federal Rule
of Civil
Procedure
26(c)(7) and is enforceable in this Court. Because Microsoft clearly
anticipated that
Plaintiffs
would request its source code given that Microsoft has made technical
integration an issue in
this
litigation, it should have requested additional protections in the
Stipulated Protective Order
or
otherwise moved the Court if it felt such protections were necessary.
Microsoft has not done
so,
but rather unduly delayed producing the source code based on its improper
objections.
These
delays severely impede Plaintiffs ability to prepare their case for the
rapidly approaching
trial.
In
addition to the Stipulated Protective Order, Microsoft now requests that the
parties
enter into a commercial license agreement for its source code. (See
Exhibit G). The
terms of the
license agreement are so oppressive that entering into such an agreement
would literally
eliminate
Plaintiffs' ability to utilize any competent technical expert.
Specifically, the proposed
commercial
license prohibits anyone who views the source code from working in any way
on any
project
related to operating systems for a period of twelve months, and further
prohibits any
consultant
from working in any way for a list of many of the largest software companies
for a period
of
eighteen months. Accordingly, Plaintiffs will be unable to utilize the
service of their
consultants
or experts who work with operating system technologies unless they are
willing to give up
their
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
6
livelihood for a period of twelve to eighteen months following the
termination of this litigation.
Such a limitation is improper in the context of this litigation and
effectively prohibits
Plaintiffs
from employing experts knowledgeable about operating system
technologies.
Microsoft's requirement that Plaintiffs enter into such a
license is severely
undermined by
its position with regard to third party Novell, Inc.'s confidentiality
concerns. Microsoft
subpoenaed documents and testimony from Novell, a direct competitor. Novell
objected to
the
subpoena based on confidentiality concerns. Microsoft moved to compel
Novell's
compliance
with the subpoena. (See Exhibit H). Acknowledging that Novell is a
direct
competitor,
Microsoft asserted that disclosure of Novell's trade secrets to its outside
counsel and
consultants
was appropriate under the terms of the Stipulated Protective Order because
the Stipulated
Protective Order provided adequate protections for the trade secrets.
(Id. at 8-10).
Given
Microsoft's assertion that third party direct competitors, such as Novell,
who did not
participate
in the drafting of the Stipulated Protective Order are adequately protected
by the Order,
Microsoft's arguments that it is not adequately protected should be
rejected.
Finally,
the Court should note that Microsoft attempted to advance similar arguments
in
on-going antitrust suit with Caldera, an operating system vendor, in the
District of Utah.
Caldera's motion to compel production of documents including source code was
heard on
July
30, 1998. The Utah Court ordered Microsoft to produce the source code to
Caldera.
(See
Exhibit I). The Court specifically refused to require the twelve and
eighteen month
limitations
Microsoft seeks to impose here.3
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
7
B. Plaintiffs' Questions
Microsoft cannot justify limiting the deposition of Mr.
Gates, the founder,
former president,
Chief Executive Officer, and Chairman of the Board of the only defendant in
this matter, to a
mere
8 hours. In this jurisdiction, Local Rule 207(c) states that: A[n]o
presumptive limits are
established
for the duration of a deposition, but the Court in its scheduling order may
provide that a
deposition
shall not exceed a set number of hours or days. (a) This Court has not made,
nor has
Microsoft
sought, any such order limiting Mr. Gates' deposition. Microsoft simply has
unilaterally refused
to
permit Plaintiffs to question Mr. Gates for more than 8 hours.
Full
access to Mr. Gates is necessary for Plaintiffs to prepare their case. Mr.
Gates has
personal knowledge about every aspect of this matter which cannot be
obtained through
other
sources. (Fed. R. Civ. Proc. 26(b)(2)(ii).) Countless documents reveal Mr.
Gates personal
involvement in most of Microsoft's critical corporate decisions, many of
which are at the heart of
this
case. Mr. Gates' name appears in a large portion of the documents produced
to the United
States
by Microsoft, and appears in no less than 16 of the exhibits submitted in
support of the United
States'
motion for preliminary injunction. Mr. Gates has given numerous speeches
and reports to the
press,
testified before Congress, and has actively represented Microsoft's position
on the relevant issues
in
public.4
Additionally,
Plaintiffs have not yet taken Mr. Gates' deposition in the investigation
or
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
8
litigation of this matter.
If Mr.
Gates answers all of Plaintiffs' questions to the best of his ability within
the first 8
hours, Plaintiffs would see no value in extending the deposition to the
following day. Plaintiffs
do
not seek carte blanche access to Mr. Gates; rather, Plaintiffs simply want
to be able to schedule
Mr.
Gates for two consecutive days, so that they may exercise their rights under
the Federal and
Local
rules to seek all relevant information and testimony from Mr. Gates.
D. The Court Should Order
Microsoft To Schedule
All Noticed Depositions
Based
on agreements among the parties and the Court, the Court's Pretrial Order No.
1 did
not set any limits on the parties' ability to take depositions, except to
instruct the parties to
Anot
tak[e] unreasonably large number of depositions. (a) (¶ 3) Thus far,
Plaintiffs have only
sought the
testimony of 15 Microsoft employees and two 30(b)(6) witnesses. Neither
Microsoft, nor
the
individual employees for that matter, have objected to or sought leave of
court for a protective
order
from the deposition subpoenas. (See Fed. R. Civ. Proc. 26(c).) Rather,
Microsoft unilaterally
refuses
to schedule more than nine of the seventeen depositions.
Plaintiffs repeatedly sought to address Microsoft's
concerns about the numbers
of depositions.
Plaintiffs
proposed to place a number
of the witnesses into several tracks, and to take depositions of the witnesses
in each track in order
of priority. (See Exhibit F). If an earlier witness in that track
provides all the information needed on the subject matter of that track and
further depositions in
that
track would merely be cumulative, Plaintiffs would cancel subsequent
depositions in that track.
Because of the limited time for discovery and the
difficulty in coordinating
schedules among
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
9
the various parties and witnesses, at a minimum, all depositions must be
scheduled. Doing so
will
ensure that all parties are prepared to take the depositions if needed and
that Plaintiffs can
complete
discovery in time for trial. Microsoft's unilateral decision that
Plaintiffs are entitled to no more
than
nine depositions, and refusal to even schedule the remaining eight
depositions, impairs Plaintiffs
ability
to prepare for trial.
III. CONCLUSION
For the
foregoing reasons, Plaintiffs respectfully request that the Court compel
Microsoft to
produce the requested source code, to schedule Mr. Gates' deposition for two
days, and to
schedule
the Rule 30(b)(6) depositions and depositions of Microsoft employees.
DATED: July 31, 1998
_____________/s/______________
Christopher S Crook
Chief
Phillip R. Malone
Denise M. De Mory
Michael C. Wilson
Attorneys
David Boies
Special Trial
Counsel
U.S. Department of
Justice
Antitrust Division
450 Golden Gate Ave., Room 10-0101
San Francisco, CA 94102
(415) 436-6660
UNITED STATES' MEMORANDUM IN SUPPORT OF MOTION TO COMPEL - Page
10
FOOTNOTES
1
Plaintiff United
States and Plaintiff States expressly reserve their right to move to compel
production in response
to other requests for production not discussed herein.
2
Microsoft bases
its relevance objections on the Plaintiffs' Responses to Defendant Microsoft
Corporation's First
Set of Interrogatories. Plaintiffs disagree that their responses could, or
do, render the request for
Microsoft's source code irrelevant. Specifically, Plaintiffs responses state
only that their
Complaints do not make any contentions about which code comprises Internet
Explorer. The
responses do not indicate that the Windows source code is irrelevant to
addressing various
Microsoft contentions. Any Microsoft objection based on these responses,
however, has been
superseded by Microsoft's Answer, which directly puts technical matters at
issue.
3 The
Court did
agree to incorporate certain other terms from Microsoft's license agreement
into an enforceable
amendment its protective order. Plaintiffs already have informed Microsoft
that they too are
willing to agree to incorporate a substantial number of terms from Microsoft's
license agreement
into an amendment to the Stipulated Protective Order. Microsoft has refused
Plaintiffs' offer
absent an agreement to the twelve and eighteen month limitations.
4 Indeed,
Microsoft's stubborn refusal to permit full access to Mr. Gates is perplexing
in light of the fact
that Microsoft has already found it necessary to take depositions of the
non-party witnesses
which exceed the unilateral 8-hour duration. Microsoft's noticed deposition
of Mr. Mark
Andreesen, vice president of products and marketing for Netscape Communication
Corporation,
lasted over 12 hours. Despite the fact that neither Mr. Andreesen nor
Netscape are parties to this
litigation, Microsoft found it necessary to depose Mr. Andreesen well into the
night, without any
pressure from the United States' to limit the duration of the deposition.
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