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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
¶64). 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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U.S. Department
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