We are on the record at 3:24 p.m. on Friday, July 7th, 2000 for the videotape deposition of Michael Eisner. We are taping this deposition at 500 South Wista Street in Burbank, California on behalf of the defendants in the action entitled Universal City Studios, Inc. at All versus 2600 Magazine, Inc. at All. Case number 00 CIB 0277 L AK. My name is Chuck Goss. I'm the video production specialist from Interim Court Reporting located in Los Angeles, California. This is tape number one of volume one. Would council and all present please identify themselves for the record.
David Atlas, council for defendant.
From Scott Cooper of the law firm of Proscar Rose LLP, uh, council for the plaintiffs.
Mark Litback Motion Pictures Association of America Council for the Pliffs
Mor Noaki for Walt Disney Company also blue company.
Thank you. The witness may be sworn in. He's right now sir for the testimony. You'll give him a fine proceeding will be the truth and the truth and I've got the truth. So I hope you do.
Good afternoon, Mr. Riser. My name is David Atlas. I'm the attorney for the defendants in this case. I'm going to be asking you some questions this morning. There's anything you don't understand, just uh let me know and I'll rephrase it. Uh could you say your full name for the record?
Michael D. Eisner. Uh your address.
Hang hang on. Is business address?
At 500 South Point of Business Street, Burbank, Illinois.
And uh your position with Disney?
Uh chief executive officer.
Um are you aware of the utility known as DECSS?
What is your understanding of a DECSS?
Uh an encryption system. Uh, I'm not sure whether it's the encryption system or the anti-encryption system, but it's the an acronym for the uh DVD security of full video, full motion video is I think that's CSS. Is that the
Oh, okay. Right.
So, I think DCSS was the other one that you referred to. What is what is your understanding if any of DEECSS?
Well, one is the encryption system and one is the system to bypass the encryption system.
Okay. Um, when was the first time you learned of the existence of DECSS?
Just answer the time.
So, I have the right anacronis. That is the
He's asking about the hack system.
He's asking about when you first heard about the existence of the hack.
I don't remember exactly.
Okay. Would it have been 1999, late 1999? I'm not ex I'm just not sure.
Okay. Um, do you know of any other utilities that perform the same function as the ECSS?
What the heck he's asking about? Why not?
Okay.
Would it have been October 1999 that you first learned of the existence?
It calls for speculation. He's asked and answered.
Um, let me ask you that briefly. Can you tell me how Disney determines the price at which it sells DVDs?
Not really. It's it varies from time to time and territory to territory and competitive nature of the business. So, I really can't
You would agree that uh the DVDs released by Disney are appropriately priced.
How is that question relevant to the lawsuit? And what do you mean by appropriate?
Do you understand the question? I understand that by council's response.
Are are you going to suggest in some way that it's relevant? Uh the court has made it clear that this deposition is to be circumscribed.
Um okay, then why don't you indicate to me in what way that might be?
First, I'd like an answer to the question. I think it'll
You're asking whether the prices are appropriate.
Disney obviously thinks the prices are appropriate. What are you trying to get at?
I'd like that answer from him and then we can move on. If that's the answer,
you can answer yes or no.
as you sit here today, can you uh tell me any discussions you've had with anyone uh regarding the potential damage that DEECSS could cause other than council?
just vague recollections of various convers no specific I can't remember any specific conversations that I can put meat on.
Can you tell me with who you had those conversations?
General uh internal executives the Walt Disney Company.
Can you tell me the substance of those conversations just in relationship with our overall strategy to combat piracy of our products?
did you discuss specifically the damage that DECSS could cause to those executives?
Well, just to the sense that it would be fairly devastating this kind of piracy and this is an example of it.
Okay. Do you have any knowledge of DECSS actually being used to copy DVDs?
I don't. Okay. Do you have any knowledge of any evidence of DECSS being used to pirate DVDs?
H how do you mean to distinguish that from your prior question? Um
I'll be more specific. Trafficking them trafficking in them over the internet, for example.
You're asking for his personal knowledge?
I have no knowledge one way or the other.
Okay. Uh has any information been brought to your attention by anyone within Disney or anyone else? um of DECSS being used to copy DVDs or traffic in the over the internet.
Mr. Eisner, I want you to exclude from your answer to that question conversations you've had with council either within the company or outside council.
Yeah, just the general conversations about the the the prospect the devastating prospects of of uh video piracy beginning with DVDs but moving on.
Okay. But I guess what I'm asking for is any evidence other than sort of prospects, the possibility. Do you have any hard evidence of it being done?
I'll I'll instruct the witness not to answer that question. Um, this witness uh is the chief executive officer of a company um that is a litigant in this lawsuit. He has information regarding this in the context of the attorney client privilege. If you're asking for um the witness's information and evidence, um I will tell you uh that the only source of the evidence uh to be used in this case is going to be through counsel.
Okay. Um do you have any understanding of the feasibility of trafficking in DVDs over the internet uh using this DEECSS utility?
Would you read back the question, please?
Do you have any understanding of the feasibility of trafficking and DVDs over the internet using this DEECSS utility?
Check to the form of the question.
You can answer if you understand it.
Do I understand the feasibility of trafficking on the internet in video? Do I have specific understanding of the exact technology that this process uses to traffic? No.
No. I guess what I'm asking is you understand that I think you the DECSS utility is one means of bypassing the CSS encryption. What I'm asking you is do you have any understanding of using the the practical aspects of using DEECSS to bypass the encryption and then copy it onto a drive and traffic it onto the internet?
I don't even understand exactly the question.
Okay. Um I'm going to I guess show you what I've had pre-marked as a exhibit one. Copy that.
Uh, as as I read this, this looks like the text of a presentation you gave to Variety Schroeder's Big Picture Conference. Is that correct?
Uh, when was this presentation given?
Uh, a couple months ago. I don't know the date.
Okay. And, uh, what is the Variety Schroers Big Picture Conference? It's an entertainment industry symposium uh attended by either um investment analysts or people like that interested in the uh various public companies that are presented
and this is the text of the the speech or presentation you gave to them
I believe so. Take your time to take a look at and make sure you're familiar with it.
Okay. Um, was this presentation accompanied by a PowerPoint demonstration? I know that there are notes about video in here.
Okay. What uh how did this go along with whatever videos you were showing? Do you recall?
They showed videos to demonstrate uh uh parts of my speech, your strength to, but I don't believe it was a PowerPoint presentation.
Okay. Um, as I was reading this uh this morning, I noticed uh on I guess the third page uh says uh I might add that we receive legal clearances to show you all this terrific copyrighted intellectual property of our competitors. Uh is that that's actually true? The uh
Uh who did you recall who you called or who you had called to get these the clearances?
Assume facts not evidence. You're asking who the company did or are you asking what whether Mr. Eisner had something to do with
Did you make any of the Did you make any of the calls together
Okay. Uh the next line uh says in 1993, as I'm sure you all remember, Jurassic Park came along and by the way, we couldn't get those clearances. That was your understanding that I guess Spielberg or the people that control Jurassic Park wouldn't give you the clearances to use that.
When we I gave the speech twice, the second time we gave it, they gave the clearances. Uh they they they it didn't get I guess to the right person. So they we couldn't get the clearance of the first one.
Why uh they give you a reason for not giving you the clearance the first time or
I think they just say no on everything from Steven Spielberg. I I I'm speculating but when I did it a second time I used it as a joke and when I did it I did it a second time they didn't want to look as though they were not cooperate with us. But um out of curiosity, why did you want to use the Jurassic Park uh clip for the presentation?
Well, the speech is all about dinosaur and the evolution of uh uh dinosaur movies from the beginning of the film industry. So, that was a important dinosaur movie.
Uh do you have any knowledge of whether you actually needed the permission of uh the competitors to use these clips?
Calls for a legal conclusion.
Do you have any understanding of whether strike that uh do you have any understanding of the term fair use?
Do you know what what is your understanding of that term?
You're asking if I had a general understanding.
He's only asking for your general understanding. He's not entitled to any legal conclusions from you.
Therefore, I I would be hesitant to give you a specific response because I only have a general understanding of fair use.
I'll I'll take the general understanding if that's that's all you have.
My general understanding would really be kind of limited to parody. Short use parody would be kind of my general understanding.
Do you have any understanding again I'm asking you as a layman uh whether fair use would have permitted you to use these clips without permission?
There's the judge has made it clear that he does not expect this deposition to be um a question and answer the way it was with Mr. Valente on um whether the witness has a particular legal understanding about what's legal and and what's not. I don't think there's any question that that's an area the judge has indicated he doesn't consider appropriate for this deposition.
I'm asking one question. It's not going to go beyond that. I think it's I'm just asking for his lay understanding.
You've asked him his understanding of fair use. Um and I'm not going to allow the witness to answer hypothetical legal questions.
It's not a hypothetical legal question. asking if he had an understanding whether he could have used it without getting permission.
You and I disagree on what a hypothetical is.
You instruct him not to answer.
I'm going to instruct him not to answer legal questions. Yes.
Uh can I direct your attention to page six of uh this text here? I think you were talking about uh the new dinosaur movie uh and you said uh the movie took four years to make uh during which 45 million megabytes were crunched or enough data to fill 70,000 CD ROMs all to generate the necessary data for an 80minute film uh which were to get into the wrong hands could be compressed onto a single DVD disc in a matter of minutes and instantaneously put on the internet uh while the film is still in the theater. uh what is the basis for that last part of the statement about it being compressed onto a single DVD disc and transferred onto the internet? What was the basis for for your knowledge on that point?
Uh the person that did the research in this speech worked with our you know engineers and uh our research and development people and internet people and determined that this was the appropriate language to use in the speech. Do you have any personal knowledge of whether it actually would be possible to compress uh all the the megabytes for that film onto a single DVD disc and instantaneously put it over the internet
for personal technological knowledge other than what he understands? And
I'm asking you know other than what you were presented and do you have any personal knowledge of whether that was actually possible?
Well certainly I have personal knowledge that you can put all that into a disc because we deliver it we do it all the time on on DVD. So I have a DVD collection that has all those things on a disc. The process of putting it over the internet depends upon the you know where you are the bandwidth uh uh the power of the bandwidth and uh uh which is all rapidly changing but but it varies from from service provider and customer to service provider and customer. Um, do you know of any actual tests done by anybody here at Disney where a DVD disc uh was actually put onto the internet? The information on a DVD disc?
Yes, I've I've seen presentations uh where uh research and development people at uh Walters Imagineering have taken off the internet full-length movies. But do you know whether they were sourced from DVDs or videos or V? When I say video, I mean VHS.
You're talking about sourced. You're saying whether the um people who originally put the movie on the internet had um obtained the the movie from a DVD source.
I can't remember exactly where they said the the source was on the presentations that I saw.
Um, were you f are you familiar with the process of downloading uh information from the internet? You know, a a full-length film from the internet. And by when I say familiar, how long it takes, what kind of equipment you need, uh, what you need to be able to match the video, the with the audio, that sort of thing.
Do you mean to be suggesting that there's a specific process for that one way to do it? Well, no, but I'm asking if he's familiar with the different steps. Oh,
okay. That again assumes a specific single process. Are you asking whether he knows of any way to do it?
I think he can answer the question if you can answer it.
Yeah, I I I'm not a technologist. I I know generally that it's not only possible, but every day getting more probable and soon to be very convenient and and and available.
Is that with the advent of broadband
Well, over the over the internet it broadband it enhances the speed in which you can do it. Yes. Okay. Um not it's not it doesn't exclude narrowband but it but it but it just makes it faster and easier.
When you saw this demonstration I guess being done with the tech group uh how long did it take? the demonstration.
Yeah, of downloading a film off the internet. He had not done it in front of me. He I just saw the end result of him getting one of our movies off the internet.
Okay. Do you know how long it took him?
Okay. Do you know what kind of modem he was using?
Do you know how big the file was when he downloaded it?
Um, how was the quality of the film?
The audio matched the video?
that's how it originally came out or whether he had to do anything to get the audio to match the video?
No. He said this is the way he downloaded it.
I wonder do you know how long it took him to do that?
So, it's going back to uh the statement on page six though specifically with respect to DVDs. Uh do you have any information of de DVDs being uh put up onto the internet uh asked and answered either you're meaning um the same way you asked the question earlier which is DVD as the source of the downloaded material in which case he's explicitly answered the question um or you're talking about the use of DVDs that's referenced on page six which has to do with um compressing the information onto a DVD but I think he's answered both questions. Do you have an understanding of compression technology?
Okay. Have you heard of the term divix?
I'm sure I have, but I couldn't define it for you.
Okay. Do you know whether um when you compress information uh onto a DVD, there's a loss of quality?
Assume facts, not an evidence.
I've been told the opposite.
Perfect. Perfect rendering. Master every time. Do you know using um
the process by which one would obtain a perfect copy every time?
I told you everything I know.
And who told you that, by the way?
Everybody consistently. I've never heard before that you lost quality on DVD.
And that's when you download something off of the internet or what specifically are you referring to when you say there's no loss of quality when you
not intelligible. He he was referring specifically to the questions you asked him. Now I think you're asking him a different question and making reference to his prior answers.
Okay. Well, I'm asking him what he was referring to.
I was answering your question. If you want to answer another another question, I'll answer that. Um,
do you have any understanding of whether when you download a film off of the internet whether it's necessary to use any compression technology if you I'll leave it there. Whether it's necessary to use any compression technology in order to download it.
Yes. I don't know the technology.
It's used.
Um, jumping down a little bit uh to the second to last paragraph.
This is still on page six.
Yeah. The second sentence that when they hack a DVD and then distribute it on the web, it is no different than if someone puts a quarter in a newspaper machine and then takes out all the papers. uh which of course would be illegal and morally wrong. Um and again I just ask you do you have any knowledge of anyone hacking a DVD and distributing it over the web?
He's he's already answered the question and putting it in in this particular context can't change the answer.
Yes. Which There are two parts to the to the first part of the sense, hacking the DVD and distributing it over the web. Is one more of a concern than the other to you? I mean, is it the actual hacking that's more of a concern or distributing it over the web that's a concern?
Well, hacking is, as I understand it, is just the definition of illegally taking it. It's then what you do with it once you've taken it, whether it's distributing over the web or selling on street corners or or uh through the stratosphere. It's it's it's the distribution of a of of an illegally acquired piece of copyritten material that's of concern.
Okay. So, the distribution side of it is is the greater concern.
No, I didn't say that. You have to you have to hack it first so you can distribute it. So it is the hacking that is the beginning of the what I would call a crime and the distribution which is the culmination of it.
But you you would agree though that you could hack a DVD but not necessarily distribute it.
You're asking him a hypothetical question?
No, I'm asking him if he knows.
Well, hypothetically I would say that would be probably kind of counterintuitive. If you're going to hack it, you probably are hacking it with a purpose.
Okay.
But not you agree though that you could hack a DVD but not for the purpose necessarily of distributing it over the web.
for speculation without doubt.
For the purposes of distributing it, you know, through the subway station, but the you would probably be hacking it for a purpose that was uh uh more devious than just going in and buying one.
Well, um, you could hack a DVD for purposes of understanding the the cryptological code. I think we've I think we've um crossed into the area of the hypothetical again. Are you asking whether it's possible plainly all things are possible? Are you asking this witness some fact-based question um that is consistent with the reasons given to the court for his presence here today?
Yeah, he he seems to believe that all hacking of DVDs is nefarious and I just want to understand whether the company believes that the hacking of DVDs is a violation of the DMCA. I'm prepared to let you know that that's our legal position. What what's the factual question for this witness um that's behind this series of questions about what's possible and what's not?
Well, if there are other purposes one may have in hacking a DBD, that's that's not a fact-based question. That's a hypothetical legal question.
Are you aware of anyone hacking a DVD for the purpose of trying to learn the cryptological code?
No, I'm I'm not aware of anybody doing that.
Okay. Are you aware of anyone hacking a DVD uh for academic purposes?
Okay. Are you aware of anyone hacking a DVD so that they can make a home copy of uh a lawfully purchased DVD?
I'm not aware of it. No. Right.
Do you see any difference between hacking the code on one hand and distributing it over the web or it's all part and parcel?
Probably shouldn't have answered it but that's okay. Seems related.
I thought you had answered it which was going to be my earlier point but that's okay.
Um, if you could turn to the next page. That's page seven. I think what you were doing is uh on the video you had a pirated copy of Tarzan, which I assume was video and then what was shown was a copy that was downloaded off the internet. Is that correct?
Okay. Looking at the second paragraph, it says, "As you can see, uh, these tapes are barely watchable." And I think that's referring to the pirated scene from Tarzan. Uh, and it goes on to say, "But now look at the same scene as it could be downloaded directly off the internet."
That's what it says. Are you asking him whether that refreshes his recollection about what was on the screen?
I'm just reading the speech and the fact that it says could be downloaded could be a demonstration or it could be actually one that was, I just don't know.
Okay. So, uh, Then you're not are you saying you're not sure that the the next video that uh appears to have been shown that says excellent quality scene from Tarzan was or was not actually downloaded from the internet?
I think he's already testified he didn't prepare that part of the speech.
Uh next paragraph last sentence is last sentence says and new technology is making it faster and easier for users to download this kind of material. Uh what what is the new technology you're referring to there?
Broader bandwidth, faster bandwidth, a little bit compression, all the things that that that are happening technologically which I could not describe to you other than saying I know they're happening.
Do you know how far off sort of a widespread uh consumer use of broadband is?
Less far than we would like. Uh most offices now have high enough bandwidth to uh to download full video. Uh and those are getting even wider and I guess there be four to five million um you know cable modems that have highspeed and DSL and then of course T1's and T2. These all they're all coming. So
are those all within the rubric of broadband?
Yes. Okay. So I would say we'll be at the same place three or four years in the video world that the audio world is in today. Pretty pretty pretty broad uh ability to to stream video.
Don't you have a problem though with broadband in terms of the number of users using it at the same time? Doesn't that have an impact on whether you know four, five or six people in office can download a movie at the same time?
assumes facts not in evidence and calls for a technological conclusion.
Well, I know that that all that that's like saying um doesn't the Model T Ford move slower than a Corvette? I mean, yes, but the the the speed in which uh technology, which I can't describe to you, is moving at which to allow multiple people in single areas to download full motion video is amazing. And this uh ability to do it is coming very soon.
Okay. The the ability to do it, would you say it's with us today or not?
The ability to do it is with us today. The ability to do it on a worldwide mass basis is growing.
In terms of broadband though, it's not, as I understand it, unlimited. It's it's still uh
It's still a limited utility from which one can download films.
Never mind that doesn't make sense. Uh, do you have I can do you have an understanding of when in your do you have an understanding of when it may be possible for consumers for the widespread uh ability of consumers to download films off the internet? Is that something you can pinpoint or that's something that you just see as being in the not too distant future?
Ambiguous and mischaracterizes the witness's prior testimony. Witness hasn't said that it's not widespread now. He said it will become more widespread um very soon in the future. And I think that your question assumes the opposite.
Okay. Do you believe that the ability to download uh films now off of the internet is a widespread problem?
It's a widespread problem to afficionados and people with the patience for a a faster slower download than say music. But that all is changing at lightning speed. And in a very short amount of time, it will be mass spread as opposed to just widespread.
Okay. As you sit here today, can you sort of pinpoint that point in time or not?
There are a lot of different uh reports that I've read that varies in when the time is, but I don't think any I haven't read one that says it would be any further out than say 2003 2004 that it would be ubiquitous.
Okay. Uh when you said it's slower now to download films as opposed to music, do you have an understanding of how long it would take to download the average film off the internet?
are you asking about a specific um kind of technology through which you'd be downloading it or are you asking the witnesses general informationally?
It depends on what kind of uh user you are on whether you have a T1 or T3 or a DSL line. It's it it right now there various different things. It's well look at how long the movie is and how how much how much information is in it and all that.
Okay. Using a T3 line, do you have a sense of how long it would take to download a film and sync the audio with the video?
I think a T3 line would be pretty quickly. Pretty quick. I think it' be pretty quick on a T3 line, but I don't know.
Okay. Do you know with respect to a T1 line or a DSL?
You're getting out of my area of expertise. Excuse me. Oh god.
Do you have any understanding of the term ripper as applied to DVDs?
Do you know uh by any other name a device that rips the content off of a DVD?
Are you familiar with the uh licensing arrangements uh between the DVDCA and its licenses?
No. Do you know what the DVD CCCA is?
No.
It may be DVDCA, but I'm not sure if I have that right. I don't know. Okay. Uh, do you have an understanding of how CSS works?
