Message from the Chairman
November 15, 2004
Dear Shareholder,
We have posted our complete financials
for the quarter ending September 30, 2004
on our web site: www.burst.com. However,
for your convenience, enclosed with this
letter are our Summary Financials for the
third quarter of 2004.
As our anti-trust and patent
infringement litigation progresses, the
recent focus has become the culmination of
the issue of email and document
destruction by Microsoft. Based on the
evidence and testimony collected in our
case thus far, it appears that over a
period of years, Microsoft has
purposefully designed and operated its
email retention (and destruction) policies
to systematically eliminate any email or
other documents that might turn out to be
damaging to Microsoft in any litigation,
including Burst’s. This issue has been the
subject of numerous motions that Burst has
filed with the court, leading up to
perhaps the most significant motion thus
far, the “Motion for Spoliation
Instruction, Witness Preclusion, and
Related Relief.”
In the “Spoliation” motion, Burst asks
the court to issue an instruction to be
read to the jury at the beginning of the
trial, indicating to the jury that
Microsoft knowingly destroyed evidence
relevant to the Burst case and that the
jury may therefore infer that the evidence
destroyed would have been damaging to
Microsoft (and helpful to Burst). In
addition, Burst has asked that one of
Microsoft’s employees, whose email records
were destroyed by Microsoft, be prevented
from testifying at trial. This is
important because unless this employee is
prevented from testifying, he is free to
conveniently remember any version of
events that might be more advantageous to
Microsoft than those which actually
occurred.
The Spoliation motion recently has been
“unsealed,” meaning that its contents are
now public and available for viewing by
anyone. While the motion is quite lengthy,
for your convenience, a copy can be found
at the court web page: https://ecf.mdd.uscourts.gov/cgi-bin/DktRpt.pl?11641
(this requires a registration. The file
number is: MDL1332). In order to help you
understand the scope and implications of
this issue, we are enclosing a copy of a
recent article in the Wall Street Journal
which discusses the Spoliation motion, as
well some additional background on the
Burst case. This article represents the
first time we have received press coverage
by as far-reaching a mainstream media
entity as the Journal. We trust that you
will find it to be helpful.
The coming months will no doubt bring
additional motions, as well as rulings in
our case (MDL#1332). We will endeavor to
keep you up to date on events as they may
occur. We thank you for your continued
confidence and support.
Sincerely,
Richard Lang
Co-Founder, Chairman & CEO
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