world recognition of distinguished general counsel · the antitrust field today. as more and more...

WORLD RECOGNITIONof DISTINGUISHEDGENERAL COUNSEL

GUEST OF HONOR:

Bradford SmithGeneral Counsel of Microsoft

Copyright © 2008 Directors Roundtable

2Winter 2008

WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

General Counsel are more important than ever in global affairs. Boards of Directors are lookingincreasingly to them to enhance financial and business strategy, compliance, and integrity of corporateoperations. In recognition of our distinguished Guest of Honor’s career accomplishments, of the vital roleof the Corporate Counsel profession, and of the leadership of Microsoft as a corporate citizen, we are honoring Bradford Smith, General Counsel of Microsoft. His address focuses primarily on thelegal challenges of managing a global business amidst diverse and uncertain regulatory climates andspecific antitrust, intellectual property, and Internet policies in this context. The Distinguished Panelistswill speak on international deal-making, antitrust challenges, information technology, and trends inEuropean litigation.

The Directors Roundtable is a civic group which organizes the preeminent worldwide programming forcorporate Directors and their advisors, including General Counsel.

Jack Friedman Directors RoundtableChairman & Moderator

THE SPEAKERS:

TO THE READER:

Bradford SmithGeneral Counsel,

Microsoft

Sir Christopher BellamySenior Consultant

to Linklaters

Roger Enock Partner,

Covington & Burling LLP

Tyler B. Robinson Partner, Simpson,

Thacher & Bartlett LLP

Professor Ian Walden Of Counsel,

Baker & McKenzie


3Winter 2008

WORLD RECOGNITION of DISTINGUISHED GENERAL COUNCIL

Brad Smith is Microsoft’s Senior Vice President,

General Counsel and Corporate Secretary. He

leads the company’s Department of Legal and

Corporate Affairs, which is responsible for all

legal work and for government, industry and

community affairs activities.

Smith has played a leading role at Microsoft on

intellectual property, competition law, and other

Internet legal and public policy issues. He is also

the company’s chief compliance officer. Since

becoming general counsel in 2002, he has over-

seen numerous negotiations with governments

and other companies, including Microsoft’s

2002 antitrust settlement with state attorneys

general, its 2002 data privacy negotiations with

the Federal Trade Commission and European

Commission, and agreements to address

antitrust or IP issues with Time Warner, Sun

Microsystems, RealNetworks, IBM and Novell.

Smith is responsible for Microsoft’s intellectual

property work, including all of its IP portfolio,

licensing and public policy activities. He has

helped spearhead the growth in the company’s

patent portfolio and the launch of global cam-

paigns to bring enforcement actions against

those engaged in software piracy and counterfeit-

ing and against viruses, spyware and other

threats to Internet safety. He is also responsible

for the expansion of Microsoft’s citizenship and

philanthropic activities, work to revise its con-

tracts to make them more customer-friendly, and

the strengthening of legal compliance programs,

issuing Standards of Business Conduct for all

Microsoft employees and creating an Office of

Legal Compliance.

Smith previously worked for five years as Deputy

General Counsel for Worldwide Sales, and

before that, he spent three years managing the

company’s European Law and Corporate Affairs

group, based in Paris. Before joining Microsoft,

he was a partner at Covington & Burling, hav-

ing worked in the firm’s Washington, D.C. and

London offices and represented a number of

companies in the computing industry.

Smith graduated summa cum laude from

Princeton University, where he received the

Class of 1901 Medal, the Dewitt Clinton Poole

Memorial Prize, and the Harold Willis Dodds

Achievement Award, the highest award given to

a graduating senior at commencement. He was

a Harlan Fiske Stone Scholar at the Columbia

University School of Law, where he received the

David M. Berger Memorial Award. He also stud-

ied international law and economics at the

Graduate Institute of International Studies in

Geneva, Switzerland.

He has written numerous articles regarding

international intellectual property and electronic

commerce issues, and has served as a lecturer at

the Hague Academy of International Law.

Bradford SmithSenior Vice President,General Counsel, Corporate Secretary, Legal & Corporate Affairsfor Microsoft


4Winter 2008


JACK FRIEDMAN: Good morning. I’mJack Friedman, Chairman of the DirectorsRoundtable. We are very privileged today topresent world recognition to Bradford Smith,who is the General Counsel of Microsoft. I’dlike to make a few remarks of orientation aboutthe series, and then present the other speakerswho will speak after him.

We are a civic group that works worldwide withboards of directors and their advisors, includ-ing general counsel, financial institutions, andaccountants. We’ve never charged a penny foranybody to attend any event in 16 countries.The way in which this particular honor, whichis called “World Recognition of DistinguishedGeneral Counsel,” has evolved is that in thediscussion we’ve had with directors, their feel-ing unanimously has been that their corpora-tions never get a positive word anywhere, anytime, for any accomplishment that they have. Ifthey’re in the news in any way, it’s always criti-cal. And there is the impression that many peo-ple have that a corporation does not do theright thing unless the government first beats onthem. In order to in some way correct or ame-liorate that particular impression, we decidedthat it would be very worthwhile to host differ-ent leaders of the business community – in thiscase, it’s a general counsel – to talk about theleadership of their companies from their per-spective.

In terms of the format of the event today, we’regoing to have our Guest of Honor speak first.Then there will be some brief remarks on rele-vant topics by our four distinguished panelists.We have Sir Christopher Bellamy, who is a con-sultant to Linklaters; Professor Ian Walden, OfCounsel to Baker & McKenzie; TylerRobinson, a partner of Simpson, Thacher &Bartlett; and Roger Enock, a partner ofCovington & Burling.

In our series, we have honored previously, onthe American side, individuals such as theGeneral Counsel of Citigroup, Ford, Chevron,Intel, and Fidelity. And on the European side,we’ve honored the General Counsel of RoyalDutch Shell, GlaxoSmithKline, UBS, andNestlé. It’s a truly global honor.

I think it’s evident that there is no company inthe world which has done more to change mod-ern times in the last few years than hasMicrosoft, and it’s really unique to hear a leaderof Microsoft speak about its perspective.

So, without further ado, I’d like to have BradSmith take the podium here and make hisremarks. Thank you.

BRAD SMITH: Thank you. It’s a pleasureto be here. Thank you all for coming this morn-ing. What I wanted to do was to introduce the

topic, and then I’ll be followed by the other fourpanelists. Then what we are really hoping to dois have a discussion, because I think that’s prob-ably a lot more interesting for everybody thanjust having you all sit there and listen to each ofus speak.

It is a pleasure for me to be back in London.Next to Seattle, I’ve spent more years living andworking in London than any place in the world.It is something I’ve benefited from, in terms ofhaving a perspective on what is happeningaround the world.

One of the challenges I think that we all have,whether we’re working at a company or advisinga client, is to look beyond the issues of a partic-ular day to discern some longer-term trends.Obviously, it typically takes the perspective of anumber of years to get a sense of the biggerthings that are unfolding over time. I personallyfind it’s helpful to look at the experiences ofthose who’ve gone before us, whether they wereindividuals or companies or industries. Oneoften sees the past repeat itself in various ways,or at least provide some instructive analogies.

Indeed, I sometimes ask myself, as a generalcounsel, “Where did this job come from?” What

led to the creation of the in-house counsel role?In the United States, it’s actually clearly traceableto a very particular event. In 1869, for the firsttime, there was the completion of a railroadtrack that connected New York City with SanFrancisco. It was a momentous event for ourcountry. Before that, if you wanted to travel from

New York to San Francisco, it would take youthree months, and there was a 30% probabilitythat you would die before you got there. Literally!Just think about how different that is from ourworld today. And yet the moment that track wascompleted, it became a journey of a week; andthere was a nearly 100% probability that youwould arrive safely at your destination.

It not only connected our country, it trans-formed it. The railroad changed American soci-ety; and as it changed American society, a lot ofother things changed in response. The lawchanged. The next decade – the 1870s – was oneof the most controversy-filled decades for thepatent law in our country, and there was anenormous spread of litigation and debate aboutpatent reform in the U.S. Congress. It led to thebirth of the antitrust law in the United States,the Sherman Act, that we all still talk about inthe antitrust field today.

As more and more people relied on railroads,there emerged new issues of public safety andnew regulations, first at the state level and thenat the federal level. It led companies in theUnited States, for the first time, to employlawyers inside their businesses. Before that, itsimply wasn’t done. And yet it made perfect


5Winter 2008


sense, because in the course of a day, a railroadtrain would start in one state, and it might crossthe state lines of two or three other states, socompanies had to figure out how to comply withmultiple state laws in their businesses in newways. You couldn’t just switch trains every timeyou came to a new state border.

Companies therefore adapted. They adaptedthrough the creation of legal departments. Theychanged the way they purchased products,because they wanted to centralize their patentarrangements. It led to a whole host of new busi-ness organizational models.

All of the changes in technology, the economy, andsociety led to changes in government, as well. Themodern regulatory state, as we know it today, inmany respects has its origins in the changes thatthe railroads unleashed, as people felt first thatstate governments needed to enact new regulations.Ultimately, there needed to be a real national sys-tem of regulation in fields that previously had notbeen part of the national scene at all.

Personally, I think we’re living in a similar timetoday, but the changes are taking place at theglobal level instead of on a national basis. Thereare many technologies that are driving thesechanges, but certainly one of the leading forcesof our generation has been information technol-ogy [IT] – first the personal computer, and thenits integration with telecommunications, andthen its culmination in the Internet and all ofthe new services that the Internet has unleashedover the last decade.

We’re seeing it lead to changes in substantivelaw over time, and we’ll talk about that a littlebit this morning. It has led over time to changesin antitrust and competition law. It’s leading tochanges in intellectual property [IP] law, especial-ly in the copyright field and the patent field; andit’s leading to debates and changes in multiplejurisdictions simultaneously, as different govern-ments decide where they want to go.

A bit like the states in the United States in thelatter part of the 19th century, different govern-ments, perhaps not surprisingly, are decidingthat they sometimes want to go in differentdirections. Values sometimes differ in differentsocieties, in different cultures. Different policygoals are sometimes given a different priority indifferent parts of the world. Even though thedebate is remarkably similar oftentimes, the out-come sometimes can vary quite a bit.

As these substantive changes unfold – not only inintellectual property and antitrust law but in otherareas, like the protection of personal privacy, forexample – it’s unleashing a series of changes inprocess, as well. Companies have to adapt. Ithink the role of the contemporary lawyer today,whether working inside a company or advising acompany from a law firm, is often to help clients

determine how to navigate these very complicatedand often uncertain shoals; to recognize that theexercise of giving legal advice is not only talkingabout what the law is today, but predicting whereit is likely to go in the future; and sorting out howto help companies deal with the complexity thatarises, especially when different laws in differentcountries move in different directions, all at thesame time, and yet one is trying to offer a globalproduct or service.

If the challenge for companies is substantial, Ithink the challenge for governments is equallyso. There was an interesting book called A NewWorld Order written a couple of years ago by,Anne Marie Slaughter, the dean of the WoodrowWilson School of Public and InternationalAffairs at Princeton. One thesis of the book isbasically that a new world order is, in fact, emerg-ing through the interaction of regulators aroundthe world. Regulators have become the newestform of diplomats. Officials who previously con-fined their work to a single national jurisdictionhave to spend more time talking with, workingwith, and sometimes debating with, their coun-terparts in other countries. Ultimately, one of thebig questions for our generation is where thesethings will evolve over time.

In the latter part of the 19th century, it was dif-ficult for people to contemplate that certainareas of regulatory life would ultimately be dealtwith at the national level. In the United States,everyone took for granted that things would bedealt with locally or at the state level, not in far-off Washington, D.C. And yet, over the courseof decades – not years, but a few decades – new

models emerged. Similarly, we’re living in a timewhere we’re seeing more and more internation-al discussion, whether it’s about ways to coordi-nate informally, or have some formal mutualrecognition, or ultimately bring things togetherat a regional level, whether it be the EuropeanUnion, or a global level in an organization likethe World Trade Organization.

It’s very difficult to know exactly where thingswill go; and yet, personally, I do believe that overthe course of this century, we are likely to con-tinue to see much increased international andeven global integration of certain legal rules. Bythe time those people who are leaving lawschools and starting work in law firms today fin-ish their careers, say three to four decades fromnow, the legal world in which they work is like-ly to be quite different from the legal world thatthose of us in this room first entered when weleft school. The four perspectives you’ll heartoday each draw in some of the various ways onwhich this increasing international integration isforcing all of us to come to terms with new chal-lenges and new opportunities.

So let me stop there and turn it over to the oth-ers. Thank you.


6Winter 2008


JACK FRIEDMAN: Our next speaker, SirChristopher, if you’ll mention your backgroundwith the courts.

SIR CHRISTOPHER BELLAMY: I’llwork something in as I go along.

JACK FRIEDMAN: Thank you.

SIR CHRISTOPHER BELLAMY: Now,I first of all compliment Brad on a brilliantintroductory speech. I couldn’t help thinking, inrelation to railroads, how James Watt ruthlesslyenforced his patent on steam engines for over 20years, and I wonder if he would have got awaywith it today, or if we had had an antitrust lawin the 18th century.

I would like to spend just a few moments look-ing at two aspects at a relatively high level; oneon substance, as regards the EU concept ofabuse of dominance, and the other on the issueof process in the antitrust area.

As you know, antitrust has spread like wildfirearound the globe in the last few years. Many,many jurisdictions have antitrust laws. We’vealmost got a kind of jus gentium, a kind of uni-versal law. Inevitably, with all those jurisdictions,we now get the clash of the tectonic plates as theyjostle for position, particularly as between theEuropean Union and the United States.

In general, and I greatly oversimplify, the worldhas tended to follow the EU model rather thanthe U.S. model around the world. The EUmodel is essentially administrative enforcementby an agency on the basis of the concept ofabuse of dominance, with recourse at the end ofthe process, to a court of some kind to reviewthe decision by the agency.

The U.S. system, on the other hand, is essential-ly more court-based, where the agency tends tobe more the prosecutor than the decision-maker,and the underlying concept is that of monopo-lization mitigated by a rule of reason.

But because the EU system has been copied sowidely around the world, not only in Europe,but also from the point of view of other coun-tries, it’s extraordinarily important that theEuropean Union gets it right and develops asensible system of abuse of dominance underArticle 82 of the EC Treaty.

Dominance, as such, is a concept that’s not sodifficult to understand. Many business peoplewrite about dominance embarrassingly in inter-nal papers, with disastrous consequences. It cansometimes be misleading. I was a junior mem-ber of the IBM team in the mid-1980s at thetime when IBM was regarded as a dominantcolossus around the world, practically a nation

state in its own right. Within a few years, as aresult of the advent of new technology, includingthe personal computer, IBM had virtually disap-peared from the scene. Dominance can be moreapparent than real.

But in the EU context, it’s abuse that is themore difficult subject; and I would like to sug-gest that at the moment the European Unionstill lacks a coherent theory of abuse groundedin sound economics and the realities of com-mercial life. One can, perhaps, argue that theMicrosoft decision in itself illustrates that. In theend, that case (talking in very general termsnow) was decided not on the basis of consumerharm, or a close economic analysis, or a rule ofreason, but on a rather form-based test derivedfrom a case called IMS, which was in turnderived from an earlier case called McGill.

Now, the question, I think, is whether this is asatisfactory way forward. When I was a judge ofthe CFI [Court of First Instance, the EuropeanUnion’s second-highest court] in Luxembourg,in a particular case called European NightServices, we thought we had reoriented Article81 of the Treaty toward a “rule of reason”approach. If you take cartel cases, the CFI has

been very assiduous in controlling the facts ofthe case. If you take merger cases, like Air Toursand Tetra and so forth, the CFI has been veryassiduous in reviewing the reasoning of the deci-sion. But for some reason, and it’s quite hard tounderstand why, in Article 82 cases, the courtseems to be much more content to adopt arather formal approach.

Both McGill and IMS were rather one-off cases,but they’ve been used in Microsoft to turn whatwas essentially a rather obscure and idiosyncraticline of reasoning into a series of basic principles.

I wonder if anybody realized that in McGill,which I think I also had the honor to be in atone point, the parties who were alleged to haveabused their dominant position actually turnedout to make more money after the abuse thanyou could possibly have imagined, because hav-ing been ordered by the court – this was theRadio Times and the T.V. Times – to carry theTV schedules of rival television companies,those products became much more attractive tobuyers; and they sold many more copies withcarrying their rivals’ products than they haddone before. So it all backfired as the law ofunintended consequences.

So there’s a lot to think about in abuse. But interms of process, what role should the courthave? When I had the job of setting up the courtsystem in this country in the antitrust area, theCompetition Appeal Tribunal, there was onetweak that most of us insisted upon, which wasthat the court – the national court, in this case– should have a merits jurisdiction, and not just


7Winter 2008


a judicial review jurisdiction. It seemed to usabsolutely essential, if you’ve got an agencyenforcement-based system, that there should beproper control by the court. In that regard, whatis important from a court’s point of view, I ven-ture to suggest, is not so much the actual out-come of the case, but the fairness of the process.What gives confidence in the system is thethought that at the end of it, you’ve got a courtthat will grapple openly and fairly with theissues and produce a reasoned judgment.

Whether we’ve got such a situation in Europe atthe moment, as far as abuse of dominance isconcerned, may be open to question. This is afast-developing area.

This is my last point, just to bring us right upto date. Last week, we saw – as you’ve seenreported in the press, so it’s in the publicdomain – a series of dawn raids in the pharma-ceutical sector. These raids were not in the con-text of any alleged cartel activity, not even in thecontext, as far as one can tell, of any specific alle-gation of wrongdoing, but in the context of asector inquiry into the alleged abuse of intellec-tual property rights in respect of generic compe-tition to ethical pharmaceuticals.

In that context, the Commission has sealed, orraided and sealed, the offices of European gen-eral counsel in a number of major pharmaceuti-cal firms, and sought documents relating to liti-gation in the intellectual property area, and pre-sumably some abuse of some kind in relation toArticle 82 is suspected or alleged.

Those kinds of events – striking, confrontation-al – do highlight the power of the authoritiesand underline, in my respectful view, the needfor an extremely strong judicial control ofadministration action.

Thank you very much.

JACK FRIEDMAN: I wanted everybody toknow that Christian Alborn and his staff atLinklaters have been incredibly generous in theirtime and expertise, particularly over the holidayperiod, when many people were on vacation.Professor Walden is our next speaker.

PROFESSOR IAN WALDEN: Thankyou. My name is Ian Walden, and I’m Professorof Law at the Center for Commercial LawStudies, Queen Mary, University of London,and affiliated with Baker & McKenzie.

I’m here to talk about, and I started my careerin 1987 looking at, information technology law;and clearly Microsoft plays a fundamental rolein information technology developments overthe last 20 years.

But I really want to talk not about the technolo-gy, but about the “I” – the “information” side,and look at the evolving treatment of informa-tion products and services over the last five to 10years.

I break that down into three categories of inter-est to me as an information lawyer. The first isclearly the increasing harmonization of formalpublic law rules. We see, as manifest most obvi-ously in the World Trade Organization’s TRIPS[Trade-Related Aspects of Intellectual PropertyRights] agreement, considerable harmonizationat an international level on the way in which wetreat the vast range of different informationproducts and services under intellectual proper-ty law.

So despite the problems of the multi-jurisdic-tional environment in which general counseloperate, general counsel have had considerablehelp over recent years from governments in theincreasing harmonization of the treatment ofintellectual property, and the increasing strength-ening of the intellectual property regimes interms of public law.

While we’ve seen harmonization of public lawrules, in terms of private law arrangements,what I think is of particular interest in recent

years is we’ve seen a burst of creativity and diver-sity, which has created great complexities for gen-eral counsel in arranging the protection of theirinformation products and services.

We’ve moved from simple proprietary licensingto the emergence of public domain licensingunder the Free Software Foundation, the emer-gence of the “open source” movement, and mostrecently, the Creative Commons initiative andthe “some rights reserved” movement. They’re

trying to create a greater variety of private lawarrangements to deal with the use and abuse,essentially, of information products and services.Microsoft has participated in that evolution,with the recent announcement between theCreative Commons movement and Microsoft inrespect to the licensing tool, a collaboration try-ing to encourage the use of Creative Commonslicensing in association with Microsoft products.

As well as this greater diversity of private lawarrangements, we’ve also seen an evolution with-in our traditional private arrangements, the pro-prietary license, in the way in which companiestry to protect or offer access to their informationproducts and services.

In particular, in terms of patent licensing, in cer-tain areas of the IT industry we’ve seen an aban-donment of the traditional patent license infavor of covenants not to sue; and we’ve seenMicrosoft, IBM, Sun, make these open promis-es. A whole range of major IT companies areactually saying, “We have these rights in our


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information products and services, but we wantto assert to the world, make these promises,covenants, to the world, that we do not intendto assert our rights; we want to encourage theiruse, access, and exploitation by others.”

So we’ve seen a greater diversity and complexityof the private law arrangements, whether bilater-al multinational licensing arrangements or thesemore unilateral covenants and statements anddeclarations to the world.

That creates problems for general counsel interms of issues of software development, forexample. How do we control our technologies,as they participate in a huge range of opensource development? How do we ensure thatthey do not export or import code into the com-panies where we don’t actually know under whatlegal arrangements those products and serviceshave been developed? It creates issues in merg-ers and acquisitions for general counsel. Whatsort of information products and services are weactually obtaining under these mergers andacquisitions? We see the emergence of forensicanalysis of software in the M&A [mergers andacquisitions] process to try to determine, withinthis huge code that represents the major assetthat is being bought or sold, what within thatcode is subject to proprietary licensing, opensource, public domain, Creative Commons. Thecomplexities and the detail with which we treatour information in a modern commercial envi-ronment have changed very significantly.

The final thing I wanted to mention is the roleof technology. We have seen the emergence oftechnical protection mechanisms – the ability ofthe technology to enhance and even supersedeour ability to control the use of informationthrough law. We have seen the use of digitalrights management techniques to disclose moreabout the way in which we obtain, use, andabuse information products and services. Butdespite the promise of technologies and digitalrights management systems, [there’s the need] toenable companies to control, access, and useinformation.

Over very recent years, we’ve seen the steadyabandonment, or the giving up, of such tech-nologies and such possibilities, as the con-sumers have essentially bucked against thosetrends. They don’t want their property to beinterfered with by the technological protectionmechanisms that the companies want to insertin their products. They don’t want their privacy

to be interfered with through the disclosure ofdigital rights management tools. We’ve seen theindustry having to respond to these consumerconcerns, and the role of technology has some-what fallen away as a mechanism for controllinginformation products and services.

In conclusion, I want to highlight the fact thatin our modern information technology environ-ment, we have a considerable way to go in termsof the legal arrangements that surround accessand use of information, because at the end ofthe day, it’s not the technology that we desire;it’s the information that underpins that.


JACK FRIEDMAN: We have two morespeakers, who will be speaking regarding litiga-tion issues; and then we’ll turn to the panel dis-cussion where everybody may speak about eachtopic.

TYLER ROBINSON: I’m Tyler Robinsonfrom Simpson, Thacher & Bartlett, and I’m aU.S. litigator transplanted over here to London.I thought I might introduce some evidentiaryissues that come up, certainly in my practice, ase mails and other documents spread around theworld.

From a litigator’s perspective, whether you’reinvolved in a criminal case or an insurance caseor a securities case, evidence is always key. Howdo you get it? How do you preserve it? Where isit located? How to maximize it when it’s goodfor you and how to minimize its impact when

it’s bad? And particularly topical for today, howto comply with the expectations of courts andregulators around the world that evidence bepreserved and be made available when legal dis-putes arise?

This is becoming more of an internationalundertaking, both because business is expand-ing globally, but also because information tech-nology makes documents easily spread aroundthe globe, literally by the click of a mouse. I’msure it’s no surprise to anybody in this roomthat e mails are really the modern-day fuel of lit-igation. Unlike other kinds of fuel, e mails seemto be in limitless supply and turning up every-where, which is, of course, good for me.

While private litigants and government regula-tors are increasingly looking overseas and acrossjurisdictional boundaries to gather evidence –and this is a recipe for conflict – let me offer acouple of anecdotes by way of example.

I was in a deposition not long ago, here inLondon, in relation to a U.S. action; and I wasrepresenting the U.S. subsidiary of a U.K. par-ent. The witness was a former employee of theU.K. parent; and, for some reason, he didn’twant to volunteer in his retirement for a deposi-tion in a U.S. litigation, so he was compelled todo so by an English court order. There wereEnglish lawyers in the room, and there wereU.S. lawyers in the room. During the course ofthe deposition, the witness was being askedquestions that tried to pry into communicationsthat had involved some of my partners in theUnited States. The witness, a U.K. national,


9Winter 2008


wasn’t all that conversant in U.S. privilege law,and he had a question that he wanted to ask hislawyer. As the English lawyers in the roomexplained to us, under English rules, you cannotstep out of the room in the middle of a witness’stestimony and communicate substantively withthe witness about his testimony. In the UnitedStates, you can; but you’re subject to questionsthat then elicit the fact that you did, for impeach-ment purposes. Well, as you can probably imag-ine, there was a whole lot of yelling and scream-ing and carrying on in the room about whetherthe deposition could stop and this guy couldleave the room and have his question answered,so that U.S. privilege would be preserved.

Another example: internal investigations. Thatthey are becoming more “popular” is probably notthe right word; but they’re definitely becomingmore common, especially for U.S. companies.This is probably true over here, as well, as lenien-cy programs become available, certainly in theantitrust field. Companies want to know what’sgoing on inside their companies; they want tohave the ability to investigate internally when thereis reason to suspect that there may be wrongdoing.U.S. companies are really obligated to be able todo so, but that requires access to company data,wherever it may be, including e mails.

In Europe, many European countries have veryprotective privacy laws that protect employee emails and other company data maintained oncompany systems; and you may need to haveconsent from the employee in order to accessthat information. If you’re a U.S. lawyer andyou’re trying to investigate possible wrongdoinginside of a company, you potentially compromiseyour investigation, and perhaps even the evi-dence that you’re trying to preserve, if you haveto go and ask everybody inside the company ifit’s okay if you look at company data. What doyou do in that situation?

There are three broad areas that I’ll mention forlater discussion in which these kinds of prob-lems arise. One is different discovery rules; oneis different privacy laws; and one is differentprivilege doctrines. Just a quick example there.In certain European countries, and before theEuropean Commission, the communications ofin house counsel may not be privileged. In theUnited States, they are. So, legal advice that maybe privileged in one jurisdiction may end up notbeing privileged in another jurisdiction, where itmay be sought, either by private litigants or gov-ernment regulators.

Finally, I just wanted to introduce an interestinglaw in the United States that is perhaps not asfamiliar to lawyers overseas as it ought to be.There’s a federal law in the United States. (it’scalled “Section 1782”), and it allows interestedpersons in foreign proceedings to takeAmerican-style discovery of witnesses and docu-ments located in the United States. What thismeans, potentially, is that if you’re a party to aforeign proceeding and you have either witness-es or documents in the United States, you couldbe at a potential strategic disadvantage vis-à-visan adversary that doesn’t have any ties to theUnited States and doesn’t have anything recipro-cally discoverable in the United States.

The big debate now about § 1782 is whether it’savailable in international arbitration. And

there’s U.S. case law, a Supreme Court case,suggesting in dicta that it is, and a number oflower court cases thereafter that have directlyheld that litigants in arbitration can use thisstatute to take American-style discovery, which,for the arbitrators in the room, is somewhat atodds with the goals of arbitration – to not allowAmerican-style discovery.

So, with that introduction, I’ll sit down.

JACK FRIEDMAN: Before our last speaker,just a quick comment about an issue that came upat a prior event, when we honoring the generalcounsel of Intel. One of the panelists was basedin Germany, an intellectual property litigator. Hesaid that in litigation you can’t ask for a documentin Germany unless you know it exists. You can’t

just say, “We want all the documents.” You haveto say, “There is such a document, and we wantto see it.” In order to know that something exists,parties are able to bring a minor piece of litigationagainst the same party in the United States; doAmerican discovery for all the documents; andthen introduce them into Germany. That was apiece of information that was worth coming to theevent right there. I asked him if the Germancourts cared about this sort of running aroundthem, and he said, “No, they don’t care.” So that’sanother tactical issue which we can get into later.It’s very clear that many people have not reallygrasped on a world scale how to use U.S. proce-dures for their purposes.

Our next speaker is Roger Enock of Covington& Burling.

ROGER ENOCK: Jack, thanks. Jack askedme to talk about the differences in the civil liti-gation system in the United Kingdom andEurope, in five minutes. So I said, “That’s fine!I do what I’m told. I’ve just joined an Americanfirm; I do what the Americans tell me.”

Instead of going through every single country inEurope, which would be a little too interesting,I thought I’d just tell you a story. It’s one ofthose true stories of a case I was doing quiterecently in Germany, and it brings out some ofthe differences. I’ll try to be brief. I’ll stick to myfive minutes, because I’m sure you’ll want to getinto some questions.

It was a largish case – 50 million for a U.S.client. It was a U.S. general counsel who want-


10Winter 2008


ed me in London to oversee a case in Germany.I said, “Look, it’s Germany; it’s not England –it’s all very different.” But he wanted me to man-age the case and to deal with a lot of the thingsthat had happened in London – and to keep awatch over what the Germans were doing, whichis never easy, I can tell you.

I got in touch with a partner in Frankfurt who’sa litigator, and the first thing he says is, “Roger,look, you’ve got to arbitrate this case.” I said,“Why is that?” And he said, “The Germancourt system is just so bad; it’s so slow, it’s sounused to this sort of case. You’ve no idea whatsort of judge you could end up before. You’vegot to arbitrate it. I said, “Well, thanks, but Ican’t. I’ve got no arbitration clause in the con-tract. It submits to the jurisdiction of thecourts.” And he said, “Yes, you’re right, but theother side may take the same view as me. Youshould still try to arbitrate it.” So we tried, andwe failed. But that was how it started. It was myintroduction to the German court system.

So the next step was, we prepared a beautiful doc-ument – 10 out of 10 for technical and artisticmerits, a lovely claim document, very full, lots ofappendices, diagrams. It was fantastic. And wetook it off to court. Just to start the case, we hadto pay a fee of 370,000 to the court, a sort oftax on litigants, which was difference number two.

Then I said, “But where’s this case going to beheard?” I’m used to London. We’ve got thislovely building along the Strand and it’s got allsorts of courts and any case of any size andimportance is heard there and you tend to getquite a good judge (they’re not all great, butthey’re mostly pretty good). So I said, “Where’sit going to be heard?” And he said, “Well,there’s a rule in Germany which means that youhave to sue where the defendant has someassets.” And this defendant, which is rather astrange defendant, only has assets that we couldidentify in a town called Darmstadt, which I hadnever heard of.

So instead of suing in Düsseldorf, which I amtold has a commercial court, or even in Berlin,we end up suing this huge case in Darmstadt.No disrespect to Darmstadt, which I didn’t visit,but it’s like bringing a case in Eastbourne orWarsaw. Again, no disrespect to Eastbourne orWarsaw at all.

So we go to Darmstadt! We’ve got this beautifuldocument; we’ve paid this huge fee. And I say,

“So who’s the judge? What sort of person are wegoing to get as the judge?” And he said, “Well,the judges in Germany, they’ve gone to lawschool, like me, and they decided at the end oflaw school that instead of practicing law, they’dbecome a judge. So at the age of 28, 29, 30, theybecome a judge.” It’s the same in Italy; I thinkit’s the same in France. That’s what happens;they don’t practice law; they go and sit. What dothey do? Well, they do hundreds of cases. Thisjudge will have – the lawyer’s wife was a judge,so he knew – 250, 300 cases on the go at anyone time. Road traffic, conveyances, matrimoni-al – you name it. And we had this huge case,this beautiful document that we’d served.

So, anyway, we start. We start the case, and wehave a hearing. And the judge says, “I’ve no juris-diction over this case whatsoever. I think you’vegot it wrong. I think you should go to Düsseldorf.It really should be heard in Düsseldorf.” I can’t

remember why; my take was he just didn’t like thelook of this case. It was massive.

So we go to Düsseldorf. About a year later, wehave a hearing in Düsseldorf. And theDüsseldorf judge says, “No, actually, the judgein Darmstadt got it wrong. It should be heard inDarmstadt.” And that’s where it stayed. It’s sortof veering up and down the motorway betweenDüsseldorf and Darmstadt.

I then said – I’m exaggerating, but it’s basicallyall there – I then said to the partner inFrankfurt, “Look, in the extremely unlikely eventof this case ever actually getting to trial, what can

happen between now and actually at the trial?Just talk me through it so I can explain this tothe people in the States, who are getting increas-ingly baffled by the day.” Well, there’s no discov-ery. There’s no system whatsoever of disclosureof documents by either party to the case at all.Now, in our case, that was great. I was absolute-ly delighted, having seen our documents. So Ithought that was tremendous news. But Ipressed him and, yes, there was no system.There will be very, very rare occasions where thejudge, acting inquisitorially, may order disclosureof certain types of documents, the precise exis-tence of which is known. But there’s no discov-ery. There’s no system of expert witnesses. Thiswould have been a case which required expertevidence in a number of areas to help the courtin England. In Germany, the court may appointits own expert – who knows who that would bein Darmstadt? Are there any experts inDarmstadt in this particular area? Again, no dis-

respect to Darmstadt. But there was no systemat all of parties to litigation calling expert wit-nesses. If the court appoints an expert, you mayask an expert to help you in analyzing the court-appointed expert’s work, and maybe asking himsome questions. But it’s a different world.

There’s no real cross-examination of witnesses.A trial of this quite interesting ethical case wouldlast a day, maybe two days at most. Two dayswould be a long hearing. Far too long for manyof the judges. But probably one day.

It’s usually very, very difficult to call anyone whois a witness from a party to the litigation. There’s


11Winter 2008


a sort of presumption – I’ve come across this inFrance and other countries – that someone whoworks for a company who is actually a party tothe litigation will not tell the truth. They’rebiased. They will obviously only advance thecase of the person they’re employed by. So it isquite rare for there to be evidence of fact fromparties to the litigation; to the extent that thereis, there will be a hearing at which the judge, byand large, is the person who asks the questions,rather than the parties having the right to cross-examine.

That’s an oversimplification, as I’m sure youwould gather, but it is quite different to what wehave here.

There’s something called a Code, I gather inEurope, which lays down the law, in our com-mon law system here.

So, to sum up, if the two people who, in myview, have made the greatest contribution toBritish legal history, namely the Duke ofWellington and Admiral Lord Nelson, hadfailed in their task against Napoleon, perhapsthe system over here would be as it is on main-land Europe. As it is, we have a system whoseprincipal characteristics, I would say, are that itis extremely centralized in London, so that casesof importance and complexity tend to be heardin London. They are heard before judges who’vepracticed in the law for at least 20 years, usuallyat the bar, occasionally as solicitors. They’vebeen there, they’ve been in the trenches, they’reworked with clients, they know what’s going on.They’ve seen all the tricks that lawyers can play.They’re highly experienced, and they’re totallyindependent. They’re also relatively enthusiasticabout the law, which is something not to beunderestimated.

You tend to get a full inquiry before the courtsin this country, with full disclosure – which maynot be a good thing for you, but that’s whatyou’ve got, with all evidence of fact and expertwitnesses. On the whole, you tend to get prettywell-reasoned and well-written judgments, in acommon law system, which evolves and is large-ly judge-made.

It’s very expensive, and that’s really is the maindownside. If you talk to litigators in Europeabout the cost of litigation and arbitrationsunder our system in this country, it is very, veryexpensive. But it, nevertheless, is a totally differ-ent system from the one that exists over the

English Channel. It was interesting hearingwhat Brad had to say about how things arechanging, how things are converging. It may wellbe true in the law of privacy and intellectualproperty law and maybe regulatory inquiries, butthe system for trying cases has not reallychanged. It has changed remarkably little overthe decades. There is remarkably little in com-mon between our system and the American sys-tem and the system that exists over the Channel.


JACK FRIEDMAN: We’re going to start thepanel discussion. Brad, what are some of thevariety of matters that you, as general counsel,have to deal with in Europe.

BRAD SMITH: I can speak about it fromthe perspective of an information technologycompany, and I’d probably point to three or fourdifferent groupings. There’s first a category thatevery business has to deal with – a businessincorporates in a country, it employs people, itcontracts for services and goods. Microsoft, likeevery global business, has to deal with all ofthose issues.

In addition to these types of general topics, thereare issues that are fairly distinctive in the IT sec-tor. We’re an intensely intellectual property-based industry. If you think about software, itcosts a very large amount of money to create,and yet any one of us in this room can copy it.We have these things on our desks called PCsthat are perfect copying machines. So we do atremendous amount as an industry to protectwhat we create under the copyright laws, underthe patent laws, under the trademark laws – withpatents being the biggest thing that has changedover the last decade or so.

As a company, we patent about 2,500 to 3,000inventions a year in the United States, and we’llsimilarly patent a large number in Europe, by fil-ing with the European Patent Office and goingto a number of the major member state govern-ments, including the British Patent Office. So

we have a very wide array of intellectual proper-ty-based challenges that we address.

Because of our market share and because of thefocus on the industry in general, competitionlaw has become quite substantial. That’s the onearea of law that’s the most heavily EuropeanUnion-focused, as distinct from nationality-based. There are national inquiries in a numberof countries every year. In any given year, we typ-ically have matters that are under review in prob-ably 20 countries around the world, and at leasta third of those are typically in Europe.

Then there are two other categories that areworth touching upon, both of which have beenreferred to in various ways in some of the com-ments that people have made. One hugelyimportant issue for our industry is the protec-tion of the privacy rights of customers. If youthink about the ways in which customers areusing Internet-based services today, consumersprovide an enormous amount of informationabout themselves. If you are using an e mailservice – Hotmail or Yahoo mail or Gmail –your e mails are being stored on a server some-where. It’s an important question as to what lawis going to protect the confidentiality of yourinformation.

And even if you’re not thinking about it, everyday you’re providing enormous informationabout yourself. Every time you do a search, aserver is keeping a record of that search and theInternet Protocol address of the computer isbeing saved with that search records. As you visitwebsites; many of these sites drop a cookiewhich may enable other sites to see what sitesyou’ve visited so that information can be used tohelp deliver ads to you.

As a result of these changes, the amount ofinformation that is being stored about individu-als is growing considerably. One big questiontherefore is what government will have access tothis information and when. Similarly, in a law-suit, what individuals will have access to thatinformation about you?

“ ”If you think about software, it costs a very large amountof money to create, and yet any one of us in this roomcan copy it.— Brad Smith


12Winter 2008


You heard the reference to the notion that we havean old-fashioned system for enabling governmentsto work with each other. We really do. Data fromcustomers in Europe are typically stored, for exam-ple, on a server in the United Kingdom or Irelandor the United States. But let’s say there’s a requestthat comes from the government of Norway. Thegovernment of Norway will contact Microsoft andsay, “Here’s a Hotmail account; we’d like you toturn over all of the e mails in this Hotmailaccount so we can look at them.” And we say,“Well, the data is not in Norway, it’s in Ireland;so you’re going to have to go to your embassy andget what’s called a Letter Rogatory, and it’s goingto have to go to their embassy, and then it’s goingto have to go from their embassy to the Ministryof Justice in Ireland, and then the Ministry ofJustice will decide whether we have to respond toit, and we’ll turn it over.” The Police Departmentin Norway, not surprisingly, may say, “Why? Youdo business in Norway. Give us the information,and frankly, we’d like it in about six and a halfminutes, because we really want to get on with thisinvestigation.”

And our answer is typically, “Look, we’ve got todeal with governments around the world in aconsistent way.” So everybody can think of thegovernment that would be top of their list thatthey’d be most worried about obtaining access tosomebody’s e mail, whether it’s a large govern-ment in one part of the world that’s had somecases arise because of allegations of persecution.And we say, “Look, we can’t turn it over to you,the government of Norway, unless we’re pre-pared to turn it over to them on the same basis.And we don’t think you want your citizens tohave that information turned over to that gov-ernment on that basis.”

This increasingly is creating issues that are morerelevant to the protection of human rights andfree expression. We see these arising in Europeevery day, and they’re much more complicated inother parts of the world.

JACK FRIEDMAN: Isn’t Europe way beyondthe Americans in terms of the fear of releasingprivate information, including employees?

BRAD SMITH: There is a particular tradi-tion that comes out of Germany and comes outof the experience in the 1930s that then result-ed in strong data protection laws across theEuropean Union. I also think, though, it’sworth thinking a little bit about the difference inprocess. The U.S. system is fundamentally

derived from the English legal system. It’s enor-mously important to see how the principlesdeveloped in English law were transmitted intothe United States. This fundamental focus onan adversary process created a system in whicheach side gets to tell its story, and then there isan impartial, objective decision maker who isgenuinely independent, who listens to each side,and then makes up his or her mind.

It is a creature of the British Isles that thenmoved to those parts of the world that hadBritish colonies. It’s typically not found else-where to a comparable degree. I think one canconsider a topic such as the protection of per-sonal information and appreciate the impor-tance of process as well as substance. Ultimately,one thing I find each day, even in the context ofinternal investigations inside a company, is thatthere is no substitute for having some kind ofsystem of checks and balances that gives eachperson the right to tell their story and have thedecision made by someone who is independent.

JACK FRIEDMAN: I have been told thatAmerican companies in the United States werevery agitated by a recent French law that said thatif you had an investigation of an employee, youhad to tell the employee in 48 or 72 hours thatthey were the subject of an investigation. Theproblem that the American companies had washow to make the two jurisdictions compatible,because in the United States, the idea is, you don’ttell somebody they’re the subject until you’ve inves-tigated to know there’s a basis for questions to beraised. The company won’t say anything to theemployee for a day, a week, a month, or howeverlong it takes to gather information. To be forcedby the French government to start doing it theopposite way was driving them crazy, and theycomplained to the French government. How docorporations deal with this whole issue of privacy,including the electronic privacy issue?

BRAD SMITH: I’ll offer two thoughts;other people here probably have other thoughts.First, the general principle in most countries in

the world is that the information that employeesput on a computer network belongs to theemployer and not the employee. As a result,legal experts typically advise that employeesshould not have an expectation of privacy withrespect to that information. It’s possible that thismight change n some countries over time. Ithink in a lot of companies, individuals developa sort of proprietary view of “this is my laptop.What I put on my laptop belongs to me, and Idon’t feel good about my employer going in andlooking at that information.”

JACK FRIEDMAN: A jury might feel thesame way.

BRAD SMITH: I actually think it points toa broader question. In the wake of Enron andthe corporate scandals, especially in the UnitedStates, at the start of this decade, there was ahuge push – it’s still continuing – on companiesto ensure compliance with legal rules. That’s agood thing. I do think, though, that it’s right forthere to be more discussion than there has beenon ensuring that compliance processes bothensure fair treatment for employees and ensurecorporate compliance.

There is a real role for lawyers to contributemore broadly to an informed discussion aboutthe best approach – at least the best practices –for companies to be applying in light of theheightened responsibilities and authorities theyhave in this context.

JACK FRIEDMAN: Is there a particulardepartment or individual who has to monitorcertain of these things?

BRAD SMITH: Yes. Most American compa-nies today, in the wake of the financial scandals,have a Chief Compliance Officer. At Microsoft,that’s one of my roles. I’m the ChiefCompliance Officer.

We have groups that are investigative groups. Oneprinciple that I’ve been insistent on is separating

“”

…the amount of information that is being stored aboutindividuals is growing considerably. One big questiontherefore is what government will have access to thisinformation and when.— Brad Smith


13Winter 2008


the groups that have the investigative role fromthe groups that have the decision-making role.

JACK FRIEDMAN: Not to have judge, jury,and executioner in the same person.

BRAD SMITH: Exactly. I think it is very difficultto ask a single individual to be the investigator,the prosecutor, the judge, and the jury. I thinkthe potential for people to make assumptionsrather than fact-based determinations, and havemistakes creep into the process, is very high.

JACK FRIEDMAN: Going back to theantitrust area, what would be an example of howregulation functions in the European Union andthe United States that might be different, in termsof the parties and how the decisions are made?

SIR CHRISTOPHER BELLAMY: Interms of the United States, although Brad willknow better than I, the roles of investigation andprosecution and decision-making are really threedifferent roles. They tend to be more split up inthe United States than they are in Europe. Interms of the European Commission, they are allrolled into one. Anyone from a common lawbackground has a continuing reservation aboutthe viability of this system. Honest administra-tors will admit that nothing is more difficultthan persuading a team that’s been working ona case for two, three, four years, that they’vemissed something, that they’ve got it wrong, thatthey should take a different direction, or whatev-er it is. The sort of momentum to get to a con-clusion is very strong in a system that does nothave the internal checks and balances that Bradis talking about.

If you have that administrative system, it thenthrows an enormous weight on the court end ofthe process to ensure some sort of fairness.There are really two aspects to that. One is, whatis the scope of review by the court? And mostlyin Europe, it’s what we would call a judicialreview scope for procedural error or for manifesterror of fact or law, rather than a re hearing.

JACK FRIEDMAN: You mean it’s deferringto the agency.

SIR CHRISTOPHER BELLAMY:Exactly. So that is, from a common law perspec-tive, a certain weakness in the review system.

You then have these process differences that youare talking about at the EU level, where at one

extreme, you’ve got the Darmstadt story; but, atleast in most cases, you do not have the fullpanoply of the adversarial process that we areused to in common law countries.

Now, if I may expand anecdotally on that for alittle. When I first started at the Bar and I wasdoing cases before the court in Luxembourg –this is before we had the CFI – it was like

appearing in front of Madame Tussauds. Youwould get no reaction whatever from the court.This is because, in the French tradition, it is notappropriate for the judge to interrupt an advo-cate and ask him a question before the advocatehas finished his pleading, because you, thejudge, are supposed to be simply receiving theargument, and you shouldn’t give any indicationof which way your mind is going and how you’rethinking, before the advocate finishes the argu-ment, because of the risk of pre-judging the case.Now that’s the very pure, Napoleonic view ofthe role of the court. The judge is simply anempty vessel, and you don’t say, “Mr. So-and-So,what’s going through my mind is whatever isthis,” because nothing is supposed to be goingthrough your mind; it’s supposed to be justreceiving information.

Now, with the advent – I’d be very interested tohear from Brad in a moment, how he saw theMicrosoft hearing as a hearing – of common lawcountries to the European Community, of theBritish and the Irish, the courts (first the maincourt and then the Court of First Instance)began to become more lively, because the judgesrealized that there was utility in asking questions,

in probing the parties, in putting hypotheses, inhaving a Socratic debate, admittedly within thelimitations of the simultaneous translation sys-tem, but you could at least get somewhere. Andmoreover, from the attorney’s point of view, itwas much more fun than just sitting there.

So, certainly, when I was at the CFI, within theframework of the Continental system, the hear-

ings actually became much more lively. I used tofind them pretty useful; and my colleaguescaught on to the idea and started to join in.

I’d be very interested to hear in a moment howyou felt at the time, as far as the hearing wasconcerned, disappointing though the result was.

I’m probably one of the few judges who hasworked in both systems. I’ve seen the Darmstadtsort of thing, where you’ve got none of the toolsthat the English judge would have, and I’ve seenthe other side of things.

It’s not completely one-sided. The adversarial sys-tem is very expensive, and it can sometimes,especially if you’ve got a human situation, beaffected by elements of emotion or feeling. TheContinental system is supposed to squeeze outall sorts of emotion; it’s a very dry sort of system.

Nonetheless, I think there probably is somecompromise position to be made, and certainlyin the Competition Appeal Tribunal hearing, wetry to synthesize the two systems and get theadvantages of both.


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The problem is, of course, in Europe, thatalthough you can harmonize substantive lawwithout too much difficulty, procedure complete-ly defies harmonization. It’s almost impossibleto get any of these legal systems to harmonize. Isuspect that over the next 25 years, with theimpact of globalization and the increasing inte-gration, at last the civil justice systems, whichgenerally speaking are the last things to change,will start to in a small way.

JACK FRIEDMAN: Many Americansassume that there is a common procedural rulethroughout the European Union, just like thereis in the federal courts in the United States.

SIR CHRISTOPHER BELLAMY:Absolutely far from it. In general terms, you’vegot three or probably four different sorts of fam-ilies. You’ve got the central Continental coun-tries that are still operating on the proceduresthat date from Napoleonic times, which are theinquisitorial procedures that Roger was explain-ing in terms of the courts in Germany, whichare typical of Italy and France and Spain andthose Continental code-based countries.

You’ve got the common law countries of theUnited Kingdom and Ireland and Malta andCypress and so forth. You’ve got theScandinavian countries that are a bit closer tothe common law model, but not quite the same.And then you’ve got Eastern Europe, which Isuppose is, in general, closer to the mainContinental model, but still very young jurisdic-tions, very, very underdeveloped procedures.

JACK FRIEDMAN: Any of the others wantto comment?

PROF IAN WALDEN: There has been alot of political effort to harmonize criminal pro-cedure because of the terrorism threat and theconcern, which is going to have perhaps a knockon effect eventually to civil procedure. So withinEurope, we’re starting to see a number of thosecriminal procedures designed to enhance themovement of information, particularly betweenlaw enforcement agencies.

JACK FRIEDMAN: And if you have aEuropean Union hearing, by the way, is it inBrussels? I’m really sorry to ask primitive ques-tions, but this will show you something abouthow little Americans who are not professionalattorneys here know about this.

SIR CHRISTOPHER BELLAMY:Proceedings before the agency are held inBrussels.

JACK FRIEDMAN: Let me thank you, Brad– oh, go ahead.

AUDIENCE MEMBER: I don’t mean tobe too cynical and post-modern, but don’t youstill probably end up with different results fromdifferent decision makers in different places?

SIR CHRISTOPHER BELLAMY: Youprobably do. But then I saw a case the other daywhere a high court judge sitting in the Strand inLondon had revoked a particular patent ongrounds of prior art or whatever it was; and sixweeks later, there’s a 200 page judgment fromthe Southern District of New York upholdingthe same patent. So you can’t get it always right.

TYLER ROBINSON: And this, I think, isone of the reasons why international arbitrationis so interesting, because it provides a privatedisputes resolution marketplace in a sense wherecivil and common law traditions can be com-bined in the combinations that various arbitra-tion institutions or private parties to arbitrationwant, and to try different things and see whatworks, and you can pick and choose.

SIR CHRISTOPHER BELLAMY: Itwouldn’t be wrong to say that you all know bet-ter than I in that context, in the internationalarbitration context. These various traditions dofuse and reinforce each other and produce a sys-tem that is acceptable and workable from the

parties’ point of view. Of course, there are thingsto be gained from each side.

TYLER ROBINSON: Right. And interna-tional arbitration is, of course, limited to thekinds of disputes that people can agree contrac-tually to resolve.

JACK FRIEDMAN: Brad, as a participantin some of these proceedings, could you makesome comments about your observations?

BRAD SMITH: Sure. I’ve attended morethan I ever hoped to, in many countries, actually!

First of all, I was extremely impressed with thehearing that we had before the Court of FirstInstance, the CFI, in Luxembourg. We had afive-day hearing on the merits, which was unusu-ally long. The court allowed us to come in andset up a computer network with lots of monitors,and then every party in the case was able to useit. We had lots of people there to answer ques-tions. I thought the judges showed quite animpressive command of the facts of the case;they clearly had spent a tremendous amount oftime studying and preparing. They did an excel-lent job of using a relatively informal process toput a question to one side, and then put thesame question to somebody from the other side.It was almost a little bit humorous, because thefirst day, Monday, we had a number of engi-neers who came from the Seattle area, and wewould have to sort of point to them – “You’resupposed to answer this question” – and theywere a little nervous about it. By Friday, theywere running up to the microphone, and the


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lawyers didn’t even have a chance to tell themwhether it was their turn – they had somethingthat they wanted to say to these judges, and thejudges really did quite an amazing job of havinga very sophisticated discussion.

So to me, that is as high quality a hearing as Ithink one will see anywhere in the world.

The question I have where I’m a little moreskeptical perhaps is on the administrative hear-ing process. There really is very little discussionor consensus around the world about what aproper administrative process should include.There’s less administrative law than desirable, inmy view. It would help to have more clarityabout how administrative hearings should work.Are there any rules of evidence? Should the deci-sion-maker attend the hearing? If not, how willthe decision-maker be informed about what wassaid at the hearing?

JACK FRIEDMAN: What are some of theissues that you have litigated here in Europe,Brad?

BRAD SMITH: There are two issues thatwe’ve unfortunately litigated in a number ofcountries. One is the boundary or the balancebetween intellectual property rights and compe-tition law, and how does that balance get struck– you heard a little bit about that before – andin particular, when does a company have a legalduty to license its intellectual property rights toa direct competitor. The Court of First Instance,in our case, found that we had a legal duty tolicense the intellectual property rights and tech-nology in our communications protocols tocompetitors. That’s one issue.

The other issue relates to the integration of newfeatures into a product, and when does that con-stitute a tying violation. When we add a new fea-ture to a product like Windows, is that consid-ered a product improvement to a single product,or is that, instead, tying two different productstogether? In Europe, that was the focus of theMedia Player issue. That’s a classic example, Ithink, of a practice that somebody could say iseither pro-competitive or anti-competitive,depending on the economic effects. It’s not likeprice fixing, where everybody around the worldwould say, “Look, price fixing is always bad.There’s never any good that can come from it.”That would be contemporary antitrust or compe-tition law doctrine.

But product integration can be good, or it canbe bad, depending upon one’s point of view indifferent parts of the world, and depending onthe economic effects. And as Sir Christopherremarked earlier, there’s a question as to howmuch economics will be used to make that deci-sion, how much it will be grounded in econom-ic data, and what’s considered to be a rule of rea-son analysis versus what would be traditionally

considered a per se or rule-based approach thatsays, “In these conditions, it’s always unlawful,”and not really looking at the economic factors.

JACK FRIEDMAN: It’s often said in thepress that American antitrust is more orientedtoward the impact on the consumer, and second-ly on the impact on the competitor. In contrast,it is said that the European approach is inreverse order; that there’s more emphasis on theimpact on the competitor, and secondly on theconsumer. I don’t know if that’s fair or not,

SIR CHRISTOPHER BELLAMY: Mypersonal view is that it’s a false dichotomybecause in some cases-admittedly, they’re fairlyextreme – it may well be necessary to protect andencourage a competitor in order to serve the ulti-mate consumer interest in having some competi-tion. So I think that whether you start from oneend of the telescope or the other, you shouldprobably reach more or less the same point.

If I could throw one other remark into this gen-eral discussion of process and courts and howwe’re getting on in Europe, which is not some-thing that we can do anything about, but it’s per-

haps wise not to underestimate the impact of thefact that we now have 27 member states inEurope, including 10 new member states thathave only very recently emerged from commu-nist dictatorships of one sort or another andhave no really established judicial tradition ofthe kind that now stretches back for hundreds ofyears on both the Continent and in the com-mon law countries.

It is inevitable, I think, that the newer judgesfrom the new member states are grappling withproblems that, for them, are very unfamiliar,because they won’t have encountered the kindsof problems that people are used to dealing withas regards great corporations in Western Europeand the States, and they won’t have a back-ground of a sophisticated legal system and all thesort of confidence that that brings to one as ajudge. So it may be that we’re in for a period ofconservatism at the level of the EU court, andthat those factors may, to some extent, on someissues, reinforce deference toward what theadministrative authority says. It’s very hard toanalyze this, and I wouldn’t want for a momentto be suggesting any criticism of the judges innew member states; far, far from it. It is just apsychological factor that needs to be added to themix in the decision-making process, and it’srather hard to assess it. But we all tend to assumethat we’ve got judges who have got a lot of expe-rience and know their job and all the rest of it,but it’s quite hard for those new judges to catchup and get up to speed on some of these issues.

JACK FRIEDMAN: Have you experiencedwhere a company is given basically different


16Winter 2008


orders by different countries that are in conflict,such as one says “Keep this secret,” and theother one says, “Give them your codes, havethem come in and be trained in your secrets”?Are you ever in that situation where logically youcan’t run a business with such different ordersbeing given to you?

BRAD SMITH: We’ve faced that kind ofdichotomy at two different levels. One level isjust diverging policy, but not conflicting rules,where different governments in different conti-nents want to go in a different direction and it’sclear that the policy goals are different to somedegree. But it’s literally possible to comply withone rule in one country and a different rule inanother country.

Then we’ve run into some other situationswhere potentially the rules would be in directconflict. In other words, we cannot comply withthis rule in Korea and comply with that rule inthe United States and this third rule in theEuropean Union, because they are actually…

JACK FRIEDMAN: That has come up?

BRAD SMITH: It has come up in discus-sions with governments when they have contem-plated those kinds of rules. I will say that whenwe have had that conversation, and we’ve said,“If you do this, we can do it in your territory,but we can’t do it in this other territory becauseit will throw us into violation of the remedy thatwas instituted in this other country,” the peoplewithin the agencies involved have always stoppedand listened and –

JACK FRIEDMAN: You mean they actuallytry to be responsive to....

BRAD SMITH: Yes, they do. They recognizethat they can’t throw us into violation of the lawin another country. That doesn’t mean that theywon’t want to pursue a diverging policy thatactually has some degree of regulatory conflict,but [they] stop short of a direct violation withthe rule where that’s been put in place else-where. But they absolutely do listen when it getsto that point.

JACK FRIEDMAN: In American lawschools, in about 10 to 20 years, you’ll havesome professor saying, “Antitrust is dying off asa live field.” However, no matter what happens,antitrust just keeps on coming back.

I’d like to open up the discussion to the audi-ence.

AUDIENCE MEMBER: A very completeexample of the current disconnect betweenEuropean legislation and the lack of theEuropean Supreme Court was demonstrated inthe case of the database directive, where we

thought we understood what that meant in theUnited Kingdom, and Mr. Justice Maddy gave avery reasoned judgment based on our databaseregulations. When that judgment appeared inthe European court, it turned out that theEuropean conception of what the database direc-tive was saying was completely different, andwe’ve been thrown back on a huge uncertainty.I think that that illustrates the point that thecourt will defer to the administration. As aEuropean, that gives me great concern, thatthere isn’t a proper checks and balances in theway the Americans have established, in having aSupreme Court that sits separate from theadministration, and says, “This is the law;whether you like it or not, in Brussels, this is thelaw you’ve got. If you don’t like it, you have tochange the law.”

ROGER ENOCK: A very hot topic at themoment in Europe that reflects very much thetraditional Continental concept of an advocate,as distinct from an in house lawyer, is that an inhouse lawyer still can’t be a member of the Bar.This is a way in which the United States andUnited Kingdom have developed quite different-ly up to now. But to harmonize all that sort ofthing is very difficult.

BRAD SMITH: I’m increasingly struck, Ihave to say, as the years go by, that the principleof an independent judiciary is, at one level,something that is found in the governmentalfabric in many, if not most, countries in theworld, and yet is fully understood in the sensethat it started in this country in a much smallernumber of places. It causes one to appreciate

that what happened at what is now this littlepark next to the Thames at Runnymede, withthe Magna Carta, has shaped centuries of cul-ture and thinking about the role of courts andthe role of lawyers and law, in all the countriesthat inherited that tradition.

And yet, when you get outside the countries thatinherited that tradition, there is just muchgreater caution, even among the judiciary andamong lawyers, about the extent to which theyfeel courts should be operating as a check onexecutive power. In a world where everybodytalks about the rule of law to such a degree, real-ly thinking through the real independent role ofthe judiciary is more important than ever.

JACK FRIEDMAN: Yes, sir.

AUDIENCE MEMBER: I’m a German-qualified lawyer, and funny enough, I was bornin Darmstadt! But I think, firstly, if you had thesame kind of meeting in Germany or Francewith expert panelists, you probably would hearopposite opinion and opposite wishes. I thinkit’s important to first of all respect everyone’sview in Europe, and when I say “Europe,” Iinclude the United Kingdom. And secondly,


17Winter 2008


what Sir Bellamy said, his observation of wherethings might go to, I think we will be talking alot about pros and cons. I wouldn’t call it“Napoleon law point of view”; I would rathercall it the “Roman law point of view.”Transaction contracts that are put in place, a lotof them, they have similar wording coming fromthe United States. Many clauses and contractsare pure American clauses; nobody in Europeunderstands why they are in there. In the future,I think more and more we’re going to see astronger influence of Europe in the UnitedStates.

And just quickly to add that Darmstadt, thecomparison with Eastbourne might not be100% correct. I don’t know if anybody else isinterested, but I needed to [address] that.Darmstadt actually has a worldwide known uni-versity for engineering; it has the European cen-ter of aerospace and science.

JACK FRIEDMAN: I want to say that anytime someone born in a small area is such aneloquent speaker he or she should be given aspecial award by the Chamber of Commerce forthe service they’ve provided the community!

BRAD SMITH: As a business trying towork around the world, I’d like to give you a per-spective. Cambodia has a population of about14 million people. In Africa, Mozambique has apopulation of about 18 million people. You putthose two countries together, there are 30 mil-lion people. There are more lawyers right nowin this building than there are in those twocountries put together. Cambodia has about 240lawyers; Mozambique has 280 lawyers. Thatincludes all the lawyers engaged in private prac-tice, all the lawyers who work for the govern-ment, and all the lawyers who are judges.

I think that one of the things that it’s so easy forus to forget is that, in the United States especial-ly, we have more lawyers than the country needs,I would say. And yet, you go to many, manycountries around the world, and there just arenot enough lawyers, and there never will be any-thing nearly approaching the kinds of thingswe’re talking about here, until there are morelaw schools and more lawyers and more judgesand more lawyers who are prosecutors workingfor the government, as well.

JACK FRIEDMAN: How does a companylike Microsoft keep itself nimble, quick, and ableto respond? What is the role of your department

in supporting the business people? Some ofthem are going to come in and say, basically,“Lawyers are an annoyance, what we want is newtechnology – let’s get it out the door and makeit available to customers.” So, could you pleasetalk about the business side of Microsoft?

BRAD SMITH: Sure. There are two differ-ent questions you asked, and they’re both verygood ones. The first is frankly, how does any

large organization stay nimble? And first of all, Iwould say, it’s a very difficult challenge. Anytime you get any organization that has a lot ofpeople, trying to be nimble is a very difficultthing. I’ve seen in the evolution of Microsoft aswe grew, people started to say, “Look, I don’twant rules, because that’s bureaucracy. Andbureaucracy slows things down.” And yet, wealso realize that not having any rules basicallyleads to anarchy, and anarchy slows thingsdown, too.

JACK FRIEDMAN: In correcting mistakes.

BRAD SMITH: Not only that; unless youhave clarity as to who gets to make decisions,everybody spends every day undoing the deci-sion that somebody else made yesterday, andthat really slows an organization down. Withinour company, five or eight years ago, one of thethings that was really slowing us down was thatit wasn’t clear who was to make a decision, soeverybody thought they could, and people weresort of undoing each other’s decisions. I will sayit resembled a partnership in a law firm to somedegree!

JACK FRIEDMAN: Oh my!

BRAD SMITH: Which are wonderful insti-tutions, but also have questions of how do youstay nimble. And so, yes, I think that what itreally forces a company to do as it grows, is tothink through, very carefully, who it is going toempower to make which decisions, and how,and when, and to some degree, delegate andempower groups so that they can go drive a cer-

tain part of the business and know that theyhave the resources to make investments. They’vegot the authority to make decisions; and thenthey’ll be held accountable, not only by the com-pany’s management, but by the investing public,because financial results will lead to transparen-cy to the decision-making.

One of the big challenges in information tech-nology is once you establish a position, you havemore at risk. The classic process of innovationis for somebody to come in not only with newtechnology, but a new business model; and itwill upset the old business model. You’ve got tobe prepared, if you’re going to be successful overa sustained period of time, to risk putting your-self out of business with something new, oryou’re just going to wait for somebody else to dothat to you.

JACK FRIEDMAN: You make yourselfobsolete.

BRAD SMITH: Yes.


18Winter 2008


JACK FRIEDMAN: And somebody elsemight make you obsolete if you don’t do it.

BRAD SMITH: Yes. The transition from theold character-based computing to the graphicaluser interface, for example, was an interestingcase study, where Microsoft was the leader in theoperating system for character-based computing,and yet we were prepared to move to the graphi-cal user interface, because we knew that some-body else would if we didn’t. So we put our exist-ing success at risk to try to create something new.You could look every day at certain successes wehave, and you could say, “Boy, we’d better be will-ing to put ourselves at risk with something newand different, because if we don’t, it’s justinevitable that somebody else will do it to us.”

JACK FRIEDMAN: Hasn’t Bill Gates madecomments about how Microsoft may be a verydifferent company in years to come with thechange of technology and what businesses youwere in?

BRAD SMITH: Absolutely. About every fiveyears, if we don’t look substantially differentfrom the way we looked five years before, we’reprobably on a path to decline. This constantchange is just a fact of life; and it means foremployees, you’d better thrive on change oryou’re going to have a hard time being happy.

JACK FRIEDMAN: What is the role ofyour department and the general counsel indealing with the business side?

BRAD SMITH: I think that’s a great ques-tion, as well. At one level, you could say it’s toensure that we do all of these things in a legalmanner, which is absolutely true. But it goesbeyond that in a couple of respects.

First, in my opinion, great lawyers are greatthinkers, and great thinkers don’t confine them-selves to just thinking about the law, but thinkabout everything that’s in front of them. So wetry to create an environment in which thelawyers have the opportunity to contribute tobusiness thinking in a broad way. One of theways we do that is ensure our lawyers are sittingon the management teams of different business-es. Another aspect of this is to try to encourageboth our lawyers and our business people toalways go back to what is it that we’re trying toaccomplish – to ask what’s the goal. A typicalconversation inside the company, or any compa-

ny, may be a businessperson coming to a lawyerand saying, “I want to do this particular thing.Tell me if I can.” And the answer, sometimes, is“No.” But the way to have the conversation, inmy opinion, is to go back and say, “What areyou trying to accomplish? What’s your goal?”And a lot of times, if you can have that kind ofdialog, you find out that the idea that somebodybrought you is not workable from a legal per-spective, but there is some other approach thatis not only going to work legally, it’s going towork better from a business perspective ofachieving that goal than the idea that the personwalked into your office with.

It requires having a very robust relationship, sothat the lawyers are involved in business think-ing from start to finish and are appreciatedinside the company, not only for the quality oftheir legal reasoning, but for the creativity oftheir business thinking.

JACK FRIEDMAN: What is the relation-ship between general counsel and the board?

BRAD SMITH: At our company, andindeed at a lot of American companies, I, as thegeneral counsel, operate as the corporate secre-tary, as well. So that means that at one level, wemanage the process for the board of directorsand all of the board committees; manage thework flow. We have certain responsibilities thatare legal responsibilities, to ensure that informa-tion flows to the board and that the boardmakes its decisions with a full view of all of itsfiduciary and legal responsibilities.

But beyond that, we are the stewards for corpo-rate governance, in my view, and that meansthat we have the opportunity to ensure thatprocesses work well, that people have thoughtfulconversations before they make decisions, andthat different points of view get considered alongthe way.

It is a great opportunity to help ensure that good

decisions are made; it’s a great opportunity tohelp contribute and shape decisions at times. Itrequires that one recognize that when one is thesteward of a process, one’s first and foremostresponsibility is to ensure that the process workswell. If you ever have an idea that you believe inso passionately that you put the pursuit of thatidea, as a business goal, ahead of the preserva-tion of a great process, you put your stewardshiprole at risk.

JACK FRIEDMAN: There is a generalcounsel who has indicated that his company hasan annual capital budget of several billion dol-lars a year, and that there is virtually no time inthe entire year where the full board considersthat budget. The full board is so busy with reg-ulatory compliance they don’t have a chance toreally get involved with the direction of the busi-ness. What is the feeling about the fact that thepeople at the top can be so involved with legalcompliance that they don’t have time to thinkabout the business?

BRAD SMITH: It’s a very good question,and it goes back fundamentally to what is therole of a board of directors. One of the roles ofa board of directors is to safeguard the share-holders’ assets and be sure they’re not stolen orwasted. Another role is to ensure that the com-pany adheres to its legal obligations. I thinkthose are two important roles of boards of direc-tors. In the wake of the Sarbanes-Oxley legisla-tion in the United States, the first half of thisdecade saw the pendulum swing so that boardswere spending so much of their time on thosetwo responsibilities that they sometimes werenot, in the United States at least, really able todevote as much time as people recognized wasimportant to two other very important roles of aboard. One is to ensure that the company’s strat-egy is fundamentally sound, and the second isto decide whether the CEO is doing his or herjob, or should be replaced, because it is theboard that is uniquely responsible for those twothings, as well.

“”

You’ve got to be prepared, if you’re going to be successfulover a sustained period of time, to risk putting yourselfout of business with something new, or you’re just goingto wait for somebody else to do that to you.— Brad Smith


19Winter 2008


I think over the last two years, the pendulumhas swung back a bit; and part of it is that, asthe Sarbanes-Oxley and other legal complianceprocesses have matured, boards have figured outhow to do them in a somewhat more efficientway while still giving them all the attention theydeserve. The other part of it resulted from arecognition that the attention to strategy wassubsiding, and even if it needed to be done inmore meetings, boards needed to spend moretime on the strategy topics.

JACK FRIEDMAN: What is the feeling inLondon and on the Continent about the ques-tion of serving on boards these days: Is it driv-ing people crazy that they can’t get anythingdone because they have so many regulations, ordo you feel it’s not as bad as in America?

AUDIENCE MEMBER: Our feeling isthat an American director is facing the outsideinvestors more, whereas a director in a Europeanenvironment is more responsible internally forall kinds of matters.

JACK FRIEDMAN: Brad, how do youapproach your selection and relation to outsidelaw firms?

BRAD SMITH: First, in my opinion, mostof the time a law firm is serving in one of twodistinct roles for a large company. Either the lawfirm is retained to do a very discrete task. Forexample, we’ve got a subsidiary that we’re open-ing in Slovakia. Help us figure out how to dothat. What we’re hiring is somebody who hasexpertise in a particular process and will beemployed for a discrete project. Or, we’re retain-ing counsel for a role that is strategic, eitherbecause the particular issue is of such impor-tance to the bottom line of the company, or it’sa broad, long-term issue that we’re going to beworking on for a long time.

In the first instance, you’re looking for some-body who can accomplish a particular task, andin the second context, you’re looking for some-one who you want to have develop a very deepknowledge of the company, and you want to beable to look to as a strategic advisor for a longperiod of time.

Most of us would probably say the second roleis more interesting and fun than the first. Thatcertainly was my perspective when I was in a lawfirm, and it’s the perspective I typicallyencounter when talking to outside lawyers today.

I continue to believe that the opportunities forpeople to play a truly strategic and broad and deeprole are there; but the changes in the professionhave probably made that a little harder to come bythan was the norm, say, 20 or 40 years ago.

The second thing that is just a fact of life is thisfocus on costs, which is a source of consterna-tion and tension sometimes, between the clientsand firms everywhere.

JACK FRIEDMAN: One shouldn’t thinkthat because you have good profit margins, peo-ple aren’t worried about your budget.

BRAD SMITH: No – we’re a $750 milliondepartment, which is a very large cost, and we’repretty public about it.

JACK FRIEDMAN: How many lawyers isthat?

BRAD SMITH: We have a thousandemployees internally; and yet about 60% of ourcosts get spent on outside advisors, so it’s nottoo difficult to do the math. And that’s a bigcost. The company and the company’s share-holders are entitled to expect that that money isgoing to be spent very efficiently and as effective-ly as possible. In a world where Wall Street start-ing legal salaries recently went through the$160,000 barrier, there is obvious pressure onrates. All of these things continue to work theirway through our profession.

I’ve actually heard people get fairly emotional inthe past year about the whole question of lawfirm rates, and yet I personally think they are

mostly an issue of market economics: rates arerising because of market economics, and yet themore law firm rates rise, the more likely it is thatwork’s going to be done inside a company. Youwere referring before to the growth of in houselegal departments and the number of in houselawyers working in Manhattan. We are living ata time that, among other things, is characterizedby the real growth of global legal departments.

When I left my law firm in 1993 to join Microsoft,it was the first time that anybody had left thereas a partner to go work inside a company.

JACK FRIEDMAN: Why did you want togo in house?

BRAD SMITH: To be honest, I came toMicrosoft with the firm expectation – and I saidit to the folks who hired me at Microsoft and Isaid it to the folks at the firm – that this wassomething I planned to do for two years andthen go back. Then fourteen and a half yearslater…. I’ve been stuck – I say that jokingly – I’mvery, very happy where I am!

The early 1990s were still a time when peopledidn’t tend to leave law firms to go work inhouse as frequently unless they thought theywere going to get shorter hours. That’s what peo-ple said. “Oh, you’ll go to a company, you’llwork shorter hours.” But in every other respect,it was considered a step in the wrong direction,almost, for many people’s careers.

JACK FRIEDMAN: What are your hoursnow?


20Winter 2008


BRAD SMITH: As long as they ever were ina law firm. They always have been. My hoursdidn’t change at all.

But we’re able to hire great lawyers out of greatlaw firms around the world; and we’re living ata time where, in part because of the cost struc-ture of the profession and in part because ofclose counseling about tough issues, we reallybenefit from having lawyers and business peopleclosely intertwined.

This is an era of large legal departments in largecompanies. So that’s changed the profession,both for the lawyers working in house and forthe lawyers working in outside firms. The wholenature of the profession has to some degreechanged because of that over the last decade.

JACK FRIEDMAN: I try to wind up the dis-cussion with a personal question. With the fiveminutes a month that you have free, what do youlike to do, or what’s your idea of a good vacation?

BRAD SMITH: I definitely could do thingsoutside the office. I have two kids, and my wife’sa general counsel of a public company in theUnited States, as well. That’s a little bit unusualto have two of us in the same household. But wedefinitely get away from work.

The question that I’m most often asked in thatcontext, which I’ll share with you and I’ll giveyou my answer, because it’s really what I findpeople often really want to know is: “what’s itlike to be the lawyer for Bill Gates?”

That’s what people want to know – what’s helike as a client? I’ve had the opportunity to workwith Bill for 14 years, and for the last five and ahalf years to be down the hall. I’ll have thatopportunity for another five and a half months;and then he’ll be the chairman of our board,but he’ll no longer be at Microsoft every day.

He is truly a unique individual, in my opinion,in our generation and in the world, in terms ofsomebody who is a business leader and a real

technologist. It’s very unusual to find peoplewho are technical leaders and business leaders.It’s usually one or the other; they go in onedirection or the other.

But the other thing that has always been, andremains, so unique about Bill is his ability to

think about the law. His father is and was a veryprominent lawyer in the Seattle communitywhen Bill was growing up, so Bill grew up inthis legal family. He is the only really seniorbusiness executive whom I’ve encountered wholikes to read judicial decisions. I mean this seri-ously. He reads patent decisions. He readsSupreme Court decisions.

I will share, sort of in closing, one episode thatcaptured this. I’m going to the World EconomicForum tomorrow, and I remember being thereabout three or four years ago, and one of theindividuals we were going to be with was a U.S.official from the Justice Department. So theweek before, I had sent Bill a recent SupremeCourt decision, because this particular JusticeDepartment official had worked on taking thiscase to the Supreme Court and was proud of thedecision that resulted. I said, “You might want

to read this, because this is a good topic for youto talk about.”

As we were in the back of a car driving througha snowy street in Davos on the way to the meet-ing, I turned to Bill and asked, “Did you have achance to read that decision?” “Oh, yeah, I read

that last week,” he responded, and he startedreciting the key aspects of the case. Then he said“And footnote 14. That was my favorite footnote!That footnote,” and he quoted the footnote, bymemory, and sure enough, walked into themeeting and started reciting this. It is an unbe-lievable experience to have a business client whonot only reads cases, but unfortunately has thisability to recite the footnotes back to you! I wassitting there thinking to myself, “What the heckdid footnote 14 say?”

JACK FRIEDMAN: Let me thank ourGuest of Honor for sharing his wisdom and histime. I want to thank all the panelists for theirsupport and their sharing their thoughts. Mostof all, we always thank the audience because ourmission is education for the business communi-ty and we want to create value for you. Thankyou very much for joining us. ■


21Winter 2008


Sir ChristopherBellamySenior Consultant to Linklaters

Prior to joining Linklaters, Sir Christopher set

up what is now the Competition Appeal

Tribunal (CAT) and held the post of President

from 1999 to 2007. The CAT hears appeals

from regulatory decisions by the OFT and other

regulators under the Competition Act 1998 and

Articles 81 and 82 of the EC Treaty, appeals

under the Communications Act 2003, reviews

in relation to merger and market investigations

under the Enterprise Act 2002, and certain

damages actions. As President, he was responsi-

ble for case management, interlocutory and

interim applications, chairing the main hearings

and preparing and delivering the judgments.

Prior to joining the CAT, from 1992 to 1999 Sir

Christopher was one of 15 judges of the Court

of First Instance (CFI). He was President of a 5-

judge chamber from 1996 to 1999. Cases where

he presided as judge covered a wide range of EU

law areas including: anti-dumping; competition;

contractual disputes; Euratom; freedom of infor-

mation; free movement of goods; international

law; pharmaceutical licensing; trademarks; and

state aid.

Before becoming a judge at the CFI, Sir

Christopher was one of the leading QCs at the

competition and EU law Bar in London.

As competition law increasingly influences criti-

cal aspects of corporate and commercial strategy,

first-class competition advice is vital for doing

business globally. Throughout the world, clients

come to Linklaters for competition advice on

their most complex and challenging cases.

Linklaters is committed to working closely with

you to achieve your commercial objectives, and

consistently demonstrates value by:

• delivering expert, innovative, commercial

advice on law, risk and strategy

• quickly developing a deep understanding of

the markets and industries in which you

operate

• offering a seamless global approach to mirror

the borderless way you do business

• combining quality and efficiencyto ensure

optimum value for money

With over 100 dedicated Competition/Antitrust

lawyers, including 27 partners, working across

the world, Linklaters embraces the continued

globalisation of competition law and policy.

With expertise on both sides of the Atlantic, in

Eastern Europe and in the developing competi-

tion regimes of Asia, we strive to nurture the

emerging generation of global antitrust lawyers.

The multi-national and multi-lingual nature of

our team allows us to understand the national

concerns that shape global competition policy

and to maintain strong relationships with

authorities and enforcement agencies across the

globe. A member of the European Commission

recently commented that he “sees Linklaters a

lot and appreciates its high standards of profes-

sionalism and integrity.”

Linklaters


22Winter 2008


Roger Enock Partner, Covington & Burling LLP

Roger Enock is a partner in Covington &

Burling’s Litigation practice group and

Managing Partner of the London Office.

Roger has extensive experience advising corpora-

tions, financial institutions, liquidators and indi-

viduals in a variety of judicial, arbitral and regu-

latory proceedings in the UK and foreign juris-

dictions. His experience has included:

• coordinating multi jurisdictional litigation;

• advising on major restructuring and insolven-

cies;

• internal investigations in the UK and abroad;

• international and domestic arbitrations

• FSA investigations; and

• representing policy holders in claims against

insurers.

Before joining Covington in June 2007, Roger

was a litigation partner at Freshfields for 15

years.

Covington & Burling LLP represents clients in

cutting-edge technology, litigation, white-collar

defense, transactional, governmental affairs,

international, life sciences and other matters. In

responding to the needs and challenges of our

clients, our lawyers draw upon the firm’s expert-

ise and experience in a broad array of industries

to provide solutions to difficult, complex, and

novel problems and issues, whether in litigation,

transactions, or regulatory proceedings.

From our offices in Brussels, London, New

York, San Francisco, and Washington, we prac-

tice as one firm, holding closely to core values

that start with a deep commitment to our clients

and the quality of our work on their behalf. Our

lawyers are recognized nationally and internation-

ally for their legal skills and the depth of their

expertise. Many have served in senior govern-

ment positions. Virtually all of them provide

public service through pro bono representation.

The diversity of our lawyers strengthens our abil-

ity to evaluate issues confronting our clients and

to communicate effectively on their behalf in any

setting.

In the corporate, tax and benefits area, we take

a multi-disciplinary approach, resulting in an

ability to deliver innovative and creative solu-

tions. Clients benefit from the collaboration of

teams of lawyers having expertise in mergers and

acquisitions, securities, finance, corporate gover-

nance, tax and benefits, bankruptcy and real

estate.

Covington & Burling LLP


23Winter 2008


Tyler B. Robinson Partner, Simpson, Thacher & Bartlett LLP

Tyler Robinson is a Partner in the Firm’s

Litigation Department and is based in the

London office. He represents clients in a wide

range of complex commercial matters with a

focus on international arbitration, litigation and

overseas internal investigations. Mr. Robinson’s

recent experience has included representing a

leading global manufacturer of defense systems

in LCIA arbitration in London; U.S. hedge

funds in judgment enforcement proceedings

against a foreign sovereign; Moody’s Investors

Service in a variety of international litigations

and arbitrations in Chile, Uruguay, and

Indonesia; a U.S. company with overseas opera-

tions in an internal investigation under the

Foreign Corrupt Practices Act; Swiss

Reinsurance Company in various reinsurance

arbitrations and in insurance coverage litigation

arising out of the September 11 terrorist attack

on the World Trade Center; Royal Indemnity

Company in asbestos-related litigation against

General Motors Corporation; and General

Electric and Bechtel in ICC, AAA and UNCI-

TRAL bilateral investment treaty international

arbitrations arising out of India’s alleged expro-

priation of the multi-billion dollar Dabhol

Power Project.

Mr. Robinson received his B.A., magna cum

laude and Phi Beta Kappa from Macalester

College in St. Paul, Minnesota and his J.D.,

magna cum laude and Order of the Coif from

the University of Michigan Law School where he

was an Article Editor for the Michigan Law

Review. Prior to joining the Firm in 2000, Mr.

Robinson served as Law Clerk to the Hon.

Ferdinand Fernandez of the U.S. Court of

Appeals for the Ninth Circuit and the Hon.

Thomas Griesa of the U.S. District Court for

the Southern District of New York.

Simpson Thacher & Bartlett LLP is one of the

world’s leading global law firms. The Firm was

established in 1884 and has more than 800

lawyers. Through its New York City headquar-

ters and its offices in Los Angeles, Palo Alto,

Washington, D.C., London, Beijing, Hong

Kong and Tokyo, the Firm provides coordinated

legal advice on the largest and most complex cor-

porate transactions and disputes.

The Firm provides a full array of general corpo-

rate and litigation services to industrial corpora-

tions, commercial banks, investment banks and

other financial institutions, partnerships, joint

ventures and similar business entities, insurance

companies, educational and philanthropic insti-

tutions and individuals. Cross-border finance,

banking and bank regulation, mergers and

acquisitions, securities issuance and regulation,

project and asset based finance, real estate, asset

management, joint ventures, taxation, litigation

and dispute resolution are important aspects of

the Firm’s practice.

The litigation practice of Simpson Thacher &

Bartlett LLP encompasses every type of complex

litigation, including antitrust, insurance and

reinsurance, securities, mergers and acquisi-

tions, banking, intellectual property, labor and

employment, product liability, and other com-

mercial litigation for U.S. and non U.S. clients.

The Firm has also an active practice in interna-

tional dispute resolution on behalf of United

States and multinational companies, including

significant international arbitrations.

Simpson, Thacher & Bartlett LLP


24Winter 2008


Professor Ian Walden Of Counsel, Baker & McKenzie

Dr Ian Walden is Professor of Information and

Communications Law and head of the Institute

of Computer and Communications Law in the

Centre for Commercial Law Studies, Queen

Mary, University of London. His publications

include EDI and the Law (1989), Information

Technology and the Law (1990), EDI Audit and

Control (1993), Cross-border Electronic

Banking (1995, 2000), Telecommunications Law

Handbook (1997), E-Commerce Law and

Practice in Europe (2001), Telecommunications

Law and Regulation (2001, 2005, 2009),

Computer Crimes and Digital Investigations

(2007) and Media Law and Practice (forthcom-

ing 2009). Ian has been involved in law reform

projects for the World Bank, the European

Commission, UNCTAD, UNECE and the

European Bank of Reconstruction and

Development, as well as for a number of indi-

vidual states. In 1995-96, Ian was seconded to

the European Commission, as a national expert

in electronic commerce law. Ian has held visiting

positions at the Universities of Texas and

Melbourne. Ian is a solicitor and is Of Counsel

to the global law firm Baker & McKenzie

(www.bakernet.com) and is a Trustee and Vice-

Chair of the Internet Watch Foundation

(www.iwf.org.uk).

Founded in 1949, Baker & McKenzie provides

sophisticated advice and legal services to many of

the world’s most dynamic and successful organi-

zations through more than 3,900 locally qualified

lawyers and 7,000 professional staff in 70 offices

and 38 countries. Baker & McKenzie is known

for having a deep understanding of the language

and culture of business, an uncompromising

commitment to excellence, and world-class fluen-

cy in the way we think, work and behave. Baker

& McKenzie’s global revenues for the fiscal year

ended June 30, 2008, were US $2.19 billion.

John Conroy is Chairman of the Firm’s

Executive Committee. (www.bakernet.com).

Baker & McKenzie


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