1 SUPERIOR COURT FOR THE DISTRICT OF COLUMBIA 2 CIVIL DIVISION 3 4 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 5 ) COVINGTON & BURLING, ) 6 ) Plaintiff, ) Civil Action No. 7 ) 01-0004360 v. ) 8 ) DEPOSITION OF INTERNATIONAL MARKETING & ) 9 RESEARCH, INC., et al., ) KEVIN KATZ ) 10 Defendants. ) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ) 11 12 13 14 TAKEN ON: Monday, March 4, 2002 15 TAKEN AT: 4350 La Jolla Village Drive 7th Floor 16 San Diego, California 17 REPORTED BY: Jerre Walker CSR No. 5343 18 19 20 21 22 23 24 25 1 1 APPEARANCES: 2 FOR PLAINTIFF: 3 COVINGTON & BURLING One Front Street 4 San Francisco, California 94111 BY: RICHARD C. DARWIN 5 FOR DEFENDANTS and MR. KATZ: 6 COZEN & O'CONNOR 7 1900 Market Street Philadelphia, Pennsylvania 19103- 3508 8 BY: MICHAEL P. BROADHURST 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 1 I N D E X 2 WITNESS EXAMINED BY PAGE 3 KEVIN KATZ Mr. Darwin 4 4 5 E X H I B I T S 6 NUMBER DESCRIPTION PAGE 7 8 1 Second Amended Complaint, 20 pages 83 9 2 Defendant Fax.com's Objections and Responses to Plaintiff's First Set of 10 Interrogatories, 11 pages 105 11 3 Printout of Fax.com website, 32 pages 108 12 13 14 QUESTIONS WITNESS INSTRUCTED NOT TO ANSWER 15 PAGE LINE 16 126 11 17 126 22 18 19 20 21 22 23 24 25 3 1 San Diego, California, Monday, March 4, 2002, 10:30 a.m. 2 3 KEVIN KATZ, 4 BEING FIRST DULY SWORN, TESTIFIED AS FOLLOWS: 5 6 EXAMINATION BY MR. DARWIN: 7 Q. Can you please state your name for the record. 8 A. Kevin Katz. 9 Q. Okay. What's your business address? 10 A. It's 120 Columbia, Suite 500, Aliso Viejo, 11 92656. 12 Q. And can you spell the city for me, please. 13 A. A-l-i-s-o V-i-e-j-o. 14 Q. And who is your employer? 15 A. Fax.com. 16 Q. What's your title at Fax.com? 17 A. President. 18 Q. Have you ever had your deposition taken before? 19 A. One time before. 20 Q. Okay. You understand you're under oath? 21 A. Yes. 22 Q. I'm just going to go over a few ground rules 23 before we get started about depositions generally. Then 24 we'll get into a little more detail about your work at 25 Fax.com. 4 1 If I ask you a question that you don't understand, 2 will you let me know so I can rephrase it for you. 3 A. Sure. 4 Q. Unless you tell me that you don't understand a 5 question, I'll assume you understand it. You 6 understand that? 7 A. Okay. 8 Q. You have to answer audibly for the court 9 reporter so she can take everything down. She can't 10 take down a shake of the head. So whenever you can, an 11 audible and -- you know, response with a "yes" or "no" 12 or other substantive response is what we need. 13 A. Okay. 14 Q. Are you taking any medication that would 15 prevent you from testifying accurately today? 16 A. No. 17 Q. Is there any other reason you can think of why 18 you couldn't testify honestly and accurately today? 19 A. No. 20 Q. When else did you have your deposition taken? 21 A. I don't remember the exact date. It was maybe 22 three or four months ago. 23 Q. Was it -- were you a witness to that -- in that 24 action or were you a party to that action? 25 MR. BROADHURST: Objection to the form. 5 1 You can answer the question. 2 I'm sorry. Could you hear me? 3 REPORTER: Yes. 4 THE WITNESS: I don't really know if I was a witness 5 or -- I don't know. 6 MR. DARWIN: What was the action? 7 THE WITNESS: It was -- I guess it was something 8 along the similar lines. I thought it was actually just 9 giving information at that particular deposition. 10 BY MR. DARWIN: 11 Q. Was it a lawsuit in which Fax.com was being 12 sued for sending unauthorized faxes? 13 A. I believe so. I believe it was against 14 Fax.com, yes. 15 Q. Do you know who the plaintiff or the person who 16 was suing Fax.com was in that action? 17 A. No. 18 Q. Okay. Other than that deposition a few months 19 ago in which Fax.com was being sued, you've never given 20 any other depositions that you're -- that you can recall 21 today? 22 A. No. 23 Q. Have you ever testified in a trial of any sort? 24 A. No. 25 Q. Can you describe for me generally what your 6 1 responsibilities are as the president of Fax.com? 2 A. My main responsibility, I would say, would be 3 to make sure that, you know -- to look after mainly the 4 financial end of things in terms of, you know, when we 5 pay our checks, I sign the checks, so, you know, to make 6 sure they've been paying the correct amount out to our 7 vendors, make sure employees okay that, you know, we 8 comply with our employee handbook, and make sure that, 9 you know, we take care of our employees the way they're 10 supposed to be. And generally, you know, to look 11 towards growing the company. Various forms of marketing 12 that we're able to do, to be able to grow the company 13 and, you know, bring in new clients. Those are the 14 three main functions that I'm involved with. 15 Q. Are there other officers in the company? 16 A. I believe Eric Wilson is, my partner is. 17 Q. What's his title? 18 A. CTO. 19 Q. How do -- what are Eric Wilson's 20 responsibilities as a CTO at Fax.com? 21 A. He's more involved in the -- I guess in the 22 technical aspects of how we -- how we -- how software 23 programs are set up and, you know, making sure that 24 internet access is up and running at the company, and on 25 the technical end, which I'm really -- I'm not very 7 1 clued up on. 2 Q. Other than yourself and Eric Wilson, are there 3 any other officers of the company? 4 A. No. 5 Q. Do you have a chief operating officer? 6 A. No. It's me and Eric, and then we have, you 7 know, people that do various functions in the company, 8 our employees. 9 Q. How many employees does Fax.com have? 10 A. I believe we have in the range of about 37, 38 11 at this time. 12 Q. Are all the employees of Fax.com located in the 13 Aliso Viejo office? 14 A. Yes. 15 Q. Did you do anything to prepare for today's 16 deposition? 17 A. You know, I met with my -- I met with my 18 lawyers. 19 Q. When did you meet with your lawyers? 20 MR. BROADHURST: Objection. I'm not sure how 21 that -- the timing of any meeting has anything to bear 22 on things. I'm not even sure you're entitled to the 23 information. 24 You can answer the question. 25 THE WITNESS: I met with my lawyers yesterday. 8 1 BY MR. DARWIN: 2 Q. Did you review any documents in getting ready 3 for this deposition? 4 A. I think I read through a couple of documents. 5 Q. What was the purpose of reading through the 6 documents? 7 MR. BROADHURST: Objection. The purpose of 8 reviewing the documents? 9 MR. DARWIN: If it was to refresh his recollection 10 about matters he's going to testify about today, then 11 I'd ask what those documents were. 12 MR. BROADHURST: Well, you can ask the question 13 about what documents he reviewed, but lay a foundation. 14 MR. DARWIN: That's what I was going to try to do. 15 THE WITNESS: I wouldn't really recognize one from 16 the other, to tell you the truth. 17 BY MR. DARWIN: 18 Q. Do you recall as you sit here today any of the 19 documents you looked at yesterday to prepare for today's 20 deposition? 21 A. Not really. 22 Q. Did you speak with anyone other than your 23 attorneys in order to get ready for the deposition today? 24 A. No. 25 Q. You didn't speak with Mr. Wilson about this 9 1 deposition? 2 A. No. 3 Q. Did you ever see a copy of the deposition 4 notice for today's deposition? 5 A. I really wouldn't know what the deposition 6 notice looked like. 7 Q. I'll hand you this. You know, I'm not going to 8 mark it as an exhibit. 9 A. See if I've seen this one before? 10 MR. BROADHURST: Just take a quick look at it. 11 MR. DARWIN: Right. 12 MR. BROADHURST: Just take a quick look at it. 13 Hold on. Hold on. Hold on just for a second. 14 Just for the record -- 15 THE WITNESS: Uh-huh. 16 MR. BROADHURST: -- the witness has been shown a 17 letter and attachments to the letter, it's a 18 February 12th, 2000 letter from Jason Levine to Peter 19 Axelrad and myself attaching notices of deposition for 20 Mr. Katz and Mr. Wilson. 21 I'm sorry. 22 THE WITNESS: As I said, I mean -- 23 MR. BROADHURST: I'm not sure that the question was 24 asked. You should wait until the question was asked. 25 MR. DARWIN: We need to have a clean record. 10 1 THE WITNESS: Okay. 2 BY MR. DARWIN: 3 Q. There's -- one of the documents in this set 4 I've just given you is a deposition notice for you. 5 Have you ever seen it before? 6 A. I may have. As I said, you know, all these 7 documents I've looked through all look the same to me. 8 I don't particularly recall seeing this. I know I had a 9 deposition today. 10 Q. Okay. Were you asked to look for any documents 11 to bring with you today to the deposition? 12 MR. BROADHURST: I'm going to object to the 13 question. First of all, may call for disclosure of 14 privileged information. Second, the document requests 15 attached to the deposition notice are subject to 16 Rule 34; 34 provides a party 30 days' time within which 17 to respond. The date of that letter is February 12. 18 Thirty days have not yet elapsed. We still have time to 19 produce documents or not. 20 BY MR. DARWIN: 21 Q. Well, let me just ask this then: Did you bring 22 any documents along with you today relating to this 23 action? 24 A. No. 25 Q. Your attorney has stated an objection that we 11 1 can talk about off the record. 2 A. Okay. 3 Q. How long have you been president of Fax.com? 4 A. I think about three, three and a half years. 5 Q. Is that the only title you've held at Fax.com? 6 A. Yes. 7 Q. Where is Fax.com incorporated; what state, if 8 you know? 9 A. I believe it's Delaware. 10 Q. Were you one of the founders of Fax.com? 11 MR. BROADHURST: Objection to relevance. 12 You can answer the question. 13 THE WITNESS: I was one of the first parties 14 involved in Fax.com. 15 BY MR. DARWIN: 16 Q. Was there -- was Fax.com preceded by another 17 entity called Fax ID, Inc.? 18 A. I don't know if I would say "preceded." Fax ID 19 was a company that was started for a very short amount 20 of time, which was totally different to anything Fax.com 21 does. 22 Q. So Fax.com did not emerge out of Fax ID; 23 they're separate entities? 24 A. I believe so. I believe they're two totally 25 separate entities. 12 1 Q. What year was Fax.com created, incorporated? 2 A. I want to say sometime in the early part of 3 1999. Maybe March. February, March. Somewhere around 4 that date. 5 Q. Were there other principals involved with 6 founding Fax.com other than yourself? 7 MR. BROADHURST: Objection to the form. 8 You can answer the question if you understand. 9 THE WITNESS: It would just be myself and Eric in 10 the beginning stages. 11 BY MR. DARWIN: 12 Q. Had you and Mr. Wilson ever been in business 13 together before Fax.com? 14 A. We were -- we were also involved together at 15 Fax ID. 16 Q. Can you describe for me generally what the -- 17 what the business was of Fax ID. 18 A. Fax ID -- Fax ID was a database company. We 19 sold data. 20 Q. What kind of data did Fax ID sell? 21 A. Fax data. 22 Q. Telephone numbers, fax telephone numbers? 23 A. Well, it was more of a -- it was more of a 24 system. We sold people -- we sold systems. Fax ID 25 system people were able to utilize to do faxing with. 13 1 Q. Was it a software system? 2 A. Yeah. 3 Q. When was Fax ID created? 4 A. I think it was sometime in October or November 5 of 1998. 6 Q. When did it cease -- does Fax ID still exist 7 today? 8 A. No. 9 Q. When did it cease to exist? 10 A. I'm not sure of the exact date when it got 11 dissolved. Probably sometime towards the end of '99, I 12 would assume. Around there. 13 Q. Why was Fax ID dissolved? 14 A. It just wasn't making any money. 15 Q. What was your title at Fax ID? 16 MR. BROADHURST: I'm going to object to the 17 relevance of this line of questioning. You can 18 continue. I just want to state a standing objection on 19 the line of questioning. 20 THE WITNESS: I guess it was president as well. 21 BY MR. DARWIN: 22 Q. What was Eric Wilson's title? 23 A. He was secretary. 24 Q. Can you give me a general description of your 25 educational background starting with high school. 14 1 A. Went to high school, went into the Army for a 2 couple years, came here. 3 Q. And before Fax ID, what was your -- did you 4 have a job or were you employed before you became and -- 5 founded Fax ID? 6 A. I had another company before Fax ID was 7 founded. Three or four years. 8 Q. What was it? 9 A. It was called Galloping Gourmet. 10 Q. What kind of company was Galloping Gourmet? 11 A. It was a restaurant delivery service. 12 Q. Were you the president of Galloping Gourmet? 13 A. I was the president, if I remember correct. 14 Q. What was your employment before Galloping 15 Gourmet? 16 A. I worked -- before that I worked at an 17 exercise equipment company selling exercise equipment. 18 I was a salesman. 19 Q. What was the name of the company? 20 A. It was called Busy Body. 21 Q. Was that here in San Diego? 22 A. We had branch in San Diego, but I worked out of 23 Newport Beach. 24 Q. How did you come to found Fax.com with 25 Mr. Wilson? 15 1 MR. BROADHURST: Objection to the form; calls for a 2 narrative. 3 You can answer the question if you want. 4 THE WITNESS: I met Eric and he knew a little about 5 the faxing business. I knew a little about marketing. 6 And, you know, with the -- I combined -- you know, my 7 marketing and his technical ability, we thought selling 8 faxes would be a good idea at the time. We thought it 9 would be a good idea to be able to market to customers 10 via fax. 11 BY MR. DARWIN: 12 Q. What was Eric Wilson's background in faxing 13 that you were aware of? 14 A. Eric worked up -- I believe he had developed 15 some fax databases in the past and he had sold fax 16 databases to -- to people in the past. 17 Q. And how did you meet him? 18 A. Through a referral. 19 Q. And Fax ID was your first business together 20 with Mr. Wilson? 21 A. That's correct. 22 Q. And then Fax.com was your second? 23 A. Correct. 24 Q. Do you and Mr. Wilson have any other companies 25 that you have founded together? 16 1 A. No. 2 Q. Are you employed by any other companies today 3 other than Fax.com? 4 A. No. 5 Q. Have you ever been convicted of a felony? 6 A. No. 7 Q. Do you know where Fax ID was incorporated, 8 what state? 9 A. I don't remember. 10 Q. I'm going to turn just to a general description 11 of what Fax.com does as a business. Can you tell me, 12 you know, what different businesses that Fax.com has 13 that it uses to generate revenue. 14 A. Fax.com generates revenue by sending faxes. 15 Q. Does Fax.com have any other revenue-generating 16 activities; consulting or selling information or 17 anything like that? 18 A. No. It's -- faxing is really 99.9 percent of 19 anything we do. We send our faxes and get paid for 20 sending that out. 21 Q. How does -- can you describe for me the pricing 22 scheme that uses to charge its customers to send faxes. 23 MR. BROADHURST: Objection. Relevance. 24 You can answer the question. 25 THE WITNESS: It's so varied that it's -- you know, 17 1 we can charge a range from the page, we can charge by 2 the minutes it takes to do a job. It could vary between 3 how many faxes somebody sends out on a given day or on a 4 given period. It varies in terms of how long the fax 5 is. 6 So there are so many different parameters of pricing 7 that each case is on a case by case basis on what we 8 would charge the client. 9 BY MR. DARWIN: 10 Q. Do customers get charged on each of these 11 different kinds of bases? I mean, depending on what 12 they want? 13 A. They -- 14 MR. BROADHURST: Again, objection to the relevance 15 and the scope. 16 You can answer the question. 17 THE WITNESS: They could. They have some choices on 18 how they're going to pay. 19 BY MR. DARWIN: 20 Q. Can you just outline what those choices are. 21 When a customer comes to Fax.com, what choices are they 22 given in terms of how they'll be charged? 23 A. How they'll be charged. Well, they could be 24 charged on how many faxes they send out or they could be 25 charged on how much -- how many minutes it takes to send 18 1 out the faxes. Really those are the two major forms of 2 charging that I guess could occur. 3 Q. Does the charge differ depending on how many 4 faxes the customer is going to send out or how long -- 5 MR. BROADHURST: I'm sorry. Finish your question. 6 BY MR. DARWIN: 7 Q. -- they anticipate the fax campaign will last? 8 MR. BROADHURST: Objection. Asked and answered. I 9 think you've already covered this. 10 THE WITNESS: Yeah, I think we did. 11 BY MR. DARWIN: 12 Q. Let me just give you an example. Are there any 13 type of volume discount that Fax.com offers customers? 14 A. Yes. 15 Q. How is that -- describe the volume discount 16 offering by Fax.com. 17 A. Well, once again, it's -- it varies with so 18 many different factors. Each and every client that we 19 have is going to be charged a different price depending 20 on what they do. So it's not -- there's no one standard 21 rate sheet that we offer to anybody. We have 22 parameters, but that's -- I mean, I guess. But it -- 23 what we do is just each individual client is assessed 24 separately. 25 Q. Does Fax.com have a rate sheet of any kind? 19 1 A. I believe we have like a standard parameter 2 where salespeople can at least get some idea on certain 3 volumes and that type of thing. 4 Q. Those are documents given to salespeople so 5 they can have some general idea? 6 A. I believe our V.P. may have something along 7 those lines that give them a general idea on what to 8 charge and what not to charge. 9 MR. BROADHURST: I'm going to state a standing 10 objection to relevance on this line of question. 11 BY MR. DARWIN: 12 Q. Do you know what that document is called or 13 referred to? 14 A. No. 15 Q. Is there a vice president of sales at Fax.com? 16 A. There is a gentleman that oversees sales, yes. 17 Q. Who is that? 18 A. His name is Jeff Dupree. 19 Q. How do you spell his last name? 20 A. D-u-p-r-e-e. 21 Q. Do you have any estimate of how many -- what 22 number of pages Fax.com sends out a day? 23 A. I wouldn't have any -- I wouldn't know exactly. 24 I mean, every day it varies. 25 Q. Does Fax.com have a maximum capacity of how 20 1 many faxes it can send in a day? 2 A. That would be more of a technical question. 3 Q. Mr. Wilson question? 4 A. I would think, yeah. 5 Q. Who's on -- does Fax.com have a board of 6 directors? 7 MR. BROADHURST: I'm going to object to the 8 relevance. I really don't see how it relates to 9 anything. 10 You can answer the question. 11 THE WITNESS: I mean, we're kind of small. Me and 12 Eric, you know, are the board, I would assume. 13 BY MR. DARWIN: 14 Q. You and Eric? 15 A. Yeah. I guess. 16 Q. When a customer comes to Fax.com and says, "I 17 want to do a" -- well, how do you refer to the faxes 18 that you send out for customers? Is it a -- is there 19 a -- fax campaign or a fax broadcast? Is there a phrase 20 that you use? 21 A. Fax broadcast, I guess. 22 Q. Fax broadcast. I'll just use that phrase -- 23 A. Okay. 24 Q. -- for simplicity's sake. 25 When a customer comes to Fax.com wanting to do a fax 21 1 broadcast, who is the first person that they speak to? 2 MR. BROADHURST: I'm going to object to the 3 relevance and the scope of the question. 4 You can answer the question if you can. 5 THE WITNESS: I assume a salesperson. 6 BY MR. DARWIN: 7 Q. How many salespeople does Fax.com have? 8 A. It varies, but I think we have somewhere 9 between six and eight. 10 Q. Are customers offered any services in terms of 11 designing the fax page itself? 12 MR. BROADHURST: Again, object to the relevance of 13 the question. 14 You can answer it. 15 THE WITNESS: We -- we have an option. Some -- we 16 have -- we have -- we have the ability to be able to do 17 a design. If somebody requires it, we can provide that. 18 BY MR. DARWIN: 19 Q. Is Fax.com frequently asked to help participate 20 in designing the content of a fax? 21 A. I'm not really involved in the day-to-day sell 22 cycle. So I would have no idea what percentage utilize 23 the service or don't. 24 Q. But it is something offered by Fax.com? 25 A. Yes, we offer that service. 22 1 Q. Are the salespeople given any guidelines or 2 scripts to use in terms of questions to ask customers 3 when customers first come to Fax.com and ask to do a 4 broadcast? 5 MR. BROADHURST: I'm going to object to the form of 6 the question; appears to me to be vague. 7 If you understand the question, you can answer it. 8 THE WITNESS: Say that again, please. What was the 9 question again? 10 BY MR. DARWIN: 11 Q. Are the salespeople given any guidelines or 12 procedures or a type of script that they can refer to in 13 terms of questions to ask or responses to give to 14 customers when customers first come to Fax.com and ask 15 to do a broadcast? 16 A. I think they learn from each other. It's -- 17 there's no manual or anything. It's all how to sell, I 18 guess. 19 Q. When a customer comes to Fax.com because they 20 want to do a fax broadcast, who makes the decision about 21 what -- what numbers or what geographic area to target? 22 MR. BROADHURST: Again, I think this -- I'm going 23 to object to the relevance. I'd also like to place an 24 objection in that it appears to me that since we're in 25 the range of a hypothetical, we're calling for 23 1 speculation. 2 BY MR. DARWIN: 3 Q. Do you understand the question? 4 MR. BROADHURST: You can answer the question if you 5 understand it. 6 THE WITNESS: Okay. Who makes the decision? 7 Generally the salesperson -- the salesperson will talk 8 to the client and they'll make a decision together. 9 BY MR. DARWIN: 10 Q. What options are given to customers in terms of 11 how to target their fax broadcast? 12 MR. BROADHURST: I'd just like to make my objection 13 to calling for speculation a standing objection. 14 THE WITNESS: Sorry. Say that again, please. The 15 question was? 16 BY MR. DARWIN: 17 Q. What options are given to customers in terms of 18 how to target their fax broadcast? 19 A. General -- the general options are there. You 20 can target it to a specific SIC code or you can target 21 it to a geographical area. The client will tell us how 22 he wants to do it and we just do it the way he wants it 23 done. 24 Q. What's an SIC code? Can you explain that. 25 A. It's a standard industry code. There's a 24 1 commonly available database of numbers available that 2 has it listed. It lists a fax number and address and 3 everything else by its industry code, like plumber or 4 dentist or doctor. 5 Q. Do you know what it stands for? 6 A. SIC? 7 Q. Yeah. 8 A. I believe SIC stands for "standard industry 9 code." Standard industry code. 10 Q. Are customers given the option of targeting 11 their broadcast to a specific area code? 12 A. I believe that is an option that is available. 13 Q. So you can do it by SIC, by area code, by 14 geographic area. Any other options that are given to 15 the customer? 16 A. I think that covers it. Geographic ways. SIC. 17 That pretty much sums up any option you may have. 18 Q. Do you know what the ranges are in terms of the 19 price offered for -- by per page and by per minute for 20 the fax broadcast? 21 MR. BROADHURST: Objection. Asked and answered. 22 You can answer the question. 23 THE WITNESS: It's -- it's pretty vague. I mean, 24 it's such a broad range. It's, you know, it varies so 25 much depending on what somebody's doing. 25 1 BY MR. DARWIN: 2 Q. I understand it's a range. 3 A. Yeah. 4 Q. Without me giving a specific -- 5 A. Yeah. 6 Q. -- client and target, you can't give me 7 specific numbers. But do you have in mind what the 8 ranges are that you're aware of from the low and high 9 end, both by per minute and by per page? 10 MR. BROADHURST: I'm going to object to the form of 11 the question. You've thrown in a number of factors 12 there. 13 If you understand the question, you can answer it. 14 THE WITNESS: If I just take what we've done in the 15 past, I mean, a fax page could sell anywhere from 16 2 cents to $2. I mean -- I mean, it's -- it could, you 17 know. It's a very large -- a very big range depending 18 on what they're doing. 19 BY MR. DARWIN: 20 Q. What factors go into what the price is that 21 Fax.com decides to charge? 22 MR. BROADHURST: Object as asked and answered and to 23 relevance. 24 You can answer the question. 25 THE WITNESS: How long it may take to transmit the 26 1 fax, I guess, could be one option. How many times 2 they're going to do it. How many they're doing at a 3 time, where they're going to, what data are they using. 4 Various parameters. I mean, hundreds of different 5 parameters would go into determining the price of the 6 broadcast. 7 BY MR. DARWIN: 8 Q. You also mentioned that sometimes Fax.com will 9 charge by the minute. Is it -- what type of -- you've 10 given me -- I'll withdraw that. 11 The 2 cents to $2 was per page; is that correct? 12 A. Correct. 13 Q. Is there a per minute range that you're aware 14 of? 15 A. We really don't -- 16 MR. BROADHURST: Forgive me. I'm going to object to 17 the characterization of prior testimony. 18 You can answer the question. 19 THE WITNESS: The per minute range could be in the 20 same range. Could be the exact same range. 21 BY MR. DARWIN: 22 Q. Other than the factors you've given me, are 23 there any others that you can think of that go into the 24 calculus of what price Fax.com would charge its 25 customer? 27 1 MR. BROADHURST: Object to the form. 2 You can answer the question. 3 THE WITNESS: Just off the top of my head right now, 4 I think I've given you most of them. There may be some 5 others that I -- 6 MR. BROADHURST: Off the -- excuse me. Off the 7 record. 8 (Discussion off the record.) 9 BY MR. DARWIN: 10 Q. Does Fax.com maintain a database of fax 11 numbers? 12 MR. BROADHURST: Objection to the relevance. 13 You can answer the question. 14 THE WITNESS: Do we maintain a database of fax 15 numbers? Yes. Yes, we maintain fax numbers. 16 BY MR. DARWIN: 17 Q. Do you know approximately how many numbers are 18 in that database? 19 A. I couldn't give you an exact figure. I mean, 20 our numbers vary weekly, monthly basis. 21 Q. Do you have -- can you estimate for me what the 22 number is? 23 MR. BROADHURST: Object as calling for speculation. 24 BY MR. DARWIN: 25 Q. I don't want you to guess, but if you have a 28 1 reasonable, you know, informed estimate, that's what I'm 2 asking for. 3 MR. BROADHURST: I'm also going to object. 4 You can answer the question. 5 THE WITNESS: How many fax numbers? It would be 6 hard to guesstimate because, you know, some of the fax 7 numbers are used, some of them aren't used, some of them 8 are bad, you know. So to, you know, try guess how many 9 fax numbers we use on a daily basis would be impossible 10 for me to determine. 11 MR. BROADHURST: And just for the record -- and 12 please correct me if I am wrong -- I think you've 13 already stated you're not interested in a guess. You're 14 not interested in speculation. 15 MR. DARWIN: Right. 16 MR. BROADHURST: He's only interested in what you 17 know. 18 THE WITNESS: Yeah, I couldn't give you an accurate 19 answer on how many fax numbers we use. 20 BY MR. DARWIN: 21 Q. Do you believe it exceeds one million numbers? 22 A. I believe it exceeds one million. 23 Q. Do you believe it exceeds 30 million? 24 A. I don't believe it exceeds 30 million. 25 Q. Somewhere in there? 29 1 A. That's a range one to 30, but it could be 2 fairly accurate, I assume. 3 Q. Where is the database maintained? 4 MR. BROADHURST: Objection to the relevance. 5 THE WITNESS: That would be more of an Eric 6 question. But I'm assuming we maintain it in-house in 7 our office in Aliso Viejo. 8 BY MR. DARWIN: 9 Q. Is it maintained as an electronic database on a 10 computer? 11 MR. BROADHURST: Objection to the relevance. 12 THE WITNESS: I wouldn't know those exact details. 13 BY MR. DARWIN: 14 Q. Are those questions for Eric Wilson? 15 A. Probably, yeah. 16 Q. How -- can you tell me the different ways in 17 which Fax.com goes about acquiring fax numbers to build 18 this database. 19 MR. BROADHURST: I'm going to object to the form of 20 the question. 21 You can answer. 22 THE WITNESS: The main way that we acquire it is, I 23 guess, same as most people do, is there's a public 24 company called Info USA -- 25 /// 30 1 BY MR. DARWIN: 2 Q. Info USA? 3 A. Yeah. And everybody -- it's a public -- 4 everybody buys fax data from them. And we get quarterly 5 updates. 6 Q. Quarterly update? 7 A. They update their fax numbers. 8 Q. Other than any fax number data from Info USA, 9 does Fax.com use any other methods to acquire fax 10 numbers for its database? 11 A. We buy fax numbers from brokers, basically, as 12 well, as well as from all our clients. A lot of our 13 clients furnish their own fax numbers and, a lot of the 14 agreements that we have with our clients is to allow us 15 to utilize their fax numbers for our purposes as well. 16 So we're able to incorporate all the different ways of 17 bringing in their data and putting it into a database. 18 Q. Are there any other methods that Fax.com uses 19 to acquire fax numbers, other than from Info USA, from 20 brokers, and from clients? 21 A. Clients, brokers, and Info USA. Those are the 22 three main -- main ways that we are able to obtain our 23 database. 24 Q. Where is Info USA located? 25 A. They have offices all over the country. 31 1 Q. Does Info USA provide a subscription service? 2 How is it that they sell numbers to you? 3 A. I'm -- I think a subscription sounds accurate. 4 I don't know. I just called them up a couple years ago 5 and asked them if they sell them and they do so I bought 6 them from them. 7 Q. Do you know how much Info USA charges for their 8 numbers? 9 A. Not off the top of my head. It's a contract, I 10 guess. I don't remember exactly what they charge. 11 Q. Do you know if Fax.com has a written contract 12 with Info USA? 13 MR. BROADHURST: Objection to relevance. 14 THE WITNESS: I don't know if it's a written 15 contract. It may just be a verbal deal you just buy 16 from them. 17 BY MR. DARWIN: 18 Q. I'm sorry. I didn't mean to interrupt. 19 A. That's okay. 20 Q. Do you know how Info USA supplies -- 21 physically supplies the numbers to Fax.com, whether it's 22 on a disk or over the internet, electronic or hard form? 23 A. They would deal directly with the programming 24 part of our company. That would be Eric. 25 Q. Can you identify any of the brokers that 32 1 Fax.com also buys fax numbers from? 2 A. Only if I went back and looked it up, I could 3 look in my records. But off the top of my head, I don't 4 remember names. There's so many of them. 5 Q. Are these brokers regional or how do they come 6 to Fax.com's attention? 7 MR. BROADHURST: Objection to the form of the 8 question. 9 MR. DARWIN: Let me strike that. It was compound. 10 BY MR. DARWIN: 11 Q. How has Fax.com come to learn of brokers that 12 are willing to sell fax numbers? 13 A. Like any other vendor, they call us up. We get 14 calls every now and again, "We have fax numbers. Do you 15 want to buy them?" 16 Q. And then describe the arrangement that Fax.com 17 has with its clients in terms of being able to -- with 18 its clients who supply their own fax numbers about how 19 you're able to use those over again. 20 MR. BROADHURST: I'm going to object again to the 21 form, and I think it's calling for speculation. 22 But you can answer the question. 23 THE WITNESS: It's normally a verbal thing. You 24 know, maybe some -- we may give them a price break and 25 do the broadcast for them. 33 1 BY MR. DARWIN: 2 Q. Is the agreement that after the client's 3 broadcast has been completed, Fax.com gets to keep the 4 numbers that were brought for the broadcast in its own 5 database? 6 A. Each deal's different. So it depends on what 7 the client wants to do. Some yes; some no. 8 Q. Well, then at least in some cases, it is the 9 case where Fax.com will have an agreement with a client 10 to keep the numbers that the client brings for the 11 broadcast for its own use afterwards? 12 MR. BROADHURST: Objection to the form, and I think 13 it's -- it calls for speculation as well. 14 THE WITNESS: As I said, each -- each client is 15 different. So I guess some may allow us to use their 16 data after they're finished with us. Some don't. 17 (Discussion off the record.) 18 BY MR. DARWIN: 19 Q. Are clients given price breaks if they bring 20 their own fax numbers to Fax.com for a fax broadcast? 21 MR. BROADHURST: Objection to the relevance, and 22 again the question calls for speculation. 23 THE WITNESS: Yeah. They may. I mean, it's not 24 really my area that I'm involved in. That would be a 25 decision of the salesperson. 34 1 BY MR. DARWIN: 2 Q. Do you know the source from which Fax.com 3 obtained the fax numbers of Covington & Burling, the 4 plaintiff in this case? I'll just read them into the 5 record. Fax numbers in the range of area code 6 (202) 778-5000 through 5999, (202) 778-6500 through 7 6599, and then (202) 662-6291. 8 MR. BROADHURST: Just a second. The question -- 9 there's a foundation missing, and, I'm sorry, could you 10 read those numbers back for me one more time. 11 MR. DARWIN: (202) 778-5000 through 5999. 12 MR. BROADHURST: And the other range? 13 MR. DARWIN: (202) 778-6500 through 6599. 14 MR. BROADHURST: And then there was one more. 15 MR. DARWIN: 66- -- (202) 662-6291. 16 MR. BROADHURST: Okay. Thank you. 17 THE WITNESS: The question once again? 18 MR. DARWIN: Can you read it back. 19 (Record read.) 20 THE WITNESS: Okay. I mean, off the top of my 21 head -- off the top of my head, I wouldn't be able to 22 say where those numbers came from. 23 BY MR. DARWIN: 24 Q. Do you know if there's anyone at Fax.com who 25 would know where those numbers were obtained? 35 1 A. Possibly. As I said, it wouldn't be me, no. 2 Q. Who might know at Fax.com? 3 A. Possibly Eric Wilson may be able to determine 4 that. With research, I would assume. I don't know for 5 a fact. 6 Q. When Fax.com obtains fax numbers from Info USA, 7 is there any record of the numbers that are provided? 8 MR. BROADHURST: I'm going to object to the form of 9 the question. 10 THE WITNESS: I'm not sure if they keep records, 11 once again. They may just go into the database and 12 that's it. I wouldn't know the answer to the question. 13 BY MR. DARWIN: 14 Q. And you told me you don't know if they come by 15 e-mail or by disk? 16 A. Yeah, I'm not sure how they come. 17 Q. Do you know if Fax.com maintains any records, 18 electronic or hard copy, of numbers when they're 19 purchased from brokers? 20 A. I highly doubt it. I really wouldn't think so 21 because most -- I think everything -- most of the stuff 22 that comes in is encrypted. But I would say this would 23 be an Eric Wilson question on how the process works with 24 the data. 25 Q. What is a FaxCaster? 36 1 MR. BROADHURST: Objection to relevance. 2 THE WITNESS: A -- FaxCasters, I guess, are 3 utilized for stand-alone fax broadcast system. 4 BY MR. DARWIN: 5 Q. Does Fax.com use FaxCasters in its business in 6 any way? 7 A. Yeah. We use it as our broadcast platform, as 8 a way of sending out faxes. 9 Q. That's the method by which you send faxes out? 10 A. That's one of our methods. 11 Q. Do you -- have you ever heard of a war dialer? 12 A. No. I'm not familiar with that term. 13 Q. Does Fax.com utilize any equipment or software 14 to gather fax numbers on its own for its database? 15 A. No, not that I'm aware of. 16 Q. So the only source of fax numbers for your -- 17 for Fax.com's database would come from either Info USA, 18 brokers, or clients; is that accurate? 19 MR. BROADHURST: Objection to the form -- to the 20 point that you're characterizing the witness's prior 21 testimony. 22 THE WITNESS: There could be other sources as well. 23 One of the things that the FaxCaster will do is when the 24 database is being purchased and obtained or loaded on to 25 the system, the system also, by sending out faxes, also 37 1 has a way of verifying whether those numbers are fax 2 numbers or they're just a regular phone number. So we 3 can keep our database fresh that way. So, you know, you 4 may pick up a number or two from that process as well. 5 BY MR. DARWIN: 6 Q. So the FaxCaster can confirm that numbers are 7 in fact fax numbers as opposed to voice numbers? 8 A. It can, yes. 9 Q. So a FaxCaster can keep the fax database 10 updated with fax numbers? 11 A. Yeah. Makes sure that it is a fax number, not 12 a phone number, that we're calling, correct. 13 Q. Does Fax.com ever use a FaxCaster to just dial 14 random numbers to find out if they are fax numbers? 15 A. No, we never dial randomly to do that. 16 Q. I'm sorry? 17 A. No, not that I'm aware of. 18 Q. Does Fax.com enter into agreements with third 19 parties pursuant to which third parties will use their 20 equipment to dial random numbers and identify fax 21 numbers and then sell them back to Fax.com? 22 MR. BROADHURST: Object to the form. Object to the 23 relevance. 24 You can answer the question, if you understand it. 25 THE WITNESS: Can you repeat it again, the question. 38 1 BY MR. DARWIN: 2 Q. Sure. 3 Does Fax.com ever arrange with third parties, people 4 who are not employees of Fax.com, to dial random phone 5 numbers and look for fax tones and then sell the fax 6 numbers back to Fax.com? 7 A. No. 8 Q. Once Fax.com obtains a set of fax numbers from 9 Info USA, does Fax.com call those numbers and attempt to 10 obtain permission to send faxes, fax advertisements to 11 those numbers, before they're entered into the 12 database? 13 MR. BROADHURST: Objection to the form. 14 You can answer the question. 15 THE WITNESS: Well, when we -- when we buy numbers 16 from Info USA or broker, for that matter, or from our 17 clients, we are under the assumption that those are 18 permission-based fax numbers to start with because, in 19 other words, how would they have got them? So that's 20 our first assumption. We assume that we have permission 21 to fax them. 22 And then with a FaxCaster, we come into it to kind 23 of almost as a double operating or confirmation to make 24 sure it is a fax number and we're not wasting our time 25 dialing phone numbers or anything else. 39 1 We also send out what's called a permission document 2 which -- the permission document has two purposes. One 3 is to confirm that the number we're sending to is a fax 4 number, no. 1. No. 2, it does give people opportunity, 5 so to speak, to call the toll free number on that 6 particular document and therefore, if they didn't give 7 permission in the first place, they could take 8 themselves off before any marketing or advertising or 9 any other fax, for that matter, would go to them. 10 And the third purpose, which is really how the 11 company was founded in the first place, was to make 12 people aware of all the public service work that Fax.com 13 does and where, you know -- where at one point we are 14 able to derive some income and now we can't, but the 15 third -- the third way of sending out a permission 16 document is to let people know about our public service 17 works, such as we find missing children all over the 18 country. We work with about seven or eight various 19 missing children's organizations, such as Polly Klaas, 20 Operation Lookout. We used to work with the National 21 Center for Missing and Exploited Children. We work with 22 Canadian agencies. 23 We work with police departments throughout the 24 country. We did the Sandra Levy case. We've done the 25 van Dam case in San Diego. We do organ and organ 40 1 donation targeted faxing. We do blood drives. We do 2 emergency relief. We do -- we've done fugitive faxes. 3 So it's -- it's a real good way for us to get out a 4 public service message to what -- one of the other 5 functions Fax.com does besides, you know, one of our 6 ways of doing -- getting revenue, sending faxes. 7 BY MR. DARWIN: 8 Q. I'm going to break that down a little bit. Ask 9 you some questions about your response. 10 A. Sure. 11 Q. Okay. You say Fax.com makes an assumption that 12 the numbers it gets from Info USA or from brokers or 13 from clients, that those numbers are numbers for which 14 there was permission to send fax advertisements? 15 A. Correct. 16 Q. What is the basis of that assumption? 17 A. Well, how else would they get the number if 18 they hadn't spoken to the person and asked them for the 19 fax number? 20 Q. Well, you're aware, aren't you, that there are 21 machines that can dial fax numbers, dial random numbers? 22 A. Right. 23 Q. And identify numbers that are fax numbers from 24 the fax tone, correct? 25 A. I'm not aware of -- of anything. I mean, I 41 1 just know what our -- you know, what -- I think Info USA 2 does. What I've been told. 3 Q. What has Info USA told Fax.com about whether it 4 gets permission to send faxes to the numbers it sells to 5 Fax.com? 6 A. Well, from what I understand is that Info USA 7 that is three, 400 people on a daily basis that make 8 phones calls throughout the country asking people for 9 their fax numbers, businesses and individuals. 10 Q. And has Info USA represented to Fax.com that 11 the numbers that they sell to Fax.com have been cleared 12 as in the sense that the owners have given permission to 13 send fax advertisements to those numbers? 14 A. I don't think they've put themselves in a 15 situation to say either one of the two, whether they 16 have or they haven't. 17 Q. Has Fax.com ever asked Info USA to provide a 18 representation that any numbers it sells to Fax.com have 19 been cleared in the sense that the owners of the fax 20 numbers have given permission to send fax advertisements 21 to them? 22 MR. BROADHURST: I'm going to object to the form of 23 the question. 24 THE WITNESS: I don't believe we have because 25 it's -- it's kind of a ridiculous thing to expect them 42 1 to make representation that each and every one of the 2 numbers could possibly -- it's not -- it's a possibility 3 that any one of them -- numbers we get on a daily basis 4 or monthly basis could have changed or they spoke to 5 somebody else at an office of 1500 people that did give 6 permission. So I don't believe that representation 7 would make sense. 8 BY MR. DARWIN: 9 Q. Why not? 10 A. Well, for example, if somebody called the front 11 desk at this law firm and said, you know, "Do you mind 12 receiving faxes and can I have your fax number?" And 13 she said, "Sure," and she gave us a few fax numbers in 14 the office and one of the fax numbers comes to your 15 desk. And you didn't give permission. But your law 16 firm did. Somebody at the front desk said, "Yes, you 17 can send us a fax." She just looked at it as something 18 that she wants to get at the office on the fax machine, 19 and that's the reason why. 20 Q. Has Info USA ever given anything in writing 21 about what steps it does take to obtain permission from 22 the fax owners of the fax numbers it sells to Fax.com? 23 A. I don't know. I don't remember seeing any 24 document that in writing they would state that. As I 25 said before, how I think they would give a 43 1 representation. I don't think anybody would. For the 2 very reason I just gave you. 3 Q. Once the numbers are received from U.S. -- 4 Fax -- sorry -- Info USA, does Fax.com take any steps 5 itself to confirm that the owner of those numbers have 6 given permission to have fax advertisements sent to 7 them? 8 MR. BROADHURST: Object to the form. 9 THE WITNESS: I already answered that question. 10 BY MR. DARWIN: 11 Q. Speaking now specifically to fax -- I asked you 12 a general question. I'm speaking now specifically to 13 numbers received from Info USA. Does Fax.com take steps 14 to confirm the numbers coming from Fax. -- Info USA that 15 the owners of those numbers have given permission to 16 send fax advertisements? 17 MR. BROADHURST: Objection. Asked and answered. 18 Go ahead. 19 THE WITNESS: As I said earlier, I don't know if we 20 distinguish which numbers come from where. So we do 21 this for all fax numbers. So no. If -- if Info USA's 22 mixed with other brokers and our clients, that may well 23 be we'd do the same thing. We have the same methods in 24 place for all our fax numbers we get. 25 /// 44 1 BY MR. DARWIN: 2 Q. With respect to numbers that Fax.com buys from 3 brokers, does -- has Fax.com received any 4 representations from the brokers that the numbers 5 Fax.com is buying, the owners of those numbers have 6 given permission to have fax advertisements sent to 7 them? 8 A. Not on paper. Not -- verbally is one thing. 9 MR. BROADHURST: For the record, I'd just like to 10 state an objection to the relevance and the scope. 11 You can proceed. 12 BY MR. DARWIN: 13 Q. Has Fax.com received any verbal assurances or 14 representation from brokers that the numbers the brokers 15 are selling are numbers for whom the owners have given 16 permission to send fax advertisements? 17 MR. BROADHURST: Objection to the form and the 18 relevance. 19 Go ahead. You can answer the question. 20 THE WITNESS: As I said, I don't speak to every 21 single broker we do business with. And some have made 22 those representations. I guess some haven't. 23 BY MR. DARWIN: 24 Q. Does Fax.com assume that the numbers they're 25 receiving from the brokers are numbers that have been 45 1 cleared in the sense that permission's been granted by 2 the owners of those fax numbers to have fax 3 advertisements sent to them? 4 MR. BROADHURST: Objection to the form. Objection 5 to the relevance. 6 If you understand the question, you can answer it. 7 THE WITNESS: We assume that all numbers we get have 8 some sort of permission attached to it. Or else we 9 wouldn't have got them. 10 BY MR. DARWIN: 11 Q. What do you mean by "some sort of permission"? 12 A. Like the example I gave you of this law firm. 13 Somebody in the business had agreed to receive the fax. 14 Or else we wouldn't have got their fax number. 15 Q. You agree, don't you, that there are methods by 16 which brokers can obtain fax numbers that would not 17 involve those brokers obtaining permission to use the 18 numbers? 19 MR. BROADHURST: Object to the form of the 20 question. I think you're calling for speculation. 21 You can answer the question. 22 THE WITNESS: I mean, I couldn't speculate on how 23 they do their business. 24 BY MR. DARWIN: 25 Q. But do you understand generally that there are 46 1 methods of obtaining fax numbers that don't involve 2 calling people and asking them for their fax numbers? 3 MR. BROADHURST: Objection to the form of the 4 question. It's also been asked and answered. 5 THE WITNESS: It would just been -- I would just be 6 speculating. 7 BY MR. DARWIN: 8 Q. I'll just ask the same questions with respect 9 to numbers you receive from clients when clients turn 10 over their own databases. Does Fax.com make an 11 assumption that those numbers that it receives from its 12 clients are numbers for which the owners have given 13 permission to receive fax advertisements? 14 MR. BROADHURST: Object to the form, and I believe 15 it's also been asked and answered. 16 THE WITNESS: Yeah, we assume that we have 17 permission for those numbers. 18 BY MR. DARWIN: 19 Q. Does Fax.com ask its clients when it obtains a 20 list of numbers from its clients whether permission has 21 been given by the owner of those numbers to receive fax 22 advertisements? 23 A. I would assume that we do or each individual 24 salesperson would be responsible. 25 MR. BROADHURST: I'd just like to repeat. I don't 47 1 believe that Mr. Darwin is interested in asking for 2 assumptions. I'd instruct you just to answer what you 3 know. 4 THE WITNESS: Okay. I understand. 5 BY MR. DARWIN: 6 Q. Why do you assume that that's something that 7 the individual fax -- I'm sorry -- the individual 8 salespeople would ask? 9 A. Because our policy at Fax.com is to send out 10 faxes with permission, permission-based faxes. 11 Q. Why is that Fax.com's policy? 12 A. It's -- why is it our policy? Well, it just is 13 one of the policies we have. I don't have a detailed 14 explanation why we do things a certain way. That is a 15 policy that we have to send out -- we don't -- I 16 guess -- I guess to answer it in a business sense is we 17 don't send out faxes to people that don't want to 18 receive our faxes because as a business application, 19 it's a stupid thing to do. People that don't want to 20 receive faxes aren't going to purchase anything from the 21 faxes so we aren't going to keep our clients very long 22 and we're not going to get any result. So that's why I 23 guess the policy is to send faxes to people who want to 24 get faxes. 25 Q. Are there any other reasons of which you're 48 1 aware why that's the policy of Fax.com only to send 2 faxes to people who have given permission? 3 A. That's the main reason that we do it. 4 Q. Do you know if Fax.com has ever received from 5 its clients, when it buys or obtains fax numbers from 6 its clients, any representations or promises in writing 7 that the numbers are numbers for which the owners have 8 given permission to send fax advertisements? 9 MR. BROADHURST: Objection to the form, and I 10 believe it's already been asked and answered. 11 THE WITNESS: Well, I'm not aware either way whether 12 we -- whether we have or we haven't. 13 BY MR. DARWIN: 14 Q. Do you know if Fax.com salespeople are given 15 any written procedures that include asking the client 16 the question whether the fax numbers they're receiving 17 are those for which permission has been granted to send 18 fax advertisements? 19 A. I don't believe -- I really don't know. I 20 really don't know. It's not my -- it's not one of my 21 functions. 22 Q. Would Jeff Dupree be in a better position to 23 answer that question? 24 A. He may. 25 Q. Generally, are there any -- in other words, not 49 1 related to any specific topic, but does Fax.com give any 2 kind of, you know, instructions or guidelines to its 3 salespeople that -- reference guide, book, handbook, 4 that those salespeople use? 5 MR. BROADHURST: Objection to the form, and I 6 believe it calls for speculation. 7 You can answer the question. 8 THE WITNESS: As a I said, I don't know at this 9 point. If there is something in writing, it would be 10 more of a sales function. 11 BY MR. DARWIN: 12 Q. Does Fax.com have an internal internet site 13 that's available to all employees but is not accessible 14 from the outside? 15 A. No. 16 Q. You said Fax.com sends a permission document 17 out to the numbers it receives. Is that to every number 18 that it receives from any source, any fax number? 19 A. Yes. 20 Q. Does that permission document precede any 21 advertisements that are sent to the numbers in its 22 database? 23 MR. BROADHURST: Objection to the form, and I 24 believe it's already been asked and answered. 25 THE WITNESS: It precedes any fax that goes out. 50 1 It's the first fax that you would send out. 2 BY MR. DARWIN: 3 Q. What -- well, first of all, who is in charge or 4 who's responsible for sending these permission documents 5 out? 6 A. It would be a function of technical people, I 7 would assume, which would be an Eric Wilson question. 8 Q. Is the permission document that Fax.com sends 9 out a standard document that -- is there just one that 10 Fax.com has? 11 A. Yes. 12 MR. DARWIN: Do you know if that's been produced? 13 MR. BROADHURST: I'm not sure. I do not believe it 14 has been. 15 MR. DARWIN: Informally we'd like to see it, but I 16 can put that in writing. But informally we'd like to 17 see it. 18 MR. BROADHURST: With the understanding you'll put 19 it in writing to us, we will respond accordingly. 20 MR. DARWIN: I'm just giving you a head's up. 21 BY MR. DARWIN: 22 Q. Have you seen the permission document? 23 A. Yes. Yeah, I've seen it. 24 Q. Were you involved in creating it? 25 MR. BROADHURST: Objection to the relevance. 51 1 THE WITNESS: No. 2 BY MR. DARWIN: 3 Q. Do you know who created it, designed it? 4 A. No. 5 Q. And the permission document is sent to every 6 fax number Fax.com receives from Info USA, from brokers, 7 or from its clients? 8 MR. BROADHURST: Objection. Asked and answered. 9 THE WITNESS: It's sent to every fax number we have. 10 BY MR. DARWIN: 11 Q. In terms of timing, when is the permission 12 document -- between the time when Fax.com obtains a fax 13 number is the starting point, when in time does Fax.com 14 send the permission document out? 15 MR. BROADHURST: Asked and answered. 16 You can answer the question. 17 THE WITNESS: Yeah, I wouldn't have an exact time 18 frame. All I know it goes out before the second fax -- 19 the second fax goes out afterwards. I don't think 20 there's a particular time frame. 21 BY MR. DARWIN: 22 Q. I'm sorry? It goes out -- the second? 23 A. It would go out prior to anything else going 24 out. There's no time frame based on when we get the 25 number it goes out. 52 1 Q. When did Fax.com start sending the permission 2 documents out to the numbers in its fax -- in its 3 database? 4 A. That's the policy we've had since Day 1. 5 Q. Since Fax.com was founded? 6 A. Correct. 7 Q. So for any number that's in Fax.com's database, 8 from Day 1, a permission document should have been sent 9 out to each one of those? 10 A. Should have been, yes. 11 Q. When a client comes to Fax.com with its own 12 database of numbers and says, "I want to do a broadcast. 13 Here are the numbers I want to use," does Fax.com send 14 out permission documents to those numbers before the fax 15 broadcast for the client occurs? 16 MR. BROADHURST: Objection. Asked and answered. 17 We've gone over this ground a couple times. 18 You can answer the question. 19 THE WITNESS: No. If a client provides its own 20 database, there's no need to -- at that point to send a 21 permission document. 22 BY MR. DARWIN: 23 Q. And why is that? 24 A. Because it's the client's -- because it's the 25 actual client's database going out with the client's 53 1 literature to his database. It's one specific piece of 2 data going to one specific database. 3 Q. Does it matter to Fax.com that the faxes -- 4 even when the client is supplying its own numbers, the 5 faxes are actually being sent from Fax.com? 6 MR. BROADHURST: Objection to the form. 7 You can answer the question. 8 THE WITNESS: It's a little different because we are 9 just merely at that point the carrier for the 10 client. When we utilize our own data, we have to be a 11 little more responsible and that's why any data after 12 the fact we would have a permission document sent first 13 to let them know that Fax.com is sending the 14 information. 15 BY MR. DARWIN: 16 Q. And just so I'm straight, before Fax.com 17 incorporates that client database into its own for 18 future use -- 19 A. Yes. 20 Q. -- it will send out the permission documents? 21 A. Absolutely. 22 Q. What does -- well, strike that. 23 Does the permission document ask the recipient to 24 call back and give permission? 25 MR. BROADHURST: Object to the relevance. 54 1 You can answer the question. 2 THE WITNESS: There's a couple of ways that -- the 3 applicant can call back the toll-free number and 4 reconfirm that they want to receive faxes, or they can 5 simply call the number and delete themselves from the 6 database for future use. Or they can -- I guess the 7 third choice, they can choose to do nothing at that 8 point. 9 BY MR. DARWIN: 10 Q. If the recipient of a permission document from 11 Fax.com does not respond, will Fax.com thereafter send 12 fax advertisements to that recipient? 13 A. I believe so. I believe so. 14 Q. Does Fax.com consider a non-response from the 15 recipient of a permission document to have given 16 permission to send fax advertisements? 17 MR. BROADHURST: Objection to the form of the 18 question. Objection to the extent that it calls for a 19 legal conclusion. 20 THE WITNESS: Yeah. So -- I mean, we don't really 21 assume anything. But we -- we -- the only assumption we 22 have is that the initial number that we got is a 23 permission-based number and this is just merely a second 24 confirmation. So we don't make any assumptions once it 25 goes out. 55 1 BY MR. DARWIN: 2 Q. Fax.com doesn't require a response to a 3 permission document in which the recipient says, "Okay, 4 send me fax advertisements," before it will send that 5 recipient additional fax advertisements? 6 MR. BROADHURST: Objection to the form of the 7 question. 8 You can answer it if you understand it. 9 THE WITNESS: Say the question again. 10 MR. DARWIN: Let me rephrase it. It was awkward. 11 BY MR. DARWIN: 12 Q. Fax.com doesn't require the recipient of a 13 permission document to call back and affirmatively say, 14 "You have my permission to send me fax advertisements," 15 before Fax.com will send fax advertisements to that 16 recipient, right? 17 A. I can't answer that question accurately. 18 Because it's more of a technical -- it's more of a 19 technical question on how the process works, you know, 20 when somebody calls back, it's just added or it's not 21 added in. I'm not sure exactly what the process is once 22 the permission document goes out, whether it gets sent 23 out or doesn't get sent out. So I wouldn't be able to 24 answer that question. 25 Q. Does Fax.com keep any records of recipients of 56 1 permission documents calling back and saying, "Yes, go 2 ahead and send me advertisements," or, "No, please 3 de-list me from your database"? 4 A. I -- I don't know if there's any record 5 keeping. 6 Q. Who would know? 7 A. Possibly Eric. Possibly. 8 Q. Does Fax.com customarily for any fax it sends 9 out, fax advertisement it sends out, put a phone number 10 at the bottom that allows the recipient to call back and 11 have that fax number removed from the database? 12 MR. BROADHURST: Objection to the form of the 13 question. I also believe it calls for speculation. 14 But you can answer the question. 15 THE WITNESS: Does fax -- okay. Repeat the question 16 again. 17 BY MR. DARWIN: 18 Q. For any fax advertisement -- 19 A. Yeah. 20 Q. -- that Fax.com faxes out -- 21 A. Yes. 22 Q. -- do those fax advertisements always include a 23 number, a toll-free number, at the bottom or somewhere 24 on the fax page -- 25 A. Yeah. 57 1 Q. -- that allows the recipient to call back and 2 have their number taken out of the database? 3 A. Yes. 4 Q. Are there any records kept by Fax.com of 5 people responding and having their -- asking their -- 6 for their numbers to be taken out of the database? 7 A. Yes, I believe there are records of that. To 8 the extent of how they're kept, I don't know. 9 Q. Is there anyone at Fax.com who's in charge of 10 receiving those de-list -- I'll call them de-list calls. 11 A. Yeah. Deletion. Yeah. I believe it's an 12 automatic process. I don't believe any one person would 13 be in charge, so to speak. 14 Q. Who at Fax.com is involved in the process of 15 processing de-list calls? 16 A. I mean, it would be -- I think it would be more 17 of an Eric question. He would be able to answer that, 18 who would be in charge to do that function. 19 MR. BROADHURST: Off the record. 20 (Discussion off the record.) 21 BY MR. DARWIN: 22 Q. When a recipient calls the toll-free number to 23 have their number removed from the database, do they get 24 an automated or computer-generated response? 25 A. Yes. 58 1 Q. Do you know the method by which a number is 2 removed from the database once someone calls in to the 3 de-list number and asks for that to be done? 4 A. I don't know the technical details on how that 5 works. I do know we take the numbers out. That's all. 6 Q. And that's more within Eric's realm of 7 responsibility? 8 A. Yeah. 9 Q. Is there anyone else who might be more intimate 10 with the details of that process? 11 A. No. That would be Eric. 12 Q. Do you know if -- when someone calls the 13 toll-free de-list number, do you know how quickly their 14 number is removed from the database? 15 A. If I'm not mistaken, we ask for a minimum of 16 seven days, and that's what we say, seven days to delete 17 the number completely. 18 Q. Do you know why it takes seven days? 19 A. Yes. Because when jobs are profiled, they are 20 normally profiled for about a week at a time. So if we 21 have bad data in the profiles, without getting into the 22 technical details, I believe that once a bunch of 23 numbers have been profiled for the week's job, Monday 24 through Sunday, for example, and it goes into the 25 system, it's there and it just goes through the course 59 1 automatically for the week. 2 And after fax -- for example, you called in on 3 Monday and say, "I want to take out these five numbers," 4 we take them out immediately on the Monday out of the 5 database, so to speak. I know it gets taken out. But 6 the problem is there's still data that would be planned 7 for the week before that's going through, and we can't 8 remove that data. That's why we say seven days. But 9 the following Monday or that week, I should say, 10 starting on that Monday, Tuesday, Wednesday, when new 11 data's being filed and run for the next week, those 12 numbers won't be available. So you may get a lag for 13 that week period, but that following Monday it'll be 14 totally gone. 15 Q. Is it your understanding that there's a 16 technical reason why numbers can't be removed from the 17 lists that are being faxed for the very week when the 18 de-list call is made? 19 A. I think there would be more of a -- a 20 technical, you know, it's something for Eric. He may be 21 able to give the reason of why we can't shut down our 22 entire -- I think it's got to do with, you know, having 23 to shut down our entire operation, you know, maybe even 24 a couple of days and then take everything out and then 25 redo everything. 60 1 It would -- it would basically shut us down, out of 2 business. I believe. But, as I said, Eric may be able 3 to explain a little bit better. 4 Q. Is it your understanding that if, in your 5 hypothetical, someone calls on a Monday and says, 6 "Please take my number out of the database," that it's 7 possible that person can continue receiving faxes for 8 the rest of that week? 9 A. That's very possible. And we let people know 10 that too. We ask them just to be patient for us. We 11 apologize for the problem. We say, "Can you be patient 12 with us. You may receive a couple of faxes sporadically 13 through the week. If you happen to receive any the 14 following week, then we have a problem," and that's when 15 we would, you know -- then we would have a problem at 16 that point because that's something is wrong at that 17 point. Or they -- they didn't give us the correct 18 numbers. That's -- that's a strong possibility too. 19 Some people don't give us the -- all their numbers. So 20 they may get another number. 21 Q. Do you know how many de-list calls Fax.com 22 receives a day? 23 A. How many what? 24 Q. De-list calls. 25 A. I wouldn't have the exact number off the top of 61 1 my head, because it's automated. 2 Q. Can you estimate? 3 A. No. 4 Q. We've been going for an hour and a half. Why 5 don't we take about a 10-minute break. 6 (Recess taken.) 7 MR. DARWIN: Back on the record. 8 BY MR. DARWIN: 9 Q. Who at Fax.com came up with the policy of 10 sending out the permission documents? 11 A. I don't remember who the exact individual was. 12 It was probably a combination of me and Eric just 13 working on how to comply. 14 Q. Are you and Eric primarily in charge of setting 15 the policies of the company? 16 A. Yeah. Oh, yeah. 17 Q. Is it fair to say that after someone has called 18 the de-list number on the bottom of a fax advertisement 19 and asked for their number to be removed from the 20 database that Fax.com doesn't have permission to send 21 them faxes anymore? 22 MR. BROADHURST: Object to the form of the question. 23 And object to the -- to the extent that it calls for a 24 legal conclusion. 25 You can answer the question if you understand it. 62 1 THE WITNESS: The -- legally-wise, I don't know. 2 But our policy is if someone does call in, we don't send 3 them faxes again ever. 4 BY MR. DARWIN: 5 Q. You do acknowledge, though, that it's likely 6 that some faxes may still go to that person if they call 7 during the rest of that week, even after they call and 8 ask for that number to be removed? 9 A. Well, that is our policy. We do make that 10 clear when we tell the person or if they listen to the 11 automated voice message, it does say allow seven days 12 for it to be removed. 13 Q. Does Fax.com provide any mechanism for someone 14 to object to that seven-day lag time? 15 MR. BROADHURST: Object to the form of the 16 question. 17 If you understand it, you can answer it. 18 THE WITNESS: I think I do understand it. I think 19 we allow people to leave a message on our voice system. 20 So they don't just, you know -- it just isn't -- it's 21 kind of an irritation. So, yeah, we do call those 22 people back. So if somebody does have a problem with 23 that, we'll call them back and talk them through it and 24 basically explain to them how it works. 25 /// 63 1 BY MR. DARWIN: 2 Q. If someone calls to have their number 3 de-listed, is there any way for them to make sure that 4 no further faxes will come to them between the time they 5 call and the next -- 6 A. Seven days. 7 Q. Yeah, seven days. 8 A. When you say "mechanism" -- 9 Q. Is there any way -- 10 A. That it could happen? 11 Q. -- to make sure? 12 A. I mean, it is -- anything's possible. I mean, 13 a mistake. No one's perfect. Mistakes happen all the 14 time. But 99.9 percent of the time, if somebody gives 15 the correct number and they put it into the system 16 correctly or we put it into there correctly, I would say 17 99.9 percent of the time after the seven-day period they 18 would no longer receive that particular -- that 19 particular -- they wouldn't receive anything to that 20 particular fax number. 21 Q. Would you agree that faxes sent before the end 22 of that seven-day lapse are faxes that are sent -- the 23 fax advertisements that are sent to the recipient 24 without that recipient's permission? 25 MR. BROADHURST: Object to the form of the question. 64 1 Also object to the extent it calls for a legal 2 conclusion. 3 You can answer the request. 4 THE WITNESS: Repeat the question, please, Rick. 5 (Record read.) 6 MR. BROADHURST: To the extent that it's necessary, 7 I repeat the objection. 8 THE WITNESS: We don't intentionally send faxes to 9 anybody without permission. So we wouldn't know that we 10 were sending something without permission until somebody 11 calls us for whatever reason to say they would prefer 12 not to receive faxes any longer. It doesn't mean they 13 haven't given permission in the first place. They 14 don't want to receive faxes any longer. That's why we 15 have a deletion line so that people that no longer wish 16 to receive these faxes, they have an option of not 17 receiving them even though they may have given 18 permission prior. 19 BY MR. DARWIN: 20 Q. You would agree, wouldn't you, that faxes that 21 a recipient who has asked for their number to be removed 22 from their database are faxes that are sent to them - - 23 the next following seven days are faxes they don't want, 24 haven't given permission for? 25 MR. BROADHURST: Objection to the form of the 65 1 question to the extent that it calls for a legal 2 conclusion and it's been asked and it's been answered. 3 THE WITNESS: Logically speaking. I mean, if we 4 were in a perfect world, which we're not, if somebody 5 says to me, "I don't want to receive faxes," obviously 6 they don't want to receive any more faxes. You know, 7 99.9 percent of the situations we have only has one fax 8 number. We've got from fax numbers -- the four years 9 we've been in business we've never had an issue. We've 10 had this many fax numbers for one company. And it was 11 just, you know, that's what I'm saying, it was just a 12 very unusual circumstance that this happened. 13 So, generally speaking, the faxes that they did get 14 on those days they didn't get again. They got faxes to 15 other numbers that we hadn't sent to prior. It was just 16 a very, very unusual situation. So, you know, obviously 17 because of it we have to change certain things in the 18 way our system works to be able to deal with this in the 19 future. But when it only -- if any person's -- three 20 and a half years or whatever the case is, it happens for 21 the first time, you know, you didn't know. We didn't 22 have any way to be able to, you know, take care of the 23 situation, unfortunately, you know. 24 Q. Does Fax.com have any records of the faxes that 25 were sent to Covington & Burling in June of 2001? 66 1 A. I don't know. I don't know to what extent we 2 have or don't have records pertaining to that. 3 Q. Who would know? 4 A. I'm not exactly sure who in the company would 5 have that information. Eric may be able to answer that 6 question better than I would. If we -- if we have a 7 record at all. 8 Q. How do you know that the numbers to which fax 9 advertisements were sent at Covington & Burling and 10 Covington called and said, "Please take our numbers out 11 of the database" -- 12 A. Right. 13 Q. -- were different than the ones that were sent 14 before? 15 MR. BROADHURST: Object to the form of the 16 question. 17 You can answer the question if you understand it. 18 THE WITNESS: I think I understand it. 19 One of the things, just common sense, the rule is we 20 don't send to the same numbers over and over and over 21 again. We wouldn't send to a single number four times 22 in a day or four times in a week because business-wise, 23 it doesn't make sense. Because if you did that, 24 everybody would want to be taken off the list, so to 25 speak, and we'd be out of business. 67 1 So, you know, from what I can understand is when we 2 do profile and send numbers, we only do it one time in 3 that week period. And that's where the whole issue 4 occurred. In other words, we only have one number. We 5 never had a problem. We only have one number it goes 6 to, and it would go to them on Monday and they would 7 tell us on Monday take it out and we would take it out, 8 and the following Monday and Tuesday, they wouldn't 9 receive it. 10 But because there was an array of numbers, more than 11 one, even though the first few numbers we are making the 12 assumption that those numbers that we sent to were 13 different from the numbers that may be Tuesday or 14 Wednesday or Thursday or Friday, they were all different 15 individual numbers, which is very unusual for us. 16 So that's -- that's -- maybe that kind of explains 17 why I feel that we didn't duplicate the numbers, so to 18 speak. It was just more than one number. 19 BY MR. DARWIN: 20 Q. Will Fax.com ever send more than one 21 advertisement to the same fax number in a week? 22 A. It -- like I said, it can happen. We really 23 try to avoid that happening. Because, once again, 24 whether they get cell phone ad or restaurant ad, 25 whatever, it's to somebody that doesn't want to receive 68 1 too many faxes, whether it's different type fax, we 2 still wouldn't want to send to that one number two 3 faxes. Even if they are different faxes, we would 4 attempt not to do that. I'm not saying it's never 5 happened and one number a week has gotten two different 6 types of faxes. 7 Q. So the general practice is not to do it, but it 8 does occur from time to time? 9 A. I wouldn't say for a fact that it has ever 10 occurred or it hasn't. I'm just making an assumption 11 that, you know, it's not a perfect world and, yes, 12 occasionally I would assume maybe it could happen that 13 one number could get two faxes in a week. 14 Q. You've used the word "profile" a couple times. 15 Tell me what you mean when you use the word a "profile." 16 A. Profile is just what we spoke about earlier 17 when you said you do a fax broadcast and people can 18 choose. So the profile would be what they chose. If 19 they choose a certain pack of geographic numbers or SIC 20 numbers, that's considered a profile. 21 Q. And each fax advertisement has a different 22 profile? 23 A. Correct. 24 Q. I'm trying to understand your testimony. 25 Different customers are generally not given the same 69 1 profile for their advertisements for the same week? 2 A. Yes. 3 Q. And does Fax.com generally try to make sure 4 that profiles do not overlap if they're being sent out 5 on the same week? 6 A. Yes. 7 Q. Once a fax broadcast is completed, does Fax.com 8 report -- are there any type of report or information to 9 the customer about the broadcast? 10 MR. BROADHURST: Object to the form of the question 11 and the relevance and -- 12 THE WITNESS: I'm not involved in seeing or looking 13 at those reports. But I would imagine that we do give 14 the customer some kind of reporting back. I don't know 15 the detail. But I think it would be as simple as how 16 many went out. 17 BY MR. DARWIN: 18 Q. Is it just done as an element of customer 19 service, you know, "Your fax broadcast went out and this 20 is how many went through"? I mean, is that something 21 that Fax.com -- 22 A. It sounds kind of right to me. That sounds 23 kind of how it works. 24 Q. What information is provided to clients when -- 25 when Fax.com reports to a client about a fax broadcast? 70 1 A. As I said, I mean, I -- I don't recall seeing 2 it for a while, and I'm not sure what actual reports are 3 being generated, if any, at this point. But I'm making 4 an assumption it would be very simple, how many went 5 out, how many went through. Something as basic as that. 6 And maybe what it cost at the end of the page, you 7 know. 8 Q. Are those reports -- have you ever seen the 9 report like that? 10 A. I've seen the few -- I've seen numbers of 11 different types of reports that have come out. 12 Q. How long has Fax.com been giving reports like 13 that to its customers? 14 A. I don't remember the exact time that we started 15 doing it. 16 Q. Do you think it was before last year? 17 A. I couldn't say exactly when we started doing 18 the reporting. 19 Q. Who at Fax.com is responsible for providing 20 reports to customers about the success of a fax 21 broadcast? 22 A. It would be each individual salesperson would 23 be responsible for providing their client whatever they 24 wished to have. 25 Q. Have some clients asked for more additional -- 71 1 or more detail to be contained in their reports that 2 they get about a fax broadcast? 3 A. That would be more a question how to deal with 4 clients so that would be more of a question that a 5 salesperson would be able to answer. 6 Q. Are you aware that anyone has ever asked for 7 that additional detail? 8 A. I'm not aware. 9 Q. In what form have you seen reporting to clients 10 take? You said you've seen some over the years. What 11 forms have they come in? E-mails or spreadsheets? 12 A. I think I've seen an e-mail that basically 13 said, "You tried 'X' amount, 'Y' amount went through, 14 and the price per fax was 'Z,' and that's how much you 15 owe." That is what -- type thing. It's very, very 16 simplistic. 17 Q. Does Fax.com maintain those reports anywhere? 18 A. They may be retained for a month at a time, I 19 would assume. But I -- I don't think we keep, you know, 20 records for six or eight months at a time on those 21 reports. 22 Q. Are they destroyed at a certain point? 23 A. Yeah. They would be -- we shred our stuff 24 after it's not relevant any longer. 25 Q. Does Fax.com have an official document 72 1 retention policy for how long it would keep records? 2 MR. BROADHURST: Objection to the relevance. 3 You can answer the question. 4 THE WITNESS: Not that I'm aware of. I don't think 5 we have anything in place that certain documents have to 6 be kept for a certain amount of time. There's nothing 7 in writing on that. 8 BY MR. DARWIN: 9 Q. Did you say Fax.com shreds documents after 10 they're no longer relevant? 11 A. Normal waste disposal. Whatever the -- 12 California is into the -- what do you call it -- 13 recycling, stuff like that. So we have recycling bins 14 that this company brings in and we throw the stuff away 15 that we don't need. 16 Q. How about from computers; are electronic files 17 deleted on a regular basis? 18 A. No, there's no policy to do that. 19 Q. Do individual salespeople have their own 20 computers? 21 A. Yes. 22 Q. Do you know -- do individual salespeople -- 23 are they the ones that generate the reports to a client 24 about the success of a fax broadcast? 25 MR. BROADHURST: Objection. Asked and answered. 73 1 THE WITNESS: Yeah. I don't know. I don't know if 2 they do it or if it's more of a central sales 3 application that gets done. 4 BY MR. DARWIN: 5 Q. How are the numbers in terms of the success of 6 faxes versus ones that didn't go through, how are they 7 compiled -- 8 MR. BROADHURST: Objection to the form of the 9 question. 10 BY MR. DARWIN: 11 Q. -- to report to a client? 12 MR. BROADHURST: I'm sorry. 13 Objection to the form of the question. And also 14 objection to the relevance. 15 THE WITNESS: I don't know. It's more of a 16 technical question. 17 BY MR. DARWIN: 18 Q. Do you know anyone at Fax.com who might be 19 knowledgeable about how they compile that information to 20 report to customers? 21 A. Eric may have someone who does that. I don't 22 know. 23 Q. Does Fax.com in the course of doing a fax 24 broadcast create any record, whether in hard copy or 25 electronic, of which numbers successfully received 74 1 faxes? 2 MR. BROADHURST: Objection to the form; objection to 3 relevance. 4 You can answer the question. 5 THE WITNESS: I don't believe it's as detailed as 6 that, as I said before. It would be maybe a total 7 number -- total tried, total sent. But I truly don't 8 believe it's each number is kept as a record. I don't 9 think so. 10 I think that would be -- technically be very 11 difficult. But it's really a technical question. So 12 I'm not 100 percent sure on how that works. 13 BY MR. DARWIN: 14 Q. Who might be knowledgeable about any records 15 are created about which -- 16 A. Possibly Eric. Eric may be able to direct you 17 to the -- 18 Q. Has Eric ever told you that he can figure out 19 which fax numbers received the faxes and which ones did 20 not? 21 A. No, we don't really -- never really discussed 22 it. 23 Q. When faxes do not go through to a fax number, 24 does Fax.com remove that number from its database? 25 A. Once again, that would be more a technical 75 1 application. I wouldn't know the answer to that 2 question. 3 Q. Is that something that you've ever asked them 4 to do? I mean, if a fax number isn't -- if faxes aren't 5 going through to a number, take it out, it's no good? 6 A. Well, it's not really because -- the fax 7 numbers change all the time and sometimes a fax machine 8 may be on, sometimes it may be off. So it would be 9 hard if you had to go through from one time to the next 10 time, that means it's not going to go through the next 11 time. So that's why I don't know if it's a specific 12 policy. Just because something doesn't go through, you 13 take it out, as you said. I don't know. 14 Q. Is there any procedure or policy at Fax.com 15 whereby if a successive five faxes or some number of 16 faxes in a row don't go through to a number, the number 17 is deleted somehow from the database? 18 A. It may. I mean, that makes sense. It may be 19 something Eric has set up in the database. 20 MR. BROADHURST: You can probably ask him that 21 question. 22 BY MR. DARWIN: 23 Q. Does Fax.com receive any phone bills from the 24 phone company that reflect the numbers to which faxes 25 were sent whether they went through? 76 1 A. Once again -- 2 MR. BROADHURST: Objection to the relevancy. 3 THE WITNESS: -- I don't -- I don't handle the phone 4 bills so I wouldn't be able to answer that question. 5 BY MR. DARWIN: 6 Q. Who handles the phone bills? 7 A. There would be somebody within Eric's 8 department. 9 Q. Have you ever seen Fax.com's phone bills? 10 A. I've seen the front page where it -- 11 Q. With the big number on the front? 12 A. Yeah. 13 Q. Do you know if Fax.com actually receives hard 14 copy phone bills from the phone company? 15 A. I don't believe we do. I think it would be too 16 many pages. 17 Q. Is it transmitted by e-mail or downloaded? 18 A. No. As I said, I don't know how they do it. 19 That's more the technical side of things, how they get 20 it. 21 Q. Does Fax.com keep its phone bills for any 22 length of time? 23 A. No. 24 Q. Does Fax.com destroy its phone bills? 25 A. It would be similar policy. You might get it 77 1 for 90 days and then get rid of it at a certain point. 2 There would be a certain window. I know we certainly 3 wouldn't hang on to phone bills for years at a time. 4 Q. Are most of Fax.com's records destroyed after 5 90 days? 6 MR. BROADHURST: Objection. 7 THE WITNESS: I wouldn't -- I don't know, to answer 8 that question. 9 BY MR. DARWIN: 10 Q. Do you know if Fax.com still has in its 11 possession any records regarding the fax broadcasts that 12 were sent to Covington & Burling in June of 19- -- in 13 June of 2001? 14 A. How long ago was that? 15 Q. June of 2001. 16 MR. BROADHURST: I'd like to object to the extent 17 that it assumes a fact not in evidence. 18 THE WITNESS: Do we have it? 19 MR. BROADHURST: Was it actually transmitted to 20 Covington & Burling? 21 But you can answer the question. 22 THE WITNESS: I highly doubt it. I highly doubt if 23 we have records from nine months ago. 24 BY MR. DARWIN: 25 Q. Why? 78 1 A. Because just the sheer volume of keeping that 2 much information, I don't think it's done. 3 Q. Is Fax.com able to search its database of fax 4 numbers to find out how many or which broadcasts that 5 number has been sent? 6 A. I don't know. I mean, as I said, it would be 7 more of a database kind of question, how that works. 8 Q. Is that something Eric would know more about? 9 A. He would know. 10 Q. Do you know if Fax.com's database of fax 11 numbers is searchable in any way? 12 A. Yeah. I know it's searchable to profile it, 13 to set a job up. Because we discussed that earlier how 14 you can go to a certain area and stuff. So I guess you 15 could search it by criteria that's listed. 16 Q. And those criteria would be SIC code or area 17 code? 18 A. I'm not sure how they do it. I'm not sure how 19 they search, what criteria they put together with the 20 number to be able to search that number. I don't know 21 if they do it by the address that's attached to the 22 number or that type of thing. I don't know. 23 Q. With respect to each fax number in Fax.com's 24 database, does Fax.com have additional information about 25 the owner of that number? 79 1 A. I don't know the format of how the database is 2 kept and what information we get, and if we keep it, we 3 don't. That would be more of a database type question. 4 So -- 5 Q. Well, let me just ask you. I mean, does 6 Fax.com ever receive in connection with a list of fax 7 numbers when it buys those numbers from Info USA or from 8 the brokers? 9 A. I believe we do. I believe you can get a fax 10 number with the address, phone numbers on occasion and 11 sometimes e-mail. You can get complete records. You 12 can get -- if we keep them, I don't know how that works. 13 Q. Is that customary? Do fax numbers that Fax.com 14 buys usually come that additional information? 15 A. Some do; some don't. 16 Q. What examples -- you've said there's -- 17 sometimes there's an address or some other information. 18 What information have you seen that comes along with the 19 fax number? 20 A. I've seen really mainly an address, an address 21 with -- sometimes an e-mail, occasionally there may even 22 be some kind of a phone number as well. 23 Q. How about a name, does it ever come with names? 24 A. Some of our data does come with names; some of 25 the customer data may come with names as well. 80 1 Q. How about the information that Fax.com obtains 2 from Info USA, does that ever come with that type of 3 additional information, address, name? 4 A. You know, I don't know because I don't receive 5 that -- I don't receive the data. So I don't know 6 that. 7 MR. BROADHURST: I'd just like to state an objection 8 to the relevance of this entire line of questioning. 9 You can go ahead. 10 BY MR. DARWIN: 11 Q. If Fax.com were asked to find out if it sent 12 any faxes to the number ranges owned by Covington & 13 Burling in June of 2001, what, if anything, could 14 Fax.com do to find out one way or the other if faxes 15 were sent to those numbers? 16 A. I don't know. I don't know what could be done 17 to figure that out. 18 Q. Is there anyone at Fax.com who would know how 19 to, what records exist and whether they could be 20 searched during the fax broadcast? 21 A. Possibly. Possibly Eric. 22 MR. BROADHURST: Getting tired? 23 THE WITNESS: Yeah. There's a few minutes left 24 before lunch. 25 /// 81 1 BY MR. DARWIN: 2 Q. Is there anyone at Fax.com who is watching 3 equipment or a computer or a screen to see which numbers 4 are being dialed? 5 A. No, I don't believe so. 6 Q. I'm going to touch on something I asked about 7 earlier, but I just want some clarification. When a 8 client comes to Fax.com to do a broadcast, what is the 9 role of the client against the role of Fax.com in 10 deciding what the profile of the broadcast will be? 11 MR. BROADHURST: I'd just like to object to this. 12 This question's been asked and answered. We've been 13 over this ground a number of times. 14 THE WITNESS: Depends on the client. Depends on how 15 active he wants to be. 16 BY MR. DARWIN: 17 Q. Does Fax.com ever get passive clients or 18 clients who are just less knowledgeable for whom Fax.com 19 has to offer some advice about where to target its 20 broadcast? 21 A. Maybe. As I said, I wouldn't be able to 22 accurately answer those questions because I don't deal 23 with the clients. 24 Q. I'm going to mark as this as Plaintiff's 25 Exhibit 1. 82 1 (Exhibit 1 marked for identification.) 2 BY MR. DARWIN: 3 Q. I'm going to hand you your own copy of what's 4 been marked as Plaintiff's Exhibit 1 and ask if you've 5 ever seen that before. 6 MR. BROADHURST: I'd like to instruct the witness to 7 take his time with the document and let Mr. Darwin know 8 when you're ready to proceed. 9 THE WITNESS: I believe I've seen this document 10 before, yes. 11 BY MR. DARWIN: 12 Q. Do you recognize it? 13 A. Could have. Let's just go through it a little 14 bit. 15 MR. BROADHURST: Again, take your time, look at the 16 entire document, and let Mr. Darwin know when you're 17 ready to proceed. 18 THE WITNESS: Okay. 19 BY MR. DARWIN: 20 Q. Have you seen Exhibit 1 before? 21 A. Have I seen this particular one before? 22 Q. Yeah. 23 A. I believe I have. 24 Q. What I marked as Exhibit 1 is the second 25 amended complaint that was filed by Covington & Burling 83 1 in this case. Do you recognize any of the 2 advertisements that are attached as exhibits to the 3 complaint? And that's all the tabs except for tab F. 4 MR. BROADHURST: The question was, does Mr. Katz 5 recognize the documents attached A through E and G and 6 H -- 7 MR. DARWIN: Correct. 8 MR. BROADHURST: -- at the end? 9 THE WITNESS: Yeah. 10 MR. BROADHURST: Yeah. 11 THE WITNESS: I recognize this. 12 MR. BROADHURST: State an objection to the form of 13 the question. 14 THE WITNESS: At a glance, it looks similar to 15 faxes we may have sent out. 16 BY MR. DARWIN: 17 Q. Do you recognize any of the exhibits as faxes 18 Fax.com has sent out in the past? 19 MR. BROADHURST: Objection. Asked and answered. 20 You can go ahead. 21 THE WITNESS: I don't know. They look similar to 22 faxes we may have sent out. 23 BY MR. DARWIN: 24 Q. Which ones? 25 A. These are all the same. This one's different. 84 1 We may have sent out two. The others are all the same 2 fax just over and over again. 3 Q. Let me just -- for a cleaner record, attached 4 as Exhibit A to the complaint, which we've marked as 5 Exhibit 1, is a one-page document. At the top it said 6 "Orlando Beach Bahamas"? 7 A. Right. 8 Q. Is that a fax advertisement that you recognize 9 at some point in time being sent out by Fax.com? 10 A. No. I said it looks similar to a fax we may 11 have sent out. I don't know for a fact that this was 12 ever sent out. 13 Q. Do you know if -- strike the question as 14 standing. 15 For what client has Fax.com ever sent out an 16 advertisement like this? 17 MR. BROADHURST: I'm sorry. I'm sorry to interrupt. 18 Did you just strike the question that hadn't been 19 answered? 20 MR. DARWIN: No. It was the mumbled beginning of 21 this one. 22 MR. BROADHURST: Okay. I'm sorry. Forgive me. 23 Could you repeat the question as to this -- the standing 24 question. 25 /// 85 1 BY MR. DARWIN: 2 Q. You said this looks familiar to you? 3 A. Okay. 4 Q. Exhibit A, correct? 5 A. Right. 6 Q. Why does it look familiar to you? 7 A. It just looks familiar to the kind of faxes 8 that we do send out. 9 Q. Do you recognize the de-list number in the 10 bottom right-hand corner? 11 MR. BROADHURST: For the record, I take it you're -- 12 there are two numbers at the bottom of the page, both to 13 the right. 14 MR. DARWIN: I'm talking about the most -- the 15 bottom-most number. 16 THE WITNESS: Yeah, we have more than one deletion 17 number. I don't have them all memorized. So without 18 having the entire list in front of me of each and every 19 one of the numbers we have, I couldn't say for certain 20 that this was ours or not. 21 BY MR. DARWIN: 22 Q. Does the advertisement marked or attached as 23 Exhibit A to the complaint remind you of any 24 advertisements Fax.com has sent out for International 25 Marketing & Research, Inc.? 86 1 MR. BROADHURST: I'd like to object to the form. 2 And you can answer the question. 3 THE WITNESS: I've never heard of International -- 4 this particular company besides what's here on this 5 piece of paper. So I wouldn't be able to put the two 6 and two together. 7 BY MR. DARWIN: 8 Q. If this in fact was a fax sent out by Fax.com, 9 do you have any knowledge about who would have been 10 involved in making the decision about to whom it would 11 be sent helping to design the profile? 12 MR. BROADHURST: Objection to the form of the 13 question. And objection in that it calls for 14 speculation. 15 THE WITNESS: It certainly wouldn't have been one 16 individual. It could be a host of people involved in 17 making sure this fax went out. Within the company. 18 BY MR. DARWIN: 19 Q. Have you ever inquired within Fax.com about who 20 the client was for the fax that's attached as Exhibit A? 21 A. No. 22 Q. Do you know if Fax.com has sent out 23 advertisements advertising "Orlando and Beach and 24 Bahamas" for any client? 25 A. I believe Fax.com has sent out travel ads 87 1 similar to this in the past. 2 Q. Do you know who the customers were that asked 3 for those advertisements to be sent? 4 A. No. 5 Q. Do you recall which salesmen have been involved 6 in doing a fax broadcast for beach vacations like this? 7 A. No. 8 MR. BROADHURST: I'm just going to object to the 9 form of the question. 10 BY MR. DARWIN: 11 Q. Are there any records at Fax.com that show 12 that Covington & Burling called the de-list number for 13 Fax.com on June 4th and June 5th of 2001? 14 A. I don't know how to answer that question. 15 Q. You don't know now? 16 A. I don't know the answer to that question. It 17 would be very technical. 18 Q. Who is Charles Martin? 19 A. Charles Martin is a gentleman that works in our 20 compliance department. 21 Q. What is Charles Martin's job at Fax.com? 22 A. His job would be if somebody calls in to get 23 the number removed to try to -- to make sure that indeed 24 it did happen. If we had issues with it happening, he 25 would be -- he would take -- you know, he would take the 88 1 necessary steps to try to alleviate the problem. 2 Q. Have you ever talked to Charles Martin about 3 any phone calls he received from Covington & Burling in 4 June of 2001? 5 A. I spoke to him after we got the lawsuit. 6 Q. What did Charles Martin tell you about any 7 phone calls he received from Covington? 8 A. He did tell us he received a phone call. I 9 think he said it was Monday. And that he took out the 10 range of numbers that were given on Monday, but it was 11 explained that there may be additional faxes going on 12 during the week due to the fact that the profile -- 13 there's no way of stopping the system. 14 Q. Charles Martin told you that that is what he 15 had represented to Covington when Covington called? 16 A. Correct. 17 Q. Did Charles Martin tell you what he did to 18 remove the Covington numbers from the database? 19 A. He told me that what he normally does for every 20 person that wants their number deleted, put it into the 21 computer system to have it deleted. 22 Q. Do you know if Charles Martin took any notes 23 from his phone calls with Covington or confirmed what 24 he'd done in writing in any way? 25 A. I don't know if he's got any notes or not on it. 89 1 Q. Did Charles Martin tell you anything else about 2 phone calls he received from Covington & Burling in the 3 June 4th or June 5th of 2001? 4 A. No. Not that I can recall. 5 Q. Did Charles Martin tell you that he had told 6 the caller from Covington that faxes were still going to 7 come for the next seven days? 8 MR. BROADHURST: Objection. Asked and answered. 9 THE WITNESS: I think I answered earlier when I said 10 he did. 11 BY MR. DARWIN: 12 Q. Was there any record made by Charles Martin 13 about what numbers he was given by Covington when it 14 called -- 15 MR. BROADHURST: Objection. Asked and answered. 16 BY MR. DARWIN: 17 Q. -- for de-listing? 18 A. I don't know -- I don't know if he kept a 19 record of it or he simply entered it into the system. 20 Q. Turning to what's attached as Exhibit C to the 21 complaint, do you recognize that advertisement? 22 A. Yeah, it looks similar to advertisements that 23 we do send out from time to time. 24 Q. For what client? 25 A. There's no specific client. It would be sent 90 1 out -- we send out this kind of advertisement for a lot 2 of different clients that sell ink jet cartridges. 3 Q. Do you know what salesmen at Fax.com was in 4 charge of handling the customer for this advertisement? 5 A. No. 6 Q. Is there any way to find out? 7 A. Possibly. Possibly if we took the fax back and 8 went through the sales stuff, if he's still working for 9 us. Ask somebody if they recognize it. 10 Q. Do you know if this advertisement was sent to 11 Covington & Burling in June of 2001? 12 A. I don't know for a fact that it was or wasn't. 13 Q. Are you in a position to deny that it was? 14 MR. BROADHURST: Objection. He's answered the 15 question. 16 THE WITNESS: I wouldn't be able to confirm it 17 either way. If we had or hadn't. 18 BY MR. DARWIN: 19 Q. Is there any way to find out one way or the 20 other at Fax.com? 21 MR. BROADHURST: Objection. Asked and answered. 22 THE WITNESS: I -- I think it is possible we could 23 find out for 100 percent if we did or didn't. 24 BY MR. DARWIN: 25 Q. Who would you go to to find out? 91 1 A. I would go to Eric, do some research and see if 2 this was one of our ads. 3 Q. Do you think Eric could find out whether or not 4 this was sent to Covington & Burling in June of 2001? 5 A. Possibly. 6 Q. Do you know what he would do to find that out? 7 A. The process, no. I don't know what kinds of 8 steps you would go through. 9 Q. Turning to the last exhibit, Exhibit H. 10 MR. BROADHURST: I'm sorry. Exhibit what? 11 BY MR. DARWIN: 12 Q. Is the one-page fax advertisement attached as 13 Exhibit H to the complaint an advertisement that Fax.com 14 has broadcast for its customers? 15 A. This does look similar to -- looks similar to 16 ads we have broadcast in the past for some of our 17 clients. 18 Q. Have you ever heard of Advanced Cellular 19 Communications? 20 A. Yes, I have heard of them. 21 Q. Are they a customer of Fax.com? 22 A. Yes. 23 Q. Do you call them customers or clients or both? 24 A. Do I call them customers? I call them 25 customers. 92 1 Q. I just want to use the right nomenclature. 2 Do you know who at Fax.com is responsible for the 3 Advanced Cellular account? 4 A. No, I don't know the exact salesperson that's 5 assigned. 6 Q. Actually, let me back up. 7 Are salespeople assigned to specific customers 8 that -- 9 A. I -- they can start that way. It doesn't mean 10 they would continue with them. They may start it for a 11 client and run for a while and maybe it gets changed. 12 It varies depending on the client, how well they get 13 along with the salesperson, that type of thing. 14 Q. As you sit here today, you don't know what 15 salesperson would be responsible for Advanced Cellular? 16 A. At that time? 17 MR. BROADHURST: Objection. Asked and answered. 18 THE WITNESS: At that time, no, I would have no idea 19 who was dealing with it. 20 BY MR. DARWIN: 21 Q. Is there anything about your conversation with 22 Charles Martin about the phone calls he received from 23 Covington in June of 2001 that you haven't told me? 24 A. No. I think everything we discussed is -- is 25 accurate. 93 1 Q. What's Charles Martin's job title? 2 A. Compliance officer. 3 Q. How long has he been at Fax.com? 4 A. I believe Charles has been there a couple of 5 years maybe. Two, two and a half years. 6 MR. DARWIN: Okay. Let's stop now and take a lunch 7 break. 8 THE WITNESS: Okay. 9 (Whereupon at 1:05 p.m., the lunch recess was 10 taken.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 94 1 San Diego, California; Monday, March 4, 2002, 2:05 p.m. 2 3 MR. DARWIN: Back on the record. 4 MR. BROADHURST: If I could, before we get going, I 5 just want to -- this is something I meant to say 6 earlier. Mr. Katz would like to read and sign his 7 deposition. 8 MR. DARWIN: Sure. Absolutely. 9 MR. BROADHURST: Okay. 10 BY MR. DARWIN: 11 Q. You testified in response to an earlier 12 question today that the case with Covington & Burling 13 having such a large number of fax numbers was something 14 that was unusual about this case. I want to ask you to 15 clarify what you meant by that. 16 MR. BROADHURST: Object to the extent that it 17 characterizes the witness's earlier testimony. 18 You can -- you can answer the question. 19 THE WITNESS: It's unusual for us to have that many 20 fax numbers going to, I guess, a single location. 21 There's normally only one or two or three at the most 22 going to any one -- even a big location. So it's very 23 unusual for a company to be stating -- claim to have 24 been sent that many faxes. It's a little confusing to 25 us. We still are trying to figure out how that 95 1 happened. 2 BY MR. DARWIN: 3 Q. Did you do some investigation to find out what 4 had occurred here? 5 A. I think we are in the -- in the process of 6 doing it right now. At this point we haven't come to 7 any conclusions, but hopefully we will be able to. 8 Q. Have you ever learned that Fax.com did send out 9 a number of faxes to those -- that large number of fax 10 numbers at Covington? 11 MR. BROADHURST: Objection to the form of the 12 question. 13 You can answer. 14 THE WITNESS: It's just logic to me. I mean, I'm 15 not technical. But to me it didn't seem possible that 16 we could have done it, and to me a more likely 17 explanation was for that number that it was more 18 something -- either possibly our server or your server 19 went wrong and just started rolling over and over and 20 over again, kind of like a fax machine if it doesn't 21 complete the fax. 22 For example, if I sent you a fax and the fax went 23 through but it missed the last part, for whatever 24 reason, it's going to -- the fax machine's going to say 25 "I didn't receive it" and another fax is going to come 96 1 through and another one and another one. If one fax was 2 sent to this machine, it's going to keep going and going 3 and going. You're going to get 100 faxes where we only 4 sent you one. I don't want to jump to conclusions, but 5 logically I think that's what happened. 6 BY MR. DARWIN: 7 Q. Did you do anything to look into it yourself? 8 A. I'm not technical, but Eric is spending some 9 more time looking into what actually really happened. 10 Q. Has Eric ever reported to you about anything 11 he's learned in terms of his own investigation as to the 12 faxes sent to Covington? 13 A. No, we haven't. As I said, it's not like it 14 happens every day. So I guess we are -- you know, 15 didn't think it was that important until it actually 16 happened. 17 Q. There's a letter attached to the complaint. I 18 think it's Exhibit F. 19 A. A letter to -- 20 MR. BROADHURST: I take it you want him to look at 21 the -- 22 MR. DARWIN: Yeah. 23 MR. BROADHURST: -- the letter. 24 Please take a look at the letter, and when you're 25 ready to proceed, let Mr. Darwin know. 97 1 BY MR. DARWIN: 2 Q. Just so you know, my question to you is going 3 to be: Have you seen that before? 4 A. You know, I believe, if I'm not mistaken, I 5 believe Charles Martin may have shown me this particular 6 letter at some point prior to me looking at it now. 7 It's my -- weren't there some other numbers that we took 8 out of there? 9 MR. BROADHURST: I can't answer your questions -- 10 THE WITNESS: No. 11 MR. BROADHURST: -- in the midst of the deposition. 12 You just need to wait for Mr. Darwin to ask a question, 13 and when he does, you can respond to it. Please do. 14 THE WITNESS: I understand. 15 MR. BROADHURST: Is there a question on the table? 16 MR. DARWIN: I'm still waiting for his response as 17 to whether he recognizes this letter. 18 THE WITNESS: Yeah. I do recognize it. 19 BY MR. DARWIN: 20 Q. Was the letter dated June 7th -- it's addressed 21 to you from Gerald Waldron at Covington & Burling -- was 22 that received by you on or about June 7th or June 8th? 23 A. I don't remember the exact date that I -- that 24 I did get it. Obviously, this is FedEx'd on June the 25 7th. I would assume it would have got to me on the 8th, 98 1 and I would think that I probably received this letter 2 right about that time. 3 MR. BROADHURST: Again, I would like to clarify. I 4 don't believe that Mr. Darwin is looking for as