Gates responds to wide range of questions for over 20 hours -Defends Microsoft’s freedom to innovate

Testimony on Apple refutes government’s allegations and affirms that resolving patent dispute was Microsoft’s highest priority

WASHINGTON, D.C., Nov. 2, 1998 — In three days of videotaped deposition, Microsoft Chairman and CEO Bill Gates answered a wide range of questions from government attorneys and defended his company’s right to improve its products for the benefit of customers in the face of stiff competition in the personal computer industry. The U.S. Government and 20 State Attorneys General today began playing edited segments from the videotaped deposition rather than call Mr. Gates as a witness.

“The more we see of the government’s case, the less we see about harm to consumers, and the more it is becoming an unfair personal attack on Bill Gates, a person whose vision and hard work have helped bring the opportunities of the Information Age for tens of millions of Americans,”
said William H. Neukom, Microsoft’s Senior Vice President for Law and Corporate Affairs.
“The government is resorting to an edited videotape instead of actually calling Bill Gates as a witness. This is little more than a scheme designed to get around the judge’s limit on the number of witnesses, and a gimmick to get snippets in the headlines rather than get at the facts pertinent to this lawsuit.”

Neukom said the government is shuffling witnesses at the last minute and wants to show edited excerpts from Mr. Gates’ nearly 20 hours of deposition in an attempt to draw attention away from the significant setbacks it suffered during cross examination of its first two witnesses, Netscape’s Jim Barksdale and AOL’s David Colburn.

In the videotaped segments shown in Court Monday, Gates testifies that Microsoft’s primary goal in negotiating a 1997 agreement with Apple was to resolve a long-standing patent dispute that could have tied up both companies for years. The government says Microsoft tried to force Apple to disadvantage Netscape and Sun, but the facts will show that Apple had threatened a massive patent lawsuit against Microsoft, so resolution of the patent dispute was Microsoft’s top priority in the 1997 agreement.

“The main reasons we were having discussions with Apple in this ’97 period was that they had asserted that various patents that they had applied to various Microsoft products, and so our primary focus in discussing an agreement with them was to conclude a patent cross license of some kind,”
Gates testified.

In other excerpts released today:

  • Gates said he was generally aware of discussions in 1995 between Netscape and Microsoft regarding ways the two companies could work together to improve their respective technologies for customers. He only learned of the government’s market allocation accusations in April 1998 when he read Netscape’s claims in the Wall Street Journal, three weeks prior to the government filing its lawsuit. Gates said he instructed Microsoft’s legal department to look into the allegations.

  • Gates testified that Microsoft had shipped Office productivity applications for Macintosh for over a decade. Despite widespread reports of Apple’s imminent collapse and discussions in the industry and within Microsoft the merits of continuing to develop applications for the Macintosh , Gates makes it clear in his deposition that Microsoft did not threaten to cancel Office for Macintosh in order to force Apple to make Internet Explorer the default browser. As part of the August 1997 agreement with Apple, which resolved the patent issues, Microsoft committed to continue to develop new versions of Office for Macintosh for five years. In fact, Office 98 for the Macintosh is widely considered the best version yet.

  • Gates also points out that after the broad agreement between Apple and Microsoft, both Internet Explorer and Netscape Navigator continued to be offered for Macintosh customers.

  • Gates testified that Microsoft and Apple discussed ways the two companies could work together to improve Apple QuickTime on Windows in order to make Apple’s technology more popular and to enhance Windows functionality for customers. Gates said that both companies would continue to ship their respective technologies.

“Anyone who attended the deposition could see that the government simply doesn’t want to hear the facts,”
Neukom said.
“Bill told the government repeatedly that resolving a patent dispute was Microsoft’s main goal in the Apple agreement, but the government just refused to listen because that doesn’t support their misguided case.”

Neukom pointed out that Microsoft has cooperated fully throughout the government’s investigation.
“Bill provided three full days to answer all the government’s questions,”
Neukom said.

On Aug. 27-28 and again on Sept. 2, Gates answered a broad range of questions from government lawyers on topics as diverse as Microsoft’s business negotiations with America Online, Apple, Intel, Intuit, RealNetworks, Netscape and other subjects. The
“scatter-shot”
approach of the government’s questions during this summer’s deposition underscores the fact that the government is all but abandoning its original claims filed May 18 in an attempt to salvage a lawsuit badly damaged by a U.S. Court of Appeals decision on June 23.

“Bill answered a broad range of questions covering several years of business interactions in one of the most fast-paced, competitive industries in the world,”
Neukom said.
“He answered truthfully and precisely, often asking government lawyers to clarify or narrow questions that frequently were vague, leading or ambiguous. The government lawyers seemed frustrated that Bill’s answers did not support their accusations, so they frequently asked Bill the same question over and over again. To his credit, Bill did not allow the government to put words in his mouth or bully him into saying something he did not believe to be accurate.”

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