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., ) ERIC WILSON ) 10 Defendants. ) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ) 11 12 13 14 TAKEN ON: Tuesday, March 5, 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 (117325) 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. WILSON: 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 ERIC WILSON Mr. Darwin 4 4 5 E X H I B I T S 6 7 NUMBER DESCRIPTION PAGE 8 4 Defendant Eric Wilson's Responses and 9 Objections to Plaintiff's First Set of Requests for Admission, 5 pages 54 10 5 Marketing document, 5 pages 68 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 San Diego, CA, Tuesday, March 5, 2002, 10:25 a.m. 2 3 ERIC WILSON, 4 BEING FIRST DULY SWORN, TESTIFIED AS FOLLOWS: 5 6 EXAMINATION BY MR. DARWIN: 7 Q. Good morning. 8 A. Good morning. 9 Q. Can you state and spell your name for the court 10 reporter. 11 A. Eric Matthew Wilson. E-r-i-c, M-a-t-t-h-e-w, 12 W-i-l-s-o-n. 13 Q. Mr. Wilson, have you ever had your deposition 14 taken before? 15 A. No, I haven't. 16 Q. I'm going to go over some ground rules that you 17 may have already heard from your attorney, but I want to 18 get them on the record, make sure you understand them. 19 I'm going to be asking you questions and you're 20 going to be giving me answers about a lawsuit that my 21 law firm has filed against Fax.com. 22 Everything you say and I say is going to be taken 23 down by the court reporter and it's going to be put into 24 a book form that you're going to have a chance to review 25 and correct. 4 1 Do you understand that? 2 A. Yes. 3 Q. If you make substantive corrections, for 4 example, changing a "yes" to a "no," in the event this 5 case goes to trial, that's something I could comment 6 upon to the jury. Non-substantive changes like spelling 7 changes or punctuation, you can make all you like. 8 You understand that? 9 A. Yeah. 10 Q. If you don't understand a question that I ask, 11 will you let me know so I can rephrase it for you? 12 A. Sure. 13 Q. Because the court reporter can only take down 14 spoken words, your responses will always have to be 15 audible. She can't take down nodding heads or things 16 like that. 17 Do you understand that? 18 A. Uh-huh. 19 Q. "Yes"? 20 A. Yes. 21 Q. She can't take down "uh-huh." 22 A. "Uh-huh" doesn't make sense on that thing. 23 Okay. 24 Q. To the best ability that you can, try to avoid 25 talking over my questions. Sometimes you may know 5 1 exactly what I'm asking before I'm done with my 2 question. But just for the court reporter's sake, if 3 you can just wait until I'm done and then give your 4 answer, that gives her the ability to take down both of 5 our responses. Can you do that? 6 A. Okay. Yes. 7 Q. Are you on any medication that would prevent 8 you from giving full and complete, accurate testimony 9 today? 10 A. No. 11 Q. Is there any other reason why you couldn't give 12 full, complete, and accurate testimony today? 13 A. No. 14 Q. What's your job title? 15 A. Founder and CTO, which is chief technology 16 officer. 17 Q. And that's at Fax.com, Inc.? 18 A. Uh-huh. Yes. 19 Q. What -- I take it you don't have any 20 responsibilities as a founder. I mean, continuing 21 responsibilities. Is that true? 22 A. Rephrase that. What do you mean by -- 23 Q. Forget it. 24 What are your responsibilities as chief technology 25 officer? 6 1 A. I'm basically a programmer. That's what I like 2 to do and -- 3 Q. Well, what does that entail in terms of the 4 business of Fax.com? 5 A. Writing software for the company. 6 Q. Other than writing software, do you do anything 7 else at Fax.com? 8 A. Pretty much that's it. 9 Q. Do you supervise any employees? 10 A. Yes. 11 Q. Who -- well, let me ask you this: Is there a 12 breakdown in the company of departments or divisions? 13 A. Really it's programmers that I oversee. 14 Q. How many programmers do you supervise? 15 A. Three. 16 Q. What are their names? 17 A. Brian Hong, Dennis Habgood. 18 Q. How do you spell that? 19 A. H-a-b-g-o-o-d. 20 Ahmed, A-h-m-e-d, Sadiq, S-a-d-i-q. 21 Q. Can you give me an overview of the types of 22 programs you're writing at Fax.com. You and your staff. 23 A. We write software to allow faxes to be sent to 24 individuals. 25 Q. Do you write any other types of software? 7 1 A. That's pretty much it. 2 Q. Do you have a name for you and your department 3 of programmers? Is there a department name? 4 A. Developers. 5 Q. Are there other departments or divisions within 6 Fax.com? 7 A. There are, yeah. 8 Q. What are they? 9 MR. BROADHURST: I'd just like to place an 10 objection as to relevance to this line of questioning. 11 You can answer the question. 12 THE WITNESS: Sales, operations, accounting. That's 13 basically it. 14 BY MR. DARWIN: 15 Q. Is anyone in charge of the operations of 16 Fax.com? 17 A. There's an operations director. 18 Q. Who's that? 19 A. Chad Nelson. 20 Q. What does the operations group entail? 21 A. Make sure electricity's on so we can send out 22 faxes. Computers are running, or up. 23 Q. Anything else? 24 A. That's it. 25 Q. I take it Mr. Dupree is the head of the sales 8 1 group? 2 A. Uh-huh. Yes. 3 Q. And the president of Fax.com is Mr. Katz? 4 A. Yes. 5 Q. And you founded Fax.com with Mr. Katz? 6 A. Yes. 7 Q. When did you found Fax.com with Mr. Katz? 8 A. It was approximately, I'd say, three years ago. 9 Q. So early 1999? 10 A. Yeah. That's about right. 11 Q. Before founding Fax.com, had you been in any 12 other business ventures with Mr. Katz? 13 A. Yes. 14 Q. What was that? 15 A. Fax ID. 16 Q. What was Fax ID? 17 A. Fax company. 18 Q. What did its business entail? 19 A. Sold fax equipment. 20 Q. What types of equipment did Fax ID sell? 21 A. It was a computer system. 22 Q. Can you describe generally what the computer 23 system did. 24 A. It sends faxes to -- sends faxes to 25 individuals. 9 1 Q. When did you and Mr. Katz found Fax ID? 2 A. I think it was '98. I'm not sure of the month. 3 Q. Before founding Fax ID, had you been engaged in 4 any other business venture of any kind with Mr. Katz? 5 A. No. 6 Q. Does Fax ID still exist? 7 A. No. 8 Q. What happened to it? 9 A. Dissolved. 10 Q. Did any assets or employees from Fax ID get 11 assumed into Fax.com? 12 MR. BROADHURST: Objection to the relevance. 13 You can answer the question. 14 THE WITNESS: I'm sorry? 15 MR. BROADHURST: I'm sorry. You can answer the 16 question. 17 THE WITNESS: Oh. Myself and Kevin. 18 BY MR. DARWIN: 19 Q. Any parts of its business get assumed by 20 Fax.com? 21 A. Selling computer equipment. 22 Q. Does Fax.com still sell -- or sell computer 23 equipment? 24 A. Uh-huh. 25 Q. It does? 10 1 A. Yes. 2 Q. Does Fax.com sell the same types of computer 3 equipment that Fax ID sold? 4 A. Uh-huh. Yes. 5 Q. Does the computer equipment that Fax.com sells 6 have a name? Is there a name for that system? 7 A. It's called FaxCaster. 8 Q. Is that the same type of equipment that Fax ID 9 was selling? 10 A. Similar, yes. 11 Q. When you say "similar," are there some 12 differences? 13 A. Software revisions, upgrades. 14 Q. Functionally is it the same? 15 A. Same system. 16 Q. Okay. Just before we move away from that, does 17 Fax.com sell FaxCaster systems? Lease them? What's 18 the -- how does it work? 19 A. Sells them. 20 Q. Sells them. 21 Is that the only -- does it do any leasing of 22 FaxCaster systems? 23 A. I'm not really sure. I'm not sure if it -- if 24 it has or not. It's -- 25 Q. How did you come to found Fax ID with Mr. Katz? 11 1 A. I was a list broker and Mr. Katz called me and 2 wanted to purchase a list from me, and we just started a 3 business relationship from there. 4 Q. What is a list broker? What was your job as a 5 list broker? 6 A. Sell lists, databases. 7 Q. What kind of databases were you selling? 8 A. Direct mail, fax. That's -- that's basically 9 it. 10 Q. Who were you working for at the time? 11 A. Myself. 12 Q. Did you have a company? 13 A. Yes. 14 Q. What was it called? 15 A. Data Quest. 16 MR. BROADHURST: Again, I'd like to place an 17 objection on relevance to this line of questioning. 18 BY MR. DARWIN: 19 Q. Does Data Quest still exist? 20 A. No. 21 Q. Was it dissolved? 22 A. Yes. 23 Q. Can you summarize for me your educational 24 background. 25 A. Two and a half years of college. 12 1 Q. Where? 2 A. University of Washington. 3 Q. After the University of Washington, can you 4 just give me a quick summary of your job history leading 5 up to Data Quest? 6 A. Yeah. I learned computer processing from the 7 family business. My father passed away so we took it 8 over. 9 Q. What was the name of that company? 10 A. Boy. Accurate. 11 Q. And you stayed with that computer processing 12 business until you founded Data Quest? 13 A. Correct. 14 Q. I understand you haven't testified in a 15 deposition before. Have you ever testified in a trial 16 or any other proceeding under oath before? 17 A. No. 18 Q. Is it one of your responsibilities as the chief 19 technology officer to create and maintain Fax.com's 20 database of fax telephone numbers? 21 A. It's not my responsibility. 22 Q. Who's responsibility is it? 23 A. The DBA, database administrator. 24 Q. Who's that? 25 A. Ahmed. 13 1 Q. Ahmed? 2 A. Sadiq, yeah. 3 Q. Ahmed Sadiq, the database administrator, 4 reports to you? 5 A. Yes. 6 Q. And you supervise Mr. Sadiq, correct? 7 A. Yes. 8 Q. Do you know the sources from which Fax.com 9 obtains numbers for its database? 10 A. Yes. We buy lists from list brokers. We have 11 customers who give us their databases. We also have 12 people who call in and want to be included on our list. 13 Q. Are there any other sources other than brokers, 14 customers, and people who call in and ask to be 15 included? 16 A. That's pretty much the bulk of how we obtain it. 17 Q. With respect to brokers, do you consider 18 Info USA to be one of those brokers? 19 A. Yes. 20 Q. Is Info USA the primary source of fax numbers 21 that you obtain from brokers? 22 A. Yes, they're the primary source for anybody. 23 Q. When -- well, let me ask this: How often - - 24 what is the arrangement -- oh, strike that. 25 How often does Fax.com receive fax numbers from 14 1 Info USA? 2 A. I think it's either quarterly or biannually. 3 Q. So either every three months or every six 4 months? 5 A. Yeah. 6 Q. Correct? 7 A. Yes. 8 Q. And Fax USA's -- sorry -- Fax.com pays 9 Info USA some amount of money for that database? 10 A. Correct. 11 Q. How does Fax.com transmit to -- strike that. 12 How does Info USA transmit numbers to Fax.com? 13 A. I think it's probably either floppy disk or 14 CD. I'm not responsible for putting that into the 15 system. 16 Q. It's not by e-mail? 17 A. No. Well, it could -- possibly. I'm not sure. 18 Q. Does the numbers -- strike that. 19 When Fax.com receives numbers from Info USA, do they 20 receive them along with any documentation, a cover 21 letter, any other correspondence from Info USA? 22 A. Not that I'm aware of. 23 Q. Does Fax.com keep the floppies or CDs from 24 Info USA after the numbers are loaded into its own 25 database? 15 1 A. I'm pretty sure we have -- I'm sure we do, yes. 2 Q. Do you know where those are kept at Fax.com, 3 those CDs? 4 A. Probably at the company, I would think. 5 Q. Once the numbers arrive from Info USA, what is 6 done with them by Fax.com? 7 A. They're put into a database, a main fax 8 database. 9 Q. Who does that? 10 A. DBA. 11 Q. And that -- has that always been Mr. Sadiq? 12 A. Yes. From Fax.com, yes. 13 Q. How long has Mr. Sadiq been employed? 14 A. Three years. Yeah. 15 Q. Does the database of fax numbers at Fax.com 16 reflect when a number is loaded into it? 17 A. No, it doesn't. 18 Q. Is there any record kept by Fax.com of when 19 numbers are loaded into it? 20 A. No. 21 Q. Does the database at Fax.com of fax numbers 22 keep an internal change log of any sort? 23 MR. BROADHURST: Objection to the form. 24 You can answer the question. 25 THE WITNESS: Say that -- I mean, rephrase that 16 1 question for me, if you could. 2 BY MR. DARWIN: 3 Q. If Fax.com wanted to find out when a particular 4 number was loaded into its database, is there any way 5 Fax.com can do that? 6 A. No, we don't keep track of that. 7 Q. How is Fax.com's fax number database stored? 8 A. On a computer. On computer servers. 9 Q. Are those computer servers at Fax.com's Aliso 10 Viejo premises? 11 A. Yes. 12 Q. This is kind of another ground rule for 13 depositions as a preface to my next question. 14 Throughout this deposition, I never want you to guess 15 about something, but if you have a reasonable estimate 16 based on, you know, your experience or what you've seen 17 or heard, I'm entitled to an estimate. 18 With that preface, can you give me an estimate of 19 how many fax numbers are on Fax.com's database today? 20 A. An estimate? I mean, like approximate? 21 Q. Yes. I mean, if you know exactly, I'd like 22 that. 23 A. I don't know exactly. It's changing all the 24 time. There's probably -- probably a total of eight 25 million numbers, whether those are fax numbers or phone 17 1 numbers, that's -- or deleted already if people do not 2 want to receive our faxes, that's probably in the mix as 3 well. 4 Q. With respect to brokers other than Info USA, 5 does Fax.com receive numbers from other brokers in a 6 similar manner? 7 A. Yes. 8 Q. In other words, they come in the form of a 9 floppy or a CD? 10 A. Those -- some of those are usually e-mail. 11 Most of them are all smaller than Info USA. 12 Q. And those are then loaded by the DBA into the 13 Fax.com database? 14 A. Correct. 15 Q. How does Fax.com obtain fax numbers from its 16 customers? 17 A. Via e-mail, mostly e-mail, floppy -- and floppy 18 disks. 19 Q. Is it part of Fax.com's arrangements with its 20 customers that Fax.com will get to use the customer's 21 database in the future after a broadcast is done for a 22 customer? 23 A. I'm not sure how the arrangement's set up. I 24 don't deal with customers. 25 Q. And then Fax.com also receives telephone calls 18 1 from people who affirmatively ask to have their number 2 put on the database? 3 A. Correct. 4 Q. Is there anyone at Fax.com who receives those 5 calls? 6 A. It's an automated system. 7 Q. What information is maintained in the Fax.com 8 database? Is it just fax numbers or is there other 9 demographic or address material that's also included? 10 A. It's phone numbers. 11 MR. BROADHURST: Objection to relevance. Obviously 12 he -- the question's already been answered. 13 BY MR. DARWIN: 14 Q. So as far as you know, there's no additional 15 information associated with any given fax number? 16 A. No. 17 Q. Does Fax.com maintain any database of 18 demographic or address information anywhere? 19 A. No. 20 Q. Does Fax.com occasionally receive databases 21 either from brokers or from customers that in fact do 22 contain additional information other than fax numbers? 23 A. Not that I'm aware of. 24 Q. You've not seen that happen? 25 A. No. 19 1 Q. Is the Fax.com database searchable in any way? 2 A. Geographically. 3 Q. Explain what you mean by "geographically." 4 A. Well, if a customer wants to send to a physical 5 location, that's how it's searchable. 6 Q. How would you do a search to send faxes to a 7 particular location? 8 A. Through query language. 9 Q. I mean, what information within the database 10 do you look for? I mean, how do you -- how do you frame 11 a search? 12 A. Area codes are based in geographic location 13 within a state. That's basically how we do the search. 14 Q. Is it just by area codes? 15 A. There's ZIP Codes. Basically the ZIP Code 16 level is the lowest you can get geographically so 17 that's -- 18 Q. Are ZIP Codes maintained for each fax number in 19 the database? 20 A. No. For area codes. So it's a relationship. 21 Databases are related basically area code to ZIP Code. 22 Yeah. 23 Q. I guess I'm just looking for clarification on 24 that. I guess ZIP Codes frequently contain -- well, 25 sorry. Area codes sometimes encompass more than one ZIP 20 1 Code. 2 A. Sure. 3 Q. How would someone perform a search on Fax.com's 4 database to get just one ZIP Code within a given area 5 code? 6 A. There's multiple ZIP Codes per area code. So 7 you -- it's not an exact science. I mean, if you pick 8 ZIP Codes you automatically go into multiple ZIP Codes. 9 But we do allow them to do it that way. It's not an 10 exact geographic. We haven't tightened it that far yet. 11 Q. And there are no other search terms that you 12 can use to search the Fax.com database? 13 A. Anything higher than ZIP Code, county, state, 14 as an -- if you know the ZIP Code, you know the county 15 and the state, and that's pretty -- U.S., you know, 16 country. 17 Q. But when you go into the database yourself, 18 what you're doing a search for is area codes? 19 A. Sure. It's the relationship to everything 20 else. 21 Q. When a customer wants to do -- well, you 22 recognize the term "a fax broadcast"? 23 A. Yes. 24 Q. Okay. Tell me what you mean when you use the 25 phrase "a fax broadcast." 21 1 A. Customer requests to send faxes to a particular 2 geographic location. We call it a broadcast. 3 Q. When a number -- I'm sorry. Back up. 4 The numbers that are used for a particular 5 broadcast, is that referred to as a profile? 6 A. Well it's -- there's a lot of different terms 7 for it. It's really a -- it's a broadcast. 8 Q. Okay. When a phone number from Fax.com's 9 database is used in a broadcast, is there any record 10 maintained in Fax.com's database that that number was 11 used for that broadcast? 12 A. No, we don't keep that. 13 MR. BROADHURST: Objection to the form. 14 You can answer the question. 15 THE WITNESS: No. We don't keep track of that. 16 BY MR. DARWIN: 17 Q. Does Fax.com's database keep information 18 relating to the number of fax broadcasts that have been 19 sent to any given phone number in the database? 20 MR. BROADHURST: Objection to the form. 21 You can answer the question. 22 THE WITNESS: Rephrase that for me, please, if you 23 could. Maybe I didn't -- 24 BY MR. DARWIN: 25 Q. Does Fax.com's database maintain any 22 1 information about the number of broadcasts sent to any 2 given fax number? 3 A. No. We just keep track of geographic location. 4 Q. When numbers are added into the Fax.com 5 database, from whatever source, does the database 6 automatically identify duplicates? Duplicate numbers. 7 A. The procedure that we have is duplicate numbers 8 or ranges of numbers, what we do is we take -- we came 9 up with a number five records out of -- if you have more 10 than five records in a range, we keep five records. 11 That's the -- that's the policy and the procedure that 12 we have in place. Sometimes computers aren't perfect. 13 There's -- you know, there's glitches, there's bugs in 14 software. But that is the policy that we maintain. 15 So we don't want to send to someone who has 200 16 numbers, 1,000 numbers, owns a whole prefix of numbers, 17 you know, exchange. We don't want to send to those 18 people because there's no point in doing that. So we 19 keep a certain amount of those numbers after they're 20 confirmed, and that's what we try to keep in our 21 database. 22 Q. When you say "five numbers within a range," 23 what is -- 24 A. Well, if you get five numbers in a row, we'll 25 keep those five. If you get six numbers in a row, the 23 1 sixth one's deleted. Seventh, all the way through. 2 Q. And with respect to if you get a number -- get 3 some numbers from Info USA, you're loading them into the 4 database, does the database identify that some number's 5 already in there and let's not load it in? Is there any 6 way to make sure you don't have the same number five or 7 six times? 8 A. It's bounced. Yeah. There's no reason to put 9 that in there. 10 Q. And that's done automatically by the database? 11 A. That's an automatic procedure. 12 Q. Did you write the software for the database? 13 A. No, I didn't. 14 Q. Who did? 15 A. There's been about four different programmers 16 from the past five years, even from Fax ID. So they're 17 no longer with us. I'm not sure of their exact names 18 anymore. But it's -- a lot of different people have had 19 their hands on. 20 Q. Fax.com occasionally receives phone calls from 21 people asking their numbers to be removed from the 22 database, correct? 23 A. Correct. 24 Q. And when callers call in, they get an automated 25 response, correct? 24 1 A. Correct. 2 Q. Can you just tell me mechanically how it is 3 that Fax.com, you know, upon receiving one of those 4 phone calls removes a number from the database. 5 A. They call the toll-free number so there's no 6 cost to the consumer or the individual, put in -- your 7 phone number into your keypad on your phone. It accepts 8 those digits, puts them into a deletion or "do not fax 9 me" list, and the number in our database is then removed 10 from the -- there's like a good and a bad. So, you 11 know, you put the good and put it in the bad and it's no 12 longer good to be faxed. 13 Q. Are those numbers removed by someone actually 14 taking the list and then going into the database? Is 15 that done by the DBA? 16 A. No. It's an automated process. 17 Q. Does -- did you write the software for that? 18 A. No. 19 Q. Is it commercial software or did someone at 20 Fax.com -- 21 A. It's a third-party software. 22 Q. Does the software that automatically removes 23 numbers from the database upon receipt of a de-list call 24 keep a record that a number has been removed? 25 A. Which -- which list are you talking about? 25 1 Q. When a de-list call is made. 2 A. De-list? 3 Q. I'll refer to calls from people asking to have 4 their numbers -- 5 A. Delete list. 6 Q. Yeah. 7 A. Okay. Got ya. 8 Q. When somebody calls and says they want to be 9 removed from the database, does the software that 10 automatically accomplishes that make any record of it? 11 A. It stores it into the database. 12 Q. Oh, is there -- 13 A. There's a bad database and a good database. 14 Q. So Fax.com automatically keeps a database of 15 bad numbers? 16 A. Of people who would like to be removed, correct. 17 Q. Are the numbers that go into the bad database 18 kept there permanently? 19 A. Yes. 20 Q. So to the extent anyone has called and asked to 21 have numbers removed from the good database, as long as 22 Fax.com has been around, those numbers should still be 23 in the bad database? 24 A. Correct. 25 Q. And just for clarification, numbers that are in 26 1 the bad database have been removed from the good 2 database? 3 A. Correct. 4 Q. And the good database is the database of fax 5 numbers that Fax.com uses to send out broadcasts? 6 A. Correct. 7 Q. Occasionally Fax.com receives, I imagine, 8 requests to have numbers removed from the good database 9 that come in some other form other than the automated 10 dial-in process? 11 A. Correct. If -- if you have a large amount of 12 numbers, we don't want you to have to go through the 13 process of keying them in. So you can get a hold of us 14 and someone will put them into the system by keying them 15 in for you within like a -- like a range, let's say, you 16 know. 17 Q. And the result is the same? 18 A. The same. 19 Q. They're removed from the good database? 20 A. The bad gets removed from the good, yeah. 21 Q. So regardless of the method by which the 22 numbers are communicated to you, they're still removed 23 from the database? 24 A. Right. Same procedure. 25 Q. When new numbers are received from any source, 27 1 either a broker or a customer, does Fax.com do any 2 procedure to make sure that there are no numbers in the 3 bad database in the new group? 4 A. Correct. 5 Q. What is that? 6 A. Everything runs through the bad database first 7 to get into the good database. So if you get stopped, 8 you're not going in. If you're not there, you go in. 9 Q. Is that automated? 10 A. Correct, yes. 11 Q. Once a customer comes to Fax.com and they have 12 their advertisement and they've chosen the area, the 13 group of numbers they want to send them to, what is the 14 process by which that broadcast is then, you know, sent 15 out? What has to happen before they actually get sent 16 out? 17 A. Well, it's not necessarily an advertisement. 18 But the fax document, whatever information they'd like 19 to send, is the customer picks their geographic 20 location, query language picks those numbers in that 21 location and sends them out through the computer system 22 to -- dials the numbers to -- fax number just like you 23 would on your fax machine. 24 Q. Is there any delay between the time when, you 25 know, the broadcast is put together and the day it's 28 1 sent out? 2 A. Yes, there is. 3 Q. Explain that delay. 4 A. There's a lot of processing involved with -- 5 with making sure the systems are running, talking to 6 each other. It's a network of computers. Paperwork 7 involved. I'm not responsible for that so I can't tell 8 you the exact process. But it -- it does take a few 9 days. 10 There's also confirmation of numbers that we do, 11 make sure that the numbers are fax numbers, which takes 12 time. So there's -- there is a few-day process that it 13 must go through on most occasions. 14 Q. When -- occasionally customers come to Fax.com 15 with their own set of numbers that they want to send the 16 fax broadcast to; is that right? 17 A. True. 18 Q. Before Fax.com sends out that fax broadcast 19 using the customer's numbers, does it run the customer's 20 numbers through its bad database to look for bad 21 numbers? 22 MR. BROADHURST: Objection. Asked and answered. 23 You can answer the question. 24 THE WITNESS: If we're providing the 800 number, 25 then that database is going to be run against our 29 1 numbers for sure. The toll-free removal line, that is. 2 That's what I'm talking about, at the bottom. That we 3 put on every document. 4 BY MR. DARWIN: 5 Q. So any fax that Fax.com sends out that includes 6 its own removal number at the bottom, the numbers to 7 which that fax is sent is going to be run through its 8 bad database, correct? 9 A. Correct. 10 Q. Even if the source of those numbers was from a 11 client or a customer? 12 A. Correct. The reason being if the customer -- 13 we're handling that for the customer. That customer 14 needs to know that they shouldn't send us somebody 15 that's already removed themselves. There's no reason 16 to. So we handle that process for them. If they use 17 that database on their own, that's not our, you know -- 18 Q. Before Fax.com sends out any fax broadcasts, 19 does it first confirm that all the numbers it's going to 20 send out that fax to are indeed fax numbers? 21 A. It tries to confirm those, yes. 22 Q. How does it do that? 23 A. We send a permission document to the numbers 24 first. If the fax goes through, if the permission 25 document goes through, then we gather that it's a fax 30 1 number. And confirm that it is. 2 Q. Is that done before every fax broadcast? 3 A. It's done -- yes, before the number -- what we 4 try to do is when a number comes in we try to make sure 5 it sends a permission document to that number before it 6 ever gets faxed. In a perfect world, of course, without 7 bugs and things, that's what we try to do. That's the 8 policy of the company. I can't say it's 100 percent, 9 but that's what we try to do. 10 Q. In terms of time then, Fax.com sends its 11 permission documents out before it uses -- before it 12 permanently places a number into the good database? 13 A. Yes. 14 Q. It doesn't resend a permission document out to 15 numbers in that database before each new fax broadcast? 16 A. One time. 17 Q. You noted earlier that it -- it's Fax.com's 18 policy and procedure to make sure that only five numbers 19 within a range are used. Who came up with that policy 20 and procedure? 21 A. Something that I thought of back -- actually, 22 yeah, way back when we first started the company. It 23 makes sense. There's no reason to send people 1,000 24 faxes in a row. I mean, you know, usually people have 25 a -- they have a range. It's usually somebody who has 31 1 that range for most cases. 2 Q. Is it Fax.com's policy and procedure to send 3 this permission document as well? 4 A. Yes, it is. 5 Q. Who came up with that policy and procedure? 6 A. That was -- that was probably Kevin designed 7 it. 8 Q. Did you participate at all in developing that 9 procedure? 10 A. Not with -- not the content, no. 11 Q. What is the content of the permission document? 12 A. It's -- it basically says we are -- we are 13 going to be sending you information about local 14 businesses in your area, possibly other businesses. 15 From time to time we will also be sending missing 16 children documents, which we do, to that local area. 17 But if you do not wish to receive these, please call our 18 toll-free number and remove yourselves from the 19 database. Or call in as well and add your number or add 20 extra numbers, which people do. They receive it at 21 home, they say, "I want to receive it at my office" or 22 vice versa. 23 Q. Has the permission document changed over time? 24 A. I'm not sure. I don't -- I don't view the 25 document so I don't know if it has or not, actually. 32 1 Q. I take it this permission document is an 2 electronic file of some sort -- 3 A. Sure. 4 Q. -- that's on your system? 5 Does Fax.com use a procedure by which the faxes -- 6 the fax broadcasts for a given week, a Monday through a 7 Friday, are set up beforehand, for instance, the week 8 before and then just automatically faxed out? 9 A. Yes, it takes time to process, so, yes, they're 10 set up. 11 Q. Describe how that process works. 12 MR. BROADHURST: Objection. Asked and answered. 13 You can answer the question. 14 THE WITNESS: There's a certain amount of paperwork 15 that needs to be done. Customer picks a geographic 16 area, the numbers are processed, and the faxes are sent 17 out. 18 BY MR. DARWIN: 19 Q. Is there any type of queue that the broadcasts 20 are put into on Fax.com's system? 21 A. The -- the broadcasts are stored within their 22 broadcast; in other words, it's -- if you have a 23 broadcast, those numbers from the good are put into your 24 broadcast. So depending on the amount of broadcasts you 25 have, you'll have -- that's what you'll have, that many 33 1 broadcasts on the servers. 2 Q. Once the paperwork is done and the numbers 3 have been chosen or identified, what is the lag time 4 between when Fax.com loads that broadcast onto its 5 system and when the faxes start going out? 6 A. Well, that depends on when the customer wants 7 to go as well. They may choose a broadcast now that 8 they want to go in four or five days. Usually it's 9 anywhere from 24 hours to seven days is the usual time 10 frame. 11 Q. Is it the case that all the fax broadcasts that 12 are being done by Fax.com for an entire week are loaded 13 at once, just automatically run from that point on? 14 MR. BROADHURST: Objection to the form. 15 You can answer the question. 16 THE WITNESS: Say that again, if you could, or 17 rephrase it. 18 BY MR. DARWIN: 19 Q. Does Fax.com load all the broadcasts it's going 20 to do for a week, for a Monday through a Friday, at one 21 time and then just let it run automatically? 22 A. No. Process is constant. 23 Q. If a customer came to Fax.com on a Wednesday 24 with a broadcast it wanted to do quickly, is it feasible 25 for that broadcast to be done within 24 hours? 34 1 MR. BROADHURST: Objection. Calls for speculation. 2 You can answer the question. 3 THE WITNESS: It really depends. If it's 4 provided -- if the data is supposed to be provided 5 right, then the process needs to be confirmed, the data 6 needs to be confirmed. So usually not. But it's all 7 dependent on -- on the circumstances, the different -- 8 where they want to go with the database that comes in. 9 The querying is existing. 10 BY MR. DARWIN: 11 Q. When you say the data has to be confirmed, what 12 did you mean by that? 13 A. Fax numbers permission's been sent to them if 14 the permission's not been sent. 15 Q. When Fax.com receives requests to have numbers 16 removed from its database, customers are asked to wait 17 seven days for that to occur; is that right? 18 A. Up to seven days. 19 Q. Why does it take that long? 20 A. You have a network of computers not only at 21 Aliso Viejo but of course the FaxCasters that need to be 22 transmitted to and from, and it -- it takes time for 23 computer systems to make sure that numbers go out of the 24 good database. It's -- it's just the process involved. 25 And we're always trying to improve our processes. But 35 1 that's basically that's anywhere from one to seven days. 2 Sort of like the seven to 10 business-day rule when you 3 try to get a package. It's the same type thing. 4 There's processing involved. 5 Q. What in your experience is the main source of 6 delay in terms of the time between when a customer asks 7 to have its number removed and the day it's actually 8 removed from the database so that it no longer shows up 9 in broadcasts? 10 A. It's the computer -- it's the computer 11 processing time as far as getting out to a remote fax 12 location. Because those are not constantly connected to 13 Fax.com. So if they are processing a broadcast or 14 confirming or sending permission, you can't get into 15 them until they're finished. And if they have 16 broadcasts that are seven days long, it's going to take 17 seven days to get into those to make sure that they get 18 the numbers -- I say the bad numbers -- and that's why 19 the process may take up to seven days. 20 Q. Fax.com uses remote FaxCasters to do some 21 broadcasts, right? 22 A. Yes. 23 Q. Do those remote systems have their own copy of 24 the Fax.com database? 25 A. No, they don't. 36 1 Q. How are fax broadcasts communicated to a remote 2 FaxCaster for -- so that that broadcaster can send it 3 out? 4 A. Through the phone line. Data transfer. 5 Mind if I get some more water? 6 Q. No. Please. 7 (Discussion off the record.) 8 BY MR. DARWIN: 9 Q. Let me see if I can accurately kind of 10 summarize this idea of the delay. 11 If a broadcast is being done by Fax.com from one of 12 its remote FaxCasters and that broadcast contains a 13 number that has -- after it was sent to the remote 14 station has been asked to be de-listed by someone, is 15 the delay then associated with communicating to the 16 remote FaxCaster that that number should be deleted? 17 A. Yes. 18 Q. Is there any way that Fax.com has tried to 19 expedite that process? 20 A. We -- 21 MR. BROADHURST: Objection. Asked and answered. 22 You can answer the question. 23 THE WITNESS: Okay. We -- you know, in a perfect 24 scenario, we always are trying to improve the speed of 25 the transfers, trying to maybe let the remotes be set up 37 1 for a smaller period of time, if possible. It just 2 depends on the load of what's going out, the broadcasts 3 for customers. We've looked into having dedicated 4 lines that are always on there where it could always be 5 transmitted, but it's not cost-effective at this point. 6 We've been looking into it and we're always trying to 7 improve our systems. So -- 8 BY MR. DARWIN: 9 Q. And that delay doesn't apply when the 10 broadcasts are being done right out of the Aliso Viejo 11 facility? 12 A. Usually not seven days. It's possible. But, 13 again, there's -- when designing software, there's flaws 14 and things that need -- can be incorrect and take time 15 to correct and to have the software redone and things 16 like that. 17 So, I mean, there's always an improvement trying to 18 take place, but we try as best as we can. We'd love to 19 do it right off the bat, I mean, if we could, as soon as 20 we call in, make sure every broadcast is updated, but 21 it's a large process. 22 Q. Generally how many broadcasts does Fax.com do 23 in a day, say, in June of 2001? Do you have an 24 estimate? 25 MR. BROADHURST: Objection. Calls for speculation. 38 1 You can answer the question. 2 THE WITNESS: I really -- I couldn't -- I couldn't 3 say. It's -- I don't keep track of that. 4 BY MR. DARWIN: 5 Q. Do you have an idea or range how many you guys 6 have done in the past in a day? 7 A. Maybe 40 to 50 broadcasts a day. It just 8 depends on the load. 9 Q. Has Kevin Katz at some point recommended that 10 steps be taken to make the lag time between someone 11 asking to have their number removed from the database to 12 the time that that number is actually out of the 13 database shortened? 14 A. Myself and Kevin have -- have talked about it. 15 Q. What was that conversation prompted by? 16 A. Just it's good business practice for what we 17 do. People don't want to receive our faxes, there's no 18 reason to send them a fax. Customers -- why have our 19 customers pay for something that someone who's not going 20 to purchase their product or want their information 21 or -- or -- so it just makes sense. 22 Q. Was the conversation at all prompted by the 23 situation that occurred with Covington & Burling last 24 June? 25 A. No. 39 1 Q. Did the conversation take place after that 2 event? 3 A. The conversation's taken place many times as 4 part of our normal strategy on how to perform better in 5 our business. 6 Q. What, if anything, has been done to implement 7 that objective of shortening that lag time? 8 A. Really right now the current procedure -- it 9 did actually take longer than that at certain times in 10 the past. So we've cut it down to one to seven days. 11 Faster computers for processing information, better 12 software. It's just a constant process of developing, 13 improving, just like any version of software that you 14 might have. 15 Q. Anything else? 16 A. I'm trying to think. That's -- that's pretty 17 much all I can think about. I mean -- 18 Q. Has the seven-day lag time presented any 19 problems for Fax.com? 20 A. Problems? What do you mean? 21 Q. Irate customers or lawsuits, anything like 22 that? 23 A. I think most people when they -- if they can 24 call and talk to somebody, I think they understand then 25 why it takes that long. If we explain it to them, you 40 1 know, they're removed, it will not happen after that 2 week. I don't know of any lawsuits. 3 Q. Would you agree that once someone calls Fax.com 4 and asks to have a number removed from the database that 5 Fax.com no longer has permission to send fax 6 advertisements to that person? 7 MR. BROADHURST: Objection to the form. Objection 8 to the extent that it calls for a legal conclusion. 9 You can answer the question. 10 THE WITNESS: I -- I don't -- I'm not a lawyer. I 11 don't know the whole legal aspect of it. So I -- I 12 can't really come to a conclusion about that. I mean, 13 we try to take people out as soon as we can. We don't 14 want them to receive faxes if they don't want it. I 15 mean, I don't want to receive junk mail if I don't want 16 it. So we do our best to make sure they don't. 17 That's -- 18 BY MR. DARWIN: 19 Q. Without going into -- I don't want your opinion 20 on a legal idea, but just as a general matter of human 21 interaction, if someone asks to have their number 22 removed from the database, would it be your 23 understanding that you no longer have permission to send 24 them fax advertisements? 25 MR. BROADHURST: Same objection. 41 1 THE WITNESS: Like I said, we try our best to make 2 sure that we don't anymore. That's really -- that's 3 really -- that's kind of speculative as far as is it 4 permission or not. The word "permission" is -- I'm not 5 really aware of that -- you know, the legal aspects of 6 that term or, you know, that's a broad word. We try our 7 best. That's -- 8 Q. Despite your best efforts, on occasion people 9 still do receive faxes after they've asked that their 10 number be removed? 11 A. It's possible up to seven days. 12 Q. Would you agree it's probable? 13 MR. BROADHURST: Objection. Calls for speculation. 14 THE WITNESS: Yeah, I can't really say. It's 15 possible. I mean, it's -- 16 BY MR. DARWIN: 17 Q. Are you aware that it's ever happened? 18 A. On occasion. 19 Q. Can you give me an example? 20 A. Someone may call in and say, "I've removed my 21 number. I still got a fax from you." That -- as we 22 discussed, we let them know that it may take seven days 23 from the date that you have entered your number. And at 24 that point we won't send you any more. We're trying our 25 best to make sure that you don't receive any more faxes. 42 1 Q. Are you personally aware that people have in 2 fact received additional faxes after asking for their 3 number to be removed from the database? 4 A. Not -- I'm usually not involved in that aspect 5 of the company. 6 Q. Who would be? 7 A. Probably be compliance department. 8 Q. That's Mr. Martin? 9 A. Charles Martin. 10 Q. When Fax.com receives numbers for its database 11 from any source, whether that's from a broker or 12 customers, other than situations where people 13 affirmatively call in and ask for their number to be 14 included, what does Fax.com do to confirm that those 15 numbers are numbers for which the owners have invited or 16 provided permission for fax advertisements to be sent to 17 them? 18 MR. BROADHURST: Objection to the form, and I 19 believe it's already been asked and answered. 20 You can answer the question. 21 THE WITNESS: Send out permission document to 22 confirm -- confirm the number and send the permission 23 document at the same time. 24 BY MR. DARWIN: 25 Q. How does the permission document confirm for 43 1 Fax.com that the owner of the fax number has given its 2 consent or permission to send fax advertisements? 3 A. I can't -- you know, I don't know -- I can't 4 say whether or not a company providing a list is -- has 5 received permission. That's up to them to say, yes, we 6 have or, you know, yeah, this is -- this is an opt-in 7 list. I mean, we can't obviously follow up with every 8 number. But we send our own permission to it to give it 9 a second -- second chance if they haven't already done 10 it. 11 Q. Does Fax.com only send fax advertisements to 12 people who receive permission documents and 13 affirmatively respond, "Yes, I'll take your 14 advertisements"? 15 MR. BROADHURST: Objection to the form of the 16 question. 17 You can answer the question. 18 THE WITNESS: We allow them to remove themselves 19 from the database. 20 BY MR. DARWIN: 21 Q. You don't require them to affirmatively affirm 22 that they want fax advertisements? 23 A. No. 24 Q. Does Info USA when it sends numbers to Fax.com 25 provide any representation of any kind that "These are 44 1 numbers for which we've obtained permission to send fax 2 advertisements"? 3 A. Not that I'm aware of. 4 Q. Do any of the brokers from whom Fax.com obtains 5 numbers do that? 6 A. I don't know. I don't deal with the -- the 7 contracts, things like that, of that nature. 8 Q. Do you know if Fax.com asks the brokers the 9 numbers for which permission has been -- 10 A. I don't deal with that aspect. 11 Q. Who does? 12 A. Through various people in the country that deal 13 with the brokers. I mean, it's -- there's a wide range 14 of people who may call and deal with customers and 15 brokers. 16 Q. Who deals with brokers? 17 A. Could be Jeff Dupree, VP of sales. Could be a 18 sales individual. That's pretty much what I know of who 19 would deal with them at this point. 20 Q. When Fax.com receives numbers from customers 21 for future use, does it obtain -- does it require the 22 customers to represent that these are numbers for which 23 they've received permission to send fax advertisements? 24 MR. BROADHURST: Objection to the form of the 25 question. 45 1 You can answer it. 2 THE WITNESS: We -- we make sure it's a policy that 3 we ask the customer, "Is this your customer list?" If 4 they say, "This is our customer list," then we assume 5 that it's their customer base; therefore, they're 6 sending it to -- we can't -- there's no way of 7 determining that for every single number that comes into 8 the database. 9 BY MR. DARWIN: 10 Q. When you say "customer list," what do you mean? 11 What significance does -- 12 A. Wherever the customer got the list. I mean, we 13 can't tell. You know, they could say, "It's our 14 customer list. We already sent" -- "we already, you 15 know, sell these people" or -- we don't know, you 16 know -- we take the database, we confirm and send 17 permission documents ourselves to make sure or try to 18 make sure and send whatever information the customer's 19 looking for. It's kind of like being a post office in a 20 sense, you know. 21 Q. Does Fax.com keep any record of the numbers to 22 which it's sent permission documents? 23 A. Our policy is every number. 24 Q. How does it confirm one way or the other if a 25 permission document's been sent? 46 1 A. Well, the first time it sends that number, it 2 tries to send a permission document. That number is 3 then marked that it went through, the permission 4 document has been sent. So if the software's working 5 correctly, then every fax number should receive a 6 permission document. 7 Q. Does that mark that a number has received a 8 permission document, is that stored in the database? 9 A. Well, it confirms that that number's a fax 10 document by sending a permission document. So therefore 11 it would suggest that it's been sent, yeah. 12 Q. I guess my question is, is there any mark or 13 notation or record in the Fax.com database that a given 14 number in that database has received the permission 15 document? 16 MR. BROADHURST: Objection. Asked and answered. 17 You can answer the question. 18 THE WITNESS: If it's a good number, it's in our 19 data- -- in our good database. 20 BY MR. DARWIN: 21 Q. Have you ever checked to see if permission 22 documents were sent to any of the fax numbers owned by 23 Covington & Burling? 24 A. I've never checked. 25 Q. Is Fax.com in the position to either confirm or 47 1 deny that permission documents were sent to those 2 numbers? 3 A. It would have to be researched, but not to my 4 knowledge. We don't keep track of what fax numbers go 5 to a particular place. 6 Q. If you were to do that research, what would you 7 do? 8 A. I -- I really can't say what I would do. It's 9 very technical. But I would have to see how our 10 database structures are set up through our network, 11 different relationships and things, and see if there's 12 any way to do that. But we do not keep track of where a 13 number goes or when -- when it was sent basically. We 14 know that it was in the broadcast, but do we know that 15 that number actually -- which particular numbers went 16 through, we don't know. 17 Q. How can you confirm if a particular phone 18 number was in a particular broadcast? 19 A. By its geographic location. Geographic 20 location, if you have 500 numbers in an area code, then 21 you assume that those 500 numbers were sent out in that 22 broadcast, but you don't know which ones of those 23 numbers went through, which ones were sent. It's a 24 possibility they didn't go through. It's a possibility 25 that there was a miscommunication within the handshake 48 1 between the fax machines and it didn't get sent. It's a 2 possibility that the fax machine on the other end spit 3 out the fax ten times, you know. I mean, there's a 4 whole -- you know, there's a lot of ranges of things. 5 Q. If a customer went to Fax.com and said, "You 6 did a broadcast for me a month ago. Here's the date it 7 went out and here's the ad. Here's the geographic area 8 that I wanted to send it out to," could Fax.com then go 9 find out which numbers it was -- were in the broadcast 10 regardless of whether the faxes went through, but that 11 were in the broadcast for that particular broadcast? 12 MR. BROADHURST: Okay. I'm sorry. Objection. 13 Asked and answered. 14 THE WITNESS: We cannot determine which fax numbers 15 goes -- which fax number actually got sent, comes in, 16 out, get deleted, removed, marked bad, you know, that 17 kind of thing. So really there's no way of telling 18 because it's constant change on a daily basis. 19 BY MR. DARWIN: 20 Q. So the numbers that are included in a given 21 broadcast are not stored anywhere? 22 A. No. 23 Q. Are the numbers that were included in a given 24 broadcast reflected in any phone records that Fax.com 25 receives? 49 1 A. Not that I'm aware of. 2 Q. You do receive phone records? 3 A. I do not know. I -- possibly. I don't deal 4 with those. 5 Q. You do not deal with the phone records. Have 6 you ever seen them? 7 A. I would probably say that the phone records are 8 not actual phone numbers because that would be a -- huge 9 boxes of things. I think it's just totals due. But 10 I've -- I've never seen -- I don't deal with the phone 11 records. So I know that there's no big boxes coming to 12 the place. I can say that much. 13 Q. Who does receive the phone records? 14 A. I'm not sure. It would probably be 15 administrative level or accounting. 16 Q. Phone records could come in electronic form, 17 couldn't they? 18 A. It's possible, yes. 19 Q. Do you have any idea if Fax.com saves its phone 20 records? 21 A. I do not know. 22 Q. Has it -- have you ever been asked to go check 23 phone records to see if certain numbers were included in 24 a fax broadcast? 25 A. I haven't. 50 1 Q. Has it been your experience that phone records 2 generally reflect the numbers dialed on a given date? 3 A. Say that again. I'm sorry. 4 Q. Has it been your experience that phone records 5 generally reflect the numbers dialed from a particular 6 line on a given date? 7 MR. BROADHURST: Objection. Calls for speculation. 8 You can answer the question. 9 THE WITNESS: I -- once again, I don't deal with the 10 phone records so I don't know how the phone company 11 operates with their billing methods. 12 BY MR. DARWIN: 13 Q. Are you aware that anyone at Fax.com has ever 14 attempted to search its phone records to find out if a 15 number of fax broadcasts were sent to the phone numbers 16 owned by Covington & Burling that are identified in its 17 complaint? 18 MR. BROADHURST: Objection. Asked and answered. 19 THE WITNESS: Once again, we do not know where fax 20 numbers were sent on any given broadcast. Database is 21 also encrypted. So it's highly unlikely that anyone can 22 search the database. 23 BY MR. DARWIN: 24 Q. I'm talking now about searching phone records 25 at Fax.com. 51 1 A. I do not know about the phone records so I 2 can't tell you. 3 Q. You don't know if anyone's ever searched or 4 attempted to search phone records received by Fax.com 5 for the dates of June 4th through 8th, 2001? 6 A. I don't deal with the phone records so I can't 7 tell you if they have or not. 8 Q. I'm just asking you as an officer of the 9 company if you know that that investigation's ever taken 10 place. 11 A. I do not know. 12 Q. Do you know if that's an investigation that 13 could occur, feasibly occur? 14 A. I guess. I mean, it depends on the phone 15 company, how they provide the records. 16 MR. BROADHURST: I'd just like to remind the witness 17 that I don't think Mr. Darwin is interested in your 18 guesses. He's just interested in what you know. 19 THE WITNESS: I don't know. 20 BY MR. DARWIN: 21 Q. Has anyone at Fax.com ever attempted to find 22 out if it received permission from Covington & Burling 23 to receive fax advertisements? 24 A. I do not know that. 25 Q. You've never done that investigation? 52 1 A. I have never done that. 2 Q. And you've never been told someone else was 3 doing it? 4 A. No. 5 Q. Do you know if Fax.com has in its possession 6 any document or electronic file that shows that it 7 received permission from Covington to send it fax 8 advertisements? 9 A. No, I don't. 10 Q. Have you ever spoken to Kevin Katz about the 11 allegations made by Covington in this case that it 12 received fax advertisements without having given 13 permission to receive those? 14 A. I have not. I don't deal with any legal 15 aspects of the company. 16 MR. DARWIN: All right. We've been going an hour 17 and a half. Take a short break. Not quite an hour and 18 a half. About an hour and 15 minutes. 19 (Recess taken.) 20 MR. DARWIN: Back on the record. 21 BY MR. DARWIN: 22 Q. Are you aware if anyone at Fax.com has ever 23 checked to see if any faxes were broadcast to phone 24 numbers owned by Covington & Burling, and I'd just read 25 them into the record for you. Reference area code (202) 53 1 778-5000 through 5999, area code (202) 778-6500 through 2 6599, and area code (202) 662-6291. 3 A. No, I'm not aware of that. 4 Q. You're not aware of anyone doing an 5 investigation into whether that happened? 6 A. No. 7 Q. Are you aware that anyone at Fax.com has ever 8 checked to see if numbers in the ranges I just read to 9 you are in Fax.com's bad database? 10 A. No, I'm not aware of that. 11 Q. Are you aware if anyone at Fax.com has ever 12 looked into whether Fax.com obtained those numbers from 13 any source? 14 A. No. 15 Q. I'm going to have a document marked as an 16 exhibit. We're going to mark this as Exhibit 4, just 17 going in order. 18 MR. BROADHURST: Okay. P-4? 19 MR. DARWIN: Yeah. 20 (Exhibit 4 marked for identification.) 21 BY MR. DARWIN: 22 Q. I'm going to hand you a document that's been 23 marked as Exhibit 4. It's a set of interrogatory 24 responses. 25 MR. BROADHURST: I'm sorry. Interrogatory 54 1 responses? 2 MR. DARWIN: Request for admission responses. 3 BY MR. DARWIN: 4 Q. And ask you to look at that, review it, 5 familiarize yourself with it. Let me know if you've 6 seen it before. 7 MR. BROADHURST: And I'd just advise the witness to 8 review the document thoroughly and let Mr. Darwin know 9 when you're ready to proceed. 10 BY MR. DARWIN: 11 Q. Have you seen Exhibit 4 before? 12 A. Yes. 13 Q. What is it? What is the document? 14 A. A legal document. 15 Q. Is this a set -- is Exhibit 4 a set of request 16 for admissions and responses that you reviewed and 17 verified? 18 A. Yes. 19 Q. And that's your signature on the last page? 20 A. Correct. 21 Q. And the responses in this document, Exhibit 4, 22 are accurate? 23 A. Correct. 24 Q. I want to turn your attention to request for 25 admission no. 7. Request -- I'll just read into the 55 1 record -- is, "Mr. Wilson knew as of the period of 2 June 4th through June 8th, 2001, that Fax.com was 3 disseminating commercial fax advertisements to the 4 following ranges of fax numbers: (202) 778-5000 through 5 (202) 778-5999, and (202) 778-6500 to (202) 778- 6799." 6 The -- following a list of objections, the following 7 answer is provided at the bottom of that paragraph: 8 "Without waiver of said objections and subject 9 thereto, as of June 4th through June 8th, 2001, Wilson 10 specifically denies that he was aware that Fax.com was 11 disseminating commercial fax advertisements to the 12 following ranges of fax numbers," and they're the same 13 as I just read. 14 MR. BROADHURST: Objection to the extent that the 15 document speaks for itself. 16 MR. DARWIN: Okay. 17 BY MR. DARWIN: 18 Q. And my question to you is, what was the basis 19 for that response? 20 A. I didn't know that I was sending so-called 21 commercial fax advertisements to those numbers. 22 Q. During the week of June 4th through June 8th, 23 were you made aware by anyone at Fax.com that 24 Covington & Burling had asked that no more faxes be sent 25 to those ranges of fax numbers? 56 1 A. No, I'm not. That's not part of my function. 2 Q. Mr. Martin or Mr. Katz never approached you 3 about that issue? 4 A. That's -- no. 5 Q. Are you aware that there was even a dispute or 6 a -- strike that. 7 Were you aware that Fax.com was in any type of 8 communication with Covington & Burling during that week? 9 A. No. 10 Q. Since June 4th, since that week of June 4th 11 through June 8th, have you ever spoken to Charles Martin 12 about requests coming that no more faxes be sent to 13 certain phone numbers? 14 A. No. 15 Q. Since the week of June 4th or June 8th, have 16 you ever spoken to Mr. Katz about requests by 17 Covington & Burling that no further faxes be sent to 18 those numbers? 19 A. No, I haven't. 20 Q. Have you spoken to anyone at Fax.com about 21 that? 22 A. No. I don't -- it's not part of my function. 23 Q. You were aware before today that a lawsuit had 24 been filed against Fax.com by Covington & Burling? 25 A. Before today? 57 1 Q. Yes. 2 A. Yes. 3 Q. Excluding the conversations with your 4 attorneys, how did you become aware of the lawsuit? 5 A. Through a document with my name on it. 6 Q. Have you ever discussed the lawsuit with anyone 7 other than your attorneys? 8 A. No, I haven't. 9 Q. When Fax.com is doing a fax broadcast for a 10 client, does Fax.com offer a client the ability to 11 report on the success rate of the faxes that went out? 12 MR. BROADHURST: Objection to the form. 13 You can answer the question. 14 THE WITNESS: That the customers report to us? What 15 do you mean? 16 BY MR. DARWIN: 17 Q. I'll rephrase it. 18 Does Fax.com tell customers that it's able to, after 19 a fax broadcast, let them know how many faxes went 20 through? 21 A. Yes, that's how we bill them. 22 Q. How does Fax.com keep track of how many faxes 23 went through? 24 A. It's reported basically either success or 25 failed from the broadcast system. 58 1 Q. Does the broadcast system prepare an automatic 2 report? I mean, is that part of what the software's 3 written to do? 4 A. It -- it basically has a date of the broadcast, 5 success, total tried. Total tried minus success gives 6 you fails. 7 Q. And that's -- is that just an electronic report 8 that's generated by the software program? 9 A. Yes. 10 Q. Does that electronic report contain any other 11 data, for example, the numbers to which the successes 12 and failures had occurred? 13 A. No. The numbers are never listed on anything. 14 Q. Does Fax.com keep those reports anywhere, 15 electronically or in hard copy? 16 A. Not that I'm aware of. I -- yeah, I don't 17 know. 18 Q. Who would know? 19 A. Possibly people who deal with customers. I 20 imagine for some amount of time since that. 21 Q. I imagine the electronic reports about the 22 success and failure rate of the broadcast is kept for at 23 least more than a few days so that it can be 24 communicated to customers; is that accurate? 25 MR. BROADHURST: Objection as to form. 59 1 You can answer the question. 2 THE WITNESS: I guess so. I mean, I shouldn't 3 guess. It's possible. Invoice, maybe. 4 BY MR. DARWIN: 5 Q. Do Fax.com invoices reflect the success rate of 6 a fax broadcast, and when I say "success rate," the 7 percentage of numbers that went through? 8 MR. BROADHURST: Objection as to form. 9 You can answer the question. 10 THE WITNESS: Based on the dollar -- the amount of 11 the invoice, in regards to the amount per fax, I guess 12 that's how you'd evaluate what was a success. 13 BY MR. DARWIN: 14 Q. When the electronic report is generated showing 15 the success rate, is it sent to anyone electronically by 16 e-mail or any other methods in the company at Fax.com? 17 A. I don't know. It's up to the departments that 18 would deal with the customers if they send them 19 information. 20 Q. Who at Fax.com has access to see what that -- 21 to those reports? 22 A. The people who deal with the customers. 23 Q. Salesmen? 24 A. Sure. 25 Q. Is there anyone else who deals directly with 60 1 customers other than salesmen? 2 A. Maybe sales administrators. 3 Q. Do you know how that information is 4 communicated to clients? 5 A. I do not know. 6 Q. And you're not aware one way or the other if 7 the electronic reports regarding the success rate of a 8 fax broadcast are kept for any amount of time by 9 Fax.com? 10 A. I -- I don't know whether they're kept or not, 11 no. 12 Q. Do you know if Fax.com keeps records of its 13 invoices? 14 A. I'm sure within the accounting system. 15 Q. Who's in charge of the accounting system? 16 A. VP of finance. 17 Q. Who's that? 18 A. Tom Roth. 19 Q. Tom Roth. 20 MR. BROADHURST: I'd like to place an objection to 21 this line of questioning as to relevance. 22 BY MR. DARWIN: 23 Q. Have you ever seen Fax.com invoices? 24 A. Yes. 25 Q. What information do they reflect? 61 1 A. The amount due the customer it goes to. 2 Q. Let me ask, is there an identification of, you 3 know, a fax broadcast and then the amount due for that 4 broadcast? 5 A. Is there a relation? Is that what you -- 6 Q. For example, would an invoice to a customer for 7 a fax broadcast that occurred on December 8th, 2001 8 show "Fax broadcast December 8th 2001, amount due" -- 9 "amount owed"? 10 MR. BROADHURST: Objection. Calls for speculation. 11 You can answer the question. 12 THE WITNESS: I don't know because -- I mean, I 13 don't know how every invoice is generated. I -- I -- I 14 don't see the invoices. So I'm -- 15 BY MR. DARWIN: 16 Q. I'm only asking about -- based on your having 17 seen them in the past, whether you recall the 18 information that's contained in an invoice. 19 A. I remember what I've seen is the bottom line 20 what was due. 21 Q. Do you know the identity of any of Fax.com's 22 clients? 23 A. No, I don't. 24 Q. Do you know if Fax.com has a document retention 25 policy in place? 62 1 A. What do you mean by "document retention"? 2 Q. Is there any policy and procedure in place at 3 Fax.com regarding the amount of time that records, 4 business records, electronic or hard copy, are 5 maintained? 6 MR. BROADHURST: Objection as to form. 7 You can answer the question. 8 THE WITNESS: That wouldn't be policy that I've 9 made. It's not part of my function. 10 BY MR. DARWIN: 11 Q. That would not be a policy you've made? 12 A. Yeah, it's not. 13 Q. You've never seen a policy one way or the 14 other? 15 A. No. 16 Q. Do you know if Fax.com has a policy of 17 destroying records after a given amount of time? 18 A. I don't know about that policy. 19 Q. Do you have an e-mail account at Fax.com? 20 A. Personally? 21 Q. Yes. 22 A. Yes. 23 Q. Do you use that e-mail account to communicate 24 with other people within the company? 25 A. Yes. 63 1 Q. Have you ever communicated with anyone in the 2 company by e-mail regarding the allegations in Covington 3 & Burling's complaints relating to faxes in June of 4 2001? 5 A. No. 6 Q. When -- let me back up. 7 How does Fax.com make a decision to do a fax 8 broadcast from a remote fax broadcaster? 9 MR. BROADHURST: Objection as to lack of foundation. 10 You can answer the question. 11 THE WITNESS: It's really software based. 12 BY MR. DARWIN: 13 Q. What do you mean? 14 A. Depending on -- it depends on the availability 15 of the -- or capacity of the system, availability for - - 16 if it's needed, sort of a secondary system. 17 Q. Would you say essentially the remote FaxCasters 18 just provide you additional bandwidth when you need it? 19 MR. BROADHURST: Objection as to form. 20 You can answer the question. 21 THE WITNESS: Sure. That's part of our system. 22 BY MR. DARWIN: 23 Q. How are -- excuse me if I've asked you this 24 question before. But how are fax broadcasts transmitted 25 to a remote FaxCaster? 64 1 A. Through a phone line data transfer. 2 Q. Is it an e-mail attachment? 3 A. Standard data transfer through a phone line. 4 Q. Does Fax.com keep any records of those 5 transmissions? 6 A. No. 7 Q. Does Fax.com keep any notation or record of 8 which broadcasts are sent from its Aliso Viejo facility 9 as to which fax broadcasts are sent from remote 10 locations? 11 A. No. Once the -- it's basically treated as one 12 system. 13 Q. Does Fax.com -- let me back up. 14 The FaxCasters that are remote are owned by other 15 people; they're not owned by Fax.com, right? 16 A. Correct. 17 Q. Does Fax.com compensate those owners for the 18 use of their FaxCasters to do fax broadcasts? 19 A. On some occasions. 20 Q. Not always? 21 A. Not always. 22 Q. When do they not compensate those owners of 23 FaxCasters? 24 MR. BROADHURST: Objection as to relevance. 25 You can answer the question. 65 1 THE WITNESS: The system is owned for the use of the 2 individual's own information they want to send 3 themselves. 4 BY MR. DARWIN: 5 Q. When are the owners of FaxCasters compensated 6 for the use of their FaxCaster system? 7 A. That's -- that's more of an accounting -- 8 accounting question when they are actually compensated. 9 Q. No. Under what circumstances are they 10 compensated? 11 A. When they send out faxes. 12 Q. For Fax.com? 13 A. Sure. 14 Q. Do you know how they're compensated; in other 15 words, by per page or per minute? 16 A. I'm not -- I'm not aware of their 17 compensation. 18 Q. Would accounting have records of compensation 19 paid to remote FaxCasters for fax broadcasts? 20 MR. BROADHURST: Objection as to relevance. 21 BY MR. DARWIN: 22 Q. Do you know? 23 A. I don't -- I don't deal with that function of 24 the company. 25 Q. Is there any way that Fax.com can show that it 66 1 did or did not send faxes to the range of numbers owned 2 by Covington & Burling in June of 2001? 3 MR. BROADHURST: Objection as to form. 4 You can answer the question. 5 THE WITNESS: Not that I'm aware of. 6 BY MR. DARWIN: 7 Q. I'm going to hand you a document that was 8 marked as an exhibit yesterday during Mr. Katz's 9 deposition, and I'm going to refer you to an exhibit 10 that's attached under tab F. 11 MR. BROADHURST: I'm sorry. What's that marked 12 as, 1? 13 MR. DARWIN: Exhibit 1, tab F. 14 BY MR. DARWIN: 15 Q. It's underneath tab F. There you go. 16 If you could just review that document, which is a 17 letter dated June 7, 2001 on Covington & Burling 18 stationery. Let me know if you've seen it before. 19 Have you ever seen that letter before? 20 A. No, I haven't. 21 Q. Have you ever discussed with Kevin Katz the 22 possibility that a fax broadcast in June of 2001 was 23 sent to a Covington & Burling server that generated a 24 large number of faxes? 25 A. No, I haven't. 67 1 MR. DARWIN: Okay. I don't have extra copies of 2 this so I'll just mark it. 3 (Exhibit 5 marked for identification.) 4 MR. BROADHURST: Just for the record, the witness is 5 going to leave those records, the exhibits with you. 6 MR. DARWIN: Correct. I'm sorry. What document are 7 you referring to now? 8 This is five. I'm going to give it to you and you 9 guys can look at it. 10 MR. BROADHURST: Do you think we can get a copy 11 before the end of the day? 12 MR. DARWIN: Yeah. 13 MR. BROADHURST: I take it you're finished with P-4. 14 MR. DARWIN: Yes. 15 MR. BROADHURST: Thank you. 16 BY MR. DARWIN: 17 Q. I'm going to hand you a document that's been 18 marked as Exhibit 5 and ask you to look through it and 19 let me know if you've ever seen it before. 20 Have you seen that before? 21 A. Yes. 22 Q. What is it? 23 A. What is it? 24 Q. What is it? What is that document? 25 A. It's a marketing piece. 68 1 Q. Developed by who? 2 A. By a marketing company. 3 Q. Is it a marketing piece for Fax ID? 4 A. Yes. 5 Q. Did you have anything to do with the content of 6 that exhibit? 7 A. No, I'm not responsible for any marketing or 8 wasn't at any time. 9 Q. I'm mainly curious about one part of it. 10 If you look on the second page of the document under 11 description of the FaxCaster in the first number 12 heading, can you read that. 13 A. No. 1? 14 Q. Yeah. 15 A. "FaxCaster acquires every fax number in your 16 sales territory." 17 Q. What does that mean? 18 A. It really means it confirms every fax number in 19 your territory. 20 Q. How does it do that? 21 A. By dialing a phone number and sending a 22 permission document to confirm that it is a fax number. 23 Q. Does the FaxCaster system that Fax.com sells do 24 the same thing? 25 A. Yes. Confirms fax numbers. 69 1 Q. Does Fax.com ever use FaxCasters to obtain new 2 fax numbers? 3 A. No. It's used to confirm whatever's uploaded 4 to the system. 5 Q. Has Fax.com ever used FaxCasters to obtain new 6 fax numbers for its database? 7 A. No. It's been used to confirm numbers. 8 Q. And those numbers are numbers that come from 9 Fax.com's database? 10 A. Brokers, customer lists, opt-in. 11 Q. I'm going to hand you what's been marked as 12 Exhibit 2. This was marked during Mr. Katz's deposition 13 yesterday. He identified it as Fax.com's responses to 14 interrogatories in this case. 15 I'm just going to direct you to number -- 16 interrogatory no. 12 and ask you to read it. You can 17 look at the whole document, but I want to focus on 12. 18 A. Yeah. 19 Q. Have you seen it? 20 A. Uh-huh. 21 Q. No. 12, interrogatory no. 12 -- 22 MR. BROADHURST: That's page 5. 23 BY MR. DARWIN: 24 Q. -- asks Fax.com to identify the methods by 25 which it obtains fax numbers. And at the bottom of the 70 1 response, there's a reference to after no. 3, "Fax.com's 2 independent efforts to identify telephone facsimile 3 numbers." 4 A. That's the same pretty much as individuals 5 trying to -- that sell us fax numbers, individuals try 6 to opt in. That is the ways that we acquire the 7 database. 8 Q. That's what I was going to ask. Tell me 9 everything that those independent efforts encompass. 10 MR. BROADHURST: Objection. Asked and answered. 11 You can answer the question. 12 THE WITNESS: Customers call in to an automated 13 system to leave their fax number they wish to receive 14 faxes on. Brokers and clients give Fax.com databases to 15 send faxes out to those fax numbers. 16 BY MR. DARWIN: 17 Q. And those are all the different efforts that 18 Fax.com uses? 19 A. Correct. 20 Q. Have you ever heard of war dialing? 21 A. No. The term "war dialing," no. 22 Q. No? 23 Have you heard of a process by which a system can 24 call random numbers and identify those that have fax 25 tones, they compile a list of those numbers that have 71 1 fax tones? Have you ever heard of a system -- 2 A. I've heard of a system. I've heard of that 3 happening before, yes. 4 Q. What do you call it? Do you have a name for 5 it? 6 A. I haven't really -- not really. 7 Q. You've never -- 8 A. Dialers. I don't know. 9 Q. You've never heard of that process being called 10 "war dialing"? 11 A. No, I haven't heard of that. 12 Q. For purposes of this deposition, we'll call 13 that system "war." Has Fax.com ever engaged in war 14 dialing to identify new fax numbers? 15 A. No. 16 Q. What is an SIC code? 17 A. Standard industry code. 18 Q. What does that mean? 19 A. It is the government's way of categorizing 20 businesses by their -- what they -- what their business 21 function is. 22 Q. Can Fax.com search its database on the basis of 23 SIC codes? 24 A. Yes. 25 Q. How does it do that? Does the fax database 72 1 include SIC codes? 2 A. Yeah, the fax number is attached to a 3 particular SIC code, I'm -- as often as it can be, you 4 know. 5 Q. So on occasion fax numbers in Fax.com's 6 database include an SIC code? 7 A. Yes. 8 Q. Is an SIC code just a series of numbers? 9 A. Yes. 10 Q. How many digits? 11 A. From four to six -- actually two to six. Sorry. 12 Q. Other than SIC codes, is there any other 13 information that's ever attached to fax numbers in 14 Fax.com's database? 15 A. No. 16 Q. What's your understanding of the phrase a 17 "metro area"? 18 A. Metro area? 19 Q. Yeah. 20 A. Basically a city, that's a city area, boundary 21 area, Los Angeles metro. That's basically all. 22 Q. Can Fax.com search its database on the basis 23 of metro areas? 24 A. If the area codes relate to particular Zip 25 Codes which relate to counties, metropolitan area, 73 1 state. 2 Q. Has Fax.com attempted to put into place any 3 programs that would allow it to start keeping records of 4 fax broadcasts and the numbers to which those broadcasts 5 are sent? 6 A. No. We don't keep any records that list -- 7 which each fax number is sent. 8 Q. Have you ever been asked to by clients? 9 A. No. 10 Q. Why don't you keep those records? 11 A. Our database is encrypted, which you can't 12 actually see the numbers. That was done on -- on 13 purpose for security. And therefore there's no reason 14 to attach it if you don't even know what the number is. 15 Q. Has Fax.com ever inquired internally as to 16 whether having records that reflect the numbers to which 17 a fax broadcast is sent is useful? 18 A. I don't see any use. 19 Q. Has Fax.com ever evaluated that as a 20 possibility in terms of creating new records? 21 MR. BROADHURST: Objection as to relevance. Place 22 an objection to this entire line of questioning on this 23 point. 24 You can answer the question. 25 THE WITNESS: No, we haven't. 74 1 MR. DARWIN: Then I'm done. A lot of your answers 2 helped me get done quicker. 3 MR. BROADHURST: That's it? 4 MR. DARWIN: Yeah. 5 MR. BROADHURST: Okay. I thought we had two hours. 6 REPORTER: Same stipulation? 7 MR. BROADHURST: The same request regarding a 8 proposal of confidentiality. 9 Do you recall it or should I repeat it? I'll repeat 10 it. 11 Fax.com and Mr. Wilson intend to propose a 12 stipulated confidentiality agreement between the parties 13 in the suit by which parties can designate transcripts, 14 records, documents, et cetera, as confidential in this 15 case, and we reserve the right to designate this 16 transcript as being confidential pursuant to such an 17 agreement. 18 MR. DARWIN: I guess that means as long as we can 19 come up with a -- one we agree upon, then that's fine. 20 MR. BROADHURST: Right. 21 (Whereupon, at 12:35 p.m. the deposition was 22 concluded.) 23 * * * * * 24 25 75 1 I hereby declare under penalty of perjury that 2 the foregoing is my deposition under oath; that these are 3 the questions asked of me and my answers thereto; that I 4 have read my deposition and have made the necessary 5 corrections, additions or changes to my answers that I 6 deem necessary. 7 IN WITNESS THEREOF, I hereby subscribe my 8 name, this _______ day of __________________ 2002. 9 10 11 ___________________________ 12 ERIC WILSON 13 14 15 16 17 18 19 20 21 22 23 24 25 76 1 STATE OF CALIFORNIA ) 2 : SS. 3 COUNTY OF SAN DIEGO ) 4 5 I, Jerre Walker, CSR No. 5343, in and for the 6 State of California, do hereby certify: 7 That, prior to being examined, the witness 8 named in the foregoing deposition was by me duly 9 sworn to testify the truth, the whole truth and 10 nothing but the truth; 11 That said deposition was taken down by me in 12 shorthand at the time and place therein named, and was 13 thereafter reduced to typewriting under my direction, 14 and the same is a true, correct and complete transcript 15 of said proceedings; 16 I further certify that I am not interested 17 in the event of the action. 18 Witness my hand this _____ day of 19 _________________, 2002. 20 21 22 ___________________________ 23 Jerre Walker 24 CSR No. 5343 25